MMCDC receives $532,500 from NeighborWorks
Midwest Minnesota Community Development Corporation, a member of the NeighborWorks network, is receiving $532,500 in flexible grants from the Neighborhood Reinvestment Corporation, dba NeighborWorks America.  This grant will support its affordable housing and community development activities.   “The availability of affordable housing – housing that a family can fit in their budget – is one of the most important issues for families,” Sen. Amy Klobuchar said in a press release issued jointly this spring with Sen. Tina Smith. “NeighborWorks grants will help communities across Minnesota build and maintain reliable, affordable housing options for residents, and provide relief to Minnesotans who are still facing higher housing costs than they can handle.”   “Research has shown that a lack of an affordable, stable place to live makes it harder to find employment, maintain financial stability, succeed in school, and sustain healthy living,” Smith said. “The NeighborWorks grants are so important because they are investments in local organizations that work on the front lines every single day to provide affordable housing to those who need it.”   NeighborWorks America is announcing $70 million in grants to its network of nearly 250 nonprofit organizations located around the country, including several in Minnesota.NeighborWorks organizations will use the grants to develop and manage high-quality affordable housing, help consumers set and reach their goals through financial coaching, offer homeownership education and counseling, and revitalize and strengthen communities.   In fiscal year 2018, the NeighborWorks network provided 457,000 housing and counseling services; owned and managed 166,900 rental homes; and created more than 41,100 jobs.   MMCDC is a leading private nonprofit company providing commercial and home mortgage lending, as well as housing, business and community development services throughout Minnesota and the Midwest. Its board of directors is drawn from its Special Impact Area, which includes Becker, Mahnomen, Hubbard, Clearwater, Red Lake, Pennington and Eastern Polk counties, including the White Earth Reservation.    For more information about NeighborWorks America go to NeighborWorks.org.
DL Housing Team kicks off new down-payment program

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.

Home warranties help homeowners safeguard against the unexpected

By Marietta Rodriguez, President & CEO, NeighborWorks America

Posted with permission of NeighborWorks America. For more information, visit www.nw.org.

Marietta Rodriguez, President & CEO, NeighborWorks America

Homeownership remains a strong aspiration for many people and remains a primary mode for wealth building for most Americans. Among the many decisions homebuyers have to make is if purchasing a home warranty makes financial sense. Weighing all the costs of homeownership can be daunting for any homebuyer, but particularly for low- to moderate-income families that are first-time buyers and learning about getting their finances in check to afford their first home (pre- and post-purchase) and counting every penny. It’s hard to know whether a home warranty is a justifiable expense. 

NeighborWorks America wants to ensure that people have the proper tools and resources so they are informed consumers from the moment they consider owning a home, and its network provides housing counselors who can educate consumers from the start of the process to the finish. 

When a person purchases a home, they often will be offered a home warranty. A home warranty is not to be confused with homeowners insurance, which covers damage caused to the home by events like fires, theft and natural disasters. A home warranty is a service contract that covers the repair or replacement costs of home appliances such as a broken furnace or dishwasher. The seller may offer to purchase a home warranty on the buyer’s behalf to address any concerns they may have, or the buyer will likely receive mail solicitations once the sale closes. A consumer could also reach out to a company to purchase a home warranty after closing. 

A home warranty can provide the peace of mind a homeowner is looking for, but they must read the fine print carefully. Not all warranties are created equal and consumers want a home warranty service that best serves their needs. They need to understand the exclusions and limitations of the home warranties they research. Some home warranty companies have overall limits, where they’ll only pay a certain dollar amount out for each repair in the home. Once that limit is hit, all of the repairs and replacements come out of your budget. Others place dollar amount limits on certain items, so the homeowner pays the rest. Some home warranty companies will also allow you to receive a cash-in-lieu option, where you simply get what the home warranty company would have paid to replace the system or appliance. Pay attention to lower-priced home warranty companies because they likely have significantly less coverage and higher limits than their higher cost counterparts.

The local community development organizations in the NeighborWorks network have found ways to help homeowners decide whether a home warranty is right for them. NeighborWorks network organization Neighborhood Housing Services of the Inland Empire (NHSIE) (San Bernadino, California) has historically purchased a home warranty for all homebuyers who have bought a home from its Acquisition Rehab and Resale Program. The organization believes home warranties allow buyers to put their mind at ease when they move into a home, knowing that any repair and replacement of many major systems or appliances that might breakdown due to normal wear and tear will be covered. In NHSIE’s Homes and Hammers post-purchase class, the instructors educate new homeowners about the benefits of a home warranty, what they might cover and how long they generally last, in addition to tips and resource for maintaining their home. 

Additionally, NeighborWorks Northeastern Pennsylvania (Scranton, Pennsylvania) highlights home warranties in its homebuyer education course and specifically when discussing what to look for in a home inspection. The organization advises the prospective buyer to ask if there has been any major work recently completed at the property (such as HVAC, plumbing, electrical, or on the roof) which may have work or materials that may be covered by a warranty; if so, they should check if the warranties are transferrable (and how). 

A home warranty typically covers most major components of large home systems, such as the HVAC (central heating ventilation air condition), hot water heaters, and plumbing. It may also cover regular appliances such as washers, dryers, refrigerators and stoves. When a covered repair is needed, consumers call their home warranty company. They can set up an appointment with a licensed service provider in their area that is covered by the plan. The consumer typically only pays the service call fee for a covered repair. 

Depending on the provider and location, a home warranty costs a few hundred dollars a year, paid up front (or in installments, if the warranty company offers a payment plan) for a policy that includes most major appliances and home systems. You can add on coverage for additional larger systems. Most home warranty terms are one year and in most cases are renewable. 

Weighing the pros and cons of purchasing a home warranty is an important step for homeowners. They need to closely read the terms and conditions of the agreement, as home warranties often include clauses addressing conditions under which coverage would be denied.

Marietta Rodriguez blog, 2/7/2019, www.nw.org

A home warranty has definite benefits. For a homeowner who doesn’t have emergency savings, a home warranty can protect them financially. Home warranties are also helpful for people who aren’t handy or don’t want to have to track down a contractor when a problem arises. Home warranties make sense for first-time homeowners, who may not be as familiar with how their new home’s systems work.

One major problem with a home warranty is that it will not cover items that have not been properly maintained. What is considered proper maintenance can be a significant gray area and causes many disagreements between home warranty companies and warranty holders. That’s why it’s important to read and be clear about what is covered by the warranty and what is not. When a homeowner purchases an existing home, it might come with older appliances that the previous owner may not have maintained. The manufacturer’s warranty that comes with appliances generally only covers replacement and repair for about a year.

Weighing the pros and cons of purchasing a home warranty is an important step for homeowners. They need to closely read the terms and conditions of the agreement, as home warranties often include clauses addressing conditions under which coverage would be denied. HUD-approved counselors are available at NeighborWorks organizations around the country to help consumers understand the paperwork. Making the homeownership leap is often stressful and understanding how to navigate additional budget items—like a home warranty—can reduce that burden. 

Border State, Minnesota National, Community Development and United Community Banks Top Partner List

Midwest Minnesota Community Development Corporation has announced its Top Lender Partners for 2018. These lenders have helped provide more home mortgage loans to date in 2018 than most of MMCDC’s 54 partners throughout Minnesota:

Border State Bank Minnesota National Bank Community Development Bank United Community Bank

“We enjoy working with the lenders from all of these offices,” said Kathy Misson, MMCDC Vice President, Mortgage Lending. “We usually get very favorable comments from their clients in our customer satisfaction survey due to the high quality of service they receive from their community lender as well as the valuable products we are providing. We are thankful for all of these offices and looking forward to 2019!”

Together, the above banks helped 77 customers purchase, remodel and refinance homes in small communities throughout Minnesota. Borrowers received conventional and home improvement loans as well as USDA Rural Housing Loans, which offer a low down-payment requirement and expanded qualifying ratios.

“We are pleased to partner with these trusted community banks to connect their clients with a wider range of home loan products, and assist the local banks in remaining competitive,” MMCDC President Julia Nelmark said.

MMCDC provides in-house underwriting to its bank partners, offering a shorter time to closing, and offers long-term, fixed-rate products. It has consistently ranked as one of the top 10 providers of USDA Rural Housing loans in Minnesota and received an Outstanding Housing Partner Award from the Minnesota USDA Office in 2016.

For more information contact Kathy Misson, 218-844-7015, kmisson@mmcdc.com, or Karen Larson, 218-844-7013, klarson@mmcdc.com. Or, go to www.mmcdc.com/mortgage-lending/.

MMCDC and WEII awarded $1.15 million

Midwest Minnesota Community Development Corporation has received a $600,000 federal grant award to support community economic development in South Dakota.

“Our award will support smaller organizations that foster affordable housing, small business sustainability and quality facilities for health care, education and more,” MMCDC President Julia Nelmark said.

The White Earth Investment Initiative, an MMCDC subsidiary, received $550,000. “Our Vice President of Lending, Audra Tonihka, will help meet demand for financing capital from Native-owned businesses in Hennepin, Dakota and adjacent counties in Minnesota,” said Kevin Shipley, CEO of White Earth Investment Initiative.

MMCDC and WEII were among 302 Community Development Financial Institutions (CDFIs) receiving awards. Funds will be available for up to three years.

“The FY 2018 CDFI Program and NACA awardees will provide vital financial services and lending to low-income communities nationwide,” said CDFI Fund Director Annie Donovan in a press release. “The awards will also benefit Native Communities, areas of persistent poverty, and individuals with disabilities.”

Previous awards have helped people with limited incomes achieve homeownership, often in partnership with small lenders across the state.

MMCDC’s overall vision is to help businesses and communities succeed by providing financing and development of affordable homes and apartments. Headquartered in Detroit Lakes, Minn., it is a nonprofit company lending and investing statewide and beyond, with a special focus on rural and underserved areas.

The White Earth Investment Initiative focuses on Native American communities in Minnesota and leads the company in community-based financial education and consumer lending.

MMCDC is a chartered member of NeighborWorks America. For more information on MMCDC or WEII, go to www.mmcdc.com. or www.weii.website.

Northwest Area Foundation's Video Shows Why Investors Bank on Native CDFIs

MMCDC’s subsidiary, White Earth Investment Initiative, is a Native CDFI. Video shared with permission.

US Treasury office video features MMCDC project financing

The Office of the Comptroller of the Currency is highlighting the transformation of the historic Ford Motor plant in Minneapolis in its new video. MMCDC provided $9.5 million in financing utilizing the federal New Markets Tax Credit. Hear MMCDC’s Julia Nelmark and others describe this major Minnesota redevelopment project as part of the video below.

 

 

30 Recommendations for Affordable Housing in Minnesota

(Edited for length and reprinted with permission)

More than 554,000 Minnesota households struggle to afford quality housing, a 58 percent increase since 2000

Governor Mark Dayton and members of the Governor’s Task Force on Housing have released its final report, recommending 30 action steps aimed at improving access to quality, affordable housing for Minnesotans and building a more vibrant, inclusive economic future for all Minnesotans.

“More than half-a-million Minnesotans are struggling to afford quality housing,” said Governor Dayton. “The strength of our communities and the success of our people depend on creating solutions to the many housing challenges facing Minnesota families. I am grateful to the members of this Task Force for their collaboration and hard work. The actions they have recommended offer a roadmap for connecting all Minnesotans to the safe, quality, affordable homes we need for a better Minnesota.”

30 Recommendations for Improving Access to Good, Affordable Housing

Following extensive discussion and analysis, the Task Force compiled its recommendations in a final report, More Places to Call Home: Investing in Minnesota’s Future. The report outlines how public, private, nonprofit, and neighborhood efforts can help ensure that good quality homes and strong communities remain the cornerstones of a prosperous Minnesota. In total, the report includes 30 recommendations, organized across these six goals that have the power to transform Minnesota’s housing landscape:

Commit to Homes as a Priority –Create a broader and stronger public commitment to the urgent need for more affordable homes for more Minnesotans. Preserve the Homes We Have –Keep the homes we already have, especially those that are most affordable. Build More Homes –Build 300,000 new homes by 2030, across all types, prices, and locations to stabilize prices and meet demand. Increase Home Stability –Assist twice as many people at risk of losing their homes because of rent increases, evictions, and heavy cost burdens. Link Homes and Services –Build stronger links between where we live and the services needed to live stable lives. Support and Strengthen Homeownership –Create pathways to sustainable homeownership, with a focus on removing barriers for households of color.

To read the Task Force’s recommendations in full, CLICK HERE.

Staff Member Earns Certificate

MMCDC’s Sarah Castro has earned a professional certificate in nonprofit management from the University of California-Riverside University Extension and Regional Access Project Foundation. The classes provided a summary of the governance, financial, and legal aspects of nonprofit administration.