The Greater Minnesota Housing Fund in Saint Paul has announced the launch of an impact investment fund that will support efforts to preserve affordable housing in the Twin Cities.
According to GMHF, while older Class B and Class C unsubsidized private rental housing serves more U.S. households than subsidized housing, it is at risk of losing its affordability as prices and rents for such properties rise dramatically. In the Twin Cities metro area, thousands of low-income families and individuals are being displaced from their homes as a result of rising rents and prices.
To address the issue, GMHF has raised $25 million in social impact capital from Minnesota foundations, community banks, and state and local government for the NOAH Impact Fund, which will begin making investments this month with the goal of acquiring a thousand units of naturally occurring affordable housing (NOAH) in Minneapolis-Saint Paul over the next three years. To boost its impact, the fund will concentrate its efforts in the seven-county Twin Cities metro area, where properties are being acquired by real estate investors who view the Twin Cities market as a prime investment opportunity.
The fund itself is a public-private partnership of Bremer Bank, Sunrise Banks, Western Bank, the Minnesota Housing Finance Agency, Hennepin County, the McKnight Foundation, and the Otto Bremer Trust, each of which made an impact investment in support of the fund. In addition, Freddie Mac is making up to $100 million in first mortgage financing available as a complement to the equity financing provided by the fund.
"The NOAH Impact Fund is our response to the crisis of the loss of affordable housing in the Twin Cities metro," said NOAH Fund manager Rachel Robinson. "We are grateful for the array of partners who've come together to preserve the affordability of rental properties and to prevent the displacement of low-income individuals and families."