Housing and Redevelopment Authority Meeting Date: March 10, 2026
To: Members of the Housing and Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
Local Housing Trust Fund Discussion
Body
Action Requested:
Discuss the adoption of a Local Housing Trust Fund (LHTF) Policy to enable reimbursement from Minnesota Housing Finance Agency (MHFA), update existing Down Payment Assistance and Home Rehabilitation Loan programs, and establish basic program and funding parameters.
Summary Report:
Ordinance No. 1034, adopted by the City Council on April 19, 2022, established a Local Housing Trust Fund and designated the Housing and Redevelopment Authority (HRA) to administer the fund on behalf of the City. The prior HRA established a subcommittee to establish policy and the redlined version is included. In June 2025, the HRA was awarded $150,000 from the Minnesota Housing Finance Agency (MHFA) to support the LHTF. These funds are provided on a reimbursement basis.
Due to the structure of the MHFA application, the awarded funds are restricted to use for down payment assistance and home rehabilitation loans. As part of due diligence, MHFA requires the HRA to adopt a formal Local Housing Trust Fund policy that clearly defines eligible uses, program structure, and administrative procedures.
Need for Policy Adoption:
Adoption of a Local Housing Trust Fund Policy is necessary for the following reasons:
1. MHFA Reimbursement Compliance
MHFA requires a locally adopted policy outlining program purpose, eligibility, and use of funds before reimbursement requests can be processed. Without an adopted policy, the HRA cannot access the awarded funds.
2. Program Updates and Alignment
The City's existing Down Payment Assistance and Home Rehabilitation Loan programs predate the MHFA award and do not fully align with current funding requirements. The policy will provide direction for updating these programs to ensure compliance with MHFA guidelines while maintaini...
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