my email >> and I'll take Thank you. I didn't hear you. Yeah. Testing, testing. Can anyone online hear the mic? Yeah, >> thank you. Happy. Hello. I don't need to put on a camera or anything. Okay. Okay, good morning. It is I think 10:05 and we are going to get started. Welcome everyone to the Minneapolis Homes Financing 2026 developer technical assistance. Uh special welcome to those of you that are here in the room and special welcome to those that are joining online. Uh here is a quick overview of the agenda today. I won't go through it. You will be walked through this uh as we proceed. Starting with welcomes and introductions. Uh we will introduce city staff and then we have signin sheets here in the room and um know who's attending online. So thank you for that. Also, a quick note, those of you online, if you have any questions, please drop them in the chat. We are monitoring them. My name is Sheri Shokquist. I'm the residential real estate development services manager and I will hand it over to Eden. >> Hi, I'm Eden Spencer. I'm the supervisor of our residential real estate development team. >> Hello, my name is Joe Starky. I'm a senior construction management specialist. Morning. Dustin Brandt, supervisor of the construction management team. >> Uh Matt Johnson, construction management specialist. >> Isel, uh project coordinator. >> He said it too fast. Did you guys understand what he said? >> Say it's more than clear. >> Abdullah, project coordinator. Matthew Ramadan, senior project coordinator. And just moving over. >> Hello. Some of you I know, some of you I don't. I'm Ryan. I'm a senior project coordinator. Handles down payment assistance affordable housing, home buyer education, the fun stuff. So, >> hi. Uh Patrick Shayen, real estate coordinator. Uh if you've closed a project with the city in the last couple years, uh you probably worked with me. I get the contracts out and uh work with the developers and the title companies to get to closing. >> Good morning everyone. Bob Schmater, senior construction management specialist. >> Anyone else here for missing? >> All right. Thanks team in house today. I will mention we have another uh senior construction management specialist, Mike Williams, who is at a draw today and also uh Tara Roberts that many of you work with. She runs this program. Um she's joining us online today. She's a bit under weather like many of us are. Um you can probably hear I have a cold. So thanks for your grace as we move through the presentation this morning. Yes. Oh yes. >> Probably is. Okay. [laughter] We also have Raki Babi who is a construction management specialist. >> Hey, my name is Hi, my name is Rakivi. I'm a social management specialist. >> Thanks. >> And Tara, are you Nope. Okay, we're great. Thanks. Okay, Minneapolis homes financing our program. Today we are focused on create creating affordable home ownership units. We will go through uh Minneapolis homes financing focused on cityowned development property purchase whether rehab or single family. And also um this time we are >> based on the last >> encouraging you to bring um if you have property that you own to bring that forward as well. Um asking everyone to please mute. Um we're hearing uh extra meaning >> voices out there. Thanks. Our program goals are to eliminate racial disparities in home ownership and develop 1 to 20 units of home ownership housing affordable and accessible to low to moderate income households throughout the city of Minneapolis. our eligible applicants. Um we've been really focused in the past two years on applicants that have the capacity and ability to close and start construction within 6 months of city council approval and complete construction within 12 months of closing. We are going to stick to this timeline in the future moving forward. We're also looking for your experience performing a comparable scale of real estate development, your ability to demonstrate sufficient funding to complete your projects, and uh new applicants, which we welcome, are strongly encouraged to participate in the city's developer technical assistance program, DTAP, or other similar programs or mentors. We have several mentors in the room today. So, thank you to mentors as well as several developers that have participated in DTAP. Um, one note is it's not always easy to get into DTAP. There's a wait list. Um, but if you are interested, please reach out to me or one of the our staff and um we encourage you to uh put that on your list as soon as uh space is available. focusing on eligible projects and properties. As I mentioned before, 1 to 20 units, city-owned properties, vacant land, and vacant structures, uh perpet perpetual affordable housing, which Ryan will speak to towards the end of our presentation, and also this entire second hour. Um today, Ryan will be going on a deeper level into perpetual affordable housing. Uh so PH is is restricted to development um except in near north and Camden communities which is all of North Minneapolis uh not just those neighborhoods either recapture or perpetual perpetual affordable housing is eligible. Construction requirements Joe. So part of our construction requirements is um green communities criteria. So you can find that on the Minnesota housing website. Um that it' be the 23 24 Minnesota green communities overlay. We require um an Energy Star all new houses to be Energy Star rated. So um it's I believe version 3.1 will apply to this round of RFP. Um all visit visitability design. So um you have to have a half bathroom on the first floor. All doorways throughout the house need to be 32 in and a noep entrance. Um, and then note that if you build a project that's two or more units, your house could your project could be um could be pre um sess susceptible to prevailing wage. Um other than that um any rehab projects that I think there's a few in this round um have to follow the Minneapolis homes funded rehab standards. Anything any in more information on this can be found on the Minnesota Housing's website for building standards. >> We are going to save questions for the end, but one came up that um is really applicable to this slide. Um it has been noticed that Energy Star ready is not on this list. Joe, would you like to provide some good news? Yes. So, we are not doing net zero. We're not doing energy ready. We are just the deferred is just Energy Star certified which um is based on what the energystar.gov website has which is version 3.1. However, if you're still interested in sustainability at that level and would like to develop to those standards, okay, we do want to save a lot of time at the end for questions and um so please keep track of them. Okay. Uh why we're here today, the proposal requirements. I think many of you that have participated in this program before are familiar um and uh if you this is your first time through um they will make sense to you. We uh are looking for projects that are cost reasonable that reflect industry standards for construction cost, market value and soft costs. Um we also developer developer fees are limited to 10% of the total development cost per project of less than 10 units and 15% for 11 to 20 units. Um in addition to providing a project proforma showing sources and uses including documentation of committed financing. I want to comment on those first three bullet points about cost, reasonableness, the developer fee and the project proforma. Uh our our project proforma form has uh some builtin um calculations that it's very important to use that form and how that 10% is calculated is not just a straight 10% across the board. So this is an opportunity for me to create a plug for our pro project for workshop that will be coming up in the next two weeks. Um Eden Spencer will be leading it with the rest of the real estate uh development staff and we will take time to carefully walk through our project proforma and explain um in detail what each cell means. Um, with that said, it's really important that you take into consideration all of your project costs. Um, especially some of those upfront soft costs, whether they're architecture fees or, uh, etc. Um, you need to put all of your project costs into your request. we are not in a position and do not expect to be in a position to provide additional funds. So, one of the reasons we're really focused on the 6 to 12 month time frame getting getting to construction start in six months from award completing construction start in 12 months. That's to help help that those um cost creep from happening. Um and also uh just with the current uh economic climate um and the rising costs of single family uh or home ownership development, we need to um remain competitive and uh not put ourselves in a position where we're going back to the city council and saying, you know what, $450,000 wasn't enough for this affordable unit. We need more. We're not we're not just not in a position to do that. So, it's really important that you ask for all the funds that you need upfront. With that said, we know that your your original estimate will change a lot between what you put in column one of the proforma and column 2 when you have your actual bidding. Um, we know that many of these properties will need soil corrections. All of that we're prepared um to work through with you. Um but with all of this said, we also are looking for projects to be competitive and to be cost reasonable reflecting industry standards. So um many of you may have already reviewed our property list and map that are on the website. You know, certain pro certain properties or certain um sites will be um of more interest to more developers than others. So, keep in mind that while we want you to be as clear and um realistic as you can with your costs and we're not in a position to give you more money, um you're also in a competitive process. So, I hope that was clear uh and and makes sense to you all. Okay, two more bullet points here. We're looking for a conceptual design or rendering showing the building elevations. Um, and we're asking you to choose a city-owned property um, from the lot list provided on the website or demonstrate site control of a non city-owned property, mentioning again new construction or rehab projects. This might be a good place too for me to mention we have a lot of Minnesota housing impact funds. So, if you are a developer that has your own impact funds, carefully consider whether you are bringing your own impact funds to this RFP or if you are willing to use our Minnesota housing impact funds. Um, also we have both new construction and rehab impact funds. So those of you interested in doing rehab, we really want to expend our rehab dollars from the state as well. So um please keep that in mind uh when when you are considering your projects uh that you're proposing this year. Okay. The application is due January 15th at noon. Um and these are the requirements for your proposal. Uh complete the application online. uh complete your proforma with uh highlighting what what I just reviewed and uh complete a broker's price opinion or comparative market analysis for each address that you are interested in. Um provide construction plans. Uh we're requiring elevation floor plan and floor plans. Site plans are optional. um you may not have them um these plans specific to each site yet. Um and check to see that uh if you already have an affirmative action plan on file that it's not expiring um or if you haven't yet submitted an affirmative action plan, please do so uh to the M Minneapolis Department of Civil Rights after we receive all of your proposals in January. um a couple of weeks after that um we will reach out to you um with staff recommendations. Um we uh will then be asking for a completed offer to purchase for documentation of site control and documentation of financing. So we before we bring your proposals to the city council to the business housing and zoning committee, we need to have all of that here re viewed and approved by staff. We no longer ask you to provide that upfront. We think it's too much work to ask you to do if you know 10 or 12 developers are uh interested in the same property. We don't want you to have to do that 20 times for no reason, but we will we will need those uh that documentation eventually. For those of you that have participated in this process before, you have seen us provide really tight timelines of what happens when. Um we have a new city c a new city council, some new biz uh committee members joining us in 2026 and we don't have the full council calendar yet. So sometime in January, we will know um exactly when we expect to be bringing uh the proposals forward to biz and we'll provide a much tighter timeline then of when when we expect to um have biz and city council approval. So that will then entail when bidding will need to happen, when that six-month timeline will be, when the 12 month construction period, etc. So we don't have a timeline now because of that, but we we will provide one as soon as it's available. Uh the submission portal, how many of you have taken a look at this for this RFP round? Okay, just a couple here in the room. Uh here's a link to the proposal website. I think you've all received it in the gov delivery email. Here is a cut and paste of what the intake form looks like. It's uh just basic information, your organization name, phone number, email, um the checklist of all the documents that you need to upload. Um, these have interesting dates >> on them. Okay. It's not that way online though. Okay. Because that's how we got. >> Thank you. All right. So, whatever date um we've got noon by April 5, January 15th will be the application address proforma. Um, and then at some other date will be the other documents that we need. This is here as an example. Okay, I think I've explained our criteria for selection. Um, we're looking for cost effectiveness, meeting community needs, um, with community engagement, highlighting equitable wealthb buildinging opportunities, and incorporating unique design features that achieve city goals. Um, we need complete applications uh as obvious and um I think you uh know the rest. staff has uh the ability to uh reject or request additional information for any proposals or parts of the proposals uh and to negotiate before uh making our recommendations to biz and the city council meaning business housing and zoning committee of the city council. One thing that I think happens the most is we might have the majority of developers interested in the same properties. And so we will take a look at the designs that come in and say, "Okay, we can give you one of your top five properties or two or three. Will you consider these other properties?" So the majority of the negotiation that I have experienced from our team with developers is how do we get as many of you funded and building on as many properties as possible. Okay, it's still me Ryan. Yes. Types of funding available. Um we provide project gap, affordability gap, or both. Project gap is the difference between the total development cost of a project and its appraised fair market value upon completion. Affordability gap is the direct assistance provided to the purchaser of a funded unit including both recapture and perpetually affordable housing. The total development assistance is the combination of both of those. All right, time to turn it over to Ryan and then the rest of the time reserved will be for questions. Thank you. >> Hello everybody. Uh so the one of the goals of the program is to get people in affordable house ownership homes. And so one of the models that we pro that um is part of the affordability assistance that Sherry covered is the recapture assistance. The recapture assistance is essentially a down payment assistance loan that's given to the buyer when they buy the home initially. It's a 0% 30-year deferred mortgage. Typically, it's between $1,000 and up to 15% of the market value. Um some of the major some of the broader requirements of this assistance model is home buyers have to complete um home buyer assistance. They have to be below 80% 50% or less of D uh back or backend debt to income. um income must be at or below 80% of the area median income or AMI. Uh and this program, this model specifically is only available in North Minneapolis. So that's the typical any any project we do in north side has to be recapture. You can't do recapture in south. Um and then and obviously the I mean the these homes are sold at market value. So, it's just a general market value sold home assistance provided to the buyer. They can layer this assistance with other other non city sources to purchase the home. So, if they go to first generational down payment assistance, they can get that and this to kind of lower that gap. We're trying to um provide kind of build the cake to shrink that the amount they need to get in to own a home. Well, we'll get questions at the end. So, um, next slide. Oh, it is. >> Yeah. >> Oh, I do, man. All right. So, the second model that was that's covered is the perpetually affordable housing model uh or PH is what we call it. This is um it's I'll read the description. It's a lot, but uh perpetually affordable ownership markets the home at a reduced sales price of 20% or more from the market value. In exchange for the reduced sales price discount, the property is enrolled in one of the two equity sharing models selected by you all at application. So the two models are the city land trust model which is detailed here and the city of Minneapolis model. Both are on the application you will see there is both models for affordability recapture and perpetually affordable housing. on those on that application page, select the model and your administrator cuz on the city model it's administered by a cel land trust or a build wealth Minnesota and so it's not we're not pressuring you guys to select a model if who you guys are comfortable with select that administrator and the way this works for which I'll go into later the administrators of this program assist with you guys for the home buyer sale they don't assist with the develop Velment they're working on the back end when the home when you're ready to market you get get in touch with them to go through their process to you can use their realtor you can they'll qualify the buyer they'll handle the closing process for the city documents and this is eligible in all Minneapolis neighborhoods north and south so you can kind of go anywhere with this one. So, um, the bigger the big differences between the two is the Celix Millress model is at at um at home buyer sale, which Stacy you're here, so I can you can correct me if I'm wrong. Uh, 25% of the value increase to the buyer upon sale. So, the appreciation from when they when they bought to sale, they get they get a quarter 25% of that appreciation for their equity apprec uh sale. the mid the mo the city model and also it's secured by a 99 year ground lease. Um and then the city model is 2 and a half% appreciation per year that's compounded annually. So you can kind of bank that in every year 2 and a half%. And this is secured with a 30-year declaration of covenants which is different than a ground lease which we can get into more specifics at the end of it. Um and then it's basically it renews upon each sale. Um, yeah, same requirements for the home buyer on both models. So, you still have to do home buyer home buyer education. You have to be in at or below 50% down debt to income on the back end AMI or below. I think that's it. Oh, next slide. I'm so I'm I'm sorry. Okay, now there's question time. I guess I will take this. >> Yeah. Yeah. >> Federal. It's federal. Federal county. >> Yes. Yes. So, we we have a b we have a if you worked with government before, there's b there's buckets of funds that we use and it's federal, state, and local. And we use the federal AMI bracket for for the program. Alex. >> Yeah. Yeah. So and important caveat to the home buyer side is developer when you guys are selling you guys are responsible for qualifying that buyer. So there's things where that's a big process. Some people that's the benefit of the it's perpetually affordable housing is my program. So like it's a benefit of the program is the administrator does do that for you. So they qualify the buyer for those specific AMI bands. So that's important thing. Also the recapture side you guys are responsible for doing that and you send it to our our staff. We do review it to make sure it's in line, but it is that kind of that last hurdle removed. Yes. Oh, okay. Oh, is it um anything? I'm just standing in Yeah. >> Yeah. >> Can you mind your business? >> Uh fair market. Isn't that like >> market? >> Yeah. >> Yeah. Yeah. So, you get your appraisal from a lender. They say it's worth I'm just going to pull a number. 350. That's the sales price. And then basically the home buyer if they're approved for pick a mortgage 280 there's that $70,000 gap. I mean we can provide up to 15% if you want to provide that and or they can go out outside of the this or can go through you know neighborworks has some programs other programs can be used to fill that that pot to make sure they can keep that mortgage affordable for them. Yeah. Yeah. Oh >> uh go ahead with your online question Ahmad. >> Thank you. Um one question is since this is uh this opportunity is open to uh existing or I should say developers that have site control of their own properties. Is there any preference given one way or another? I for example, you know, I have two sites in North Minneapolis that I want to develop that this could be a good fit for. Um, but I don't want to shoot myself in the foot and submit only those two if there's a preference given to city-owned, for example. So, just curious if there's any, you know, points given one way or the other. >> Uh, thank you for your question. I believe everyone heard it. I won't repeat it. Uh, at this point, uh, no. Um, if you are coming with your own property, uh, we are not looking at preference between city-owned and, uh, property you have site control over. As I mentioned before, we have quite a lot of state funding that we're looking to expend that have deadlines. So, um, another thing that I will mention, um, without going too far down the prevailing wage, uh, rabbit hole is that a lot of the properties that the city owns are suitable not just for single family development, but for twin homes, uh, triplexes, forplexes, or more. because the state funding prevailing wage requirement limits us using their funds on twin homes or greater. Uh we are in a position where there's probably about 12 properties on our list that our uh planning and zoning department has uh informed us are single family only. So, um that is another reason that we would welcome uh if you already have site control of of properties, we would welcome you uh bringing those to the table as well. And Bob Schmott has a comment, I believe. Wait, wait, wait. We for the people online, we need to use the microphone. >> Were those properties flagged so people can see the difference between the single family option and the and the and the multif family option? At this point, we're looking at building single family homes on lots that could be developable for duplexes or triplexes, etc., because we want to keep development moving and get homes on those lots and h instead of them being vacant. Um, I think you were next. Here you go. >> Uh, so that that kind of answered one of my questions if there was any competitive advantage to a single family to, you know, twin home to duplex and what was the city leaning into or what maybe would score higher. I know you can't answer that question, but secondarily to that, is there a sweet spot in subsidy with the amount per unit that you're asking? If you're looking at your total TDC, is there an area because in in other RFPs I've been in, they usually have uh metrics or criteria that says, hey, if you're asking for 250 or less or 200 or less, you get the max score. If you're asking for more, you get a little less. Is there any sort of differentiation with that? >> Uh, thank you for your question. And um this isn't one I need to repeat because the microphone was used. Correct. Okay, great. That was a complicated question. Um starting out with the first part of your question, which was single family versus twin homes, tri multif family. So this one is really tough for me. Um we need to use state funding, state impact funds. Right now, we cannot find a way to comply with their prevailing wage requirements. And I know many of you have tried have really really gone above and beyond trying to meet those requirements. And any adjoining wall is uh makes us not able to use impact funds. We are not saying don't do any twin homes, but if you do twin homes, we have to use only our funds or a combination of our meaning the city's funds, general funds, a combination of that and our federal funds. So, home, CDBG, whatever, whatever we have available. And that means when we go to city council and say, you know, yes, there's some cost effectiveness, Alex, how much how much do we save doing a twin home compared to a single family home per unit >> per unit? >> Okay. From 300 to 1701 180. That is a great cost savings. It provides more affordable home ownership. We love that. Well, can't use state funds. So then we have to go to the city council and say um you know we're providing 180 200 you know it's like we have to put more of our subsidy in. So when we look at I'm giving way more complicated of an answer than you want and I hope I'm hope I'm not making any staff nervous here. But what we have to do is we have to figure out based on what comes in how best to use the resources we have. And it's a puzzle. And so we look at the puzzle. So it's not it's not only you know Alfred wants to get in involved in this. Oh by the way our housing director Alfrick Port has joined us. So >> good morning or afternoon. Good morning. Um I'm Alfred Port and um I work with the housing team here. First of all I want to say for those of you that are returning, welcome back. For those that are going to be new to this, I want to say welcome and we're excited to have you. Um, the work that you all are doing is important for the advancement of housing in Minneapolis and this relationship is going to continue to u make the work that we do here successful. Um, as it relates to the question around the prevailing wage on triplexes or duplexes and higher, what I'm going to encourage you all to do is put in multiple applications. Um, and then we'll go through the evaluation process looking at the resources that we have and make some informed decisions that way. Um I'm hopeful that [clears throat] and and and I would also add even if you are looking at just putting in have the capacity to do one project or two projects, I would encourage you to put in more proposals than what your um what your capacity um needs are because this is going to be a competitive process. Um, and when we're going through that competitive process through the evaluation, um, it we can make some informed decisions that way. >> Does that answer the question? >> It does. >> Okay. Um, as far as as far as sweet spot, um, I think that was the other part of your question. One dollar is the sweet spot. [laughter] Okay. Um, but I also I just want to say want to say a couple of things on the on the slides. Our intent here is to make this process as as seamless as possible, less work for you as possible um but as much as to get as much information that we can so that we are able to make some informed decisions. So on the slides, um, if you could just go back a few slides, one more back one, back one. Just go until I tell you to ask you to stop, please. There you go. Right there. On the fourth bullet, it says provide conceptual design or rendering. And then go to the next slide. And on this slide it says construction plans. We want to be clear. We're not asking you to go out and provide construction drawings which you're going to incur cost. Conceptual plans on the first slide on the earlier slide is just talking about what that concept is. The construction draw um construction plans year is not should not be confused with construction drawings where you have the details. What this is saying, we just want to see the elevations and the floor plans. We're not asking for dimensions and section plans and those types of things. We don't want you to incur cost during this process because you may or may not be awarded and then that's a cost that you would have incurred that we wouldn't be able to reimburse. Does that make sense? All right, thanks all. >> Thank you. Okay, who was next? >> We do have another online comment that's been up for a little bit. So, Muhammad, if you want to ask your comment, go right ahead. >> Yeah, thank you. Can you hear me? >> Yep. >> Okay. Um, sorry I'm I'm pretty new to this. So I had more of a conceptual question just around could you help me understand I guess kind of like what the upside to the developer is because if you have this project gap and affordability [clears throat] gap that will take you up to kind of back to get you to where you were originally on your total development costs. um like what is like I guess the upside to the developer beyond just the development fee. Does that make sense? >> Yes. Uh thank you for your question. I I would um encourage you to talk to other developers about why why they do this work and why they do this work in the city of Minneapolis and why they're focused on affordable home ownership, which really is mission missiondriven. Um, in the years that I have been part of these programs in the city of Minneapolis, I have seen neighborhoods transformed, um, and from the work that you all of as developers, whether you know you're a nonprofit that's been around for decades or, um, if you're a newer, uh, nonprofit or private developer that comes in, this is really, really important work that's incredibly important to the community. Um I know this this whole process is not easy and so the upside to the developer is your developer fee and the experience that you have uh participating in this program. Uh but like I said at the beginning I really uh encourage you to to reach out to other developers. There's a lot of developer mentors in uh uh in this space that would be willing to talk to you. And uh I think uh director port has uh some additional comments to make on this. >> So there are most of you that are in this space are seasoned developers. Others are emerging developers. The benefit to our program or this program is is twofold. We are con continuing to to build out Minneapolis. But the second is trying to ensure that developers that want to enter into the space of development has a pathway or have a pathway. And the single family development is an avenue to get us there whilst also garnering the experience that would position you to even do larger projects like the multifamily and and commercial projects. Any development has performance. Any development requires you to go and pull permits, work with the architect. So this process will give you that experience to catapult you into the next phase of your journey. >> Thank you both. Um, next in room question or comment. >> Thank you. >> I noticed that you mentioned that they were going to have a proform class in the next couple of weeks. I took uh DTAP probably two years ago, maybe a little more, and I've never been able to get into the proformer class. So, who do I need to talk to to get in that class? That's the first part of my question. The second is if I want to use my um um technical assistance that was get um who do I have to contact to do that? So, those two two items. >> Do you have a comment, Steve? Okay. All right, great. Thanks. So, the proform workshop, we need to find a room. Uh, it's hard to find rooms at the city. We'll do hybrid and so that will be uh we'll send out everyone that attended today, we have your email. >> So, if you uh if you participate online, we have your email. If you're in this room and you sign up and provide us with your email, we will email you information on the proform class that's um will probably be coming up the week of the 15th. And um I really encourage everyone to take it. Even if you um even if you are familiar with our proforma, every time we go through them, there's uh a little tip or tweak that's really important to understand uh with a proforma form that we use. So, thank you for being able to make that plug again. And the second part is technical assistance from DTAP. And um I know Matthew, I'm looking at you, Eden. >> Oh, it's just contact Zo. Okay. Zoof Theiel. And we can make her information available to everyone. Um the slides we can we will either post the slides on on the website and or send out a link or the presentation as well is some of this key information that's coming up today. Um we also will have uh questions and answers. There's a deadline I don't remember what's I don't remember our deadline for questions but we will also collect all the questions that come in and post the answers to the website. So, all right. Do we have another online or Stacy? >> Okay. >> Yes. >> Um, just a quick question in regards to the Minnesota Housing Funds. Can it be used for common lot development if the lot is big enough? >> I don't know the answer to that question, Stacy, but my answer is if the Minnesota Housing says it's okay, we say it's okay. >> Oh, two. Yes. Yes. No, no shared wall. We're okay. I do understand the prevailing wage statute. >> All right. Um Ryan, on the affordable housing, the perpetual affordable, is it still that there's the kind of the two thresholds, meaning that you have the maximum purchase price based on the number of bedrooms, but if the market value doesn't provide that 20% difference between the max purchase price and the market value, there still needs to be a 20% reduction regardless off of the market. Correct? Okay, >> thank you. I think we're back to online and then Alex >> uh Jasmine. >> Thank you guys. Um I have two questions. One question is I'm an emerging developer and my and for you know people who haven't done so many solicitations. Is there um some time where uh the team will give feedback if we don't get awarded any sites or if we do um just to make sure that we understand how this solicitation works and you know get better at doing the solicitations. And my second question um was was there going to be another round if that question haven't been answered? >> Okay, thank you Jasmine. Uh the first question is feedback. So, we encourage you to ask all the questions you have now as you're working on reviewing the RFP. Our staff uh that introduced themselves at the beginning are available for questions. We will keep track of your questions and other people's questions and provide the a answers on our website. So, that's the first encouragement that we have is to ask questions of staff. We're here um for that. Uh no matter what the question is, if you're new, don't be shy. Uh, just ask it. And then, um, Matthew also has >> I know I'm getting there. [laughter] Thank you. After the process, but I mean, I don't want you to get a after the process and not be successful because you could have asked the question up front. Encouraging questions up front. After the process, yes, absolutely. We are happy to meet with you at any time um to set you up for success uh in the future. And there was a third question, I believe. Another round. Okay. So, >> yeah, another round. >> We um we are trying to right time our funding so it will be reliable. Um those of you that participated in last year's round heard me say and many of you called me October 1st saying, "Where's the RFP? [laughter] We want to see the RFP. Where's the RFP?" And ideally, we would like to get the RFP out early fall to have it brought to city council the very first round of January. Um, there's some internal talk about bringing it in December, but I don't think that makes sense because we won't know what our funding is yet. And we've done that in the past and from my perspective, it doesn't work well. So, I would like the RFP to come out every year, every fall, so we can have approval first quarter. This year it'll be first quarter, but in the future, hopefully that first city council cycle so that you have those six months to start construction sometime between June and September, which are the ideal times to start construction and maybe have your house marketing uh sometime between March and July, right? Like that would be ideal. So, we're trying to meet that. We're trying to meet that cycle for you. So, the next round will be next year. Um, we are now naming our our RFPs for the year that they will be approved funding. There's no more round 1 2 3 4 5. I think we might have had a couple fives, I don't know, or fours. So, we're now calling it 2026 funding year 2026. So, the RFP will come out in the fall. We'll know what our budget is. We'll know how much we have from the state. We'll know how much we didn't spend. We'll know what properties from the last year's funding went forward, which didn't, and then we'll know exactly how much money we have, and we will award accordingly. Does that make sense? >> Hopefully trying to be more efficient. Okay, thanks Jasmine for your question. >> That was great. Thank you. >> Someone here was next. Yes, Alex. I have the question around so correction process. I know you mentioned some different things want to be more finite and understanding what you're giving to each project. Anything different or how's that going to work? Um want to capture assume something up front or we wait till what actually happens and then we can apply for soil correction dollars if need be. So the only way you would know the amount of your soil corrections upfront would be if we if you did full full uh what is it called? Uh soil testing you know hired Bronn inner techch or whoever you work with. We have for some of the properties we have some soil corrections reports out there. They are most of them old. They aren't maybe in the in the place you're going to do your construction. So, I don't think anyone is going to be coming with the RFP with their first column of their proforma filled out with accurate soil correction costs. Um, and so we um as far as soil corrections go, for those of you that have been a part of um RFP process in the past, they're going to be similar to what they have been. Um there's also contingency fee that that we look at. Um, so I'd say every single project is different. It's a conversation. Um, and it's a, you know, conversation towards solutions. And, um, that's my answer. Does anyone else on staff have anything to add to that, more specific? Okay. Alex has a followup. >> Yeah, words matter. >> Yeah, I may be getting more specific real soon. So the thing becomes up to this point we've been able to tap into other dollars if we run an issue and need soul correction. But then you mentioned contingency >> that's >> stuff I like about Trump >> that's different >> and there's stuff I >> so I just want to make sure there's still another pot we can go into to support. >> So when I said contingency I meant developer contingency funds that are in the proforma not any city of Minneapolis extra funding for contingency. I know a couple years ago um when we had all the delays from the 2040 plan lawsuit and increased construction costs and COVID etc etc we did bring contingency fund to the city council that was approved that was city cons that is not politically going to happen again. So, I have to be really clear. If you need more money for your project, you are better off applying in 2027 than you are coming to us saying this project costs more. Um, because we are not politically in a position where we can go back to the city council and say this project costs 50, 100, 150,000 more than we thought. That's just not not going to h happen. So we want you to be as realistic as possible with your initial proforma even and and we always tell the DTAP the new developers go higher right in you know put you know put yeah and knowing that you're still have to be competitive and it has to be cost reasonable and that's part of the reality. Um, with that said, if you have soil corrections or if you know you have something else happens to your project, like everybody does that costs a lot more than you think. Um, like we had a we had something happen with a project a couple weeks ago that the first estimate was like $80,000 that it was going to cost extra to solve this problem. Well, it turns out it was more like $12,000 in reality. So, we just need to keep working through the process with you to see what those costs really are. And of that increased costs, is there somewhere that you have to make up for those costs or is it a soil correction or something similar where we do have the ability to um dip into those soil, you know, the soil corrections that are available. And as long as I'm going into the detail, I don't know if I should. Um there's a certain amount whatever we sell you the property for is the amount of flexibility we have with soil corrections. So if we sell you the property for a dollar, um we're going to be we're going to be in trouble. We sell you the property for $20,000 and you have a $12,000 bill due to soil corrections, we can cover that. So >> followup statement also if you're on your application and your perform application you list out soil corrections and you do find out post that there's not it's not needed it can be removed from the perform correct me if I'm wrong right guys right yes so if you yeah so you put it as a put it as a a cost and then you come back and you go through the bidding you're like oh I don't need it cuz we get if you do your soil testing prior to the postal war and it says we don't need it, that can be a cost that's no longer applicable. >> So column one on the proforma are your best educated estimate. Column two are real numbers and make sure all your real numbers end up there and then column three is at the end what we find out what actually happened along the way. Um and so like I said a plug for our uh proform training uh that's coming up in a couple weeks. I am noticing that we are at time for 1 hour. Um, we scheduled a like 10-minute break before we get into perpetually affordable housing from, you know, 1110 to noon. Um, if there are more questions, should we keep going? What is what is staff or should we end on time? Are there any last questions? I see one. I see a few. >> Let's do that. Okay, we'll do the last questions and then wrap up and I'll try to not add as much extra information. >> Yes, good morning. Um, what is the process of getting so correction because some of us uh that probably apply for so corrections for the past since April, we still don't have it. So, what is the process? Okay. So, um we've had a lot of change over in staff. We lost a project coordinator and um so things are taking longer uh than they should and um we have a new finance director as well. So, we are working on our process for soil correction approval. Um that's going to be my answer to your question for now, but it sounds like we could be providing more information on this in the future. Yes. Once everyone um is awarded through biz, we will have an orientation that will go indepth on the soil correction process and also indepth on how to complete the dispersement form and how to get in all your project costs to get your funds reimbursed. Um, and there's ways, you know, sometimes, um, people pro, you know, provide information for a draw and it goes back and forth for several weeks trying to clear up questions that our staff has. Sometimes I approve something, I send it to accounting. Accounting has questions. So, there are many opportunities for delay in getting your payment. and we want to have this training to make sure that we set everyone up to get paid as quickly as possible. Um, I will say that at the state level, the federal level, and the city level, attorneys are looking at things a lot more closely than they have in the past. um our finance office and our every every person that has a review of your um funding requests or dispersement requests coming in. There are a lot more requirements than there were two years ago. Um you know, I think it's national news now. Our, you know, our governor is the fraud governor and so um that's real and it's causing a lot of delays. So, more to come. Two more. Yeah. Oh, Patrick, hold on. >> Wait, wait, wait. >> Hybrid, there's like 60 people out there that can't hear you without the microphone. >> Uh, sir, what address were you waiting on your your soil corrections for? >> All right, I'll look into that and get back to you. >> Thank you, Patrick. what service. Okay, last few questions. All right, looks like we're done. Thank you everyone. As uh Alfred Port mentioned, we really appreciate >> uh uh your commitment to affordable housing, development, and equitable home ownership. Thanks for coming. And if you want to know more about perpetually affordable housing, come stay for part two. We'll take a break in between the two sessions. Thanks so much. So, I think we're going to do the perpetually affordable housing kind of overview real quick. If you guys want to take seats. Hello. Yeah. Right. All right. So, thanks for staying. This this portion is just kind of going to discuss the professionally affordable housing model uh or program that we use part of our development program. Um I went back to the slide that we touched on previous in the in the first portion to discuss it. So perpetually affordable housing just to recycle is u ownership perpetually affordable home ownership markets the home at a reduced sales price of 20% or more from the market value in exchange for the reduced sales price discount. The property is enrolled in one of two equity sharing models selected by the developer at application. So the two models as the slide shows is city lace community land trust and the city of Minneapolis model. Um there is a third option which we've which is it's a it's a outside model like I would so I would so it say it as like a co-op cooperative approach. Um it's just make ensuring that the the homes are perpetually affordable for long term. Um so the two models that are selected by you guys at application and through the process is the city lakes as I said and city. Um the the main highlights are on this slide. Um and I have an example to show you uh kind of to kind of give it give an initial purchase once you when you guys sell it. This is kind of the initial purchase example. So this is based on the scenario is a household of four people earning less than 60% area median income which is 74520 which I think is last year's figure could be wrong but this is for parameters. Um they able to qualify for a $200,000 mortgage through a lender. Um and the market value of the home is $300,000. So, how this breaks out, how the affordability works is that the the afford the price you're selling at is $300,000. Um, and then there's a $200,000 mortgage that's approvable for the buyer and you guys are getting $100,000 in affordability assistance. So, that way that that kind of builds that fills that gap of the $300,000 market value of the home. That $100,000 is is not a down payment assistance. It's tied to the property for perpetuity essentially. So they don't repay it. It's just tied there to make sure that the subsequent buyers in the when at resale can purchase the home at an affordable price. Um and how that works is on the Celace Command trust model, uh they work with the buyer for an affordable price. I don't know the resale process, Stacy. I'm sorry. Um yeah. Oh, wait. >> Um, so at time of resale, we are notified of by the homer of the tent intent to sell and then we order an appraisal of the home and we look at the appraisal at time of original purchase and the appraisal at time of resale and that net change in value. 25% of that is the homeowner's equity, market based equity. and 75% stays with the home. So if this was the land trust example and there was the increase of the 100,000 the sale to the next buyer is going to be 225,000 versus 300 I'm sorry let me stop. Okay, so originally 200, market value 300. Let's say it went up by 100,000. So at time of resale, the home is now worth 400,000. 25% of that is the equity to the homeowner. And the next sale price is going to be 225 versus 400 if I'm doing my math mentally correct. So >> thank you. >> Yeah, >> I think the other thing that's important is the resale formula applies whether the market increases or the value decreases. So if the value had decreased in value, 25% of that decrease would be the um impact to the homeowner and 75% would be um more I would say the land trust or the impact to the original affordability because this is in perpetuity. So as markets change and go up and down that affordab affordability is retained over time. And so the way this model kind of I the importance of the model I mean it's it's it's selected by you guys at application right so at at application you if you guys want the traditional model which is market based for down pay assistance you guys can select that fine if you're if you're if you want guys want to go this model that is fine too so it's more importance of what what your guys' motivations are So this model is p primarily more beneficial to buyers at a at probably 60% AMI or below traditionally. Now with markets with higher interest rates and sales prices probably 80%. But there is a trigger for you get more subsidy from the city if you go to a lower AMI band because there's more if assistance needed to a buyer at a at a lower AMI versus 80% AM AMI. If that makes sense. So initial purchase again kind of just discuss it again. So it's so this is assumptions it's a 30-year conventional mortgage fixed rate current rates are around 6 and a half but this was like this was I use 7% just to be you don't know what the market's going to be. It's a conventional mortgage uh PMI is only tied to the conventional mortgage and the initial market price is the same for all options. So as you can see sales price is the same. The difference is the the down payment is the down payment or affordability assistance. This $10,000 on conventional is $100,000 in the buyer and the on the perpetually affordable and then so the base price is a difference of $90,000. How that equates to is a lower payment of $720 in difference and which the star shouldn't be there. uh the the buyer for the perpetually affordable housing model won't have to pay PMI because that gap they're buying a a discounted home not discounted because that's I don't want that's not the correct term the sales price is lower on the perpetually affordable housing model so that 20% gap deep down payment is already baked into this $100,000 and we'll have questions at the end. I know this is like a lot. So, and so this is a resale comparison as well. If you since on the developer side, you guys you guys are concerned about the initial sales sometimes, but if you got this just explain how the resale process would work. Um, so the new sales price on a conventional is 390. On the same example that we talked about, the CLCLT model is 222,500 and then this the PH is 22763. And it kind of breaks down from there. There's a net. So the total wealth built. So the net proceeds, this is not including real estate commissions, is about 32,700 versus 39,963 for that 5year span, which is an affordable home for that am that 6% area income buyer. And then the total wealth built is 75,974163 between both models. So it's not it obviously it's not comparable to the conventional B loan because you obviously there's more net proceeds but it's more sustainable for that buyer at that AMI band and then we want to have successful home buyers and I in the current market a 60 AMI buyer I'm not sure how that would look to even get qualified for a 390 $390,000 house like that's not like that's that's that's past eating rice and beans every night. So, so yeah. So, that's kind of how I break it out. Are there questions? It's a lot. It kind of went through it kind of generally, but yeah. Yeah. So, the biggest hear me right. The biggest benefit to the developer would be being able to offer it at 60% AMI and then you'd score higher on your application by offering to 60% versus 80% or there more subsidy or how does that work? >> So you so you wouldn't score more on the application you just if if approved you have more subsidy from the city for development. So macroy if you do 80% AMI buyer I'm just going to use general numbers $200,000 on subsidy for that for a but if you go peri 60% AMI for a peri affordable you could go to $300,000 don't use those numbers for like like the gospel I'm just picking numbers on my head that's that's the that's the difference is you get more assistance to to forward development and affordability So >> the other thing I would share is that as a developer, if you're looking for buyer pool, if you're able to have a lower purchase price, you are going to have a larger pool. Um, on average right now, we're seeing buyers between 60 and 80%. And I'm sorry, I'm with the land trust. um uh around maybe a max of 200 to 225,000 like the the mortgage ability with shifts in student loans in other things, the interest rates. Um so when you're thinking about how far and wide you want to market and I'm sorry I didn't mean to turn my back on you. Um, just thinking about that I think is another advantage too because your numbers are going to be made whole essentially and you're just going to be able to reach a larger pool of individuals or families. >> I'm sorry. Um, I just want to make clear that there's the two different options because that was a lot of questions that came from developers over the last couple years is not really knowing how they were going to keep the home affordable. So, when Ryan mentions that like land trust versus perpetual affordable and then if you're choosing the city's deed restricted um program, then making sure that you select that administrator as well. So just to really hit um hit home on that piece >> and definitely if you guys are like researching the administrators because it is between build wealth and city lakes definitely which I I don't want to speak for you Stacy but there there are u amendable to having those conversations to understand how they do home buyer stuff you know mission whatever however you want to spin it like it's important to have build that relationship because we want to have you guys come back multiple times to do projects and so that's important important as well for the for have a comfortable you know I'm going I'm going to do this project I know who my administrative program we're going to do I know the administrator we have it went I mean it it hopefully it went smoothly it's you know it's home the the home buyer process and sale is never smoothly it seems so like building those relationships because it is a relationship business I mean process I won't say business because it's we're trying to achieve things here so it's like it's a process so build those relationships and those connections because that helps you be successful uccessful in multiple projects and it helps you through our process as well because we we all like high performers and people that perform well through their projects and that and we remember those projects and the high performers so it's like okay we know they can get the job done and that's important. >> Yeah. So when it comes to the resale, I know so with the CLT model, right? So they will so on that sale, the buyer only eats up basically 25% of the loss of the equity of the home when you sell it if the market went down when they're going to sell it. What is it that the city Yeah. >> Yeah. >> So the the so the city model it's it's a 2 and a half% appreciation that's compounding annually. If there is a down market, we we we will adjust the sales price down to that affordable price as well. So, it's not something where it's like if there's a down market and it's like the the the values tank, it wouldn't benefit to either find the subsequent buyer for the for the increased price at that 5% compound. We'll still make ensure that the buyer does receive something but it is more of a assoc a calculation to understand that they are still it is still comparable in the market for that appreciation if that makes sense a little bit I said a lot I said a lot didn't say anything right right um so no no it's the same thing I mean it's kind of the same thing where it's let's not let's hope we don't have another down market you you know, let's cross our fingers. We don't know. But like a lot of times the market will I mean the the the since it is compounding alley out of 2 and a half%. It's something where if it's a down market, we couldn't justify selling having the initial buyer or subsequent buyer say I'm going to sell it for I think I can't remember the slide but like 220 750 if the market saying the house is worth 200. Like that's not like that doesn't equate to anything. that's putting the ne the next buyer in a in a bind. We want successful home ownership, especially in this program long term. You don't get I'll get you, Alex. >> I'm sorry, Alex. Um, so I understand cuz I had the conversation with Stacy earlier. Um, my biggest thing about the land trust model, the perpetual affordable housing is so with the families is actually saving money by going through these models. Is there some type of education that helps them actually do something with that money, you know, to to actually, you know, build wealth and to eventually sell and go off to something where they own everything? >> Yeah. I mean, the the benefit which we tried to go when we built the city model in conjunction with this the land trust is we tried to kind of align those those parameters and so like on the city model, they're still doing the process for the means of attorney. I mean there is a lot of post we've touched on but we haven't expanded the whole post-purchase support but that's something administrator is trying to support like you know I want to do both programs have capital improvements credits like that process they have to meet with their administrator to like if hey I want to remodel I want to finish my basement okay meet with your administrator to talk you through that process because like especially as an initial home buyer or first generational home buyer I don't know what that means like what's the process for So work because that's the administrators are industry professionals that understand the process and are support and are there to support you for your for successful home ownership. This is uh dealing with the scoring. I know in the past we've had if you've opted to go into the model PHA model when you're um from a scoring standpoint for your project you got points. So it sounds like that's taken off. So or is that you'll get quote unquote bonus points or something if you go for a PH model? I thought at one point that was kind of a seen as a thing. >> I I don't No, not this time. No, I don't believe so. No. >> Aad, go ahead. >> Uh yeah, quick question about the flexibility between PH and recapture. So a scenario might exist where we are coming up against uh a timeline, a deadline. Um, I have noticed that the perpetually affordable projects have been on the market at least twice as long on average than, >> um, and I, you know, I think it's just it's it's it's a really small slice of folks who can afford >> uh, the payments and and and income qualify. Um, is there any flexibility to switch from PH to recapture knowing that you would have to give back the excess funds that were set aside for affordability >> that I don't no >> in order. Yeah, I'm thinking about like all right, you know, obviously we start this project and then the market changes and those buyers >> No, I get what you're saying. I get what you're saying. Kind of pivot pivot to be applicable to what the market is. I get what you're saying. >> Yeah. >> Um >> we'll have to discuss that. Yeah. Well, that's a good question. Thank you, Azad. Appreciate it for the tough question. Yeah. No, we'll we'll we'll get back. We'll we'll follow that's a followup for sure to discuss it cuz I'm just I'm just going through my mental side of it where like the the contract that's signed at uh for financing and closing. I mean it's your your agreement specifying that your subsidy is tied to that as well for the city financing. Um, and I believe it's another thing we have to go back to city council to adjust that program because we when we present to city council, we're specifying the the the resale model, the amount of financing, and the address and developer. So, that's something where it would be it wouldn't be it wouldn't be a quick process. >> Um, but that's something we discuss. I'm just laying out like the steps in my and how it'll probably have to go through, but we we'll have to discuss it and let you know. >> Okay. >> Yeah. Yeah. Well, yeah. I mean, as I know we've gone through it with your projects where there's there's times where you guys can go through a gland sale or a home buyer home buyer sale extension, which we we've discussed. I think I know we've discussed uh for extending the home buyer sale uh deadline especially if like you know houses aren't moving. So I mean that's always an option to kind of extend out instead of um especially if the market's the market and it's not really being you know amendable to the the specific uh property, but we'll we'll let you know. Okay. >> Yeah. Thanks. >> Yep. Anything else? Okay, then. Well, oh, >> uh, based on the discussion before, I just want everyone to know if your project pencils out better at 80%, there's nothing wrong with doing 80% AMI. Um, PH is a great tool for 60% AMI, but if you're looking at, you know, our 80% AMI is often closer to 70, right, when you look through it. So if your project is an 80% AMI project, don't make it fit into 60. Just, you know, work with a reality. >> Yeah. >> Um it's great. It's a great opportunity if you can. >> But thank >> Yeah. Yeah. No, I mean like what echo what Sherry said, like if it's am 80% your like fine because it's you want to expand the pool out is 61 to 80 is that kind of that income band that someone has to be within to qualify for that buyer. It's not doesn't have to be up to 80. It's 61 to 80, 41 to 60, and 40 and below are like the three income bands that we use. Um, and so like when we go through this process, if you guys select the PA perpetually affordable housing program for your resale model, uh, which is including this the land trust and the city model, um, there is, and I guess I should hit on this initially. So at sale to the home buyer, it's not the market value that it's sold at. We have a set kind of a calculation we you to be determined for an affordable price that the house has to be sold at. So typically it's not at market, it's usually below market and that's how that affordability systems kind of is baked in. So that's how that dress out. And on our performer, we do have a tab that highlights the income band and the affordable price for those B for those specific bands if that just to kind of hit on that to make sure you're aware. >> Zad, another tough one, I hope. >> Uh maybe not. Uh >> okay. All right. >> So I uh just more of a interesting question. So, sounds like, and this is kind of from the previous one, not related to PH, but um so it sounds like you guys have changed the requirement for energy efficiency from uh Department of Energy 0 ready home program that technically doesn't exist anymore uh to uh Energy Star and um just kind of interested in the rationale behind that decision. >> Thanks, Zad. It's Sherry. Um, if my construction management staff were here, they'd be answering this question uh with more detail, but the answer is yes, that's true. And, um, my [clears throat] perspective on the answer, not being the specialist, is we are trying to make things easier when we can. Um, and I know that, uh, I see a lot of smiles in the room like, yeah, right. Uh but that is [laughter] uh I think Alfred used the word that's our intent. Um so if we can make it easier, we want to make it easier. Uh so that Yeah. >> Got it. Um and then uh sounds like there will be no additional subsidy for uh projects that are looking to reach uh Department of Energy's ready home or maybe like a passive house. >> That is correct. Okay. Thank you. >> Yep. I'll come to you John. Yeah. Um the energy star uh program do we um so the new one now is we just switched to um uh zero energy ready version two. Um, do we put those um cost I mean do we how do I put it? Do we put those cost in the proformer while we are putting all the numbers together? Sherry is shaking yes. So I will say yes. All right. If you want to be reimbursed for them, put them on the performer or include those costs on the performer. Well, with that I don't see other questions. The question was we had to specify it. It's just the cost I believe is the cost. Yeah. Anything else? Um I'm Ryan again. I'm the project I'm the kind of the program manager for the professionally affordable housing. If you have questions, get a hold of me. Um I don't have my I think the email will be in the chain. So, um, yeah, pleasure to see you guys or not see you or listen to me or how that works. Um, hope you guys have a good rest of your week. All right. >> Thank you.