(A) Purpose and intent. Pursuant to the authority granted to the city under M.S. § 462C.16, a local (herein referred to as Affordable) Housing Trust Fund is established to provide loans and grants to encourage the creation of affordable housing for rental housing and owner-occupied housing, to promote the preservation of existing affordable housing and naturally occurring affordable housing, and to provide rental assistance and homeownership assistance to persons of low to moderate income levels.
(B) Definitions. For the purposes of this section, the following definition shall apply unless the context clearly indicates or requires a different meaning.
GAP FINANCING. The difference between the costs of the property and either:
(a) The market value of the property upon sale;
(b) The amount the targeted household can afford for housing, based on industry standards and practices.
(C) Funding sources. Pursuant to M,S. § 462C.16, subd. 4, as determined by the City Council, the Affordable Housing Trust Fund may be funded from multiple sources, which may include, but are not limited to the following:
(1) Funds from the city’s Housing and Redevelopment Authority (HRA).
(2) Private cash donations from individuals, organizations, and businesses designated for the Affordable Housing Trust Fund.
(3) Grants and loans from a federal, state or local government or other private sources.
(4) Bond proceeds.
(5) Matching funds from a federal or state Affordable Housing Trust Fund; or a state program designated to fund an Affordable Housing Trust Fund.
(6) Principal and interest from Local Housing Trust Fund loan repayments and all other income from Local Housing Trust Fund activities, including, but not limited to, investment earnings.
(7) The sale of real and personal property as approved and as designated by the City Council.
(8) Local government appropriations, development fees and other funds as designated from time to time by the City Council.
(9) Tax increment financing (TIF) pooled funds.
(10) Other sources of funding approved by the City Council.
(D) Use of funds. The Affordable Housing Trust Fund may only be used for the following:
(1) Financial support to nonprofit affordable housing providers and/or the HRA in their mission to provide safe, dignified, affordable and supportive housing.
(2) Projects designed for the purpose of construction, acquisition, rehabilitation, demolition or removal of structures, construction financing, permanent financing, interest rate reduction, refinancing, and gap financing of housing to provide affordable housing to households that have incomes which do not exceed:
(a) For homeownership projects, 115% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development.
(b) For rental housing projects, 80% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development.
(3) Housing developed or rehabilitated with funds under this program must be affordable to the local work force.
(4) Projects are prioritized that provide affordable housing to households with incomes that:
(a) For homeownership projects, do not exceed 80% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development.
(b) For rental housing projects, do not exceed 50% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development.
(5) Priority may also be given to projects that:
(a) Reduce disparities in home ownership.
(b) Reduce housing cost burden, housing instability, or homelessness.
(c) Improve the habitability of homes.
(d) Create accessible housing.
(e) Create more energy- or water-efficient homes.
(6) Recipients using Affordable Housing Trust Fund assistance for the demolition or removal of existing structures must ensure that the cleared land is used for the construction of housing to be owned or rented by persons who meet the income limits described in this chapter. If an aid recipient uses the aid on new construction or substantial rehabilitation of a building containing more than four units, the loan recipient must construct, convert, or otherwise adapt the building to include:
(a) The greater of:
1. At least 1 unit.
2. At least 5% of units that are accessible units, as defined by section 1002 of the current State Building Code Accessibility Provisions for Dwelling Units in Minnesota and include at least 1 roll-in shower.
(b) The greater of:
1. At least 1 unit.
2. At least 5% of units that are sensory-accessible units that include:
A. Soundproofing between shared walls for first and second floor units.
B. No florescent lighting in units and common areas.
C. Low-fume paint.
D. Low-chemical carpet.
E. Low-chemical carpet glue in units and common areas.
(7) These guidelines do not relieve a project funded using Affordable Housing Trust Fund assistance from meeting other applicable accessibility requirements.
(E) Financial oversight of the Affordable Housing Trust Fund. The City Administrator, or their designee, will administer and supervise the Affordable Housing Trust Fund account and the City Finance Department will administer the Fund.
(Ord. 167, 4th Series, passed 2-5-2024)