Housing Finance Resources
The CDA is committed to assisting in the financing of affordable rental housing for low to moderate income households. The CDA will consider assisting in the development, acquisition and substantial rehabilitation or acquisition and preservation of multifamily rental housing facilities using qualified residential rental bonds, qualified 501(c)(3) bonds, refunding bonds, low income housing tax credits, tax increment financing, and Housing Opportunities Enhancement (HOPE) funds.
Housing Finance Policy
The CDA’s Housing Finance Policy contains additional information and resources for financing affordable housing in Dakota County.
CDA Utility Allowance Schedule*
*The utility allowance is subject to change.
Housing Opportunities Enhancement Program (HOPE)
Since 2001, Dakota County has been providing gap financing to 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 homeownerships opportunities for households at or below 80% of area median income.
Eligible uses for HOPE funds include:
- New construction
- Indirect or Direct Assistance with Homeownership Opportunities
Please note: individuals are not eligible to apply for HOPE Funds. This program is designed to fund developments.
For more information on the HOPE program or application questions, please refer to the CDA Housing Finance Policy or contact the Housing Finance Program Coordinator at 651-675-4488.
As the Loan Agreement outlines, current and past HOPE recipients are required each year to submit:
- Use Certification
- Income & Rent Certification
- Income & Rent Report or HTC-13 specifying the HOPE funded units
Low Income Housing Tax Credits
The CDA is an allocating agency for Low Income Housing Tax Credits (LIHTC) in Dakota County. The tax credits are allocated to developments on a competitive basis, depending on guidelines and selection criteria set forth in the Qualified Action Plan.
Once the tax credits are allocated, they are sold to an investor to generate equity for construction. The investor then becomes the 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:
- 20/50 test – A minimum of 20% of its units are both rent restricted and occupied by households with incomes at or below 50% of area median income, or
- 40/60 test – A minimum of 40% of its units are both rent restricted and occupied by households with incomes at or below 60% of area median income, or
- Average income test – A minimum set-aside when at least 40% of its units are both rent restricted and occupied by households whose income does not exceed the overall imputed average of 60% of area median income.
The households pay a maximum of 30% of their income towards rent as determined by the Department of Housing and Urban Development (HUD).
Applications for Low Income Housing Tax Credits are due in July of each year. Application materials will be posted on this webpage when they are available.
Qualified Allocation Plan
The CDA is required to develop and adopt a Qualified Allocation Plan in connection with the allocation of tax credits that identifies selection criteria that is appropriate for local conditions, the CDA’s priorities in allocating tax credits to housing projects and provides procedures for the CDA to follow in monitoring compliance.
The CDA will accept applications in Round 1 in accordance with the 2023 Qualified Allocation Plan and the Procedural Manual. Round 1 applicants must submit a completed CDA Notice of Intent to Apply form no later than May 19, 2022. The closing date for receipt of applications for Round 1 is scheduled for July 14, 2022.
- March 22, 2022: Dakota County CDA Board meeting to hold a public hearing on the adoption of the 2023 QAP and to adopt the 2023 QAP
- Late March 2022: Final 2023 QAP, 2023 Procedural Manual and Notice of Intent to Apply available
- Thursday, May 19, 2022 by 4:30 pm: Notice of Intent to Apply due – required for all eligible 2023 Tax Credit applications
- Thursday, July 14, 2022 by 4:30 pm: 2023 Tax Credit applications due
The past three years of the CDA’s Qualified Allocation Plan and Procedural Manual can be referenced below.
For more information, please refer to the CDA’s Qualified Allocation Plan or contact the Housing Finance Program Coordinator at 651-675-4478.
Multifamily Housing Revenue Bonds
501(c)(3) Bonds for Residential 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 nonprofit 501(c)(3) organization, but only if the housing is within the mission of the charitable organization. More information on these bonds can be found in the CDA’s Housing Finance Policy.
Qualified Residential Rental Revenue Bonds
The CDA receives an entitlement allocation of private activity bonding authority from the State of Minnesota each year.
The tax exempt bond benefits include:
- Low interest rates
- The ability to finance projects owned by private for profit entities
- An allocation of low-income housing tax credits to eligible projects
Developments financed with these bonds are required to have:
- A minimum of 20% of its units occupied by households with incomes at or below 50% of area median income, or
- A minimum of 40% of its units occupied by households with incomes at or below 60% of area median income.
The households would then pay a maximum of 30% of their income towards rent as determined by the Department of Housing and Urban Development (HUD).
Tax Increment Financing (TIF)
Tax Increment Financing (TIF) is used to promote:
- Affordable Housing
- Renewal & Renovation
TIF is a tool that can be used to “capture” the property taxes generated by new development or redevelopment and use it to pay a portion of the development costs. All CDA TIF Districts must be approved by the Dakota County Board of Commissioners, following a public hearing where comments are welcome from the public.
More information about Tax Increment Financing (TIF) can be found in the CDA’s Housing Finance Policy.
Home Investment Partnership Program (HOME)
The Home Investment Partnership (HOME) Program is a flexible federal grant program that allows participating jurisdictions to decide how funds will be used to provide affordable housing for people at or below 80 percent of median income.
HOME funds can be used for a variety of activities, such as:
- New construction of affordable units
- Rehabilitation of owner and rental properties
- Homebuyer assistance
- Rent assistance
A consortium – including Dakota, Anoka, Ramsey and Washington counties and the city of Woodbury – was established to receive HOME funds. Dakota County is the lead county of the consortium and the Dakota County CDA is responsible for administering, monitoring and conducting activities on behalf of the program.
For more information on the HOME Program, contact the Community Development Coordinator at 651-675-4468.