31xx 22nd Avenue S 31xx 22nd Avenue S
What types of properties can be acquired using an SMMF acquisition loan?
- Small to medium multifamily buildings with 2-49 units that were not built or rehabilitated with government subsidies. Renters in unsubsidized properties may use housing choice vouchers (HCV) or other rental assistance to pay rent.
- Buildings with 10-20 units tend to be a good fit for acquisition through the program.
- At least 20% of units in the building must be affordable to households making less than 60% of the Area Median Income (AMI). Maximum rents for 2020-2021 are:
- Studio/Efficiency $1,086
- 1 Bedroom $1,164
- 2 Bedrooms $1,396
- 3 Bedrooms $1,613
- 4 Bedrooms $1,800
- 5 Bedrooms $1,986
- View the SMMF Program Guidelines
City loan participation in LISC loans
- The City provide a 0% interest loan up to $50,000 per unit for the Land Bank to acquire, rehab, and/or operate the property. City funding is paired with a short term interest-bearing mortgage from LISC that enables the Land Bank, Twin Cities to acquire properties for short term holds.
- The City, LISC, and Land Bank Twin Cities will identify end buyers from properties.
What types of buildings are prioritized for acquisition?
The Land Bank and City of Minneapolis identify rental properties at risk of market conversion and evaluate the property based on location, condition, adjacent acquisition opportunities, current affordability and gentrification risk. LISC and the City determine the financing eligibility under the SMMF loan program based on the following criteria:
- 2-49 unit occupied residential buildings in the City of Minneapolis, with a priority for 10-20 unit buildings
- Buildings have existing rents at or near the following: 75% of the units with rents affordable to households with incomes at or below 80% of the area median income (AMI), including 20% of such units affordable to households at or below 60% AMI
- Buildings with purchase prices that are reasonable in comparison with other neighborhood properties
- Buildings that can demonstrate positive cash flow
- Additional priority will be given to buildings:
- with rents affordable to households earning at or below 50% AMI
- located in neighborhoods that have experienced higher levels of tenant evictions
- with existing tenants that include vulnerable populations, including families with minor children, elderly, and disabled tenants
- that require the lowest amount of subsidy
- where a qualified end-buyer has been identified
- that have units with multiple bedrooms
Disposition of SMMF properties
The City will work with Land Bank, LISC and with responsible investors, developers and community-based organizations to develop disposition strategies for property acquired through the SMMF Pilot Program. A variety of disposition financing strategies will be explored. Disposition strategies will prioritize the recovery and repayment of the LISC portion of the SMMF loan(s). In addition, whenever possible based on the characteristics of the property, the City and program partners will pursue disposition strategies that expand community-based ownership. Efforts to do this will include processes for purchasing properties that prioritize acquisitions by developers and investors with ties to the neighborhoods where they are purchasing property; and by community-based organizations led by people of color.
Questions regarding the SMMF Program, contact Dean Porter-Nelson.