462A.33 Economic development and housing challenge 
  program. 

    Subdivision 1.    Created.  The economic development and 
 housing challenge program is created to be administered by the 
 agency. 

    The program shall provide grants or loans for the purpose 
 of construction, acquisition, rehabilitation, construction 
 financing, permanent financing, interest rate reduction, 
 refinancing, and gap financing of housing to support economic 
 development activities or job creation within a community or 
 region by meeting locally identified housing needs. 

    Subd. 2.    Eligible recipients.  Challenge grants or 
 loans may be made to a city, a private developer, a nonprofit 
 organization, or the owner of the housing, including 
 individuals.  For the purpose of this section, "city" has the 
 meaning given it in section 462A.03, subdivision 21.  Preference 
 shall be given to challenge grants or loans for home ownership.  
 To the extent practicable, grants and loans shall be made so 
 that an approximately equal number of housing units are financed 
 in the metropolitan area, as defined in section 473.121, 
 subdivision 2, and in the nonmetropolitan area. 

    Subd. 3.    Contribution requirement; regulatory 
 flexibility.  Challenge grants or loans must be used for 
 economically viable homeownership or rental housing proposals 
 that:  

    (1) include a financial or in-kind contribution from an 
 area employer and either a unit of local government or a private 
 philanthropic, religious, or charitable organization; and 

    (2) address the housing needs of the local work force.  

    For the purpose of this subdivision, an employer 
 contribution may consist partially or wholly of federal housing 
 tax credits.  Preference for grants and loans shall be given to 
 comparable proposals that include regulatory changes that result 
 in identifiable cost avoidance or cost reductions, such as 
 increased density, flexibility in site development standards, or 
 zoning code requirements.  

    Preference for grants and loans shall also be given to 
 comparable proposals that include a financial or in-kind 
 contribution from a unit of local government, an area employer, 
 and a private philanthropic, religious, or charitable 
 organization. 

    Subd. 4.    State and local government cooperation.  In 
 making challenge grants or loans, the commissioner must develop 
 a joint application process and coordinate funding with funding 
 available to the commissioner of trade and economic development 
 and local governments for housing and infrastructure 
 construction and repair. 

    Subd. 5.    Income limits.  Households served through 
 challenge grants or loans must not have incomes that exceed, for 
 homeownership projects, 115 percent of the greater of state or 
 area median income as determined by the United States Department 
 of Housing and Urban Development, and for rental housing 
 projects, 115 percent of the greater of state or area median 
 income as determined by the United States Department of Housing 
 and Urban Development. 

    Subd. 6.    Large-scale projects.  At least one proposal 
 funded under this section must provide sufficient resources to 
 make a significant impact on the housing needs and economic 
 development activities within a community. 

    Subd. 7.    Grants and loans to individuals.  Preference 
 shall be given to grants and loans that provide down payments 
 and other assistance to individuals to purchase a home.  The 
 commissioner must coordinate home ownership assistance provided 
 to individuals under this section with other programs 
 administered by or through the commissioner. 

    HIST: 1999 c 223 art 2 s 56