Background:
History: The Affordable Housing Incentive Fund (AHIF) Program was created by the Hennepin County Housing and Redevelopment Authority (HCHRA) Board of Commissioners (Resolution 08-HCHRA-00) to work with municipalities, other government and nonprofit agencies, private and nonprofit developers, and lenders to encourage the preservation and development of affordable housing opportunities throughout Hennepin County.
A coordinated request for proposals (RFP) for the AHIF and Home Investment Partnerships (HOME) programs was released in January 2021. The RFP garnered 27 applications requesting a total of $20.2 million in AHIF and HOME funding. Proposals were reviewed by Housing and Economic Development (HED) and Health and Human Services (HHS) staff for consistency with county priorities. Proposals were reviewed and ranked by a multi-agency panel consisting of Hennepin County (HED and HHS), Bloomington, Brooklyn Park, Minneapolis, and St. Louis Park staff.
AHIF funding is typically provided to projects in the form of a 30 to 40 year deferred loan. Loan documents typically include a loan agreement, promissory note, mortgage, and declaration of covenants and restrictions. In addition, during the term of the loan, the HCHRA may be asked to sign various related documents and amendments, including subordination agreements and disbursement agreements.
Consistent with the March 4 and March 11, 2021 Homeless and Housing briefings, staff is also recommending a first-ever 15-year annual subsidy for CommonBond’s Rise on 7 project to support the difference between 60 percent of AMI rents and 30 percent of AMI rents for 19 units. This will allow the project to maintain sufficient resources to pay its capital debt financing costs, while allowing tenants at or below 30 percent of AMI access to affordable rents.
Since 2000, and including the recommended 2021 allocations, the AHIF Program has committed approximately $79 million to affordable housing projects, leveraging over $1.7 billion dollars in additional investment to assist the development and/or preservation of over 9,421 affordable housing units in Hennepin County.
Attachment A provides a summary of the 11 projects recommended for funding. The 2021 HCHRA budget includes $5.5 million in funding for the 2021 AHIF Program (Resolution 20-HCHRA-0060). An additional $2,371,294 in prior year AHIF loan repayments ($1,771,294) and rescinded project awards ($600,000) is also recommended for reallocation under the 2021 AHIF Program.
Recommended Project Awards:
Affordable Rental Housing
PR00003354 – CommonBond Communities – Rise on 7 - $950,000
8115 Highway 7, St. Louis Park; construction of 120 rental units (19 units at 30 percent of AMI, 48 units at 50 percent of AMI, 32 units at 60 percent of AMI, 21 units at 80 percent of AMI); 24 units for large families, 19 units with rental assistance, 4 units prioritized for occupancy by county HHS clients.
PR0003347 - Duffy Development Company – Tessman Ridge Apartments - $925,000
6900 85th Avenue N, Brooklyn Park; construction of 75 rental units (20 units at 30 percent of AMI, 43 units at 60 percent of AMI, 12 units at market rate); 8 units for people experiencing homelessness, 4 units for people with disabilities; 15 units for large families, 12 units with rental assistance; and 4 units prioritized for occupancy by county HHS clients.
PR00003345 - Ecumen and Lupe Development– Cornelia View - $665,000
4040 West 70th Street, Edina; construction of 118 affordable rental units for seniors (6 units at 30 percent of AMI, 35 units at 50 percent of AMI, 53 units at 60 percent of AMI, 24 units at 80 percent of AMI); 6 units for homeless seniors; 6 units with rental assistance, and 6 units prioritized for occupancy by county HHS clients.
PR00003346 – Matrix Development – Plymouth Avenue Apartments - $900,000
2309 Plymouth Avenue North, Minneapolis; construction of 63 rental units (21 units at 30 percent of AMI, 42 units at 50 percent of AMI); 14 units for people experiencing homelessness; 21 units with rental assistance; and 3 units prioritized for occupancy by county HHS clients.
PR00003348 – Plymouth Housing and Redevelopment Authority – Valor Place - $75,000
14225 41st Avenue North, Plymouth; construction of 2 rental units (2 units at 50 percent of AMI); 2 units prioritized for occupancy by veterans; and 2 units for large families.
PR00003353 – Reuter Walton – Greenway Apartments - $800,000
2839 11th Avenue South, Minneapolis; construction of 79 rental units (19 units at 30 percent of AMI, 5 units at 50 percent of AMI, 45 units at 60 percent of AMI, 10 units at 80 percent of AMI); 11 units for people experiencing homelessness; and 11 units with rental assistance.
PR00003349 – Walker Methodist – Raines Building - $800,000
3737 Bryant Avenue South, Minneapolis; construction of 89 affordable rental units for seniors (45 units at 30 percent of AMI, 44 units at 50 percent of AMI); 18 units for homeless seniors; 45 units with rental assistance, and 10 units prioritized for occupancy by county HHS clients.
PR00003352 – Wall Companies – Malcolm Yards Affordable Housing - $350,000
495 Malcolm Avenue SE, Minneapolis; construction of 142 rental units (16 units at 30 percent of AMI, 79 units at 50 percent of AMI, 47 units at 80 percent of AMI); 16 units for people experiencing homelessness; 16 units with rental assistance, and 4 units prioritized for occupancy by county HHS clients.
Affordable Homeownership
PR00003351 – City of Lakes Community Land Trust - $400,000
Scattered sites, Minneapolis; acquisition and rehabilitation of up to 20 single-family homes for long-term affordable homeownership in a land trust.
PR00003350 – Twin Cities Habitat for Humanity - $60,000
13201 Minnetonka Drive, Minnetonka; construction of 2 single-family homes for long-term affordable homeownership in a land trust.
PR00003355 – West Hennepin Affordable Housing Land Trust - $175,000
Scattered sites, suburban Hennepin County; acquisition and rehabilitation of up to 10 single-family homes for long-term affordable homeownership in a land trust.
30 Percent of AMI Unit Rental Subsidy
PR00003356 – CommonBond Communities – Rise on 7 - $1,771,294
8115 Highway 7, St. Louis Park; 15-year at 30 percent of AMI unit rental subsidy for 19 units (14 one-bedroom, 2 two-bedroom, 3 three-bedroom).
Current Request: Approve negotiation of 12 implementation agreements with a combined total not to exceed amount of $7,871,294 under the 2021 AHIF Program.
Impact/Outcomes: Eleven projects will assist a total of 708 affordable housing units in Hennepin County; projects will include 146 units for households with incomes at or below 30 percent of AMI, 255 units for households with incomes at or below 50 percent of AMI, 130 units with rent assistance, 73 units for people experiencing homelessness, 67 units for large families, 32 units for affordable homeownership, and 31 units prioritized for county HHS clients.