Item Description:
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Neg Agmt with MN Housing Finance Agency for the MN Cities Participation Program, 01/01/27-12/31/27 (no county cost)
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Resolution:
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BE IT RESOLVED, that the Executive Director be authorized to negotiate an Agreement with the Minnesota Housing Finance Agency for the Minnesota Cities Participation Program to support first-time homebuyer loans in suburban Hennepin County during the period January 1, 2027 through December 31, 2027; and that following review and approval by the County Attorney's Office, the Chair be authorized to sign the agreement and related documents on behalf of the Authority.
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Background:
The Hennepin County Housing and Redevelopment Authority (HCHRA) has participated in the Minnesota Cities Participation Program (MCPP) since 1997. Through the MCPP, the Minnesota Housing Finance Agency (Minnesota Housing) sells mortgage revenue bonds on behalf of city and county housing and redevelopment authorities, port authorities and economic redevelopment authorities (with the exception of those that receive separate entitlement of bonding authority; i.e., City of Minneapolis); the proceeds of these bonds provide below-market interest rate home mortgage loans for low and moderate income first-time homebuyers.
Per state statute, Minnesota Housing uses a population-based formula to determine the HCHRA’s estimated allocation. Participating private mortgage lenders originate home mortgage loans, which Minnesota Housing buys in accordance with the Minnesota Housing Mortgage Program Procedural Manual. MCPP mortgages must meet the requirements of standard mortgage insuring and guaranteeing entities, mortgage industry accepted underwriting standards, and state and federal law governing mortgages provided through the issuance of mortgage revenue bonds.
Borrower household income limits may not exceed certain income limits (currently $131,500 for a one-two person household or $151,200 for a 3+ person household). Maximum purchase price for a property is currently set at $515,200.
Minnesota Housing provides marketing support in the form of first-time homebuyer brochures and inserts, press releases and advertising templates. Minnesota Housing absorbs all program underwriting costs and risks of bond issuance. HCHRA staff time is primarily limited to completing the application and monitoring fund usage.
In 2026, Minnesota Housing’s MCPP formula allocation calculation for HCHRA was $16,924,818; However, as of October 31, 2026, suburban households have utilized $61,486,116 from the mortgage fund pool. Some details of Hennepin County usage since October 31, 2025:
• 233 households purchased their first home in suburban Hennepin County
• The average loan amount was $263,889
• 87% of the recipients received approximately $4.6 million in downpayment and closing cost loans to accompany the first mortgages, averaging $22,904 each
Minnesota Housing estimates a similar amount of MCPP funding will be available for below-market interest mortgage funds for income eligible first-time homebuyers in suburban Hennepin County in 2027. In order for Hennepin County to participate in the MCPP, the HCHRA must enter into a commitment agreement with Minnesota Housing.
Current Request: This request seeks authorization to negotiate an agreement with the Minnesota Housing Finance Agency to participate in the Minnesota Cities Participation Program from January 1, 2027 through December 31, 2027.
Impact/Outcomes: Approximately 275 Hennepin County first-time homebuyer households will receive below-interest mortgages through Minnesota Cities Participation Program in 2027.
This request funds services that are: core services
recommendation
Recommendation from County Administrator: Recommend Approval