Conduit financing for affordable housing development

Conduit financing for affordable housing uses pass through funding from other entities. It does not involve county funding but directs state bonding authority to projects in Hennepin County that are approved by the Housing and Redevelopment Authority (HRA).

Conduit financing helps to expand the supply of affordable housing by allowing private developers, both for-profit and non-profit, to work with public entities to secure capital via tax-exempt bonds to fund large-scale projects that benefit the general public. A principal benefit of conduit financing for affordable residential rental projects is that it may allow a project to qualify for 4% low-income housing tax credits. Outside of affordable housing, other projects can include hospitals, airports, industrial projects, public facilities, and schools.

Conduit financing includes various forms of public financing available to the HRA that:

provide financing to eligible applicants for projects that are determined to be in the public interest and,
are not dependent upon County property tax dollars. Examples include: housing revenue bonds, industrial revenue bonds, and 501 (c)(3) bonds.

Conduit financing is undertaken by the Authority pursuant to the provisions of Minnesota Statutes, Chapters 462C and 469.

Read more about conduit financing, and the application process, in Hennepin County’s Conduit Financing Guide. To request an initial meeting or application materials, contact the Multifamily Housing Development Manager.

Hennepin County HRA Conduit Financing Guide 2023 (PDF)

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Project examples

Currie Commons

Currie Commons is an affordable multifamily rental project under construction at 187 Humboldt Avenue North in Minneapolis. Hennepin County authorized $30 million in housing revenue bonds towards the creation of the project. The project also received capital funding through the Affordable Housing Incentive Fund ($950,000), the Affordable Housing Development Accelerator pandemic recovery fund ($575,000), Transit-Oriented Development ($300,000), and the Environmental Response Fund ($190,000).

Currie Commons will create 187 units in total, ranging in size from studios to three-bedrooms. 45 units are reserved for and affordable to households at or below 30% of the area median income.

Stonehouse Square

Stonehouse Square is an existing 71-unit apartment community located in Northeast Minneapolis. The original building was constructed in 1895 and is on the National Register of Historic Places. CommonBond agreed to purchase the property in 2019 in response to concern that the project would convert to market rate units and the existing Section 8 contract would not be renewed. Hennepin County authorized the issuance of $14 million in housing revenue bonds, supporting CommonBond’s conversion of most of the units from market-rate to income-restricted units. The project also received capital funding through the Affordable Housing Incentive Fund ($500,000).

Stonehouse Square will create 57 income-restricted units, 19 of which will be reserved for households at or below 30% of the area median income.

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