Request for Committee Action
A briefing memo explaining the purpose, background, and impact of the requested action.
HOME, CDBG, and NSP program income appropriation and restricting HOME and NSP loan repayments to be used as revolving funds (RCA-2023-00395)
ORIGINATING DEPARTMENT
To Committee(s)
| # | Committee Name | Meeting Date |
|---|---|---|
| 1 | Business, Inspections, Housing & Zoning Committee | April 18, 2023 |
Action Item(s)
| # | File Type | Subcategory | Item Description |
|---|---|---|---|
| 1 | Resolution | Appropriation | Passage of Resolution approving the following appropriation of funds to the Department of Community Planning & Economic Development:
|
Ward / Neighborhood / Address
| # | Ward | Neighborhood | Address |
|---|---|---|---|
| 1. | All Wards |
Background Analysis
HOME appropriation:
The City of Minneapolis receives an annual appropriation of HOME funds through the U.S. Department of Housing and Urban Development (HUD). The City Council last appropriated HOME funds on April 23, 2022. After that appropriation, a total of $1,615,807.74 in HOME program income has been generated from the following sources:
- Affordable Housing Trust Fund program—repayments of principal and interest from rental projects with existing HOME-funded loans.
- Minneapolis Homes: Financing program (formerly Home Ownership Works)—net proceeds from selling HOME-funded houses to eligible homeowners.
All program income generated by HOME-funded activities must be used following HOME rules. Staff recommends that 10 percent of the program income generated should be set aside for the administration of the program funds and the remainder for the program, as illustrated below:
- Fund 01500 (HOME FUND): Appropriation of $1,454,227.00 to Minneapolis Homes: Financing program (8900230)
- Fund 01500 (HOME FUND): Appropriation of $161,580.74 of HOME program income to the Affordable Housing Trust Fund program (8900220)
Neighborhood Stabilization Program appropriation:
The City of Minneapolis received Neighborhood Stabilization Program (NSP) grant funding through HUD from 2008-2011 in response to the housing and foreclosure crisis. All program income generated by NSP-funded activities must be used following NSP program rules. $79,881.22 in program income has accrued since the last appropriation. NSP funds were generated through the recapture of homebuyer down payment assistance and land sales of properties acquired with NSP.
- Fund 01300 (NSP Fund): Appropriation of $69,783.29 of program income to Minneapolis Homes: Financing Program (8900230)
- Fund 01400 (CDBG/NSP Fund): Appropriation of $10,097.93 of program income to Minneapolis Homes: Financing Program (8900230)
CDBG revolving fund appropriations:
Currently, there are two Community Development Block Grant (CDBG) revolving funds used by housing programs that City Council approved for use by the Residential Real Estate Development Services (RREDS) housing work unit within the Community Planning and Economic Development (CPED) department. The first was approved in 2017 (2017A-0106) to recycle CDBG land sale proceeds, and the second was approved in 2021 (2021A-0923) to recycle home improvement lending proceeds. The goal of the revolving funds is to restrict the CDBG program income earned by RREDS to ensure the rapid re-use of those funds to their respective programs. Procedures for the administration of the revolving funds were implemented through a collaboration between the Finance Department and RREDS staff.
Staff recommends approval to appropriate $334,946.09 of CDBG program income generated through the land sale (VBRLPI) and loan repayments (OHRLPI) as follows:
- Fund 01400 (CDBG): Appropriation of $334,946.09 of program income to 8900230