Minnesota Housing releases draft affordable housing plan

Minnesota Housing’s recently released its Draft Affordable Housing Plan after the Thursday board meeting and comments are due by September 12 at noon. It is anticipated that the CGMC will provide public comments to the Plan. The draft Plan outlines the Agency’s goals and direction for the allocation of the $3.66 billion in state and federal resources that will be under Minnesota Housing’s authority in 2026-2027. The Plan’s areas of focus for 2026-2027 include:

• Sustain current core work
• Create a more effective housing system, including making programs more accessible and easier to use. A couple of notable plans within this area of focus are:
  • The Agency is creating a new homebuying program to provide financing to buyers who are interest averse.
  • The Agency has hired a Continuous Improvement Manager within the Operations Department to use human-centered design to train Agency staff to deliver better and more solutions-based services to clients.
• Continue to incorporate the voice and expertise of community and people with lived experience into Minnesota Housing’s work
• Address climate change:
  • The Agency expects to update the Single-Family Overlay and Guide to Enterprise Green Communities and, starting in 2026, will require it to be used when developing properties funded through the Challenge Fund, Housing Infrastructure resources, and the Workforce and Affordable Homeownership program.
  • In 2027, the Agency will be updating the Multifamily Overlay and Guide to Enterprise Green Communities and requiring it to be used when developing properties funded through the Consolidated RFP.

Housing Needs for 2026-2027

• Minnesota Housing states that there is a 65,000-unit shortage of housing.
• Higher interest rates are cited as pricing many potential homebuyers out of the market.
• The Plan also flags housing units that are in need of rehabilitation as a key concern, but the Plan does not cite any data about that need, just states “hundreds of thousands of units.”
• The Plan cites increased federal funding uncertainty with significant HUD layoffs but more LIHTC 9% allocations and a lower bond threshold for LIHTC 4% bonds. Minnesota Housing predicts these changes on balance will make it more challenging to tackle Minnesota’s housing problems.
• Minnesota Housing also shared that higher interest rates have impacted their discretionary lending program and their proposed changes to address those impacts include:
  • Reducing maximum loan amounts for downpayment and closing-cost assistance
  • Restricting eligibility for home improvement loans by reducing the maximum income allowed to qualify for a loan
  • Pausing zero-interest Agency lending resources
  • Pausing lending for manufactured home parks to become community owned

Additional Funding Notes for 2026-2027

• The State Housing Tax Credit program is flagged in the Plan as having been very popular. The Agency is now estimating that, if the program is fully subscribed, it can provide a maximum overall contribution of $11.6 million annually and would assist in the development of roughly 580 housing units. Note that this program does not receive state appropriations and relies entirely on contributions.

For questions about housing programs, please contact GMNP Executive Director Darielle Dannen at darielle@gmnp.org.