Twin Cities Metropolitan Area Multifamily Finace System

Twin Cities Metropolitan Area Multifamily Finance System Predevelopment Funding Sources Apply for Project Funding Development Funding Sources (with varying funding requirements) tied to Potentially conflicting policy objectives Any combination of funds may finance a given project Funds enable developers to be ready for super RFP funding Super RFP Funds (limited $s in comparison to demand) Developer Costs & Risks Major Sources Complicated requirements of multiple sources of funds Qualified GMHC, LISC, GMHF, FHF Low Income Housing Tax Credits Allocation Plan Income - Location - One application to multiple funding sources Long term management costs of meeting multiple funding requirements PRI's - Banks Connection Growing complexity and cost of funds from PRI investments MHFA funds - Agency & State $s May require multiple year funding and time delay adds to cost Increased investor regulatory oversight and resulting increased cost and complexity of funds (from banks & PRI sources) Multiple sources of funds result is multiple sets of closing documents and regulatory requirements Foundation $s (FHF, GMHF) LIHTC ISSUES - Investor Risk Uncertainty of CRA requirements Requirements add to developer costs (longer time for credit payments) Neighborhhod & Community Objectives Local Gov't - City & County Foundations Dollars Unique Local Gov't Financing (i.e. Dakota County Special levy) Not all funders participate in timely way - can't all be last to fund Limited availability of foundation dollars (organizational support) Metropolitan Council Livable Communities Regional Policy Objectives, Housing needs analysis Bank Direct Lenders A separate applications to additional sources Non Super RFP Funds Public Dollars Federal $s HUD & FHA mortgage funding/Insurance Federal policy objectives to not always fit state/regional objectives Federal Policies Special Sources Polluted Site Clean up Private mortgage financing time schedule doesn't fit public schedule or priorities. Private Mortgage Financing Market Driven Dollars are NOT target to housing Land Bank Special Affordability $s (L.e. Federal Home Loan Bank Board) Mixed Income/Use developments cannot be financed privately - risk - complexity Site acquisition dollars? Prepared by Elissa Schloesser with Jim Solem for The McKnight Foundation, August 2010 0000