Subdivision 1.

Purpose.

The purpose of this section is to help metropolitan local
governments to develop and preserve affordable housingnew text begin and supportive services for residentsnew text end
within their jurisdictions in order to keep families from losing housing and to help those
experiencing homelessness find housing.

Subd. 2.

Definitions.

new text begin (a) new text end For the purposes of this section, the following terms have the
meanings givendeleted text begin :deleted text end new text begin .
new text end

deleted text begin (1)deleted text end new text begin (b)new text end "City distribution factor" means the number of households in a tier I city that are
cost-burdened divided by the total number of households that are cost-burdened in tier I
cities. The number of cost-burdened households shall be determined using the most recent
estimates or experimental estimates provided by the American Community Survey of the
United States Census Bureau as of May 1 of the aid calculation yeardeleted text begin ;deleted text end new text begin .
new text end

deleted text begin (2)deleted text end new text begin (c)new text end "Cost-burdened household" means a household in which gross rent is 30 percent
or more of household income or in which homeownership costs are 30 percent or more of
household incomedeleted text begin ;deleted text end new text begin .
new text end

deleted text begin (3)deleted text end new text begin (d)new text end "County distribution factor" means the number of households in a county that
are cost-burdened divided by the total number of households in metropolitan counties that
are cost-burdened. The number of cost-burdened households shall be determined using the
most recent estimates or experimental estimates provided by the American Community
Survey of the United States Census Bureau as of May 1 of the aid calculation yeardeleted text begin ;deleted text end new text begin .
new text end

new text begin (e) "Locally funded housing expenditures" mean expenditures of the aid recipient,
including expenditures by a public corporation or legal entity created by the aid recipient,
which are:
new text end

new text begin (1) funded from the recipient's general fund, a property tax levy of the recipient or its
housing and redevelopment authority, or unrestricted money available to the recipient, but
not including tax increments; and
new text end

new text begin (2) expended on one of the following qualifying activities:
new text end

new text begin (i) financial assistance to residents in arrears on rent, mortgage, utilities, or property tax
payments;
new text end

new text begin (ii) support services, case management services, and legal services for residents in arrears
on rent, mortgage, utilities, or property tax payments;
new text end

new text begin (iii) down payment assistance or homeownership education, counseling, and training;
new text end

new text begin (iv) acquisition, construction, rehabilitation, adaptive reuse, improvement, financing,
and infrastructure of residential dwellings;
new text end

new text begin (v) costs of operating emergency shelter, transitional housing, supportive housing, or
publicly owned housing, including costs of providing case management services and support
services; and
new text end

new text begin (vi) rental assistance.
new text end

deleted text begin (4)deleted text end new text begin (f)new text end "Metropolitan area" has the meaning given in section 473.121, subdivision 2;

deleted text begin (5)deleted text end new text begin (g)new text end "Metropolitan county" has the meaning given in section 473.121, subdivision 4;

deleted text begin (6)deleted text end new text begin (h)new text end "Population" has the meaning given in section 477A.011, subdivision 3; and

deleted text begin (7)deleted text end new text begin (i)new text end "Tier I city" means a statutory or home rule charter city that is a city of the first,
second, or third class and is located in a metropolitan county.

Subd. 4.

Qualifying projects.

(a) Qualifying projects deleted text begin shalldeleted text end include: (1) emergency rental
assistance for households earning less than 80 percent of area median income as determined
by the United States Department of Housing and Urban Development; (2) financial support
to nonprofit affordable housing providers in their mission to provide safe, dignified,
affordable and supportive housing; deleted text begin anddeleted text end (3) projects designed for the purpose of construction,
acquisition, rehabilitation, demolition or removal of existing structures, construction
financing, permanent financing, interest rate reduction, refinancing, and gap financing of
housing to provide affordable housing to households that have incomes which do not exceed,
for homeownership projects, 115 percent of the greater of state or area median income as
determined by the United States Department of Housing and Urban Development, and for
rental housing projects, 80 percent of the greater of state or area median income as determined
by the United States Department of Housing and Urban Development, except that the housing
developed or rehabilitated with funds under this section must be affordable to the local work
forcenew text begin ; (4) financing the operations and management of financially distressed residential
properties; and (5) funding of supportive services or staff of supportive services providers
for supportive housing as defined by section 462A.37, subdivision 1. Financial support to
nonprofit housing providers to finance supportive housing operations may be awarded as
a capitalized reserve or as an award of ongoing fundingnew text end .

deleted text begin Projects shall be prioritizeddeleted text end new text begin (b) Recipients must prioritize projectsnew text end that provide affordable
housing to households that have incomes which do not exceed, for homeownership projects,
80 percent of the greater of state or area median income as determined by the United States
Department of Housing and Urban Development, and for rental housing projects, 50 percent
of the greater of state or area median income as determined by the United States Department
of Housing and Urban Development. Priority may be given to projects that: reduce disparities
in home ownership; reduce housing cost burden, housing instability, or homelessness;
improve the habitability of homes; create accessible housing; or create more energy- or
water-efficient homes.

deleted text begin (b)deleted text end new text begin (c)new text end Gap financing is either:

(1) the difference between the costs of the property, including acquisition, demolition,
rehabilitation, and construction, and the market value of the property upon sale; or

(2) the difference between the cost of the property and the amount the targeted household
can afford for housing, based on industry standards and practices.

deleted text begin (c)deleted text end new text begin (d)new text end If aid under this section is used for demolition or removal of existing structures,
the cleared land must be used for the construction of housing to be owned or rented by
persons who meet the income limits of paragraph (a).

deleted text begin (d)deleted text end new text begin (e)new text end If an aid recipient uses the aid on new construction or substantial rehabilitation
of a building containing more than four units, the loan recipient must construct, convert, or
otherwise adapt the building to include: