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Minnesota Senate Environment, Economic Development and Agriculture Division

Minnesota Senate Environment, Economic Development and Agriculture Division. FY 2014-15 General Fund Budget Presentation February 13, 2013. Our Mission: Minnesota Housing finances affordable housing for low- and moderate-income households while fostering strong communities.

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Minnesota Senate Environment, Economic Development and Agriculture Division

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  1. Minnesota Senate Environment, Economic Development and Agriculture Division FY 2014-15 General Fund Budget Presentation February 13, 2013

  2. Our Mission: Minnesota Housing finances affordable housing for low- and moderate-income households while fostering strong communities.

  3. Presentation Summary • Minnesota Housing Overview • Governor’s Proposed FY2014 -15 Minnesota Housing Budget • New Investments • Base Budget Program Areas • Minnesota Housing Highlights

  4. Strategic Priorities • Promote and support successful homeownership • Preserve federally-subsidized rental housing • Address specific and critical needs in rental housing markets • Prevent and end homelessness • Prevent foreclosures and support community recovery

  5. Assistance Highlights in 2012 • Served 63,000 households • Provided $638 million for housing • 78% of all renters assisted had an annual income under $20,000 • 54% of all homebuyers assisted had an annual income under $45,000 • More than 2,300 first time homebuyers assisted, 23% households of color

  6. Agency Overview • Management and control of the Agency vested solely in the members of the Board by statute • Operating budget NOT funded by state appropriations • 100% of state appropriations go to programs • Operating costs: $25.6 million (FY12) • Operating costs 3.21% of assistance provided • Nearly all assistance provided through network of private delivery partners • Agency does not own or operate housing

  7. Funding Sources

  8. Proposed FY 2014-2015 Budget

  9. Housing and Job Growth • Governor’s investments in a strong economy • FY14-15 budget: $10 million one-time investment • 175-200 expected new units of affordable housing • Business expansion efforts are hampered by the lack of affordable housing • At least 50% of Challenge funds must be used in projects that have a contribution from non-state resources • Expected outcomes: new affordable housing in job growth areas, employer investment

  10. Potential Workforce Housing Areas

  11. Rental Assistance for Highly Mobile Students • Governor’s investments in Minnesota students • FY14-15 budget: $2 million one-time investment • 115-135 families expected to be served • Housing stability is key to school performance • Rental assistance enables housing stability • Students who move frequently tend to have lower school attendance rates • Expected outcomes: improved school attendance, savings in transportation costs

  12. Re-Entry Rental Assistance for Ex-Offenders • Governor’s investments in government reform • FY 14-15 budget: $1 million in one-time investment • Lack of stable housing is one of the 5 primary factors that influence recidivism • The annual cost to house an offender in prison is $31,025 • Rental assistance is estimated to cost between $5,500 and $7,000 annually per household • 75-90 individuals expected to be served

  13. Base Budget Program Areas • Development/Redevelopment • Challenge Program • Supportive Housing and Homelessness Prevention • Housing Trust Fund • Bridges • Family Homeless Prevention Assistance • Homeownership Assistance • Homeownership Assistance Fund • Rental Preservation and Rehabilitation • Affordable Rental Investment Fund – Preservation (PARIF) • Homeowner Rehabilitation • Rehabilitation Loan Program • Resident and Organizational Support • Homeowner Education, Counseling and Training (HECAT) • Capacity Building

  14. Development and Redevelopment • Economic Development and Housing Challenge program • FY14-15 base budget: $13,910,000 • Variety of financing tools for owner-occupied and rental housing • Provides workforce housing to Minnesota households earning up to $59,200 in Greater MN, $65,900 in Metro • 958 housing units developed or redeveloped in 2012 • Leverages private resources • $7.50 in non-state resources for every $1 of Minnesota Housing deferred financing • Used by private developers and housing authorities

  15. Supportive Housing and Homelessness Prevention • Housing Trust Fund • FY14-15 base budget: $19,110,000 • 1,902 households served in 2012 • Family Homeless Prevention and Assistance Program • FY14-15 budget: $14,930,000 • 7,785 households served in 2012 • Bridges • FY14-15 budget: $5,276,000 • 611 households served in 2012 • Median annual income for all programs ~ $9,000 • Programs provide prevention services and rental assistance • Delivered by local organizations

  16. Homeownership Assistance • Homeownership Assistance Fund (HAF) • FY14-15 budget: $1,594,000 • Down-payment and closing cost assistance (entry cost assistance) for first-time homebuyers • Paired with fixed-rate, low interest first mortgages • 1,418 households served in 2012 • Median annual income of households served: $44,406 • Financial institutions, mortgage lenders originate loans

  17. Rental Preservation and Rehabilitation • Affordable Rental Investment Fund – Preservation (PARIF) • FY14-15 budget: $8,437,668 • 14,534 units assisted to date • ~40,000 federally assisted housing units in Minnesota • Rental Rehabilitation • FY14-15 budget: $5,543,166 • Rehabilitation financing to keep housing affordable • PARIF preserves $4.80 in federal assistance for every $1 in state assistance • Reallocation • A portion of state appropriated preservation dollars are being reallocated to rehabilitation programs. The reduction will be offset by federal dollars.

  18. Homeowner Rehabilitation • Rehabilitation Loans – Single Family • FY14-15 budget: $5,543,166 • Maintains and restores owner-occupied housing • Addresses health, safety and efficiency • Serves low-income homeowners, including many seniors • Typically serves about 600 households each biennium

  19. Resident and Organizational Support • Homeowner Education, Counseling and Training (HECAT) • FY14-15 budget: $1,502,000 • Capacity Building • FY14-15 budget: $250,000 • Supports activities such as: • Foreclosure prevention and remediation • Homebuyer counseling • Community plans for addressing homelessness

  20. Regional Distribution of Assistance

  21. Minnesota Housing: A Smart Investment • 40-year track record of success • No state appropriations used for operating expenses • All appropriations go directly to programs • Investments made in communities across the state through local businesses • Investments leverage private and public resources • Savings to state through supportive housing and rehabilitation • State appropriations vital to serving low- and moderate-income Minnesotans

  22. For More Information Contact Commissioner Mary Tingerthal 651.296.5738 Mary.Tingerthal@state.mn.us Katie Topinka 651.296.3706 Katie.Topinka@state.mn.us Tonja Orr 651.296.9820 Tonja.Orr@state.mn.us 400 Sibley Street, Suite 300 St. Paul, MN 55101 651-296-7608 * 800-657-3769 * TTY 651-297-2361 www.mnhousing.gov

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