Affordability Gap – The difference between the appraised value of a home and the amount that a homebuyer can afford to pay for a first mortgage.
Area Median Income (AMI) – If everyone’s incomes in the Twin Cities Metro area were lined up lowest to highest, the area median income would lie directly in the middle. AMI varies by household size.
Developer – The individual or entity that is responsible for putting a deal together and contracts with the City of Minneapolis.
Development Assistance – Money that can be used by developers to purchase, rehabilitate, or build, and ultimately sell a home. Development Assistance can be used to fill a project/value or affordability gap.
Down Payment Assistance/Homebuyer Assistance – Money that can be used by homebuyers to assist in making a down payment or paying for closing costs.
HUD – U.S. Department of Housing and Urban Development (federal funding source).
Long-Term Affordability (LTA) – Properties that are restricted to be affordable to owners earning 80% AMI or below for 30 years.
MN Housing – State agency that provides funding previously referred to as MHFA.
Notice of Funding Availability (NOFA) - A City process through which individuals or organizations can submit proposals to participate in designated City programs.
Offer to Purchase – A written contract that defines the terms under which a buyer agrees to purchase property.
Perpetually Affordable Housing – Uses a ground lease, declaration of covenants, or co-operative agreement twit with an equity sharing formula that ensures home affordability is maintained for a minimum 30-year term that is renewed for upon each property sale, without the likely need for additional affordability gap subsidy.
Project Gap/Value Gap – The difference between the total development cost of a property and its fair market sale price once completed.
Recapture – down payment assistance secured as a 0% interest mortgage and note that is repaid upon property sale.
Request for Proposals (RFP) – A bidding process through which individuals or organizations interested in providing development services to the City submit proposals to participate in a program.
Request for Qualifications (RFQ) – A process through which individuals or organizations interested in participating in a City program prove their qualification criteria and/or eligibility.
Stabilization – Financing assistance to help a current tenant or owner-occupant remain in their home.
Terms – The conditions under which an agreement is made.
Zoning Code – A set of City regulations and laws that define how property in specific geographic areas can be used.