Authored by Laura Proescholdt, Minnesota Housing Partnership, and reprinted with permission
MMCDC Note: This story has been updated to correct the maximum loan amount to $8,000.
Say you work at a school in Becker County, Minnesota. A single parent, there’s nothing you’d love more than to own a home and provide a stable place for your daughter to grow up. But for years, homeownership has felt out of reach despite working full time.
A new program may help you achieve your goal of homeownership: Home Ownership for Me (HOMe). Administered by Midwest Minnesota Community Development Corporation, the program provides zero-interest down payment loans to qualifying individuals and families who work in Becker County and want to live there, too. Payments on the loan are deferred until the home is sold or the term of the first mortgage is complete. The program is a “revolving fund” because funds used to repay the loan are returned to the loan pool to help another family secure a home later on.
A team of local leaders advanced the idea for the HOMe program through MHP’s Housing Institute, an 18-month program that provides capacity building to three teams as they pursue a project that positively impacts affordable housing in their respective regions.
Karen Pifher, West Community Health Program Manager at Essentia Health was one of the Housing Institute team members who worked to develop the program. “I hope that people who are in that low- to mid-income range who have never thought that homeownership is something they can experience are able to realize that dream through this program,” Pifher says.
HOMe provides loans up to $8,000 for households earning up to 80 percent of Area Median Income (AMI). Households earning up to 115 percent of State Median Income can secure a loan up to $5,500. These figures are adjusted to account for household size. For reference, 80 percent AMI for a household of four is $55,600 and 115 percent SMI for the same household size is $96,830.
Working at Essentia Health, Pifher sees the many ways in which a safe, affordable home impacts the community. “One of the things we know is that housing — affordable, stable housing — has a huge impact on health across the lifespan,” Pifher explains.
Part of Pifher’s work is to carry out a regular health assessment for the county. “The previous and current health assessment revealed that affordable housing is a top concern of people here,” Pifher explains. “We know that housing is one of the social determinants of health, so this issue is extremely important to us because healthcare interventions are not successful without safe and stable housing.”
Local employers see the need for affordable housing for staff, and they’re taking action by contributing to the program. Several employers, including Essentia Health, BTD manufacturing, and Arvig have committed funding. Becker County and the cities of Frazee and Detroit Lakes have, as well.
Denise Anderson, Frazee City Administrator (center), meets with a potential funder at a Housing Institute in 2018 with the guidance of former MHP Community Development Manager Luis Pereira (right).
Carrie Johnston, a member of the Housing Institute team, often hears about employers struggling to fill positions due lack of affordable housing as President of the Detroit Lakes Regional Chamber of Commerce. “I know businesses who have tried to recruit employees, but struggle because people can’t find an affordable place to live in our community.”
Pifher sees that too at Essentia Health. “Our recruiters identify childcare and housing as two major barriers to filling essential roles such as Certified Nursing Assistants and front desk professionals. It’s hard to hire for these positions because they can’t find an affordable home in our area.”
Detroit Lakes is a growing community, and the lack of affordable housing puts that growth at risk. “We are an economic center for the County,” Johnston explains. “Our school district has grown 10 percent a year for the past couple of years. Our community has convened for a couple of work sessions on workforce issues and community needs. Our shortage of housing affordable to working people with low and moderate incomes continues to rise to the top as a pressing issue.”
Denise Anderson, City Administrator for the nearby community of Frazee, was another member of the Housing Institute team. She says the Housing Institute process helped the group successfully create the HOMe initiative. “The process was so enlightening,” Anderson says. “It brings together people who are dedicated and interested in housing in their area. It opens your eyes to the pressing needs in communities across our state. Once you see that and you start working with other people who are energetic, it’s amazing what you can accomplish.”
The Becker County team plans to continue meeting to implement more solutions for housing in their community.