Preserving Naturally Affordable 4-40 unit multifamily housing in Minnesota
- Greater Minnesota Housing Fund’s (GMHF) Naturally Occurring Affordable Housing (NOAH) program provides low-cost capital in the form of first mortgage, mezzanine and gap funding to small landlords and emerging developers of color to preserve NOAH housing stock in communities throughout Minnesota.
- GMHF’s small NOAH financing is available both in the Minneapolis-St Paul metropolitan area and in urban and rural communities in Greater Minnesota.
- GMHF’s goal in providing funding resources is to preserve the affordability of NOAH housing stock and improve the quality of the housing for tenants.
Permanent First Mortgages
- Term: 10-25 years
- Amortization: Up to 30 years
- Interest Rate: Fixed rate for term of loan starting at 30-year Treasury + 2%
- Loan to Value: up to 80%
- Debt Coverage Ratio: 1.2 in Year 1
Second Mortgages – Mezzanine
- Term: 10-15 years
- Amortization: Up to 35 years or interest only
- Interest Rate: Fixed rate for term of loan, starting at 1% over First Mortgage
- Loan to Value: Up to 95%
- Debt Coverage Ratio: 1.05
- Term: Short-term loan to pay for due diligence costs
- Amortization: Interest only
- Interest Rate: 5%
Technical Assistance (TA) support for new and less experienced owners and developers.
- TA during predevelopment & underwriting
- GMHF TA available for all stages of project: from feasibility through due diligence to closing
- Additional third-party, project management available if necessary
**Small NOAH funding requires that at least 75% of rental units be income-and rent-restricted at 80% AMI, and 40% of units at 60% AMI or 20% of units at 50% AMI. Up to 25% of units may be unrestricted at market rates.
Small NOAH Program Successes
In March 2021, GMHF provided Small NOAH financing for the acquisition and preservation of Bell Lofts, a 25-unit affordable housing development in North Minneapolis, occupied 100% by people of color and developed by New Rules, a Benefit Corporation based in North Minneapolis that seeks to take unproductive buildings in overlooked communities and co-create spaces designed by the community. New Rules is led by founder Chris Webley, an emerging developer of color.
GMHF provided a first mortgage and a NOAH mezzanine second mortgage. Other sources included owner equity and a philanthropic grant.
For More Information Contact:
Senior Loan Officer