HF4207

Purpose

This bill makes changes to housing financing, grant/loan programs, and related wage and reporting rules in Minnesota. It aims to clarify who can receive housing aid, how funds must be used, adds new rules around stakeholder engagement, and removes a prior annual reporting requirement related to emergency rental assistance.

Key Provisions in plain language

• Eligibility and disqualification for housing funds

  • The Minnesota Housing Finance Agency may award grants or loans to eligible recipients, but cannot fund disqualified individuals or disqualified businesses.
  • Disqualified individuals include anyone who or whose immediate family contributed to a special credit account and received a credit certificate; someone who or whose immediate family owns the housing project funded; an officer or principal of a business that contributed to the account and received a credit certificate; or someone who directly owns or controls 20% or more of a business entity that contributed to the account and received a credit certificate.
  • Disqualified businesses are those that contributed to the account and received credits, or have an officer/principal who did so, or have a controlling ownership held by such an individual or entity.
  • Immediate family is defined broadly (spouse, parents, siblings, etc.) with rules applying to married couples filing jointly.
  • Before applying for a grant/loan, recipients must sign a disclosure confirming disqualification rules do not apply; the agency will rely on this to determine eligibility.
  • Eligible recipients include cities, federally recognized tribes, tribal housing corporations, private developers, nonprofit organizations, housing authorities, and other housing-related entities.
  • Funds must be used to serve households that meet income limits specified in Minnesota law (section 462A.33, subdivision 5).

• Lived-experience engagement (new provision)

  • Wages earned from lived-experience engagement (work by people with relevant lived experience) are not treated as income, assets, or personal property for eligibility or recertification for state public assistance programs (e.g., child care, GA, SNAP, housing support, etc.).
  • Lived-experience engagement is defined as agency work that involves community reviewers or gathering feedback on housing program impact.
  • The Department of Human Services must not count such wages for the listed programs or eligibility determinations.

• Use of proceeds for housing aid (new rules for fund use)

  • Funds distributed under certain program sections must be spent on qualifying projects, with focus on meeting affordability requirements.
  • If a Tier I city/county cannot spend funds on a qualifying project by a deadline due to factors outside its control, those funds can be treated as spent by transferring them to a local housing trust fund (or Tribal housing fund for Tribes).
  • Funds transferred to local or Tribal housing funds must still be used for projects or households that meet affordability rules and deadlines: committed by Dec 31 of the third year after aid receipt and expended by Dec 31 of the fourth year after aid receipt.
  • Recipients cannot reimburse themselves for prior expenditures with aid funds.
  • Any program income generated from these funds must be used on qualifying projects.

• Use of proceeds for tribal and local housing funds (parallel rules)

  • Similar rules apply to 477A.36 (including Tribal Nations): if a Tribal Nation cannot spend by deadline, funds may be considered spent if moved to a Tribal housing fund; must meet affordability rules and follow the same three-year/ four-year deadline pattern.
  • Deadlines and limitations mirror the local provisions; program income must be used as described.

• Conditions for receipt of aid (enhanced accountability)

  • An aid recipient must commit to using money to supplement, not supplant, locally funded housing expenditures (i.e., create new housing or expand existing programs).
  • Tier I city/county recipients must annually certify compliance, including details of locally funded housing expenditures from the prior two fiscal years.
  • The initial report must cover two prior fiscal years; if a recipient reduces locally funded housing expenditures, it must describe the reduction and its reason.
  • The compliance certification must be publicly available on the recipient’s website.

• Repeal of an emergency rental assistance projection requirement

  • The bill repeals a prior requirement to produce an annual projection of emergency rental assistance needs (which had planning and reporting implications).
  • A separate appendix text that previously described the projection process is retained as repealed content, indicating the prior framework is removed.

Significant changes to existing law

• Tightened eligibility screening: Introduction of explicit disqualification criteria tied to contributions and ownership in credit-issuing entities; mandatory disclosures prior to applying.
• Explicit treatment of wages from lived-experience work: Wages from lived-experience engagement are exempt from being counted as income/assets for public assistance eligibility.
• Expanded use-of-funds flexibility with protections: Allows transferring funds to local or tribal housing funds to meet deadlines, while preserving affordability requirements and avoiding reimbursements of prior expenditures.
• Strengthened recipient accountability: Required annual public certification on locally funded housing expenditures for Tier I jurisdictions; detailed accounting when reductions occur.
• Repeal of a reporting requirement: Eliminates the annual projection of emergency rental assistance needs.
• Coding and clarifications: Adds statutory language and cross-references to implement the above changes within Minnesota Statutes, including changes to the 462A and 477A series.

Practical implications

• For housing projects and agencies, increased focus on preventing conflicts of interest and ensuring funding goes to truly eligible entities.
• More transparent reporting by Tier I jurisdictions on locally funded housing activities.
• Greater flexibility in timing of fund use via transfers to local/tribal housing funds, with clear spend-by deadlines.
• Public assistance programs may not count certain paid engagement work toward eligibility, and this helps ensure program funds target housing needs.

Potential considerations

• The disqualification rules may affect entities previously eligible for funding if ownership or contribution histories exist.
• The new lived-experience wage rule could affect program staffing or engagement strategies in housing initiatives.
• Repeal of the emergency rental assistance projection could shift planning processes to other mechanisms.

Relevant terms - Minnesota Housing Finance Agency - grants and loans - eligible recipients - disqualified individual - disqualified business - credit certificate - account - immediate family - disclosure (eligibility form) - cities, tribal housing corporations, nonprofit organizations, housing authorities - income limits (462A.33, subdivision 5) - lived-experience engagement - wages not considered income/assets - public assistance programs (chapters 142E, 256D, 256I, 256P, 142G) - Tier I city or county - local housing trust fund - Tribal housing fund - qualifying project - affordability requirements - program income - reimburse expenditures (no reimbursement) - emergency rental assistance needs - Appendix (repealed text) - Section references (462A.40, 477A.35, 477A.36, 462A.45)