The Minnesota Housing Tax Credit Contribution Fund would provide loans or grants to cities for certain types of housing.
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The legislation, HF 1971 (Rep. Mike Howard, DFL-Richfield) and SF 1866 (Sen. Carla Nelson, R-Rochester), has been introduced during the last several legislative sessions. It is modeled after the North Dakota Housing Incentive Fund.
The House Housing Committee passed HF 1971 on a vote of 11-1. The Senate Taxes Committee laid over SF 1866 for possible inclusion in the Senate omnibus tax bill.
Use of the funds
The bill would establish a fund to provide loans or grants to cities and other qualified entities for low- and moderate-income multifamily and single-family housing construction, acquisition, and rehabilitation.
Funds could also be used for gap financing, construction financing, interest rate reduction, and permanent financing.
Incentives for contributing
The bill provides up to $25 million per year in tax credits for individuals or corporations that make a qualifying donation between $100 and $5 million.
Individuals and corporations receive a 90-cent-per-dollar tax credit against their state tax liability if they contribute to the fund or a specific housing project.
League supports the bill
The League provided written testimony in support of the tax credit as a new tool for local governments. The League believes it is an opportunity to encourage local businesses and members of the community to invest in affordable housing options and to leverage resources from private and public entities to spur development.