Minnesota City Participation Program Sign-on Letter

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Minnesota NAHRO opposes the provision contained in H.F. 2112 and SF1789 that removes the set aside of 31% of the housing pool for single family housing programs. This set aside provides the bonding authority for the Minnesota Cities Participation Program (MCPP) and helps address the financing needs for statewide first-time homebuyer programs. MCPP serves first time homebuyers by providing at or below-market rate home mortgage loans and down payment assistance to low-and moderate-income first-time homebuyers. We oppose removing the set-aside because:

  1. Communities across the state see this tool as a way to attract young families to put down community roots. Homeowners contribute to the economic ripple effect of supporting schools, businesses, and supporting the local economy. Eliminating the set aside essentially eliminates a public/private partnership that communities want and need. This partnership leverages federal and state funds with the resources of local banks/lenders to serve first time homebuyers throughout the state.
  2. In 2017, over 1,841 families across the state used the Minnesota Cities ParticipationProgram as a pathway to homeownership. 38 cities and counties statewide rely on theMinnesota City Participation Program. The program is administered by local communitybankers and lenders, and is oversubscribed 528%.
  3. In 2017 alone, 993 families havebeen served in the metro area, and 848 families were served in Greater Minnesota. The statute as it is now written preserves the housing market eco-system. The housingmarket relies on the synergy between rental and home ownership units, and the existingset-aside strikes a good balance. Eliminating the single family programs makes itharder for families to become home owners, which then creates additional need forrental units.
  4. Rural communities across Minnesota would experience the greatest loss of resources. As proposed, the bonding authority would only be available for rental housing projectslocated in metro areas. Greater Minnesota would see the biggest negative impactbecause new rental developments typically require a larger scale and would likely locatein the metro area.
  5. The statute as now written increases homeownership opportunities. The single familyprograms are crucial to the state’s policy to increase homeownership opportunities andas a means to reduce racial disparities in homeownership.

For these reasons, Minnesota NAHRO oppose the elimination of the homeownership set aside and urge lawmakers to ensure continued funding for the MCPP program through this bonding allocation.