Why is this goal important?
Long-term homelessness is a breakdown in Minnesota’s social compact – our vulnerable should not be left to the streets. Long-term homelessness, defined as lacking a permanent place to live continuously for a year or more or at least four times in the last three years, is associated with extreme poverty, poor job skills, lack of education, and serious health conditions. Beyond their individual issues, people experiencing long-term homelessness also consume a disproportionate share of emergency room, shelter services, crisis services and other social services.

People who have stable housing tend to use fewer crisis health care services or the services they use are less expensive than when they were homeless. Successfully housing people reduces social service costs and provides opportunities for them to become economically self-sufficient, fully participating members of the community.
 

How will this goal be accomplished?
Minnesota Housing, along with the Departments of Human Services and Corrections, is a key partner in implementing the Business Plan on Ending Long-Term Homelessness in Minnesota. Developed by a working group of public and private stakeholders, the Business Plan aims to provide permanent supportive housing to an additional 4,000 long-term homeless households by 2010. While the Business Plan originally estimated the cost of creating these supportive housing opportunities at approximately $540 million over seven years, funded through federal, state, and local government resources as well as private contributions, a 2007 recalibration now estimates the total costs over the lifetime of the plan to be $483 million.

Minnesota Housing funds the development, rehabilitation, acquisition, or preservation of supportive housing through programs such as the Housing Trust Fund, the Family Homeless Prevention and Assistance Program, and the Ending Long-Term Homelessness Initiative Fund. The agency also provides operating subsidies and rental assistance for permanent supportive housing for people experiencing long-term homelessness.

What is Minnesota Housing's progress to date?
As of December 2006, Minnesota Housing has funded 1,091 units of supportive housing opportunities for people experiencing long-term homelessness. Compared to the Business Plan’s goal of 1,000, Minnesota Housing is 9 percent ahead of the target and 27 percent of the way toward the 2010 goal of 4,000 housing units.




Learn more at: http://www.mhfa.state.mn.us/multifamily/LTH.htm

Why is this goal important?
Homeownership is a principal element of the American dream. For most Americans, homeownership is the most primary means of wealth accumulation, and national and state policies have long encouraged homeownership because of its impact on strengthening families and building communities. Homeowners demonstrate higher levels of academic achievement, and greater civic and voluntary involvement.

Minnesota’s overall homeownership rate is the highest in the nation at 75.8 percent. However, the overall rate for communities of color and/or Hispanic ethnicity in Minnesota is significantly lower than the rate for white Minnesotans. This homeownership gap stymies the American dream and prevents wealth creation for households of color and/or Hispanic ethnicity.

Minnesota Housing estimates that the homeownership gap between white-headed households and households of color and/or Hispanic ethnicity in 2005 was 33 percentage points, placing Minnesota in the top ten states for the largest homeownership gap.

How will this goal be accomplished? 
Minnesota Housing, along with the Federal Reserve Bank of Minneapolis and the Fannie Mae Minnesota Community Business Office, convened the Emerging Markets Homeownership Initiative (EMHI). In 2005, EMHI worked with the homeownership industry to develop a detailed business plan to increase homeownership in Minnesota’s emerging markets. Representing the input of over 50 stakeholders, the business plan identifies twelve strategies targeted to emerging markets that will:

       enhance trust in the home buying process (e.g., recruit diverse homeownership
           industry professionals);

       expand outreach (e.g., develop culturally-
           sensitive homebuyer training); and

       grow product innovations (e.g., expand
          culturally-sensitive mortgage products and
          underwriting processes)

The EMHI Initiative has been incorporated as an independent 501(c)3 nonprofit organization. Work continues to convene representatives from leading financial institutions, real estate organizations, trade associations, and diverse community organizations to develop pilot implementation of the EMHI business plan strategies.

In early 2006, Minnesota Housing implemented significant changes to some first-time homebuyer programs to better target the emerging markets population.
 

What is Minnesota Housing's progress to date?
Minnesota Housing has increased its percentage of first-time home buyers from communities of color and/or Hispanic ethnicity from less than 16 percent in FY 2003 to nearly 22 percent in FY 2005. Actual performance in FY 2006 slipped to 17 percent as a result of organizational issues with one key lending partner. The agency estimates that 17 percent of households estimated to be eligible for Minnesota Housing assistance are from communities of color and/or Hispanic ethnicity.

Learn more at: http://www.mhfa.state.mn.us/homes/EMHI.htm

Why is this goal important?
Much of our state’s existing single-family and multifamily affordable housing stock is at risk of deteriorating, and replacement is cost-prohibitive. No affordable housing development can produce housing that is as affordable to residents as maintaining the existing stock of federally assisted rental housing or bringing substandard single-family housing into service. Preserving this housing costs substantially less per unit than new construction and leverages federal rent or mortgage subsidies well into the future.

Currently, there are approximately 100,000 units of multifamily rental housing that have received or currently receive federal or state assistance to keep them affordable. Approximately 170,000 additional units provide affordable rental housing opportunities without direct assistance. As these rental properties age or as subsidy contracts and regulatory agreements expire, these units may convert to unaffordable market rate housing or simply be lost due to deterioration. Preservation helps eliminate the danger of housing becoming unaffordable for low- and moderate- income households.
 

How will this goal be accomplished?
Minnesota Housing strategies focus on preserving the affordability of multifamily housing and on rehabilitating and improving aging single-family homes. The agency emphasizes opportunities for community partnerships and leveraging activities to maximize the continual use of Minnesota’s existing housing inventory.

To preserve affordable rental housing, Minnesota Housing strategies include changes to underlying financing, operating subsidies to owners, direct subsidies to tenants, or simply through the existing rent structure. The agency also monitors situations where federal assistance for existing rental housing is in jeopardy and examines whether using state funds to preserve this housing is appropriate, necessary and cost-effective. Minnesota Housing coordinates its preservation efforts with its funding partners – the Family Housing Fund, the Greater Minnesota Housing Fund, the U.S. Department of Housing and Urban Development, Rural Development (U.S. Department of Agriculture), and the cities of Minneapolis and St. Paul.

Home improvement programs preserve Minnesota's existing single-family housing stock with property rehabilitation, weatherization, remodeling and housing recycling activities. Delivered through an extensive network of partners and lenders, these programs reach a broad range of household incomes and properties.

What is Minnesota Housing's progress to date?
In FY 2006, Minnesota Housing disbursed funds to rehabilitate, improve, or preserve the affordability of over 6,500 units of existing single and multifamily housing. This activity includes $15.7 million to preserve more than 800 units of existing subsidized rental housing through Affordable Rental Investment Fund-Preservation (PARIF) and $4.1 million to rehabilitate nearly 400 units of housing occupied by low-income homeowners through the Rehabilitation Loan Program. Loans on a few large housing developments closed in 2006, leading to the 50 percent increase in affordable rental units rehabilitated and preserved.

Preservation of existing housing remains the most cost-effective means of providing affordable housing. Each dollar of state spending under various Agency programs, since 1998, has leveraged $5.30 of federal investment in affordable rental housing.

Learn more at:
http://www.mhfa.state.mn.us/homes/homes_improvement.htm
http://www.mhfa.state.mn.us/multifamily/multifamily_preserving.htm

Why is this goal important?
Families who pay more than 30 percent of their income for housing are considered cost-burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. The lack of affordable housing is a significant hardship for low-income households preventing them from meeting their other basic needs or saving for their household’s future. By providing affordable housing to low- and moderate-income workers, Minnesota Housing allows Minnesota’s workforce, the backbone of the state’s economic growth and vitality, to focus their energies on their jobs, their communities and their families.

By developing affordable housing in areas of the greatest employment growth, Minnesota Housing supports efforts to decrease commuter times and reduce traffic congestion in inter-regional corridors. Housing close to jobs also minimizes household transportation costs, allowing households to spend more on housing and other needs.

How will this goal be accomplished?  
Minnesota Housing provides construction and permanent mortgage financing to sponsors and developers of affordable rental housing, monthly rent assistance vouchers to qualifying low-income households, and entry cost assistance and permanent mortgage financing to qualifying first-time homebuyers.

Minnesota Housing works to increase housing choices for low- and moderate-income workers by collaborating with employers, philanthropic organizations, local governments, nonprofits, and other partners – including the Family Housing Fund, the Greater Minnesota Housing Fund, and the Metropolitan Council – to provide greater affordable housing opportunities. Selection guidelines for the Minnesota’s Housing’s Economic Development and Housing Challenge Fund prioritize funding proposals that locate housing close to areas of job growth, transit ways, and transportation corridors or that include employer or local contributions to increase the affordability of housing.
 

What is Minnesota Housing's progress to date?
The changing climate of the private mortgage market has made Minnesota Housing products once again more appealing to low- and moderate-income borrowers. First-time mortgages have jumped to over 3,000 in FY 2006 for the first time since 1997.

The median household income of first-time home-buyers assisted by the agency has inched up to $37,440 or 55 percent of the area median family income defined by the U.S. Department of Housing and Urban Development (HUD). Stable from 2005, this compares to 47 percent in 2002. The median household income of renters Minnesota Housing assists (excluding Section 8 rental assistance) is $14,125 or 21 percent of the HUD area median income. This compares to 28 percent in 2002 and 21 percent in 2003.



Learn more at: http://www.mhfa.state.mn.us/

Why is this goal important?
Minnesota Housing cannot achieve its goals independent of the developers, local units of government, financial institutions, and community organizations who partner with the agency and are often the face of agency products to end consumers. Limited resources require redoubled efforts at customer service, collaboration, and creativity.
 

How will this goal be accomplished?  
Externally, Minnesota Housing has established the Housing Resource Advisory Council as a forum for discussing how the agency’s resources can complement our partners’ efforts to promote affordable housing. The Council includes representatives from local government, housing and redevelopment and community development authorities, philanthropic organizations, local financial and technical assistance organizations, and financial advisors. The exchange of information and ideas around economic development, affordable housing and homelessness helps inform Minnesota Housing’s funding decisions and facilitate coordination of activities and funding requests at the local level.

Internally, the agency has implemented a Customer Service Initiative focused on transforming internal business processes to improve the agency’s service to customers. Key strategies of the Customer Service Initiative have included enhancing the use of technology, reviewing the agency’s regulatory/underwriting standards, seeking program consolidation and simplification opportunities, and learning from other organizations through “best practice” reviews.

What is Minnesota Housing's progress to date?
For the last year, Minnesota Housing has focused on enhancing the use of technology. The Single Family Mortgages Online System (SFMOS) is a web-based business-to-business system implemented in April 2007. Lending partners can access to the system through a web interface to qualify for affordable housing loans for purchase by Minnesota Housing. SFMOS will result in improved service and on-line access for lending partners to do business with Minnesota Housing. The agency is also implementing a new underwriting system for multifamily rental developments that will improve Minnesota Housing’s capacity to maintain accurate data for reporting and program analysis. Eventually this system will be integrated with a new web-based application and web-based underwriting that will be made available to our business partners.

Learn more at:
http://www.mhfa.state.mn.us/homes/SFMOS.htm
http://www.mhfa.state.mn.us/about/MF_CSinitiative.pdf
 

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Last update on 07/27/2007