To “Preserve the Homes We Have” in Minnesota, Greater Minnesota Housing Fund (GMHF) partnered with a new developer and the City of Hutchinson for preservation of 39 Naturally Occurring Affordable Housing (NOAH) rental homes. 907 Dale Street Apartments is a 39-unit three-building project built in 1974.
The project was in dire need of upgrades to remain viable in the market. But with the current lack of existing affordable homes, it was important that a preservation-minded owner maintain affordable rents for Hutchinson’s households. That preservation-minded company is Forest Lake-based development team, LOTI Holdings, that has held the property since 2015, and only in the last year, has been able to begin work.
With rents at naturally affordable levels, 907 Dale Street was an opportunity for the City of Hutchinson and Greater Minnesota Housing Fund (GMHF) to provide financing that would allow for the rents to remain affordable for the long-term, and to complete the much-needed rehabilitation of the property.
GMHF provided permanent financing with affordability requirements that will be in effect for a minimum of 10 years. GMHF will require at least 30 of the units to be affordable to households under 80% median income levels, and of those units, 16 must be affordable to households earning 60% median income. Funds from the City of Hutchinson were awarded under the Small Cities Development Program (SCDP) and will require 51% of the units to be restricted to households below 80% median income and with rents below HUD’s fair market rents.
This is LOTI Holdings’ first foray into the affordable housing arena, and it is hoped that the success of this project will spur interest for other similar NOAH projects across Minnesota.
For more information contact Catherine McCarthy, Director of Capital Development at Greater Minnesota Housing Fund, cmccarthy@gmhf.com.
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