Twin Cities Habitat for Humanity and Minnesota Housing have entered into a ten-year, $25 million agreement that Habitat said is its second largest low-interest financing ever, and which will help it increase affordable housing production in an increasingly expensive market.
The partnership with Minnesota Housing gives Twin Cities Habitat access to a flexible, low-cost credit line, allowing Habitat to respond to land-and-property acquisition opportunities in a tight housing market.
The financing with the state agency was negotiated over several months by long-time Habitat CEO Susan Haigh, who retired earlier this month.
In the fiscal year that ends June 30, Habitat will have helped 93 families achieve homeownership through its new-construction, rehab and low-cost financing programs, including homebuyer education. That number is expected to grow to 110 households next year.
Roughly 90 percent of Twin Cities Habitat homebuyers are minority households, who tend to be disproportionately lower income. That compares to only 13 percent of Minnesota homebuyers who used conventional mortgages in 2017.
“This partnership provides an essential ingredient for the [Habitat] Impact 2020 plan to double the number of households that Twin Cities Habitat can serve each year,” said Housing Commissioner Mary Tingerthal, “This is an important part of Minnesota Housing’s strategy to extend more homeownership opportunities to households of color and close Minnesota’s homeownership gap.”
Last month Minnesota Housing had the highest first mortgage production ever at more than $110 million, which created homeownership opportunities for 616 households statewide, more than a third of which were households of color.
Impact 2020 was catalyzed by a landmark partnership with Bremer Bank, which committed to buy Twin Cities Habitat’s mortgages at a below-market rate. The partnership is valued at more than $98 million.
“I’m thrilled by the vision and foresight of Susan Haigh and Commissioner Tingerthal,” said Chris Coleman, the former St. Paul mayor who is Habitat’s new CEO. “The line of credit from Minnesota Housing, paired with financial commitments from Bremer and generous Twin Cities Habitat donors, will help multiply the impact, so hundreds more families will have the opportunity to purchase a home of their own.”
Previously, Habitat partnered with an average of 50 families per year on homeownership.