The CDA has several financing tools available to assist in the
development and preservation of affordable housing.
Housing Opportunities Enhancement (HOPE) Program
Low Income Housing Tax Credits
Multifamily Housing Revenue Bonds
Tax Increment Financing
Home Investment Partnership Program (HOME)
Dakota County created the HOPE Program in 2001 to provide a local source of gap financing
to encourage and assist in the development and preservation of affordable
housing throughout the County. Funding
is provided in the form of a deferred loan, and requires a 2:1
match of other public or private funding sources. HOPE funds must be used to provide rental housing opportunities for
households at or below 50% of area median income or homeownership opportunities for households at or below 80% of area median income.
Eligible
uses of HOPE funds include new construction, acquisition, rehabilitation,
preservation, and indirect or direct assistance with homeownership
opportunities.
HOPE Funding Application (Word)
For more information about the HOPE Program, please refer to the
CDA Housing Finance Policy.
HOPE Program Receives National Award of Excellence (PDF)
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The CDA has been designated
as an allocating agency for Low Income Housing Tax Credits by the
state legislature. These tax credits are allocated to developments
on a competitive basis based on guidelines and selection criteria
set forth in the CDA’s Qualified Allocation
Plan. Once allocated, these tax credits are sold to an investor
to generate equity for construction. The investor becomes a limited
partner in the project and uses the tax credits to receive a reduction
in federal tax liability each year for 10 years.
Developments receiving low income tax credits must have a minimum
of either 20% of its units occupied by households with incomes at or below 50% of area median income or 40% of its units occupied
by occupied by households with incomes at or below 60% of area median income.
Maximum rents are set at 30% of applicable maximum income level, as determined by the U.S. Department of Housing and Urban Development.
Applications for Low Income Housing Tax Credits are due in June
of each year. Application files will be posted on this webpage
when they are available. For more information about Low Income
Housing Tax Credits, please refer to the CDA
Housing Finance Policy.
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501(c)(3) Bonds for Residential Rental Housing
The CDA has the authority to issue tax exempt housing revenue bonds to finance the acquisition, rehabilitation and development of rental housing that is owned by a non-profit 501(c)(3) organization, if the provision of such housing is within the mission of the charitable organization.
For more information about 501(c)(3) Bonds, please refer to the CDA Housing Finance Policy.
Multifamily Housing Revenue Bond Application (Word document)
Qualified Residential Rental Revenue Bonds
The CDA receives
an annual entitlement allocation of private activity bonding authority
from the State of Minnesota. Benefits of these tax-exempt bonds
include lower interest rates, the ability to finance projects owned
by private for-profit entities and an allocation of low-income
housing tax credits to eligible projects.
Developments financed with these bonds must have either a minimum of
either 20% of its units occupied by households with incomes at or below 50% of area median income or 40% of its units occupied
by occupied by households with incomes at or below 60% of area median income.
Maximum rents are set at 30% of applicable maximum income level, as determined by the U.S. Department of Housing and Urban Development.
For more information about Qualified Residential Rental Revenue
Bonds, please refer to the CDA Housing
Finance Policy.
Multifamily Housing Revenue Bond Application (Word)
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Tax Increment Financing (TIF)
is used to promote economic development, housing, redevelopment,
renewal and renovation in areas where it would otherwise not occur.
TIF is a mechanism whereby an authority can “capture” the
property taxes generated by new development or redevelopment and
use it to pay a portion of the cost of development.
Developments financed with TIF must meet the income and rent requirements of the low income housing
tax credit program. All CDA TIF districts
must be approved by the Dakota County Board of Commissioners, following
a public hearing.
For more information about Tax Increment Financing, please refer
to the CDA Housing
Finance Policy.
Tax Increment Financing Application (Word)
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The HOME Program is a flexible federal grant program that gives
participating jurisdictions the ability to decide how the funds
will be used to provide affordable housing for persons at or below
80 percent of median income. Eligible activities under HOME include
new construction of affordable units, rehabilitation of owner and
rental properties, homebuyer assistance, rent assistance and acquisition.
For more information about the HOME Program, contact Stephanie
Newburg at (651) 675-4466.
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