Minnesota Housing Finance Agency rehabilitation loans

How it works

Section 462A.05, subdivision 14 authorizes the Minnesota Housing Finance Agency to make or participate in rehabilitation loans for persons and families of low and moderate income and for owners of existing residential housing occupied by those persons and families. The loans are for rehabilitation of existing residential housing owned by the borrower.

What the money covers

Rehabilitation may include the addition or rehabilitation of a detached accessory dwelling unit. The statute says the loan must be used primarily for one or more of the following:

• making the housing more desirable to live in,
• increasing market value,
• complying with state, county, or municipal building, housing maintenance, fire, health, or similar codes and standards, or
• accomplishing energy conservation, decarbonization, climate resiliency, and other qualified projects.

The statute also says owner-occupied rehabilitation loans cannot be denied solely because the work will not bring the property into full compliance with all applicable codes and standards.

Amounts and terms

The loan amount may not exceed the lesser of:

• the agency’s maximum loan amount under its rules, not to exceed $37,500,
• the actual cost of the work performed, or
• the portion of the rehab cost the agency determines cannot otherwise be paid without an unreasonable share of income.

Loans made with federal funds may exceed the maximum loan amount as needed to satisfy federal lead abatement requirements.

The agency determines repayment terms and security, and loans may be with or without interest or periodic payments.

Additional options

The statute allows these loans to be combined with long-term mortgage loans, and it also allows refinancing of existing indebtedness when needed to make housing costs affordable for the owner.

Important note

This is broad housing rehab authority. The statute does not provide a separate wildfire-only allocation or a public deadline in the text captured here.