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

2. Minnesota Housing Budget, FY 2014-2015 Our Mission: Minnesota Housing finances affordable housing for low- and moderate-income households while fostering strong communities.

3. Minnesota Housing Budget, FY 2014-2015 3 Presentation Summary Minnesota Housing Overview Governor’s Proposed FY2014 -15 Minnesota Housing Budget »New Investments »Base Budget Program Areas Minnesota Housing Highlights

4. Minnesota Housing Budget, FY 2014-2015 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 4

5. Minnesota Housing Budget, FY 2014-2015 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 5

6. Minnesota Housing Budget, FY 2014-2015 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 6

7. Minnesota Housing Budget, FY 2014-2015 7 Funding Sources

8. Minnesota Housing Budget, FY 2014-2015 8 Proposed FY 2014-2015 Budget ProgramFY 12-13 Base FY 14-15 Base (adjusted for rehab loans) FY 14-15 One-time Additional Investments FY 14-15 Base Plus One-time Investments Percent Increase over FY 12-13 Bridges$5,276,000 Family Homeless Prevention$14,930,000 Housing Trust Fund$19,110,000 $3,000,000$22,110,00015.70% Homeownership Assistance Fund (HAF)$1,594,000 Preservation (PARIF)$14,626,000$8,437,668 Challenge$13,910,000 $10,000,000$23,910,00071.89% Capacity Building$250,000 Homeownership Counseling (HECAT)$1,502,000 Rehab Loans (Single Family)$0$5,543,166 Rental Rehabilitation Deferred Loans (RRDL)$4,898,000$5,543,166 TOTAL$76,096,000 $13,000,000$89,096,00017.08%

9. Minnesota Housing Budget, FY 2014-2015 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 9

10. Minnesota Housing Budget, FY 2014-2015 Potential Workforce Housing Areas 10

11. Minnesota Housing Budget, FY 2014-2015 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 11

12. Minnesota Housing Budget, FY 2014-2015 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 12

13. Minnesota Housing Budget, FY 2014-2015 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 13

14. Minnesota Housing Budget, FY 2014-2015 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. Minnesota Housing Budget, FY 2014-2015 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. Minnesota Housing Budget, FY 2014-2015 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. Minnesota Housing Budget, FY 2014-2015 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. Minnesota Housing Budget, FY 2014-2015 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 18

19. Minnesota Housing Budget, FY 2014-2015 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. Minnesota Housing Budget, FY 2014-2015 20 Regional Distribution of Assistance

21. Minnesota Housing Budget, FY 2014-2015 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. Minnesota Housing Budget, FY 2014-2015 22 For More Information Contact Commissioner Mary Tingerthal 651.296.5738 Mary.Tingerthal@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 Katie Topinka 651.296.3706 Katie.Topinka@state.mn.us Tonja Orr 651.296.9820 Tonja.Orr@state.mn.us