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FEDERAL
HOME LOAN BANK GRANTS
Jump
to the following sections:
Overview
FHLB Program
Application Materials
Background
Vision
Award of Excellence
The Future
Overview
The Federal Home Loan Bank of Des Moines (FHLB-DM) offers an
“Affordable Housing Program” designed to assist in
the
development of affordable housing for low and moderate income
households.
HFH-MN
applies for this funding and administers this program on behalf
of all affiliates in the state: training affiliates in program
requirements, creating standardized documents, reviewing / submitting
affiliates’ applications for funding, and providing quarterly
reporting. Habitat for Humanity of Minnesota has applied for and
received nine grants since 1998 totaling $3,814,920.
Federal Home
Loan Bank
of Des Moines
Affordable
Housing Program
Grant Grant Amount
Homes Total
Number per Home
Funded
Funded
98B01
$6,250
100
$625,000
99B21
$5,500
86
$473,000
01A05
$6,000
83
$498,000
02B05
$6,000
83
$498,000
03B17
$6,000
30
$180,000
04B13
$6,000
62
$372,000
04B22
$6,000
30
$180,000
06A09
$6,960
71
$494,160
06A21
$7,980
62
$494,760
Total
607
$3,814,920
The affiliates pay an application fee of $300 per grant. Affiliates
must document the successful completion of homeowner training for
homeowners benefiting from this program. Affiliates must also be very
detailed in how they quantify the cost of the home, verify family
income, and how they handle their closing process/documentation. HFH-MN
will again provide trainings in how to utilize this program in 2008 at
various locations around the state.
FHLB-DM has created as District Priorities for funding projects with
the following criteria: 1) homes built on donated land; 2) lot meets
in-fill definition -- lot has had streets, water lines, and sewer lines
available to service it (running past it) for the past 10 years; and 3)
homes built in an area of the state considered by FHLB-DM to be rural.
Application
Materials
06A09 Application Materials – RURAL
• 06A09 Application Form
• Exhibit A
• Exhibit
B
•
Calculation of Income - Worksheet
(Use with Exhibit B)
•
Calculation of Income - Instructions
• Exhibit G
Deed Restrictions
• Exhibit
K Purchase Agreement
• Exhibit
L HUD - 1 Form
• Exhibit M
Privacy Notice
06A21 Application Materials – URBAN (Duluth, Hibbing,
Mankato,
Moorhead, Rochester, St. Cloud, Winona and the Twin Cities)
• 06A21 Application
Form
• Exhibit A
• Exhibit B
• Calculation of
Income - Worksheet (Use
with Exhibit B)
•
Calculation of Income - Instructions
• Exhibit
G Deed Restrictions
• Exhibit
K Purchase Agreement
• Exhibit
L HUD - 1 Form
• Exhibit M
Privacy Notice
Background
This Habitat for Humanity of Minnesota (HFH-MN) program has been the
most widely used by affiliates - 28 of 35 affiliates have participated
since inception in 1998. HFH-MN has been sponsored by Bremer
Bank
of Willmar to receive nine Affordable Housing Program grants from the
Federal Home Loan Bank of Des Moines (FHLB-DM) totaling more than $3.8
million since 1998.
These
funds are helping to construct or
rehabilitate well over 600 homes; nearly half are located in rural
areas. Funding has been secured through 2008 to provide the Minnesota
Habitat affiliates with assistance totaling $6,960 per rural house and
$7,980 per urban house. The grants are “earned
out”
by the homeowner over a five-year period and are secured by a deed
restriction.
Vision
Our first grant from FHLB-DM was strictly for down payment
assistance. The affiliate had to demonstrate that the first
mortgage amount had been reduced by the amount of the grant. During our
administration of this first grant, we discovered that Habitat
affiliates rarely include anything other than hard costs in their
calculation of the first mortgage amount. The full market
value
of donated land, labor or materials was rarely used in the calculation
of the total cost of the home. In addition, Habitat affiliates were not
covering any other out of pocket costs associated with the creation of
the home -- salaries, office expenses, etc.
As a result of the FHLB-DM's review of our first grant, a revised
structure for the program was derived. This revised structure allows
for funding of Habitat homes that establish “need”,
and
allows the Habitat affiliates to deduct the grant amount from the
second mortgage amount (or to even add the grant amount to the total
amount of debt). This structure allows Habitat affiliates to continue
to
keep the costs of homeownership "affordable" while allowing the
affiliates some resources to keep their organizations thriving.
Federal Home
Loan Bank
Award of Excellence
In May 2003, HFH-MN and Bremer Bank were awarded the FHLB Award of
Excellence. The award honors leaders who provided a vision and overcame
obstacles and challenges to create more affordable housing for an
underserved population in their community. HFH-MN was honored for its
contribution to local Habitat affiliates and for the creation of more
affordable housing in Minnesota.
The Future
HFH-MN plans to submit grant requests to continue this program beyond
2008. Our affiliates' continued demonstration of excellence in
affordable housing and dedication to strengthening individuals,
families and communities throughout Minnesota should help ensure that
this program will continue.
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