Successful Homebuyer Program Lands $1.5 Million Grant to Help Neighborhoods Heavily Impacted by Foreclosure
Grant to Support Minneapolis Advantage Homebuyer Assistance
January 7, 2009 (MINNEAPOLIS) Mayor R.T. Rybak and partners Federal Home Loan Bank of Des Moines (FHLB Des Moines) and Wells Fargo today announced $1.5 million in new funding from FHLB Des Moines which will be used to help homeowners in more than twenty neighborhoods with down payment and closing cost to purchase foreclosed properties in areas most affected by foreclosures.
Through FHLB Des Moines Affordable Housing Program (AHP), an additional $1 million is now available for home purchases in North Minneapolis and $500,000 in the Northeast and South Central areas of the City. Funds will help low income households (less than 80% of area median income) purchase foreclosed homes. The homebuyers will also receive homebuyer and homeownership education through the Minnesota Home Ownership Center.
FHLB Des Moines considered Minneapolis for this grant because of the City's successful Minneapolis Advantage.
The Minneapolis Advantage program provides $10,000 grants to homebuyers for down payment and closing cost assistance for the purchase of foreclosed properties. The property must be a foreclosed property, purchased for owner-occupancy, and owned for a minimum of five years. The FHLB Des Moines grant will be added to existing city and private funds for Minneapolis Advantage.
The criteria used to select the Minneapolis Advantage pilot neighborhoods was used to target areas for the FHLB Des Moines program – those neighborhoods with a significant percentage of vacant and boarded properties:
- North: Harrison, Hawthorne, Near North, Willard-Hay, Cleveland, Folwell, Jordan, Lind-Bohanon, McKinley, Webber-Camden
- Northeast and South Central: Audubon Park, Beltrami, Holland, Sheridan, Bryant, Central, East Phillips, Midtown Phillips, Phillips West, Powderhorn Park, Ventura Village, Whittier
"The key to rebuilding neighborhoods overwhelmed by foreclosures is to get solid, responsible homeowners into these neighborhoods," said Mayor R.T. Rybak. "The success of the Minneapolis Advantage program has shown us that there are great homes to be had and that people are ready to move into these neighborhoods. Our job is to help make that happen and this funding just made our job a whole lot easier."
"The FHLB Des Moines Affordable Housing Program aids the unique housing needs of each community our members serve," said Curt Heidt, VP/Community Investment Officer. "The partnership with Wells Fargo and the City of Minneapolis has strengthened this community by providing quality, safe, and affordable homes." The grants, made by FHLB Des Moines, are ongoing efforts to address the mortgage crisis that has affected homeowners across its five-state district.
"We know sustainable homeownership is a priority in rebuilding neighborhoods affected by foreclosures," said Jon Campbell, CEO for Wells Fargo’s Minnesota region. "Local community efforts like this will lead to lasting solutions and successful homeownership opportunities."
"Now is a great opportunity for first-time home buyers," said City Council President Barbara Johnson. "Minneapolis has a great housing stock, and thanks to our partners, the City is working to restore a healthy housing market by bringing people back on the blocks."
Twenty-nine Affordable Housing Program grants totaling $10.4 million were awarded by FHLB Des Moines during their second competitive round in 2008. In response to community housing and economic challenges, the Bank’s Board of Directors used their second round of AHP scoring criteria to pay special attention to foreclosure projects. AHP was designed to help its member financial institutions and their community partners develop affordable housing for low- to moderate-income households. Projects must meet certain eligibility requirements and score successfully in order to obtain AHP funding.
These grants can be used for the purchase, construction or rehabilitation of rental and single family housing that assists households that are less than 80% of area median income. Each year FHLB Des Moines commits 10 percent of its annual net income to developing affordable housing. Since 1990, FHLB Des Moines has awarded more than $168 million through its Affordable Housing Program to create 34,703 homeownership and rental units.
The City of Minneapolis will announce further details of the application process for these grants and expects to launch the program in March 2009.
Published Jan. 7, 2009