Greater MN Housing Fund provided a construction loan for Park Place Apartments, a supportive housing development in Bemidji, Minn. Opened in October 2017, it includes 60 units for formerly homeless adults and serves individuals working hard to overcome addiction issues.
Investment
$5 million 10-year loan at 2%; originated in 2009
Rationale
Capital to ease the foreclosure crisis in greater Minnesota and for other high priority areas of affordable housing. Affordable housing is the building block of a successful statewide economy.
Returns
Financial Returns: The loan is on track for success. It repaid its first principal in 2016.
Social Impact: Starting in 2009, Greater Minnesota Housing Fund acquired and rehabbed 230 foreclosed houses. The properties were improved and re-sold as fresh, affordable homes to moderate-income families, helping to stabilize hard-hit communities beyond our metro. The organization has also used McKnight capital to grow; it now manages a $55 million affordable housing loan fund for projects statewide.
| Metrics | 2016 |
| Multifamily units preserved or constructed through revolving loan | 438 |
| Single family units preserved or constructed through revolving loan | 55 |
| Multi- and single family loans | $15.5m |
Lessons Learned
Given affordable rental housing demand exceeds the supply of rent-subsidized properties, Greater Minnesota Housing Fund is financing, rehabilitating, and preserving “naturally occurring” (i.e. non-subsidized) affordable housing. This economically challenging work provides tremendous promise and learning for foundation staff and housing advocates.
As of November 2017
Photo Credits: Greater Minnesota Housing Fund
Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.