Tools for Preserving Affordable Rental Housing

Oct 2018

Family Housing Fund and our partners across private, nonprofit, and public sectors are making a concerted effort to preserve privately-owned affordable rental options. This housing is sometimes called “NOAH” (naturally-occurring affordable housing). Ensuring that the most affordable rental homes in our region stay within reach for renters earning modest incomes is critical to meeting the Twin Cities region’s housing needs.

This page provides up-to-date links to resources for owners and sellers of rental property and others interested in this topic.

For owners who want to or currently offer affordable rents:

Owners who offer affordable rents, or who are interested in keeping rents affordable, should be aware of 4d Affordable Housing Incentive Programs.

Several metro cities now offer incentive programs, based on the state property tax classification system. 4d tax classification status helps apartment building owners reduce their property taxes by keeping 20% or more of their rental units affordable.

Some communities, such as Minneapolis, also help owners make their buildings greener through cost sharing for energy efficiency improvements and solar installations.

Current 4d incentive programs:

FHFund has compiled resources for owners interested in participating in current programs:

Additionally, the Saint Paul Rental Rehabilitation Loan Program provides financing for responsible landlords to make property improvements to 1-4 unit rental buildings in the City of Saint Paul.

For investors interested in purchasing and preserving affordable rental properties:

There are several resources in the Twin Cities region for investors interested in preservation acquisition and financing for new transactions.

  • The NOAH Impact Fund facilitates the acquisition and preservation of naturally-occurring affordable housing for low- and moderate-income families and individuals. It focuses on properties of 50+ units in the Twin Cities metro.
  • The Small and Medium Multifamily Acquisition Loan Program provides financing for the acquisition of 2-49 unit buildings in the City of Minneapolis. Contact Land Bank Twin Cities for specific project opportunities.
  • Land Bank Twin Cities provides brokering, land banking, and financing for properties and projects throughout the Twin Cities metro region that benefit people with low to moderate incomes.
  • Greater Minnesota Housing Fund provides loans for the acquisition of NOAH properties throughout the state, including the Twin Cities.
  • National Funds: Several national preservation funds are active in the Twin Cities market for larger multifamily properties. For example, Twin Cities LISC has a relationship with the national Community Development Trust; Aeon is a member of the Housing Partnership Equity Trust.

For owners interested in selling their properties to create a legacy

Did you know that you can get a competitive price for your property while also ensuring an ongoing legacy of high-quality and affordable rental housing for your tenants and the broader community?

Owners who choose to sell to buyers who will preserve affordability may qualify for charitable tax benefits. Mission-driven buyers are increasingly able to access low-cost sources of capital, available on a short timeframe, that allow them to make competitive pricing offers.* Learn more in our brief: Bargain Sales: A good deal for sellers, buyers, and residents.

Nonprofit buyers are actively seeking properties—typically 50 units or larger—in the Twin Cities, including Aeon and CommonBond Communities. For smaller properties, contact Land Bank-Twin Cities. For-profit buyers who make an affordability commitment may also qualify to access preservation financing and incentives.

*Disclaimer: This information does not constitute professional tax advice. Please consult with your own tax professionals.

Who is it for?
Business Leaders & Employers, Housing Providers

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