The Challenge Fund, a key affordable housing program of Minnesota, stands to take the biggest cut - by almost 75% - during the 2009 session. There is a possibility that even more will be cut.

WHAT IS CHALLENGE?
The Challenge Fund is the primary vehicle for building/and or rehabbing affordable housing. It provides deferred loans which can be used either for rental or ownership housing, and for acquiring and rehabilitating existing units, constructing new units, or refinancing rental or ownership housing. The flexibility of the Challenge Fund is a key benefit, especially with the housing market in flux. This money can address vacant and boarded homes in local communities, even in places where federal foreclosure dollars are restricted. Challenge is also one of the best programs for leveraging other investment in housing. Each dollar invested through the Challenge Program in new construction leverages 5 to 6 dollars in non-state funds. Furthermore, Challenge is the primary source of funding for deferred loans utilized in federal tax credits projects.

In recent years, about half of Challenge dollars have financed the Community Revitalization Fund (CRV) program for building and rehabbing single-family homes. The other half has been used for the Economic Development and Housing Challenge (EDHC) program which builds new rental housing to meet workforce needs. Challenge can be used flexibly to meet local needs. In 2008 Challenge funds helped finance construction or rehab 1,300 units of housing.

• Challenge Program Fact Sheet
  
  

WHAT HAS CHALLENGE FUNDED IN MY AREA?

• Multi-Family Housing

• Greater Minnesota Single-Family Homes

• Metro Area Single-Family Homes
  
  
  QUOTES FROM THE FIELD

“We are doing foreclosure remediation, but many low-income buyers cannot afford to maintain and heat these older homes. The current market provides the opportunity for Habitat to invest in long term housing supply by acquiring land that can be built on in the coming years. The last thing we should do is cut Challenge funding, since it actually provides a tangible solution to the lack of housing options.” –Susan Haigh, Twin Cities Habitat for Humanity

“Reduction in funding for the Challenge Program will severely limit the ability of groups like ours to rehabilitate vacant homes. Without that source of funding, our mixed use development, The Winnipeg, would not have come to fruition. It will act as a catalyst to reinvigorate lower Rice Street.” –Matthew Ides, SPARC, St. Paul

“In the past five years, JBS Swift & Company has added almost 500 new jobs in Worthington. Because of the lack of housing infrastructure, we have had to put further needed workforce expansion on hold. Challenge Fund resources are essential for developing housing to meet our employees’ needs.” –Bob Krebs, JBS Swift & Company

CHALLENGE BENEFITS MINNESOTA

• Challenge Restores & Builds Homes, Creates Jobs, Generates Public/Private Revenues, & Boosts the Economy

• Challenge Changes Lives

• Challenge Talking Points - whatever the reason is that drives you to advocate for Challenge, this gives you talking points to back it up.
  
  

WHAT YOU CAN DO

• Find Your Legislator l Call, Write or Email Your Legislator (sample message)

• Sign Up for Our Action Alerts