The Center is back at the Capitol again this year promoting issues important to homeownership.

As spring in Minnesota begins to take hold, the Minnesota Homeownership Center and Minnesota Housing are both hard at work putting together the application processes for $150 million in down payment assistance funds for first-generation homebuyers across the state. The Center is very proud of the role it played, alongside lobbying partner Twin Cities Habitat for Humanity and the statewide Minnesota Realtors® trade association, in seeing this funding enacted into law during the 2023 state legislative session. The 2024 session is now underway, and we’re back at the Capitol again with Twin Cities Habitat pursuing issues of importance to homeownership.

Our legislative agenda this year includes better regulation and increased transparency around the operation of Homeowner Associations, and funding for affordable housing construction (including 150 affordable ownership units) as part of The Heights Redevelopment project in St Paul. The Heights is a former golf course that offers a very rare opportunity for large-scale planned development in the heart of a major urban center.

With regard to Homeowner Associations, we seek to provide more protection for homeowners whose properties are subject to governance by these bodies. Homeowner Associations are an important part of many housing developments across the country. These elected bodies, composed of development residents, oversee the shared ownership and financing of roads and other infrastructure. They also can make and enforce rules around exterior property features such as garbage bin and mailbox placement. When dealing with delinquent fees and fines, this work is often outsourced to a law firm. Thus, an unpaid bill can quickly balloon to many many times the original amount. If these bills and fees remain unpaid, they can result in a foreclosure filing. And since the property’s mortgage is not involved, the owner has none of the protections provided by the mortgage foreclosure process. Our proposal would require Homeowner Associations to register with the state, and would create an Ombudsperson’s Office for Homeowner Associations to handle disputes between homeowners and Homeowner Associations before things spiral into foreclosure.

The Homeownership Center is also an active partner in the Homeownership Minnesota (HOM) Coalition – a partnership of sixteen active affordable homeownership entities working across the state. The biggest initiative of note this year for this group is building more consumer safeguards into the Contract for Deed homebuying process. While there are better options than Contract for Deed if you need to avoid paying interest for religious reasons (see our Guide to Non-Interest Bearing Financing) or if you can’t qualify for a traditional mortgage because you don’t have a social security number (see our Guide to Individual Taxpayer Identification Number [ITIN] Mortgages), Contract for Deed is still an important tool in other situations. But as they work today, they do not provide any safeguards for users who experience a temporary financial setback and miss a payment as a result. Missing just one payment can immediately break the contract and can result in eviction with no compensation for past payments on the contract. Our legislative proposal, created and promoted in partnership with Mid-Minnesota Legal Aid, would improve the consumer education requirements when entering into these arrangements (including information on any balloon payments) and create a contract cancellation process and timeline to provide more time to save the property when a payment is missed. It also would add prohibitions around predatory Contract for Deed practices.

We look forward to updating you on the outcomes of these proposals when the state legislative session comes to an end later this spring!