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2026-01-13 - AGE - HRA Work Session January 13, 2026 — 6:30 PM Golden Valley City Hall Council Conference Room 1.Golden Valley Affordable Housing Trust Fund and Habitat for Humanity Local Affordable Housing Aid (LAHA) Request HRA WORK SESSION AGENDA HRA Work Sessions have an informal, discussion-style format and are designed for the HRA to obtain background information, consider policy alternatives, and provide general directions to staff. No formal actions are taken at work sessions. The public is invited to attend HRA Work Sessions and listen to the discussion; public participation is only allowed by invitation of the HRA. Discussion Item(s) City of Golden Valley HRA Work Session January 13, 2026 — 6:30 PM 1 EXECUTIVE SUMMARY Community Development 763-512-2345 / 763-512-2344 (fax) Golden Valley Housing and Redevelopment Authority Work Session January 13, 2026 Agenda Item 1. Golden Valley Affordable Housing Trust Fund and Habitat for Humanity Local Affordable Housing Aid (LAHA) Request Prepared By Christine Costello, Housing & Economic Development Manager Emily Goellner, Community and Economic Development Director Summary Ordinance Background In March 2025, The Housing and Redevelopment Authority (HRA) approved an ordinance establishing the Affordable Housing Trust Fund (Housing Fund). The Housing Fund ordinance formalizes and complies with Minnesota State Statute 462C.16 and makes the City eligible to apply for any future State financing allocated for affordable housing. The Housing Fund is a permanent endowment and continually renewable source of revenue to provide loans and grants to for-profit and non-profit housing developers for the acquisition, capital, and soft costs necessary for the creation of new affordable rental and owner-occupied housing, and for the acquisition, rehabilitation and preservation of existing multi-family residential rental housing including naturally occurring affordable housing (NOAH). The Housing Fund should only be used to assist proposed projects or programs that develop or preserve affordable housing opportunities for low- and moderate-income households. The eligible uses of the Housing Fund will include, but are not limited to, the following uses per State Statute 462C.16: Making of loans at interest rates below or at market rates in order to strengthen the financial feasibility of proposed projects Guaranteeing of loans Gap financing for affordable housing developments Financing of acquisition, demolition, and disposition for affordable housing developments Financing of rehabilitation, remodeling, or new construction of affordable housing Funding to facilitate affordable homeownership opportunities including down payment assistance, second mortgages, closing costs, etc. Any other used as permitted by applicable law and approved by the City Council To the extent possible the affordable housing trust fund will be secured by liens, letters of credit, tax increment, or other forms of reasonable security. To the extent possible, loans from the affordable housing trust fund will be repaid with interest 2 at rates established from time to time by the city or which are established at the time of approval of a specific project or program. Summary of Previous Discussions During the November 2025 HRA work session, the proposed draft of the Affordable Housing Trust Fund Policy was discussed. This Policy is a crucial component to implement the ordinance because it describes eligible projects, application requirements, and the process for decision-making. Golden Valley Housing Fund The intent of the Housing Fund is to support existing programs such as the Home Ownership for Equity (HOPE) Program and the preservation of naturally occurring affordable housing (NOAH). As outlined in the Housing Chapter of the City’s 2040 Comprehensive Plan, the HRA discussed that future programs and initiatives may include emergency rental assistance, support for seniors to remain in their home with more energy efficiency measures to reduce housing cost burdens, or other housing initiatives as described by the Comprehensive Plan and City/HRA Strategic Plans. As the HRA began exploring development of the potential of First-Time Homebuyer Down Payment Assistance Program, Home Improvement Loan Program, and funding assistance for the PRISM Emergency Rental Assistance Program. Until the Affordable Housing Trust Fund includes additional financial resources (such as pooled TIF) or other sources, the use of the Affordable Housing Trust Fund and LAHA should be leveraged to fill crucial final funding gaps in local projects. The amount of funding available (LAHA total $480,849.99) is at a scale that is best suited as “last-in” funding and that proposed and/or requested use of the funds should be presented to the HRA on an individual basis for consideration. As referenced in the discussion at the November work session, an incremental approach for use of funds with initial support for the HOPE Program and preservation of naturally occurring affordable housing were agreed upon. Funding Sources It is proposed for the February 2026 HRA work session, the HRA’s Financial Advisor Ehler’s will be in attendance to discuss tax increment financing (TIF) used to date in Golden Valley as well as the potential benefits of TIF pooling which is not currently available in Golden Valley. Local Affordable Housing Aid (LAHA) Also at the November 2025 work session, the HRA discussed the potential use of funds received from the Minnesota Department of Revenue’s Local Affordable Housing Aid (LAHA). The State has provided a timeline for the commitment of LAHA funds and when the funds must be expended. It resonated with the HRA that the future of LAHA funds past 2026 was not guaranteed and those funds should not be relied upon as the only source to fund future housing programs. It was noted at that work session that a request from Twin Cities Habitat for Humanity had been made for LAHA funds and that HRA staff would come back before the HRA for discussion and consideration of the request. Request for HRA Feedback on Draft Policy 3 Staff will present this Policy on January 13 to the HRA and will seek feedback to prepare for official review and adoption at a future HRA meeting. Upon adoption of the Policy, individual funding requests can be processed. Since the City has previously worked with Habitat for Humanity, they have approached City staff with a funding request for Housing Fund dollars and LAHA dollars for two different properties. Twin Cities Habitat for Humanity (Habitat) LAHA Request Habitat has been dedicated to creating, preserving, and promoting affordable homeownership in the seven-country metro area of Minneapolis and St. Paul. Habitat is the largest affordable homeownership builder in the seven-county metro area, and since 1985, has partnered with more than 1,900 families to unlock the possibility of homeownership. Habitat has been registered with the Minnesota Secretary of State since 1985 and has been in good standing with the State since that time. In July 2024, Habitat was a qualified developer for the City’s Homeownership Program for Equity (HOPE) and completed the first home in the HOPE Program. As part of the City’s HOPE Program, Habitat was to receive funding ($135,000) for the home from the HRA’s grant proceeds that were received from Minnesota Housing Impact Funds. Due to staff changes and other issues that were beyond the control of current staff, Habitat was ineligible to receive/access funding proceeds for this project from Minnesota Housing Impact Funds since the house was under construction before the grant agreement was signed. Therefore, Habitat funded the construction and affordability of the home through other funding resources and the HRA and City did not contribute towards the construction of the home. Earlier this year Habitat purchased ($297,000) a twin-home unit in Golden Valley, with plans to rehab the unit and to continue to keep it affordable for a first-time homebuyer that has an area median income below 80%, which is in keeping with the HOPE Program. Habitat has made a formal request to the HRA to assist in the preservation of an affordable home in Golden Valley. Habitat has funded the affordability gap for this unit with about $15,500 in private funds and assumes a homebuyer can afford a first mortgage of about $180,000. Habitat has requested $70,000 in support from Golden Valley’s LAHA funds to assist in the gap and preservation of the affordable home (sources and uses attached). Habitat has shown that they have other capital contributions from other external funds and that this request will fill a crucial funding gap to ensure the unit remains affordable to a future homeowner. The 2024 LAHA funds total $137,095.15, and need to be committed no later than December 31, 2027, and expended by December 31, 2028. If the HRA were to provide the request to Habitat it will still leave a reminder of $67,095.15 from the 2024 LAHA funds for a total to date of all funding years of $410,849.99. This does not include the total of 2026 LAHA funds yet. The amount for 2026 LAHA will not be available until May 2026. The request also meets the State’s requirements for LAHA qualifying projects: Financial support to nonprofit affordable housing providers in their mission to provide safe, dignified, affordable and supportive housing; and Projects designed for the purpose of construction, acquisition, rehabilitation, demolition or removal of 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% of the greater of state or area median income as determined by the United States Department of Housing and Urban Development 4 If the HRA approves the request to provide $70,000 in LAHA funds to Habitat, a development agreement will be drafted and brought before the HRA at a future HRA meeting for approval. Additional Work with Habitat for the HOPE Program Habitat will also be constructing a new single-family home at 504 Lilac Drive North as part of the HOPE Program. Habitat was selected as the qualified developer for the site in 2023, and as part of HOPE, they are eligible for $135,000 in the HRA's grant proceeds from Minnesota Impact Funds. This project will appear on an upcoming HRA agenda for a development agreement and a sub-recipient grant agreement since they will be responsible for following the grant requirements from Minnesota Housing in order to receive grant funds. The HOPE Program does not require an application like the Housing Fund or LAHA. Developers are selected for the HOPE Program through a Request for Qualifications (RFQ) process, which requires approval by resolution of the HRA. Financial or Budget Considerations The 2024 LAHA funds total $137,095.15, and need to be committed no later than December 31, 2027, and expended by December 31, 2028. If the HRA were to provide the request to Habitat it will still leave a reminder of $67,095.15 from the 2024 LAHA funds for a total to date of all funding years of $410,849.99. Legal Considerations The City Attorney has reviewed the Housing Fund Policy and based on the discussion, would next draft an agreement with Habitat for the use LAHA funds. Equity Considerations The use of LAHA funds for providing an opportunity for a first-time homebuyer that is at 80% of the area median income advances the City’s equity goals and strategic directives of fostering a healthy mix of housing stock that accommodates various price points and life stages. Recommended Action Discuss the proposed Affordable Housing Trust Fund Policy as well as a request for $70,000 in Local Affordable Housing Aid (LAHA) from Twin Cities Habitat for Humanity for the preservation of existing affordable housing in Golden Valley. Supporting Documents Affordable Housing Trust Fund Policy Habitat Letter of Funding Request - 1715 Gettysburg Ct. Habitat Sources and Uses for 1715 Gettysburg Ct. 5 O FFICIAL P OLICY OF THE H OUSING & R EDEVELOPMENT A UTHORITY IN AND FOR THE C ITY OF G OLDEN V ALLEY General Information Policy Title: Affordable Housing Trust Policy Department: Housing and Redevelopment Authority Policy Owner: Housing & Economic Development Manager Policy ID: 26-XXX HRA Approval Date: Resolution Number: 26-XXX Effective Date: ☒New ☐ Updated Policy Overview Policy Description: This policy provides implementation guidelines for the City’s Affordable Housing Trust Fund (the “Housing Fund”), which was established by City of Golden Valley on March 4, 2025, by Ordinance No. 794 (codified as City Code, Chapter 2, Article VIII) and is authorized under Minnesota Statutes, section 462C.16. Purpose & Scope: The purpose of this policy is to establish guidelines for the administration and allocation of funds from the Housing Fund, as established by the Housing and Redevelopment Authority in and for the City of Golden Valley (the “HRA”), pursuant to Minn. Stat. 465C.16. This policy is designed to ensure that all funding provided from the Housing Fund to private parties is used effectively and efficiently to support the development and preservation of affordable housing within the community. This policy applies to all financial transactions and agreements involving the disbursement of Housing Fund resources to private entities, ensuring transparency, accountability, and alignment with the strategic goals of promoting affordable housing solutions in Golden Valley. Definitions: For the purpose of this Policy, the following terms shall have the meanings set forth below:  Affordable Housing means residential housing that is rented or owned by a person who qualifies as a person of very low income, low income or moderate income: o Persons of very low income means families and individuals whose incomes do not exceed 50 percent of area median income, as median income was most recently determined by the United States Department of Housing and Urban development for the Minneapolis-St. Paul- Bloomington, Minnesota-Wisconsin Metropolitan Statistical Area, as adjusted for smaller and larger families, or the Area Median Income calculated annually by Minnesota Housing for establishing rent limits for the Housing Tax Credit Program, whichever is higher. o Persons of low income means families and individuals whose incomes exceed 50 percent, but do not exceed 80 percent of the area median income, as median income was most recently determined by the United States Department of Housing and Urban development for the Minneapolis- St. Paul- Bloomington, Minnesota- Wisconsin Metropolitan Statistical Area, as adjusted for smaller and larger families, or the Area Median Income calculated annually by Minnesota Housing for establishing rent limits for the Housing Tax Credit Program, whichever is higher. 6 o Persons of moderate income means families and individuals whose incomes exceed 80 percent, but do not exceed 120 percent, of area median income, as median income was most recently determined by the United States Department of Housing and Urban development for the Minneapolis-St. Paul- Bloomington, Minnesota-Wisconsin Metropolitan Statistical Area, as adjusted for smaller and larger families, or the Area Median Income calculated annually by Minnesota Housing for establishing rent limits for the Housing Tax Credit Program, whichever is higher.  Market-rate Housing is housing that already exists or is part of a proposed development that is based on existing area market values and demand, rather than relying on any kind of subsidies or government assistance. Related Documents, Materials & Resources:  Housing Fund Application Form  City Code, Chapter 2, Article VIII  Minnesota Statute §462C.16 Policy I. Background This policy provides implementation guidelines for the City’s Affordable Housing Trust Fund (the “Housing Fund”), which was established by City of Golden Valley on March 4, 2025, by Ordinance No. 794 (codified as City Code, Chapter 2, Article VIII) and is authorized under Minnesota Statutes, section 462C.16. The Housing Fund is a funding source designated to provide loans and grants to for-profit and non-profit housing developers for the acquisition, capital, and soft-costs necessary for the creation of new affordable renter and owner- occupied housing, and for the acquisition, rehabilitation of existing multi-family residential rental housing, including Naturally Occurring Affordable Housing (“NOAH”). This policy aims to advance the City’s affordable housing objectives operationalizing the City’s Comprehensive plan, which seeks to expand housing options that are affordable for low- and moderate-income households without compromising their ability to cover other essential expenses. Additionally, this policy aligns with the City Council’s 2030 Strategic Directive to propose a diverse housing stock that caters to various price points and life stages. This policy applies to all financial transactions and agreements involving the disbursement of Housing Fund resources to private entities. II. Administration a. The Housing Fund is managed by the Housing and Redevelopment Authority in and for the City of Golden Valley (the “HRA”). The City’s finance department will provide financial reporting and monitoring of the Housing Fund to support the HRA oversee Fund activities. The HRA Executive Director, or their designee, will administer and supervise all Housing Fund programs, including, but not limited to program management, resource development, compliance and reporting, community engagement, staff training, and development of standard operating procedures. b. The HRA Executive Director may establish rules, forms, and guidelines to assist in the implementation, administration, and evaluation of the Housing Fund " consistent with this Policy, City Code, and state statute. c. Application fees are set by the HRA. All fees are due at the time of application and are non-refundable. The HRA shall have the right to invoice the Developer for all professional service fees and other related costs incurred in the processing of development and the monitoring of project. 7 III. Eligibility a. The HRA may approve awards of funds to specific project(s) based on demonstrated need and the advancement of City priorities. The HRA may award funds in response to direct applications or may issue a Request for Proposal (RFP) soliciting applications. b. The activities listed below are eligible for funding by the Housing Fund. The Executive Director may designate other eligible activities provided they are consistent with City Code, Chapter 2, Article VII. Other activities may be considered. i. Acquisition and land banking for affordable housing ii. Construction of affordable housing iii. Gap financing for Affordable Housing created at the very low, low-, and moderate-income levels iv. Purchase, rehabilitation and long-term preservation of naturally occurring affordable housing (NOAH units). v. Other activities to support Affordable Housing that may include infrastructure improvements as recommended by the HRA c. Application Procedures All applications for funding from the Housing Fund shall be made on forms prescribed by the HRA Executive Director or their designee. Application forms shall be fully completed and accompanied by supporting documentation and required fees at the time of submission. The Application form shall include at least the following: d. Project Description: Provide a detailed description of the project, including location, type of housing, and target population. e. Development Team Qualifications: Include resumes and qualifications of the development team members. Applicants must demonstrate professional development experience and the ability to undertake and successfully complete the proposed project in the proposed timeframe. To the extent that an applicant cannot demonstrate sufficient experience in a particular area, the developer may hire or partner with another entity that has strength in that particular area. f. Financial Information: i. Submit a detailed project budget, including sources and uses of funds. ii. Provide evidence of financial capacity and funding commitments. iii. Provide evidence of ability to manage the project successfully after completion g. Site Control: Provide evidence of ownership of or an option to purchase the subject property. h. Zoning Compliance: Provide evidence that the project complies with local zoning requirements or a plan to obtain necessary approvals. i. Market Analysis: Include a market analysis demonstrating the need for the proposed housing. j. Community Impact: Describe the anticipated impact on the community, including benefits to low and moderate-income households. k. Timeline: Provide a project timeline, including key milestones and completion date. l. Sustainability Plan: Outline any sustainable building practices or energy-efficient features included in the project. m. Legal Disclosures: Disclose any legal proceedings or conflicts of interest related to the project or development team. 8 12/15/2025 Christine Costello Housing and Economic Development Manager City of Golden Valley Dear Ms. Costello, On behalf of Twin Cities Habitat for Humanity (TCHFH), I am pleased to provide you and your colleagues with information about our twin-home unit rehab project at 1715 Gettysburg Court. Earlier this year, TCHFH purchased this home from the former owner by exercising our Purchase Option. This Purchase Option is one of the ways TCHFH keeps homes affordable for even longer than the original mortgage term of 30 years. Recently, we moved the Purchase Option and the de facto 30-year affordability period out of our mortgages and into a Declaration that is recorded on the property at homeowner closing. I mention this because upon resale to the next buyer, this is the affordability tool that will be in place. The home is currently undergoing rehab by TCHFH staff and volunteers. All work requiring licenses – such as plumbing and electrical – is subcontracted to qualified firms. Once the rehab work is complete, we will sell the twin-home to a new buyer who meets all TCHFH program criteria. These include: ● Minimum residency in the 7-county metro area of 1 year ● First-time homeowner ● AMI below 80% The increasing cost to purchase a home makes it more difficult for working families to achieve homeownership. While TCHFH is committed to keeping affordable homes available to subsequent buyers, we are faced with considerable value and affordability gap barriers. In the case of 1715 Gettysburg, the anticipated affordability gap will exceed $115,000. To help cover this gap, and to ensure the sale of this home to a <80% AMI household, we are requesting funding in the amount of $70,000 from the City of Golden Valley. Thank you for considering this request for support in your community. We hope to expand affordable homeownership opportunities in Golden Valley presently, and in the future. Sincerely, Noah Keller Real Estate Development Manager Twin Cities Habitat for Humanity noah.keller@tchabitat.org 612-305-7175 9 TWIN CITIES HABITAT FOR HUMANITY 12/15/2025 1715 Gettysburg Court Golden Valley, MN 55427 Site #: 1890 Estimated FMV: $300,000 SOURCES OF FUNDS (Permanent) BUDGET Homebuyer First Mortgage (Estimated)181,400$ Development Gap Additional site specific private funds 3,100$ In Kind Contributions 2,400$ Additional Development Gap Needed -$ Affordability Gap Habitat Private Fundraising (General Fund)10,100$ LAHA via Golden Valley 70,000$ MHFA Impact Funds/SPCP 38,500$ Additional Affordability Gap Needed -$ TOTAL SOURCES 305,500$ USES OF FUNDS ACQUISITION Habitat Acquisition 182,500$ Acquisition Closing Fees 1,800$ HARD COSTS Construction, permits, contingency 66,000$ SOFT COSTS Design, marketing, appraisal, outside fees 46,200$ DEVELOPER FEE (8%)55,000$ TOTAL USES OF FUNDS (TDC)305,500$ 10