Community Stabilization: Naturally Occurring Affordable Housing – Multifamily Rental Housing Program

In order to be eligible, properties must be considered Naturally Occurring Affordable Housing (NOAH) and must be multifamily rental housing. To meet the definition of NOAH multifamily rental housing, a property must fulfill each of the following requirements:

• Have four or more rental units
• Be at least 20 years old
• Have rents in a majority of the units that are affordable to households at or below 60% of the greater of state or area median income (AMI) as determined by the United States Department of Housing and Urban Development (HUD)
• Not currently have federal or state financing or tax credits that require income or rent restrictions, except for public housing, as defined in section 9 of the Housing Act of 1937, that is part of a mixed-finance community

An eligible recipient is one of the following:

• Local unit of government (subject to limitations as outlined in the NOAH Multifamily Program RFP Application Instructions)
• Federally recognized American Indian Tribe located in Minnesota or its Tribally Designated Housing Entity
• Private developer
• Limited equity cooperative
• Cooperative created under Minnesota Statutes Chapter 308A or Minn. Stat. Chapter 308B
• Nonprofit organization

The eligible recipient must own or control the property, which is demonstrated by meeting one of the following criteria:

• Properties are directly owned by the eligible recipient.
• Properties are owned by a Limited Liability Company (LLC), Limited Partnership (LP), or other similar ownership entity with approval from Minnesota Housing at its sole discretion, and the eligible recipient is the managing general partner or member of the LLC, LP, or other similar ownership entity. If there is more than one general partner or member, the eligible recipient must control at least 50% of the combined ownership of all general partners or members in the ownership entity.
• Other properties where the eligible recipient can demonstrate ownership or control at Minnesota Housing’s sole discretion.

Program funds are for the following purposes to support the preservation of NOAH:

• Acquisition costs: Includes costs related to the purpose of acquisition, such as title, survey, legal fees, and other fees related to acquisition financing
• Rehabilitation: Includes costs related to the purpose of rehabilitation such as:
  • Architecture and design costs, general contractor costs, and permits
  • Environmental reviews and remediation, including lead-based paint, asbestos, and radon mitigation
  • Closing costs, including legal, title, survey, and loan fees
  • Temporary relocation expenses incurred as a result of the rehabilitation
  • Reasonable developer fees in accordance with the applicable underwriting standards; refer to section 4.04 of the NOAH Multifamily Program Guide for more information
  • Capitalizing replacement reserves in accordance with the applicable underwriting standards; refer to section 4.04 of the NOAH Multifamily Program Guide for more information
• Interest rate reduction subject to Minnesota Housing review

Minnesota Housing may approve, at its sole discretion, additional uses and reasonable expenses that support the purposes of acquisition, rehabilitation, and interest rate reduction.