The City of Minneapolis is seeking public comment on updates to guidelines for the Minneapolis Small and Medium Multifamily Loan Program. The program is an innovative partnership between the City of Minneapolis, the Local Initiatives Support Corporation (LISC) and Twin Cities Land Bank. Through the program, the City offers deferred, non-interest bearing loan funds that leverage additional mortgage financing from LISC. This financing structure enables the Land Bank to purchase small and medium sized properties (2-49 units) while preserving affordable rents after acquisition.
Changes to the program include:
Increasing the City’s share up to one half of the total financing offered by LISC, with a maximum $50,000 in City funding per unit will allow for successful acquisitions that meet program goals. Previously, the City’s share was capped at one third of each SMMF loan, with a maximum of $19,000 in City funds per unit. The increased maximum City share are necessary due to rising real estate values, which have increased the amount of non interest bearing City funding required to make certain acquisitions viable while preserving affordability. Many acquisitions will require less subsidy, and the increase in the maximum per unit limit is mainly intended to allow for the flexibility needed to preserve affordability in buildings with somewhat higher property values or greater levels of required maintenance.
In addition, the updated Program Guidelines more explicitly articulate a program goal to prioritize disposition strategies that will expand community-based ownership. Specific disposition strategies for property will be developed after SMMF properties are acquired, repairs are made, and properties are stabilized. The City anticipates that disposition will take place within 1-3 years after initial acquisition by the Twin Cities Land Bank.
Please send all comments on these proposed changes by email to Dean Porter-Nelson firstname.lastname@example.org prior to 12:00 AM (midnight) on February 17, 2019 so that they can be shared with policymakers.