Greater Minnesota Housing Fund & Minnesota Equity Fund Annual Report

Transcription

1 Greater Minnesota Housing Fund & Minnesota Equity Fund 2012 Annual Report

2 Letter to the Community Dear Friends, The Greater Minnesota Housing Fund worked hard in 2012 to put our mission into action, with successes on many fronts. Still, we are reminded daily that the scope of need looms large, especially as growing numbers of HUD and Rural Development subsidized mortgages are slated to mature in the coming years. To better meet the challenge, we start with a solid foundation, responsive programming, and visionary partners. We are proud to have earned an outstanding AAA+2 rating from CARS, far higher than our peer CDFIs across the nation. We credit this to our sound governance, financial strength, management practices, and mission impact. Staff, board members, and partners long knew this from the inside out, but earning this credential demonstrates to our funders and peers that even when scrutinized by outside standards, we more than pass muster. Our solid grounding makes it possible for us to succeed in the measures that count: Supporting the creation and preservation of affordable housing units across Greater Minnesota. We provided $27.7 million towards that effort in 2012, lending support to over 1,000 units of housing. The majority of our investments subsidized existing rental housing; we also focused on foreclosure recovery of single-family homes. We continue to work closely with partners on the front lines in Minnesota s communities to respond to the most pressing housing needs. The Minnesota Equity Fund (MEF), a joint venture between GMHF and Lansing, MI-based Great Lakes Capital Fund, more than met its goal of delivering at least $25 million in tax credits to Minnesota projects annually. GMHF will work to expand the base of investors in the coming years. Corporate expansion can be a boon to Minnesota s communities, but can put undue strain on local housing markets. GMHF worked with Roseau, Warroad, Thief River Falls, Worthington, and Rochester on workforce housing. GMHF continues to forge strategic partnerships with business, government, and community entities, and works to foster public support for affordable housing. GMHF pursues improved state and local policies that support the creation and preservation of affordable housing across the entire housing spectrum. GMHF extends its thanks to its many investors, funders, and local, state, and national partners. We look forward to collaborating with you further in Sincerely, Warren Hanson, President & CEO Karel Weigel, Board Chair 2

3 The mission of the Greater Minnesota Housing Fund is to invest in affordable housing and sustainable development to strengthen communities in Greater Minnesota, and ensure that everyone has a safe, decent and affordable place to call home. 3

4 Investments & Impacts GMHF 2012 Highlights: Provided $26.2 million to Finance 937 Affordable Housing Units 2012 was a high demand period for GMHF housing loan and grant funds. Demand for development funds has been 75% for rental housing with emphasis on preservation of existing subsidized housing, and the balance on single family acquisition-rehab foreclosure recovery. The constant adjustment to align with community needs is possible by consistently collaborating with local development groups. The new Minnesota Equity Fund is also creating demand for bridge financing that greatly exceeds our current capital. $50 Million Private Capital Raised for the Minnesota Equity Fund (MEF) GMHF s new Minnesota Equity Fund finalized agreements with a Minnesota-based Fortune 500 company to invest $50 million into MEF Multi-State Low-Income Housing Tax Credit Fund I. As of this date, $39 million will be invested into six Minnesota tax credit projects, and $11 million will be invested into three out-of-state tax credit projects. GMHF plans to expand the base of Minnesota investors in GMHF Obtains Rating of AAA+2 from the CDFI Assessment and Reporting Rating Agency GMHF spent months completing a rigorous CDFI Assessment and Rating System (CARS tm ) in 2012 and demonstrated that it has a strong base of management and effective programs. GMHF received a CARS rating of AAA+2, which is significantly higher than most CDFI s nationally, signifying that CARS recognized GMHF s financial strength, its sound management and governance, and its focus on mission impact. Greater Minnesota Housing Fund Meets Needs Across the Housing Continuum 4

5 Geographic Impact Since 1996, Greater Minnesota Housing Fund has supported over 500 developments in more than 150 cities, resulting in over 10,500 affordable homes. 5

6 Minnesota Equity Fund A nonprofit subsidiary of GMHF The Minnesota Equity Fund (MEF) is designed to help socially motivated corporations and banks invest in affordable housing and community development in Minnesota. MEF will raise capital from corporations and financial institutions and invest these resources into real estate development partnerships, with the goal of providing investors with a sound investment that will produce positive social and economic outcomes for families and communities throughout Minnesota. GMHF and MEF s Complementary Strategies $50 Million Raised for MEF GMHF s new Minnesota Equity Fund finalized agreements with a Minnesota-based Fortune 500 company to invest $50 million into MEF Multi-State Low-Income Housing Tax Credit Fund I. As of this date, $39 million will be invested into six Minnesota tax credit projects, and $11 million will be invested into three out-of-state tax credit projects. GMHF plans to expand the base of Minnesota investors in

7 Helping Minnesota companies invest in Minnesota communities to foster the development of affordable housing for Minnesota s low-income families. How the Minnesota Equity Fund works MEF is a joint venture between GMHF and Great Lakes Capital Fund Goals of the MEF: Improve access to equity for developers Create a more robust tax credit investor market Offer Minnesota corporations the opportunity to invest in local community development Provide competitive economic and social returns 7

8 Financial Statements Balance Sheet Assets Cash $ 3,148,611 $ 2,060,403 Interest Receivable on Investments $ 79,037 $ 132,123 Other Receivables $ 98,878 $ 68,216 Contributions Receivable, Current $ 4,436,205 $ 4,229,899 Loans and Interest Receivable, Current $ 9,983,208 $ 4,989,019 Less: Allowance for Uncollectible Amounts $ (797,344) $ (380,298) Property and Equipment $ 323,185 $ 297,904 Less: Accumulated Depreciation $ (180,384) $ (161,259) Contributions Receivable, Long-Term $ 1,100,213 $ 3,725,000 Less: Accumulated Depreciation $ (41,044) $ (175,482) Investments $ 26,509,397 $ 28,925,962 Long-Term Loans Receivable $ 63,202,155 $ 63,174,131 Less: Present Value Discount $ (36,690,543) $ (37,122,828) Less: Allowance for Uncollectable Amounts $ (2,121,030) $ (2,023,904) Total Assets $ 69,050,544 $ 67,738,886 Liabilities & Net Assets Accounts Payable and Accrued Expenses $ 242,750 $ 204,859 Unearned Revenue $ 27,535 $ 65,284 Grants Payable, Current $ 218,028 $ 245,270 Current Portion of Long-Term Debt $ 1,750,000 - Notes Payable, Long-Term (Net of Present Value) $ 7,493,024 $ 8,988,346 Total Liabilities $ 9,731,337 $ 9,503,759 Net Assets Unrestricted - Undesignated $ 6,267,970 $ 1,473,468 Unrestricted - Board Designated $ 43,706,500 $ 45,337,988 Temporarily Restricted $ 9,344,737 $ 11,423,671 Total Net Assets $ 59,319,207 $ 58,235,127 Total Liabilities and Net Assets $ 69,050,544 $ 67,738,886 8

9 Statement of Activities Support and Revenue Temporarily Unrestricted Restricted Total Total Contributions $ 38,543 $ 2,920,070 $ 2,958,613 $ 1,504,088 Program Service Revenues $ 1,772,860 $ 1,772,860 $ 1,061,502 Amortization of Present Value Discount $ 1,429,739 $ 1,429,739 $ 2,041,338 Interest and Dividends, Net $ 751,242 $ 751,242 $ 531,872 Unrealized Gain (Loss) on Investments $ (144,540) $ (144,540) $ 747,165 Realized Gain on Investments $ 531,236 $ 531,236 $ 453,967 Miscellaneous $ 376 $ 376 $ 746 Total $ 4,379,456 $ 2,920,070 $ 7,299,526 $ 6,340,678 Net Assets Released from Restrictions $ 4,999,004 $ (4,999,004) Expense Total Support and Revenue $ 9,378,460 $ (2,078,934) $ 7,299,526 $ 6,340,678 Program Services $ 5,806,149 $ 5,806,149 $ 5,751,439 Support Services Management and General $ 409,297 $ 409,297 $ 532,135 Total Expense $ 6,215,446 $ 6,215,446 $ 6,283,574 Change in Net Assets $ 3,163,014 $ (2,078,934) $ 1,084,080 $ 57,104 Net Assets - Beginning of Year $ 46,811,456 $ 11,423,671 $ 58,235,127 $ 58,178,023 Net Assets - End of Year $ 49,974,470 $ 9,344,737 $ 59,319,207 $ 58,235,127 Community Impact Administrative Expenses 7% Affordable Housing Programs & Services 93% 9

10 Distribution of GMHF Funding GMHF Funding Awarded by Program Area GMHF Funding Awarded by Loan Type

11 Board & Staff Fire House Flats, Duluth Directors 2012 Jane Barrett Red Lake Executive Director, Red Lake Reservation Housing Authority Kim Bretheim Minneapolis Architect, Housing Studion Leader, LHB Architects Rod Brown St. Paul Vice President Family Services, Lutheran Social Services Stephanie Cummings Duluth Vice President Retail Banking, Wells Fargo Bank Duane R. Lund Staples Senior Consultant, Blandin Foundation Steve O Neil Duluth County Commissioner, St. Louis County Dale Roemmich Pipestone President, First Farmers & Merchants National Bank Richard Roesler Mora Retired CEO & President, Peoples National Bank of Mora Barbara A. Sanderson Grand Rapids Minnesota Housing Finance Agency Board Representative George Stone Minneapolis Program Director, Minnesota Corporation for Supportive Housing Mark Voxland Moorhead Mayor, City of Moorhead Nancy Vyskocil Bemidji President, Northwest Minnesota Foundation Board Officers Karel Weigel, Chair Rochester Former Administrator, Community Relations, Mayo Clinic Peter Connor, Vice Chair Petrus Business Consultants James Solem, Secretary/Treasurer Falcon Heights Former Commissioner of Minnesota Housing Staff 2012 Robyn Bipes Director of Development & Fundraising Hal Clapp Program/Loan Officer Warren Hanson President and Chief Executive Officer John Harrington Program/Loan Officer Ashley Henningsen Loan Technician Patrick Keefe Chief Financial Officer Linda Kozak Officer Manager Amy McCulloch Vice President, Programs Dave Mullen Vice President, Minnesota Equity Fund Julie Pederson Staff Accountant Trisha Presley Executive Assistant Andrew Schlack Program/Loan Officer Jacqui Taylor Program & Portfolio Analyst Kim Wielinski Office/Program Coordinator 11

12 Serving Greater Minnesota Since Minnesota Street Suite 1201-East Saint Paul, MN main toll-free fax