The Minneapolis 4d program:

• Preserves affordable homes in Minneapolis
• Helps rental property owners get property tax reductions if they agree to keep 20% or more of their rental units affordable
• Helps owners make existing buildings greener through cost sharing for energy efficiency improvements and solar installations

Recent changes

On November 14, 2024, the City Council approved the following revisions:

• Reduce the rent and income restrictions for Studio and One-bedroom units from 60% Area Median Income (AMI) to 50% AMI.
• Retain rent and income restrictions for Two-bedroom units and larger at 60% AMI.
• Allow non residential building conversions to residential to participate in the program for all unit types at or below 60% AMI.

Resources

• 4d Affordable Housing Incentive Program Guide
• Read a report about the 4d program
• See a list of current 4d participants
• See common questions compiled by the Family Housing Fund

Affordable housing criteria

Prior to Fall 2024

For studios and larger units enrolled prior to Fall 2024 application cycle, rent is affordable to households making at or below 60% AMI.

Post Fall 2024

For studio and 1-bedroom units enrolled in the Fall 2024 application cycle and onwards, rent is affordable to households making at or below 50% Area Median Income (AMI). For 2-bedroom and larger units enrolled in the Fall 2024 application cycle and onwards, rent is affordable to households making at or below 60% AMI.

Non residential conversions

Allow property owners of non residential building conversions to residential participate in the program for all units types to be rented to households making at or below 60% AMI.

Maximum rents for units applying post fall 2024 are as follows:

Single room occupancy (SRO) housing, rooming houses and group homes have rent limits based on the number of bedrooms. For these types of units enrolled in the Fall 2024 application cycle and onwards, the maximum rent limit is $652.50.  For these types of units enrolled prior to the Fall 2024 application cycle, the maximum rent limit is $783.

As 4d units turn over, they must be rented to households making at or below 50% or 60% of AMI, depending on the unit type and enrollment date. In 2024-2025 this means that units must be rented to households making no more than the following amounts:

Benefits for property owners

• 10-year eligibility for 4d property tax rate, also known as the Low Income Rental Classification (LIRC) which provides a tax rate reduction on qualifying units.  Other details about the property can impact the rate reduction, and changes in property value impact overall tax burden. See Minnesota Statute 273.128.
• Grant to each 4d property in the amount of $100 per affordable unit but capped at $1,000 per property. Payment of first year application fee to the State of Minnesota for certification of the Low Income Rental Classification. Up to $50,000 in energy efficiency funding through the Green Cost Share program.
• Free energy efficiency assessments
• Project and application support through the Center for Energy & Environment and Frontier Energy.
• Solar grants through the Green Cost Share Program.
• Lower renter turnover
• Lower maintenance & operating costs, if owners take advantage of opportunities to make energy efficiency improvements to properties.

Program eligibility guidelines

Owners of market-rate rental properties must meet the following criteria:

• Nearly all rental housing is eligible. This includes small 1-4 unit buildings as well as large properties. Single room occupancy (SRO) housing, rooming houses, group homes are also eligible.
• At least 20% of the rental units in a building are affordable to households whose family income is at or below 50% AMI (for Studios/Efficiencies and 1 Bedroom units) or 60% AMI (for 2 Bedrooms and larger units and non residential conversions) Existing tenants in units that have program compliant rents do not need to be income qualified.
• Going forward, income qualification for tenants is determined upon initial occupancy. Thereafter, increased incomes of tenants in affordable units will not violate program requirements.
• Tier 1 or 2 rental license with no rental housing license revocations or outstanding housing orders.
• Buildings can include units with owner occupants, but only rental units are eligible to apply for the 4d Program. Building does not already qualify for LIRC tax status in Minnesota through another program, such as Low Income Housing Tax Credits (LIHTC).
• Market rate new construction projects with at least 20% affordable units can receive up to a $100,000 incentive if pursuing ENERGY STAR, Zero Energy Ready, or Passive House Institute US (PHIUS) certification.

Property owner commitment

Record a 10-year affordability declaration on your property stating:

• At least 20% of units at a property (e.g. 2 units at a 10-unit property) will remain affordable to households making 50% or 60% AMI depending on unit type. You may enroll up to 100% of the units in the building.
• As units turn over and depending on the unit type, new tenants must have household incomes at or below 50% or 60% AMI. The property owner must verify new tenant incomes and report them to the City on an annual basis. Building owners do not need to verify incomes of existing tenants.
• Rent increases for tenants in affordable units are limited to 6% or less annually, unless the unit is turning over to a new tenant
• Property owner or manager commits to accepting tenant based assistance (e.g. Section 8 vouchers) and agrees to affirmatively market vacancies by advertising units on  HousingLink.org.
• If a building is sold, declarations run with the property.

Modifications to 4d program commitments

Property owners can reduce the number of units in the 4d program on condition that 20% of the units per building remain enrolled.

Application process and timeline 

Check the State's Low Income Rental Classification website to see if your property meets any of the four criteria for a qualifying property. If it does, your property can't apply for the City's 4d program. Instead, you should apply directly to the State Low Income Rental Classification program.

November - December

• We will accept applications until 4 p.m. (CST) on December 30, 2024.
  • Online application portal
  • All applicants must complete the Rent Roll Template
• Applicants with multiple buildings or condo/townhome units in the same building must submit multiple applications for each building or condo/townhome unit.
• Applicants should submit their applications as soon as possible for fastest review and processing by City staff.
• Early applications will be reviewed on a first come, first serve basis.  

City staff will send enrollment paperwork to accepted applicants for review and signature, typically by early to mid-February. In addition, applicants will need to complete a W9 and City ACH transfer form to receive the 4d enrollment grant, as well as the State of Minnesota’s which is necessary to receive 4d tax status. 

Applicants will  review and complete enrollment paperwork after receiving it. Given the limited timeline for enrollment, we recommend that applicants review the standard forms of agreement and seek outside legal or tax advice prior to receiving enrollment paperwork

Prior to March 31

City submits LIRC applications to Minnesota Housing on behalf of all selected applicants.

June - July

Applicants receive Minneapolis 4d incentive grants ($100 - $1,000 per property) via US mail.

New Construction: market rate developers should send an email during the pre-construction design phase to be considered for green construction incentives up to $100,000 per project.

Fall 2025

The next application window will occur in Fall 2025. 

Yearly compliance requirements and deadlines

January 31 – Annual Compliance form  

is due to the City of Minneapolis by January 31st. This form must be completed and submitted for yearly review. Instances of non-compliance include: 

• Tenants with incomes over 50% or 60% AMI (depending on unit type and enrollment date) unless tenants lived in the property prior to recording of the declaration.
• Rent increases of more than 6% in a year without unit turnover
• Rent over 50% or 60% AMI (depending on unit type and enrollment date)
• Units used for short term rentals, subleasing without income verification.
• Other violations of program covenants, such as a failure to address housing code violations.

Non-compliant units will face loss of LIRC (4d) tax status until they come back into compliance. 

March 31 – The LIRC re-application form must be submitted separately by participants to Minnesota Housing before March 31st. Minnesota Housing will send this form to you each year by mail, and the form must be submitted yearly in order to maintain ongoing 4d tax status.

All new households that move in after you enroll in the 4d program must be certified as income qualified for your 4d units. Household income must be verified via an applicant’s prior year IRS 1040 form.

All adult applicants must complete the 4d Government Data Practices Act form .

Applicants who do not file a federal tax return must also sign Attachment 1 to the 4d GDPA form and provide alternative third party documentation of income. Examples of acceptable alternative documentation include paystubs and Social Security benefit letters. Calculate household income by annualizing gross income received multiplied by the number of pay periods or disbursements per year.

Program participants familiar with Low Income Housing Tax Credit rules for verifying and calculating household income may instead elect to use those procedures for certifying an applicant’s eligibility.

Verified income and monthly rent charged for your 4d units must be recorded in the annual compliance form. The City of Minneapolis will review this document for completion. Each year’s compliance form should reflect all activity for the taxable year. For the first year of participation, this time period will be the start date of your declaration (e.g. 3/1) through 12/31 of that year.

• More information for 4d tenants and applicants . 

Other important dates

Green Cost Share energy efficiency and solar project annual application deadlines are published on the Green Cost share website.

August (annually) – Minnesota Housing certifies Low Income Rental Classification for each participating property. For example, if an applicant applies for 4d status during the Fall 2024 application cycle, Minnesota Housing would certify 4d status for that property by August 2025.

November (annually) – 4d program participants receive a notice of proposed levies and taxes. For example, if an applicant applies for 4d status during the Fall 2024application cycle, they would receive a notice reflecting the new Low Income Rental (LIRC) rate, aka the “4d” tax rate in November 2025.

Annually, one year after applying for the Minneapolis 4d program – Program participants will receive tax bills, which will show the LIRC rate. For example, if an applicant applied for 4d status during the Fall 2024 application cycle, their 2025 tax bill would be the first bill to reflect the lower 4d tax rate. This lag time exists because an applicant cannot receive 4d status until Minnesota Housing certifies LIRC status, which happens in August each year.

Small business technical assistance

Our Business Technical Assistance Program (BTAP) has contracts with a diverse network of business consultants and attorneys. You can contact them directly to get free help. 

4d applicants can ask for pro bono legal advice to help them understand the legal implications of participating in the 4d program. 

See the list of business consultants

Small developers technical assistance

Our Developers Technical Assistance Program (DTAP) supports small and emerging developers. 

Learn about free classes, workshops and consultants

Stay informed

Sign up to receive email updates about the 4d Affordable Housing Incentive Program

Selling property

The City works with several non-profit partner organizations that can buy properties and help apartments stay affordable by utilizing City financing. In most cases, our partners are best equipped to purchase properties with 10 units or more. For more information, contact us.

4d Affordable Housing Incentive Program