SF5060

Purpose

This bill makes supplemental budget adjustments for the Minnesota Housing Finance Agency (MHFA). Its goal is to support housing stability and reduce barriers to homeownership by providing targeted funding for homelessness prevention, homeownership assistance, and supportive housing. It also updates how some grants are awarded to respond to needs identified by the U.S. Department of Housing and Urban Development (HUD).

Main Provisions

• Transfer and general funding framework

  • The bill adds to or adjusts appropriations for MHFA, with funds coming from the General Fund or another named fund, and sets how long the money is available (fiscal years 2026 and 2027). It also notes that, in most cases, these appropriations become part of MHFA’s permanent budget base unless otherwise specified.

• Family Homeless Prevention and Assistance Program

  • This new or continuing funding supports efforts to prevent homelessness and assist families in unstable housing situations.
  • The bill allows for flexibility in how the funds are used to reduce homelessness risks and improve program effectiveness, as determined by MHFA.
  • If a new grantee enters a geographic area with a current or former grantee, the new grantee can work with an advisory committee or a local continuum of care instead of following some standard setup requirements.
  • The agency may award grants to existing program grantees even if strict procurement rules would normally apply.
  • The ongoing base funding for this program in fiscal year 2028 and beyond is set at $10,719,000.

• Home Ownership Assistance Fund

  • This funding supports the homeownership assistance program to help boost homeownership and address disparities in ownership rates.
  • MHFA is directed to continue its efforts to address the gap in homeownership between white households and Indigenous Americans and communities of color.
  • The agency must collect demographic information on a voluntary basis (race, color, national origin, and sex) from applicants to programs intended to benefit homeowners and homebuyers, to better understand and address disparities.
  • The ongoing base funding for fiscal year 2028 and beyond is $885,000.

• Supportive Housing (one-time appropriation)

  • This is a one-time allocation to support the MHFA’s supportive housing activities.
  • Funds can be used as supplemental emergency resources for permanent supportive housing, rapid rehousing, transitional housing, and related system activities tied to HUD’s Continuum of Care (CoC) program.
  • Targeted at HUD CoC funding recipients whose contracts expired or are about to expire and who experienced funding gaps due to HUD nonrenewals.
  • MHFA may prioritize awards based on need and the eligible use of funds, and may noncompetitively award grants to existing or previous federal CoC funding recipients.
  • The bill allows the agency to override standard procurement provisions in order to make these awards.

• General notes on administration

  • Several sections use “notwithstanding” to override normal procurement or program rules for these specific appropriations, reflecting a push to quickly support homelessness prevention, homeownership, and housing stability efforts.
  • The funding and programs are intended to be integrated with existing MHFA programs and HUD-related funding streams.

Notable Changes to Law

• Expanded flexibility in grant-making
  • The agency may award grants to existing program grantees and, in some cases, may bypass typical procurement rules to do so (noncompetitive awards) in order to address urgent housing needs and program gaps.
• Enhanced data collection for equity
  • The bill requires voluntary collection of demographic data (race, color, national origin, sex) from applicants for certain homeownership programs to help target efforts and monitor disparities.
• Focus on racial equity in homeownership
  • The bill explicitly aims to reduce the disparity gap in homeownership between white households and Indigenous Americans and communities of color.
• One-time emergency resources for CoC-related work
  • A new one-time appropriation is authorized to fill funding gaps for HUD Continuum of Care activities when prior funding has expired or is at risk of expiring.

Fiscal and Implementation Details

• The appropriations are structured for fiscal years 2026 and 2027, with the first year (2026) described as the initial funding period and the second year (2027) as the continuation.
• The document notes that, with few exceptions, these appropriations become part of MHFA’s permanent budget base for future years, and includes a dedicated base for 2028 and beyond for specific programs (Home Ownership Assistance Fund: $885,000; Family Homeless Prevention: $10,719,000).
• The bill includes mechanisms to transfer funds to the Housing Development Fund as part of the MHFA programs.

Public Policy Intent

• Strengthen housing stability for families at risk of homelessness and improve program effectiveness.
• Promote equitable homeownership by actively addressing racial disparities.
• Provide targeted, flexible funding to respond quickly to gaps in housing resources created by changes in HUD funding cycles.

Relevant Terms - Minnesota Housing Finance Agency (MHFA) - Family Homeless Prevention and Assistance Program (Minnesota Statutes 462A.204) - Home Ownership Assistance Fund (Minnesota Statutes 462A.21, subd. 8) - Supportive Housing Program (Minnesota Statutes 462A.42) - HUD Continuum of Care (CoC) - Permanent supportive housing - Rapid rehousing - Transitional housing - System-related activities (CoC-related work) - HUD Notice of Funding Opportunity (NOFO) - Noncompetitive grants - Advisory committee - Local continuum of care - Demographic information (race, color, national origin, sex) - Disparity gap in homeownership - Transfer to Housing Development Fund - Onetime appropriation - Procurement provisions (notwithstanding; 16C.06) - General Fund and named funds (MHFA appropriations)