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Focus on New Laws: Local Affordable Housing Aid and Statewide Local Housing Aid Reporting and Policy Changes
These changes require that the aid distributed through these programs and received by cities must be used to supplement and not supplant existing locally funded housing expenditures.
New laws passed during the 2024 legislative session, included in Chapter 127, amend policy and reporting requirements for both the Local Affordable Housing Aid (LAHA) program under Minnesota Statutes, section 477A.35 and Statewide Affordable Housing Aid (SAHA) under Minnesota Statutes, section 477.36.
These changes require that the aid distributed through these programs and received by cities must be used to supplement and not supplant existing locally funded housing expenditures, including expenditures by a public corporation or legal entity created by the local government such as a housing redevelopment authority.
As a condition of receiving aid under both programs, Minnesota Statutes, section 477.36, subdivision 5a says recipients must “commit to using funds to supplement, not supplant, existing locally funded housing expenditures, so that the recipient is using the funds to create new or expand existing housing programs.”
Reporting requirements
Tier 1 cities receiving aid via the program’s formula will also have to annually certify compliance with the new subdivision, and provide the Minnesota Housing Finance Agency with the following by Dec. 1, 2025:
- An accounting of locally funded housing expenditures in the prior fiscal year.
- Documentation of its locally funded housing expenditures in the two prior fiscal years.
If a city receiving aid reduces one of its locally funded housing expenditures, the recipient must:
- Detail the expenditure, the amount of the reduction, and the reason for the reduction.
- Make the certification publicly available on the city’s website.
Cities receiving aid that do not meet the certification requirements must pay to the Minnesota Housing Finance Agency funds the aid the recipient received under the program.
Policy changes
In addition to the reporting requirements, the language included several policy changes to both programs, including:
- Funds must be committed to qualifying projects by Dec. 31 of the third year after receiving aid and fully expended by Dec. 31 of the fourth year.
- Aid recipients are not allowed to use aid funds to reimburse themselves for prior expenditures.
- Cities receiving aid may request in writing that the commissioner of the Minnesota Department of Revenue commissioner stop payment on or before May 1 of the year prior to the aid payable year. The commissioner may resume distributing funds to a recipient at the request of the recipient in the year following Aug. 1 after the Minnesota Housing Finance Agency certifies that the recipient has submitted documentation of plans for a qualifying project.
- Eligible expenditures were expanded to include:
- Financing the operations and management of financially distressed properties.
- Funding of supportive services or staff of supportive services providers for supportive housing as defined in Minnesota Statutes, section 462A.37, subdivision 1.
- Costs of operating emergency shelter facilities including the costs of providing services.
Tier II cities in Greater Minnesota with a population of less than 10,000 are eligible for discretionary funding from the Statewide Local Housing Aid program under a separate request for proposals that is currently being developed by the Minnesota Housing Finance Agency.
More information
For more information on the program and a full list of eligible expenditures, cities can visit the Minnesota Department of Revenue webpages for LAHA and SAHA.