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Statewide Affordable Housing Aid

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Statewide Affordable Housing Aid helps counties, tribal governments, and greater Minnesota local governments develop and preserve affordable housing within their jurisdictions to keep families from losing housing and to help those experiencing homelessness find housing. Aid will begin in 2023.

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About the Program [+]

The Department of Revenue certifies amounts for eligible tribal governments, counties, and cities by August 1 each year. We base this certification on current statutes, including any changes from the most recent legislative session.

A summary of how aid was calculated is included with each year’s certification.

In 2023, Statewide Affordable Housing Aid is in one installment on December 26. Beginning in 2024, it will be paid in two equal installments in the year after it is certified. The first half is paid on July 20 and the second half on December 26.

2024 Certification [+]

2023 Certification [+]

Use of Aid [+]

Funds distributed under this aid program must be spent on a qualifying project.

Funds will be considered spent if:

A county or eligible demonstrates to the Minnesota Housing Finance Agency that the city or county cannot expend funds on a qualifying project by the deadline below due to factors outside the control of the city or county
The funds are transferred to a local housing trust fund

Funds transferred to a local housing trust fund must be spent on a project or household that meets the affordability requirements described below.

Deadline: Funds must be spent by December 31 of the fourth year after the aid was received.

Qualifying Projects [+]

Qualifying projects include:

Emergency rental assistance for households earning less than 80% of area median income as determined by the United States Department of Housing and Urban Development
Financial support to nonprofit affordable housing providers in their mission to provide safe, dignified, affordable and supportive housing
For counties outside the metropolitan counties as defined in Minnesota Statutes, section 473.121, subdivision 4, development of market rate residential rental properties as defined in M.S. 462A.39, subd. 2, para. (d), if the relevant unit of government submits with the report required as described in the Reporting to the Minnesota Housing Finance Agency section a resolution and supporting documentation showing that the area meets the requirements of M.S. 462A.39, subd. 4, para. (a)
Projects designed for the purpose of construction, acquisition, rehabilitation, demolition or removal of structures, construction financing, permanent financing, interest rate reduction, refinancing, and gap financing of housing to provide affordable housing to households that have incomes which do not exceed:
- For homeownership projects, 115% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development
- For rental housing projects, 80% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development
Housing developed or rehabilitated with funds under this program must be affordable to the local work force.

Projects are prioritized that provide affordable housing to households with incomes that:

For homeownership projects, do not exceed 80% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development
For rental housing projects, do not exceed 50% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development.

Priority may be given to projects that:

Reduce disparities in home ownership
Reduce housing cost burden, housing instability, or homelessness
Improve the habitability of homes
Create accessible housing
Create more energy- or water-efficient homes

Gap financing is the difference between the costs of the property and either:

The market value of the property upon sale
The amount the targeted household can afford for housing, based on industry standards and practices.

If aid received under this program is used for demolition or removal of existing structures, the cleared land must be used for the construction of housing to be owned or rented by persons who meet the income limits described above.

If an aid recipient uses the aid on new construction or substantial rehabilitation of a building containing more than four units, the loan recipient must construct, convert, or otherwise adapt the building to include:

The greater of:
- At least one unit
- At least 5% of units that are accessible units, as defined by section 1002 of the current State Building Code Accessibility Provisions for Dwellings Units in Minnesota, and include at least one roll-in shower
The greater of:
- At least one unit
- At least 5% of units that are sensory-accessible units that include:
  - Soundproofing between shared walls for first and second floor units
  - No florescent lighting in units and common areas
  - Low-fume paint
  - Low-chemical carpet
  - Low-chemical carpet glue in units and common areas