Pilot Program Seeks Partners to Increase Homeownership Opportunities for Emerging Market Populations
Bold Initiative Targets Reducing the Gap in Homeownership
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GMHF is launching a pilot program to support local and regional efforts to increase affordable and sustainable homeownership opportunities for emerging market populations, including households of color and Hispanic ethnicity and recent immigrants.GMHF is proud to announce nine Emerging Markets Planning Grant Awards. Click here to download media release (.pdf)
Although Minnesota is a national leader in the overall homeownership rate, it is significantly lagging in minority homeownership rates. At the same time, communities across Minnesota, including many in Greater Minnesota, are becoming increasingly diverse. To address this challenge, the Emerging Market Homeownership Initiative (EMHI), which was led by the Minnesota Housing Finance Agency, Fannie Mae, and the Federal Reserve Bank of Minneapolis and included more than 50 partner organizations, published a plan in June 2005 identifying key strategies and setting a goal of 40,000 new emerging markets homeowners by 2012.
(The EMHI Business Plan is available at http://www.emhimn.org/AboutUs.cfm.) GMHF is a Collaborating Partner of EMHI and is working closely with the lead EMHI organizations in the planning and implementation of this pilot program.
Consistent with the EMHI Business Plan, GMHF is seeking to support emerging
market pilot projects that demonstrate the following:
•
Increase the number of emerging market households achieving homeownership.
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Address one or more of the EMHI Business Plan strategies.
•
Involve community and industry partners in direct, meaningful ways to
achieve long-term success.
•
Expand the type of services, populations targeted and/or geographies
served if applying for funding for programs that are already underway.
•
Include strategies to incorporate pilot activities in regular business
activities after completion of the pilot grant period.
•
Offer the potential for program replication in other geographies and/or
to other targeted populations.
Program Seeks Creative Thinkers and Solutions GMHF is seeking to fund pilot projects from organizations and/or collaboratives serving diverse populations and communities across Greater Minnesota. GMHF is open to a range of pilot program structures, including initiatives that serve single- or multiple- geographies and emerging market populations (e.g., project serving Hispanic families in three-county area or a cross-cultural initiative in a single city). GMHF is interested in funding pilot programs that primarily serve low- and moderate-income emerging market households earning 80% or less of the statewide median income.
To encourage these efforts in Greater Minnesota, GMHF will provide multi-year grant funding (up to $75,000 per year) for pilot initiatives to cover staff costs, outreach efforts, capacity building, culturally-sensitive homebuyer training, etc. GMHF also intends to provide priority access to its “gap” financing program (0% interest, deferred loans up to $15,000 for homebuyers) for emerging market buyers who purchase homes that meet GMHF program guidelines.
Pilot Program Application Process
Organizations interested in obtaining pilot program funds must complete
a program pre-application. The purpose of the pre-application process
is to encourage a wide range of proposals and not place an undue burden
on applicants during the early pilot program planning stage. GMHF recognizes
that additional planning may be required to fully develop a pilot program
and that funds are often limited to cover this kind of work. As a result,
GMHF intends to award planning grants of up to $5,000 to several selected
pre-applicants to conduct further planning and outreach to finalize
pilot program design. Final applications will be submitted by planning
grant awardees and will be reviewed and selected for funding by GMHF.
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Frequently Asked Questions
March 2007
1) Will GMHF provide funding to existing emerging markets homeownership programs serving Greater Minnesota?
Several organizations in Greater Minnesota have already begun pilot programs in response to locally-identified needs and the issues raised in the EMHI Business Plan. GMHF recognizes the considerable effort already invested in these programs and is interested in supporting them through this pilot program. To receive funding, existing programs should demonstrate that GMHF resources are needed to allow them to increase their capacity to serve additional households. Expansion of geographic service area and/or target populations served would also be considered favorably if capacity and resources allow.
2) The pilot program materials mention serving households of color and Hispanic ethnicity and recent immigrants. Can GMHF funds be targeted to recent immigrants if they are not households of color?
In general, no. The purpose of the GMHF pilot program is to increase homeownership rates among minority households. While some of these minority households may be recent immigrants (and have different barriers to homeownership that need to be addressed), GMHF’s primary interest is to increase homeownership rates among households of color.
3) How is the GMHF pilot program connected to the Emerging Markets Homeownership Initiative (EMHI)?
The important work of EMHI, including the development of the EMHI Business Plan, provided the foundation for the GMHF pilot program. GMHF has worked closely with EMHI on the design and development of our pilot program. GMHF encourages its pilot program applicants to become certified as EMHI pilot projects.
While GMHF and EMHI have and will continue to work together closely, this pilot initiative is an independent GMHF program similar to Building Better Neighborhoods or Minnesota Green Communities. GMHF will provide all funding and administration for the emerging market pilot program.
4) What types of organizations can submit pilot program pre-applications?
GMHF expects that pilot programs will include collaborations among a range of nonprofit, government and industry partners. GMHF asks that a nonprofit or government partner serve as the fiscal agent and the lead organization on the application.
5) Can GMHF funding be used for Homeownership Education Counseling and Training (HECAT)-type activities?
Homebuyer education and counseling is identified as one of the six key barriers to homeownership in the EMHI Business Plan. As a result, GMHF anticipates that a share of its pilot program funding may be used to support homebuyer education and counseling that is culturally-sensitive and/or offered in additional languages. However, applicants should continue to apply for HECAT funding to provide a significant share of their homebuyer support services funding.
6) What does “priority access to GMHF gap financing” mean for the pilot program?
The primary purpose of the emerging markets pilot program is to support systems change that will allow more households of color to achieve sustainable homeownership. GMHF recognizes that some additional subsidy may be needed to help some low- and moderate-income households achieve homeownership. GMHF encourages pilot projects to leverage the range of available subsidy resources, including Minnesota Housing programs, to increase affordable homeownership opportunities. GMHF will offer priority access to gap financing for emerging markets homeownership programs through the Super RFP. However, the primary focus of pilot program applications should be on building and expanding community/industry partnerships rather than on obtaining GMHF gap financing resources.
7) Will GMHF require that the pilot programs be restricted to low- and moderate-income (LMI) households?
No. Research by EMHI and others shows that the gap in homeownership rates is consistent across a range of income levels. While some pilot programs may choose to focus on low- and moderate-income households, GMHF funds can be used to support programs that serve a wide range of income levels.
8) Can non-LMI households receive GMHF gap financing awarded through the Super RFP?
No. While GMHF encourages the development of pilot programs that serve a broad range of incomes, it has very limited gap financing resources for homebuyers. As a result, financing resources will be restricted to households that meet GMHF income guidelines. For more information on current GMHF income guidelines, visit the GMHF website at http://www.gmhf.com/Applications/GMHF-income-limits-acl.pdf.
9) Can GMHF funds be used to directly compensate lenders and/or realtors for their participation in a pilot program?
No. The purpose of the program is to support pilot initiatives that will facilitate sustainable and mutually beneficial community/industry partnerships that can be replicated in other communities. While compensation might encourage initial participation from some industry partners, it is not replicable or sustainable in the long term. In addition, a key premise of the EMHI Business Plan and the GMHF pilot program is that expanding emerging markets homeownership opportunities is good business for everyone. The resources likely to be provided by the pilot programs, including training for industry partners and increased access to culturally-specific homebuyer education, should prepare interested lenders and realtors to expand their business by serving more mortgage-ready emerging markets homebuyers.