Multifamily Consolidated RFP/2024 HTC Round 1 Updates
In this eNews:
Legislative Update: Housing Development Resources for 2023 Multifamily Consolidated Request for Proposals
The 2023 legislative session was a historic year with a more than $1.3 billion investment in housing! The new state funding will help to create and preserve multifamily rental housing, make homeownership more accessible, support manufactured housing, and increase housing stability resources such as emergency rental assistance and rent assistance.
Approximately 50% of the state funding is capital for housing development and preservation. Two of the largest capital resources are $200 million in the Housing Infrastructure program and nearly $121 million in the Economic Development and Housing Challenge program. These two funding sources will be made available in the 2023 and in the 2024 Consolidated RFPs for eligible multifamily, single family, and manufactured housing uses as outlined in Chapter 37 of Minnesota’s 2023 Regular Session Laws.
Additionally, several new programs were created, including the Community Stabilization program to support naturally occurring affordable housing ($90 million) and the Greater Minnesota Housing Infrastructure program ($8 million). There are also significant increases in existing capital resource programs, such as the Greater Minnesota Workforce Housing Development program ($39 million) and the Publicly Owned Housing program ($87 million). These funding resources will be made available in separate RFPs.
Stay tuned for more information and next steps about these and other programs that were created this legislative session.
Questions?
Refer to the 2023 Legislative Summary for an overview of the resources coming to Minnesota Housing. Contact Dan Kitzberger, Minnesota Housing’s Legislative Director, at dan.kitzberger@state.mn.us with any questions.
Estimated 9% HTC and Deferred Loan Resources in the 2023 Multifamily Consolidated RFP/2024 HTC Round 1
The total estimated distribution of 9% HTCs is available for the 2023 Multifamily Consolidated RFP/2024 HTC Round 1. The Internal Revenue Service calculates the amount of competitive 9% HTCs available for each state based on population. The amounts of credit distributed to suballocators, the seven-county metropolitan area and Greater Minnesota are calculated based on the provisions in Minnesota Statutes section 462A.222.
The amount of state-wide deferred loan resources anticipated to be available in the 2023 Multifamily Consolidated RFP/2024 HTC Round 1 is dependent on several variables including:
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Appropriations: The funding for deferred loans available in the annual Multifamily Consolidated RFP/HTC funding round is primarily from federal and state appropriations.
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Funding Gaps:When a project selected in a prior Multifamily Consolidated RFP/HTC funding round experiences a new funding gap, any additional funds that can be provided by Minnesota Housing reduces the amount of funds available to select new projects.
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Withdrawn Projects: If a project selected in a prior Multifamily Consolidated RFP/HTC funding round rescinds their selection or is otherwise unable to move forward, those funds generally remain available for new project selections.
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Deferred Loan Repayments:When a project repays a deferred loan to Minnesota Housing, those funds are generally recycled into new deferred loans.
With new resources from the 2023 legislative session, the total amount of deferred loan resources available for the 2023 Multifamily Consolidated RFP/2024 HTC funding round will increase from last year’s Multifamily Consolidated RFP! As noted in the legislative update, the 2023 Multifamily Consolidated RFP will include resources from the Housing Infrastructure and Economic Development and Housing Challenge appropriations. The 2023 Multifamily Consolidated RFP will also include at least $4.2 million of state appropriated Preservation Affordable Rental Investment Fund (PARIF) as well as the federally appropriated HOME and National Housing Trust Fund (NHTF) listed in the next section.
The Housing Infrastructure and Economic Development and Housing Challenge appropriations will be split amongst eligible multifamily rental uses, single family home ownership uses, and manufactured housing uses. For multifamily rental uses, Housing Infrastructure resources are statutorily limited to permanent supportive housing, preserving federal rent assistance, senior housing, and workforce housing with rents at or below 50% of area median income (Minnesota Session Laws, Regular Session, Chapter 37, Article 5, Section 11).
For multifamily rental projects applying in the 2023 MF Consolidated RFP, state prevailing wage requirements under Minn. Stat. § 116J.871 generally apply to all new construction projects that receive loans from Minnesota Housing that exceed $500,000. In addition, a separate state prevailing wage statute, Minn. Stat. § 177.41-.43, may apply if funds are used for a building that is publicly owned or leased. For all questions on state prevailing wage, please contact the Minnesota Department of Labor, Division of Labor Standards and Apprenticeship, at 651.284.5091 or by email at dli.prevwage@state.mn.us.
The estimated HTCs and deferred loan resources are subject to change and do not constitute a commitment or guarantee of funding availability for the Multifamily Consolidated RFP/2024 HTC Round 1.
Questions?
Contact htc.mhfa@state.mn.us for any questions about the estimated 9% HTC distributions.
Contact mhfa.consolidated.rfp@state.mn.us for questions about the estimated deferred loan resources.
Federal Funding in the 2023 Multifamily Consolidated RFP
Minnesota Housing is pleased to announce the anticipated federal investment levels for the HOME Investment Partnerships Program (HOME) and National Housing Trust Fund (NHTF) capital programs:
- HOME: Approximately $9.6 million
- NHTF: Approximately $4.8 million
HOME and NHTF sources are a key part of Minnesota Housing’s deferred funding resources. Several federal cross-cutting requirements must be met in order to be eligible for the following resources:
- Davis Bacon is required for HOME funding. Under certain circumstances, a project may also be subject to state prevailing wage, in addition to Davis Bacon, and subject to a dual wage decision. Refer to page 9 of the Multifamily Request for Proposals Standardsfor more detail.
- The United States Department of Housing and Urban Development (HUD) Section 3 Rulewill be in effect for projects selected for HOME and/or NHTF funding in the 2023 Multifamily Consolidated RFP. The labor hour benchmark for Section 3 workers is set at 25% or more of the total number of labor hours worked by all workers on a project. The labor hour benchmark for Section 3 targeted workers is set at 5% or more of the total number of labor hours worked by all workers on a project. Developers and contractors must also follow HUD’s prioritization of effort in directing employment, training and contracting opportunities to low- and very low-income individuals and businesses that employ them.
- A HUD Part 58 environmental review is applicable to HOME, while a project receiving NHTF must meet all NHTF environmental provisions. Some provisions align with the requirements of a Part 58 environmental review, but not all.
- Site and Neighborhood Design Standards apply to new construction projects. Projects located within a census tract with a minority concentration above 50%, a poverty concentration above 50% or is within a Racially or Ethnically Concentrated Area of Poverty (R/ECAP) will undergo further review to determine eligibility.
Questions?
Contact Aaron Keniski at aaron.keniski@state.mn.us.
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