Item Description:
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2026 AHIF funding recommendations - Neg 2 award modifications and 7 2026 award agreements, 05/12/26-05/12/81, total combined NTE $5,852,411; supp app to 2026 HCHRA budget
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Resolution:
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BE IT RESOLVED, that the unexpended amount of $75,000 from 2021 AHIF award (Resolution 21-HCHRA-0016) to the City of Plymouth HRA for the Valor Place project (Agreement PR00003348), be reallocated for distribution under the 2026 Hennepin County Housing and Redevelopment Authority (HCHRA) budget as described herein; that a budget authority transfer from HRA: AHIF 2019-2023 Project 1006757 to HRA: AHIF 2026 Project 1012017 in the amount of $75,000, be authorized; and that the Controller be authorized to disburse funds as directed; and
BE IT FURTHER RESOLVED, that the 2024 AHIF award (Resolution 24-HCHRA-0015) to Matrix Development LLC for the Logan Avenue Senior project (Agreement PR00006155), in the amount not to exceed $323,223, be rescinded and reallocated for distribution under the 2026 HCHRA budget as described herein; that a budget authority transfer from HRA: AHIF 2024 Project 1010428 to HRA: AHIF 2026 Project 1012017 in the amount of $323,223, be authorized; and that the Controller be authorized to disburse funds as directed; and
BE IT FURTHER RESOLVED, that repayment proceeds in the amount of $454,188 from Velair Development Company, formerly known as MWF, for the 2006 AHIF project Washington Court (Agreement A061361, Resolution 06-HCHRA-09), be received and reallocated for distribution under the 2026 HCHRA budget as described herein; that a supplemental appropriation to HRA: AHIF 2026 Project 1012017 in the amount of $454,188 be authorized; and that the Controller be authorized to accept and disburse funds as directed; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to negotiate the following Agreements during the period May 12, 2026 through May 12, 2081:
• PR00008411 with Clare Housing, or affiliated entity, for the Clare 5 project, with a not to exceed amount of $820,000;
• PR00008408 with Minneapolis Public Housing Authority, or affiliated entity, for the Missing Middle project, with a not to exceed amount of $500,000;
• PR00008406 with Alliance Housing, or affiliated entity, for the St. Paul’s Home project, with a not to exceed amount of $708,223;
• PR00008405 with Alliance Housing, or affiliated entity, for the Hiawatha Commons project, with a not to exceed amount of $1,650,000;
• PR00008400 with Matrix Development LLC, or affiliated entity, for the Senior Flats on Logan project, with a not to exceed amount of $520,000;
• PR00008396 with Trellis Co., or affiliated entity, for the Flour Exchange project, with a not to exceed amount of $760,000;
• PR00008390 with Bloomington Southview, LP and Sand Companies, or affiliated entity, for the Southview Estates project, with a not to exceed amount of $320,000; and
that following review and approval by the County Attorney's Office, the Chair be authorized to sign the agreements and related documents on behalf of the authority; and that the Controller be authorized to disburse funds as directed; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to negotiate a modification to the 2024 AHIF award (Resolution 24-HCHRA-0015) with Building Blocks Inc. and United Properties, or an affiliated entity, for the Upper Harbor Terminal project (Agreement PR00006153), assigning the role of United Properties to Trellis Co., with no change to the role of Building Blocks Inc as co-developer, no change to the contract period from May 7, 2024 to May 6, 2079, and no change to the not exceed amount of $1,000,000; 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; and that the Controller be authorized to disburse funds as directed; and
BE IT FURTHER RESOLVED, that the Executive Director be authorized to negotiate modification to the 2025 AHIF award (Resolution 25-HCHRA-0013) with Solhem Development, LLC, or affiliated entity, for the 1345 Central project (Agreement PR00007240), extending the contract period end date from May 12, 2080 to May 12, 2081, and increasing the not to exceed amount by $574,188 for a new total not to exceed amount of $1,470,188; 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; and that the Controller be authorized to disburse funds as directed.
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Background:
The Affordable Housing Incentive Fund (AHIF) Program was created by the Hennepin County Housing and Redevelopment Authority (HCHRA) Board of Commissioners (Resolution 08-HCHRA-00) to work with municipalities, other government and nonprofit agencies, private and nonprofit developers, and other lenders to encourage the preservation and development of affordable housing opportunities throughout Hennepin County.
A Coordinated Affordable Housing Development request for proposals (RFP) which included AHIF, Local Affordable Housing Aid (LAHA), Supportive Housing Strategy, Homeownership Assistance Fund, and federal HOME Investment Partnerships (HOME) and Community Development Block Grant (CDBG) funds was released in December 2025. The RFP garnered 36 qualified multifamily rental applications requesting approximately $37.9 million. Proposals were reviewed by Housing and Economic Development and Health and Human Services staff for consistency with Hennepin County priorities. Proposals were then reviewed and ranked by a multiagency panel.
AHIF funding is typically provided in the form of a 30- to 50-year deferred loan. Loan documents include a loan agreement, promissory note, mortgage, and declaration of covenants and restrictions. In addition, at the project’s financial closing and during the term of the loan, the HCHRA may be asked to sign various related documents and amendments, including subordination agreements and disbursement agreements.
Since 2000, including these recommended 2026 awards, the AHIF Program has leveraged over $2.4 billion dollars in additional (non-Hennepin) investment to assist the development and/or preservation of nearly 12,000 affordable housing units in Hennepin County.
Recommended Project Awards:
Clare 5 - PR00008411 - Clare Housing - $820,000
1900 Monroe Street Northeast (and adjacent), Minneapolis; construction of 33 affordable rental units for seniors (25 units affordable and restricted to households 30% AMI and below; 8 units at or below 50% AMI; 10 units for people exiting homelessness; 15 units with rental assistance; 18 units with housing support)
Missing Middle - PR00008408 - Minneapolis Public Housing Authority - $500,000
Scattered sites in South Minneapolis; construction of 25 affordable rental units for large families (18 units affordable and restricted to households 30% AMI and below; 7 units at or below 50% AMI)
St. Paul’s Home - PR00008406 - Alliance Housing, Inc - $708,223
2735 15th Avenue South, Minneapolis; preservation of 53 affordable rental units for seniors (16 units affordable and restricted to households 30% AMI and below; 4 units at or below 50% AMI; 53 units with rental assistance)
Hiawatha Commons - PR00008405 - Alliance Housing, Inc - $1,650,000
2740 Minnehaha Avenue South, Minneapolis; preservation of 69 affordable rental units out of 80 units total (48 units affordable and restricted to households 30% AMI and below; 24 units with rental assistance)
Senior Flats on Logan - PR00008400 - Matrix Development LLC - $520,000
529 and 535 Logan Avenue North, Minneapolis; construction of 48 affordable rental units for seniors (12 units affordable and restricted to households 30% AMI and below; 36 units at or below 50% AMI; 8 units for people exiting homelessness; 8 units with housing support)
Flour Exchange - PR00008396 - Trellis Co. - $760,000
310 Fourth Avenue South, Minneapolis; construction of 84 affordable rental units out of 110 units total (33 units affordable and restricted to households 30% AMI and below; 51 units at or below 50% AMI; 8 units for people exiting homelessness; 15 units with rental assistance; 8 units with housing support; 17 units for large families)
Southview Estates - PR00008390 - Bloomington Southview, LP and Sand Companies - $320,000
8901 Aldrich Avenue South, Bloomington; preservation of 47 affordable rental units (13 units affordable and restricted to households 30% AMI and below; 21 units at or below 50% AMI; 4 units for people exiting homelessness; 4 units with housing support, 9 units for large families)
2025 AHIF Project Award Modification:
1345 Central - PR00007240 - Solhem Development, LLC - $574,188 (for a new NTE of 1,470,188)
1345 Central Avenue Northeast, Minneapolis; construction of 64 affordable rental units (16 units affordable and restricted to households 30% AMI and below; 48 units at or below 50% AMI; 16 units with rental assistance; 14 units for large families)
Attachment A provides further details on the 8 projects recommended for funding.
Current Request: This request is for authorization to negotiate of two award modifications and seven implementation agreements with a combined total not to exceed amount of $5,852,411 under the 2026 AHIF Program.
Impact/Outcomes: Eight projects will assist a total of 356 affordable housing units in Hennepin County; projects will include 181 units for households with incomes at or below 30 percent of AMI, 175 units for households with incomes at or below 50 percent of AMI, 30 units designated and reserved for people experiencing homelessness, 134 senior set aside units, and 65 units for large families.
Housing Disparity Domain: Households of color are disproportionately housing-cost-burdened, and experience housing instability, including homelessness, at disproportionate rates. This request creates housing opportunities for individuals with incomes at or below 30 percent and 50 percent of AMI, and creates units specifically reserved for people experiencing homelessness.
recommendation
Recommendation from County Administrator: Recommend Approval