Preservation

Existing housing is typically the most affordable, and preserving it is more cost effective than new construction. There are segments of the existing affordable housing stock that are at risk of being lost, either to rent increases or to deterioration, particularly properties with federal project-based rental assistance.

Federal project-based assistance allows more than 60,000 lower income renter households to spend no more than 30% of their income on housing. Most of these Section 8, USDA Rural Development, Public Housing, NAHDSDA (tribal housing), and other units were built in the 1970s and 1980s and are in need of recapitalization. 

In addition to projects with federal project-based rental assistance, Minnesota Housing can help with the preservation of critical affordable units. These include but are not limited to those with current recorded deed restrictions, and/or rent and income restrictions.

Minnesota Housing has resources available for a wide range of preservation projects:

  • Project-based Section 8
  • USDA Rural Development
  • Tribal
  • Public Housing
  • Expiring Tax Credits
  • Supportive Housing
  • Greater Minnesota affordable rental housing (with or without subsidy)

Annual Consolidated Request for Proposals (RFP) Resources

The annual Consolidated RFP provides the best option for preservation projects that require significant capital for acquisition and/or rehabilitation.

In the Consolidated RFP, Minnesota Housing prioritizes properties for preservation that are at risk of losing federal rental assistance due to poor physical condition, diminished owner capacity or owner commitment, or at risk of conversion to market (opting out of the rental assistance program). 

There are several resources available through the consolidated RFP that can be used for preservation projects with substantial capital needs.

Technical Assistance

If you are applying through the consolidated RFP, we strongly encourage setting up a technical assistance (TA) meeting to discuss your preservation project. In order to make the TA meeting productive, we recommend applicants submit the Multifamily Workbook, Three Year Critical Needs Model, and information on the selected Risk of Loss in advance of the scheduled TA session to TechnicalAssistanceRequest.MHFA@state.mn.us.

Additional Preservation Resources

Publicly Owned Housing Program (POHP)

Minnesota has a unique program targeted to public housing in the state, the Publicly Owned Housing Program (POHP). POHP is a competitive funding program that uses the proceeds of General Obligation Bonds (GO) to provide financing in the form of a 20-year, deferred, forgivable loan to public housing authorities and agencies (PHAs). PHAs use these loans to rehabilitate and preserve public housing properties that are operating under HUD’s Public Housing Program. Funds are available to address life safety, accessibility, energy and water efficiency and critical needs. View more information.

Rental Rehabilitation Deferred Loan Program

The Rental Rehab Deferred Loan Program (RRDL) is a good resource for smaller scale affordable rental projects outside the 5-county metro area that have health and safety issues and/or critical physical needs. These are projects that would not be competitive in the Consolidated RFP. RRDL loans can be made up to $500,000 per project, or $35,000 per unit. Loans are typically structured with a 20-year deferred term, and 10% of the loan amount is forgiven after the loan term has been met. View more information.

Asset Management Loan Program

Asset Management loans are designed to meet immediate critical health and safety needs in properties that have Minnesota Housing financing, including those with existing affordability restrictions or rental assistance contracts administered by Minnesota Housing. Asset Management loans are made to projects that have urgent needs that cannot be addressed through the Consolidated RFP. Referrals typically come from Minnesota Housing’s asset management and compliance staff. Loans are typically less than $1 million and usually structured as deferred.

Amortizing First Mortgages

Minnesota Housing has funds available to refinance existing first mortgages for affordable multifamily housing. Funds are for first mortgage, fixed rate, amortizing debt for multifamily rental housing. View more information.

Questions?

For questions about preservation projects and/or resources or to set up a technical assistance meeting, contact Preservation Supervisor, Dani Salus at 651.284.3178.