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HAFP-0031-Minnesota

Treasury Feedback for

Resubmission of Plan

Please revise the HAF plan by providing a response to the question(s).

Completeness

The participant’s response(s) to the following questions was/ were either incomplete or

unresponsive:

• Your plan lists Jessica Deegan as the Authorized Official, while the original application 

for HAF payments was signed by Jennifer Ho. To ensure prompt payment upon

approval, the AuthorizedOfficial needs to be the same as the signatory on the original 

application for HAF payments. If you need to establish a new authorized 

representative for HAF payments, a request should be submitted by email to

HAF@treasury.gov.

We have submitted a request to establish Commissioner Jennifer Ho as the new authorized 

representative to the HAF@treasury.gov email, and Jennifer is the authorized signer of the plan. 

Homeowner Needs and Community Engagement Data

• No questions.

Community Engagement and Public Participation

• Please describe any coordination you intend with Tribes or Tribal entities. 

The HAF program was discussed at Governor Walz’s Tribal meeting on August 12, 2021. The 

Commissioner provided an overview of the state’s proposed HomeHelpMN COVID-19 

Homeowner Assistance Fund program, affirmed that Tribal members are eligible for the 

HomeHelpMN program and would also be receiving direct, but separate, HAF allocations. The 

Commissioner asked Tribal members if there had been any Tribal consultations with Minnesota 

tribes, but there had not been any at that time. We are also planning to address the potential for 

duplicate requests for assistance, should that become a possibility, with our HomeHelpMN 

program and separate Tribal programs.

Our Tribal liaison is in regular communication with Tribes, especially Tribal Housing Directors, in 

Minnesota and will continue to share information on the state HAF program.
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• Please provide an update indicating any public comments you have received 

since you submitted your HAF Plan, from which organization you received any 

such comment, andwhether you have responded to the comments. 

We held a public comment period (in addition to a public hearing) with the comment 

period closing on June 23, 2021, prior to submitting the HAF plan. While we have not 

received additional public comments, we have hosted a monthly meeting with loan 

servicers since August, and we hosted a listening session with foreclosure counseling 

organizations and legal service providers in early November. Key takeaways from these 

meetings are outlined below:

Foreclosure counseling/legal services listening session:

• Discussed how best to triage clients with imminent threats of housing instability 

based on where the homeowner is in the foreclosure timeline

• Reviewed trends counselors are experiencing with clients as they come out of 

forbearance and the loss mitigation strategies available to homeowners 

(depending on loan product type)

• Highlighted concerns over how aggressive some HOAs are to pursue foreclosure

• Reviewed experiences and support need of limited English proficiency 

homeowners seeking counseling

• Noted other trends, such as tax delinquencies increasing in certain parts of the 

state

Loan Servicer monthly discussion:

• Discussed how to operationalize a loan modification under Minnesota Housing’s 

HAF program

• Data or other documentation requirements loan servicers may, or will, request 

from borrowers

• Important considerations needed to execute the Tri-Party Authorization and 

Collaboration Agreements, and timing needed to enter into agreements

• How the loss mitigation waterfall will/can work with the HomeHelpMN program 

Ongoing Assessment of Homeowner Need

• No questions.
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Program Design

• Will there be a method in your HAF program, early in the process of engaging with a 

household,to evaluate immediate threats to the housing stability of applicants, which 

may need to be addressed under an expedited or prioritized timeline (e.g. HOA liens, 

tax delinquencies, utility shut off)? 

Yes, Minnesota Housing is building a series of triage and escalation questions that our call 

center vendor will implement upon launch of the HomeHelpMN program to evaluate immediate 

threats to the housing stability of applicants. These questions will be incorporated prominently 

in the pre-screening and intake process. For example, we plan to prioritize applicants for

referrals to housing counseling and/or legal services who indicate that they have received a 

Notice of Sheriff’s Sale, delinquent real estate tax judgement sale date, a lift of stay notice, or 

who are at the end of the redemption period and have received a property eviction date. We 

will continue to work with housing counselors and legal service providers to refine the triage 

questions to provide appropriate escalation pathways for homeowners. While the 

HomeHelpMN program will not provide utility assistance, we are partnering with the 

Department of Commerce, who has utility assistance available, to direct homeowners efficiently 

on where to go for that assistance.

• Please describe how your program will utilize housing counselors or legal services to 

assist homeowners in evaluating loss mitigation options available for their mortgage. 

Your descriptionshould include: 

Minnesota Housing supports HUD-certified housing counseling in Minnesota in three key ways: 

first, we provide funding to housing counseling organizations with state appropriations; second, 

we support housing counseling organizations to provide more intensive one-on-one counseling 

with agency resources; and third, we provide funding to a statewide housing counseling 

intermediary. While we had initially anticipated supporting housing counseling and legal service 

providers with HAF funding, had issued an RFP for services and had budgeted $6.4 million for 

this, subsequent to submitting our HAF plan for U.S. Department of the Treasury approval, the 

statewide housing counseling intermediary received a significant NeighborWorks counseling 

award. As a result of this, and additional funding that has been secured, the statewide 

counseling intermediary has indicated they have sufficient financial capacity to support the 

housing counseling need in Minnesota. Given these financial resources, we are currently not 

budgeting HAF funds for housing counseling. 

We are adjusting our budget need from $6.4 million for counseling services to $750,000 to 

cover costs for legal services. These services need to expand given the current capacity and 

income limit restrictions that the state’s most current active legal service providers are able to 

serve. With the adjusted budget for legal services, we anticipate being able to support legal 

service needs under the program’s estimated volume of need (which we acknowledge could still 

be subject to change) and in alignment with the 100% AMI level as proposed under the 

HomeHelpMN program. 
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• whether your program will connect homeowners with housing counseling or legal

services early in the process.

Yes, Minnesota Housing refers all HomeHelpMN inquiries to HUD-certified housing counselors, 

now, and will continue to provide this referral option. We are also building triage and escalation 

questions our call center vendor will implement upon launch of the HomeHelpMN program. One 

of the key triage questions asks homeowners to identify if they are able to continue to afford 

making scheduled mortgage payments. Homeowners who are unsure, or who answer no to this 

question, or who otherwise indicate they would like housing counseling support to better 

understand their financial budget to determine ongoing mortgage payment affordability, will be 

referred to a housing counselor. Similarly, a set of triage questions will help identify cases where a 

legal services referral is more appropriate, such as in cases of an imminent sheriff sale that may 

already be scheduled at the time a homeowner contacts the HomeHelpMN program. 

• the role housing counseling or legal services providers will play in supporting

homeowners’ efforts at engaging in loss mitigation.

As a result of the early and ongoing referrals we have been making to housing counseling, by the 

time the HomeHelpMN program launches, many homeowners will have been referred to housing 

counseling to support loss mitigation efforts. For those homeowners who have not directly 

engaged with their loan servicer or a housing counselor around loss mitigation, we expect to 

make referrals to housing counseling in cases where additional support is needed to determine 

the household budget and whether the ongoing mortgage payment is affordable or not. All 

homeowners will be assessed based on answers to key triage questions around whether they can 

afford to make ongoing mortgage payments (sustainability) prior to using HAF funds to reinstate 

the borrower, or in cases where a borrower may be eligible for a HAF loan modification.

• How will your program leverage resources available through a loss mitigation process 

to benefiteligible homeowners and how will your program avoid using HAF funds in 

ways that duplicate relief that available loss mitigation options might provide? 

Our proposed program structure first asks if a homeowner has accepted a loss mitigation option 

from their servicer. If they have, they are not eligible for our program. We made this decision 

based on conversations with servicers, housing counselors and other HFAs with the goal of not 

creating barriers in the process between the servicer, their investor, and the homeowner; not 

causing any delays in homeowners getting the assistance they already accepted; and preserving 

the HAF dollars for homeowners who don’t qualify for loss mitigation options. Our 

reinstatement and modification options meet borrowers on both ends of the loss mitigation 

waterfall: for borrowers that have the ability, sustainably, to resume making previously 

scheduled payments, our program can help get them caught up with no additional/future 

financial burden and no impact on any future loan workout options that they may possibly 

need. For borrowers that can’t reinstate after being advised to review and work with their 

servicer on other loss mitigation options that are available in the current waterfall, and if they 
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still need financial assistance to make that loan modification term financially sustainable for 

them, our program can help. 

• Please explain what steps, if any, your program will take to assist the homeowner in 

determiningwhether a HAF-resolution will result in a sustainable monthly payment? 

As noted above, our triage questions anticipate asking homeowners key questions related to 

whether they have pursued and/or accepted loss mitigation already, whether they can continue 

to afford their existing mortgage payment if they were able to bring past due payments current, 

and if their COVID-19 hardship has been resolved. Homeowners who are unsure, or who answer 

no to the questions related to mortgage payment affordability or resolution of the COVID-19 

hardship, or who otherwise indicate they would like housing counseling support to better 

understand their financial budget to determine ongoing mortgage payment affordability, will be 

referred to a housing counselor.

• Are you anticipating increased winter home energy costs and their potential

impact on thehomeowners that HAF will serve? 

The State of Minnesota is anticipating increased winter home energy costs, especially for those 

that heat their homes with propane. The Department of Commerce estimates that the average 

total energy bill (across all heating fuels) will increase $558 for the season.

While HomeHelpMN is not planning to include utility costs as an eligible expense for the program, 

we are coordinating closely with the Department of Commerce. Our understanding is that they 

have ample energy assistance funds available. The Department of Commerce has implemented 

several changes that may help homeowners with these increased costs:

o The Energy Assistance Program helps Minnesota households pay for current and pastdue bills for electricity, gas, oil, biofuel and propane, emergency fuel delivery, and 

repair/replacement of homeowners’ broken heating systems, and could also cover 

water and sewer bills. The Department of Commerce has raised the income eligibility 

limit for the Energy Assistance Program to 60% State Median Income. The benefit 

limits have also been increased, including up to $1,600 for energy bills plus an 

additional $1,200 for past-due energy bills. 

o Water bill assistance is newly available and households can also qualify for 

weatherization. By submitting one application through the Energy Assistance Program, 

households could qualify for payments to cover both water and energy bills, and 

qualify them for the Minnesota Weatherization Program, also operated by the 

Department of Commerce. Weatherization helps households with home 

improvements to conserve energy and lower their energy costs permanently.

o The Cold Weather Rule protects residential utility customers from having electric or 

natural gas service shut off between October 1 and April 30 if they are in a payment 

program. The effective dates of the Cold Weather Rule were extended 15 days in the 

fall and 15 days in the spring by the Minnesota Legislature in 2021.
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• Your program set $35,000 as the maximum amount of assistance per 

homeowner. Pleaseexplain how you determined this amount will be sufficient 

to resolve housing-related delinquencies and whether the cap will be sufficient

in areas with higher housing costs?

In setting the $35,000 limit, our goal was to not only provide enough to support those 

most at risk of displacement who can sustain a mortgage going forward, but to also serve 

as many households as possible. The need for assistance is greater than the available 

resources. Providing more than $35,000 in assistance per homeowner would reduce the 

number of households that we could serve.

To establish the maximum, we looked at a range of scenarios, which included:

• A Typical Homeowner Needing a Full 18-Months of Assistance. Based on the Black 

Knight data that we have received, we are expecting the typical mortgage needing 

assistance to have an original loan amount of about $220,000. Assuming a 4% 

interest rate, the monthly PITI would be about $1,600, and $28,000 would be 

needed to cover the maximum 18 months of past-due payments.

• A Higher Cost Home with a Loan Modification Option. We are limiting the 

program to households with incomes at 100% of the median income. A household 

at this maximum, roughly $100,000 (depending on the county), would be able to 

afford a $320,000 original mortgage amount. For context, the median sale price of 

a home in Minnesota was $275,000 in 2020 and $305,000 in the Twin Cities metro 

area. A $320,000 original mortgage with a 4% interest rate would have a monthly 

PITI of about $2,350, and $35,000 would cover about 15 months of past-due 

payments. Alternatively, assuming a borrower is 7 years into this mortgage, a 

$20,000 principal reduction along with a 7-year term extension would reduce a 

homeowners’ monthly payment by 20%. After the loan modification, a $35,000 

maximum benefit would leave $15,000 to cover past-due payments, which would 

cover about 6 months.

If someone needed more assistance than the amount identified in these scenarios, their 

ability to sustain a mortgage going forward is likely more tenuous and we would refer the 

homeowner to a housing counselor who would proceed to support the homeowner with 

counseling support for a soft landing. Minnesota Housing may permit exceptions to the 

$35,000 maximum assistance based on need.

Eligibility

• No questions.
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Outreach

• No questions.

Prioritization

• No questions.

Performance Goals

• Please explain how you intend to communicate your progress towards

performance to thepublic.

We will host a dashboard for the program on our website with key program metrics, similar 

to what we have for our Emergency Rental Assistance Program -

https://www.mnhousing.gov/renthelpmn-dashboard. The specific metrics would be 

tailored to our HAF program and plan.

• Please indicate which three metrics will serve as the best indicators of the

success of yourprogram.

The three most important metrics would reflect our primary program goals:

• Serve those at risk of housing displacement (data elements may include 

share of assisted homeowners broken out by income and information 

from screening/triage questions)

• Equitably structure the program to reach households that are 

disproportionately impacted. (Data elements may include share of 

assisted homeowners broken out by race/ethnicity, region and SDI status)

• Distribute assistance efficiently while delivering quality program services and 

managing to overall program integrity (data elements could include share of 

submitted applications broken out by various processing statuses.) Taking the 

time and resources to equitably reach and serve those most at risk of 

displacement will likely lead to somewhat slower distribution of assistance. More 

challenging situations will take more time. Balancing the three goals will be the 

key.

• Please indicate whether you intend to disaggregate metrics by income, race, gender,

etc.

Yes, we will report disaggregated metrics on our dashboard and other reporting.

• Please consider including as an additional metric the number of homeowners

assisted/foreclosures prevented solely through counseling or legal services without

payment ofHAF funds to resolve the homeowner’s defaults or delinquencies.
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o NOTE: In response to your question in Attachment A, that funding for housing

counseling or legal services may be used to assist any homeowner who meets 

the general requirements for eligibility under the HAF Guidance. (See 

“Eligible Homeowners”, p. 5.) In addition, housing counseling assistance that

aids a homeownerin obtaining loss mitigation assistance, rather than using 

HAF funds to reinstate their mortgage is consistent with the Guidance’s

statement that Treasury encourages

We will consider this and are actively collaborating with the statewide housing intermediary 

who tracks performance and outcome measurement for housing counseling organizations 

statewide.

Readiness

• Please provide the most recent available information about your program's 

readiness, includingstaffing, contractors, etc.

Minnesota Housing will manage the HomeHelpMN program using limited, dedicated in-house 

staff, and more significant support from outside vendors. We issued competitive Requests for 

Proposal for three primary services:

• Marketing and Outreach, including development of a strategic communications plan

• End-to-End Services, including support for a call center, software/technology and 

application processing through payment processing

• Community engagement services which will be conducted through community-based 

organizations who will amplify reach into SDI communities.

The marketing and outreach vendor has been selected, and we will use a BIPOC-led marketing 

firm who also brings experience with our statewide ERAP program. We are currently in final 

contract negotiations with the vendor. The End-to-End Services vendor selection 

recommendation is complete with all delegated authority approvals in place and contract 

negotiation underway. Upon execution of the contract, we will work expeditiously with the 

vendor to prepare for program launch. We have also finalized 10 recipients for grant-based 

funding for community engagement. We are working to have all Community Connector grant 

agreements in place by early 2022.

• Is your program prepared to launch upon approval and, if not, by what date will you

be ready to launch following approval?

Following completion of the procurement and contracting processes outlined above, we will 

work expeditiously to launch the program, with a best hoped for launch date in Q1 2022. Work 

is beginning now with the marketing and outreach contractor around strategic communications 

planning for a successful launch. Once the End-to-End Services contract is finalized, we are 
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prepared to begin and intense period launch readiness work. In preparation for this, we have 

already completed a draft of the Program Guide and the Pre-screening and Application, and 

have drafted homeowner triage questions for use by the Call Center. 

• Please provide updated information about your progress in spending the initial 10% 

paymentfrom your jurisdiction’s full allocation and the status of any pilot 

assistance already offered ormade available to homeowners.

Minnesota Housing has spent down $65,979 to date, exclusively on FTE costs associated with the 

HomeHelpMN program. These staffing costs are from three FTE positions, the HomeHelpMN 

Program Manager (hired as of June 2021), the federal Communications staff (hired as of August 

2021), and legal counsel. As the procurement process progresses, with all contracts expected to 

be executed by year-end 2021, the spend-down rate will increase significantly. We have not 

opened up a HomeHelpMN pilot as we need vendor support to be able to administer the 

statewide program effectively. 

Budget

Your total allocation amount is $128,663,948. Our records indicate that you have received an

initial 10% payment of $12,866,394.80, and that upon plan approval, you may draw up to

$115,797,553.20.

o The total budget in your draft HAF plan is for $128,663,856. Please confirm

your budget is correct, and that at this time, you wish to receive less than your 

remaining allocation.If necessary, please revise your budget, including the 

initial 10% that was paid in your initial payment.

We are requesting the total budget allocation for the state of $12,866,394.00. At this time we 

are making the three budget adjustments. The first budget change decreases the amount 

initially anticipated for housing counseling by $5,650,0000 and reallocates that to mortgage 

reinstatement. The second change is to the legal services budget for $750,000 to support 

additional legal services for HAF eligible households. The third change to the budget is to our 

marketing administrative expense which increased from $400,000 to $484,000 with the 

selection of our marketing vendor. The new totals are reflected in the specific budget line items 

below.

Counseling or Legal Services

The Participant may allocate up to 5% of its HAF funds for counseling or educational efforts by housing 

counseling agencies approved by the Department of Housing and Urban Development or a tribal

government, or legal services, target to households eligible to be served with funding from the HAF 

related to foreclosure prevention or displacement.

Specify the Participant’s allocations for the following:
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Amount ($0.00)

Counseling or Educational Services

Legal Services

Sub-total:

As a result of this change, we anticipate providing more funding for direct financial assistance 

and are revising that budget as follows:

Budgeting of HAF Funds by Program Design Element

Specify the amounts of HAF funds that the Participant proposes to allocate to each of the following

program design elements, if offered:

Amount ($0.00)

Mortgage

Payment

Assistance

Mortgage 

Reinstatement

Mortgage

Principal

Reduction

Facilitate Mortgage Interest Rate 

Reduction

Payment Assistance for Homeowners

Utilities

Payment Assistance for Homeowner’s

Internet Service

Payment Assistance for Homeowner’s 

Insurance

Payment Assistance for HOA fees or liens

Payment Assistance for Down Payment

Assist. LoansPayment Assistance for

$0

750,000

$750,000

$0.00

$11,050,000.00

$0.00

$42,175,000.00

$36,000,000.00

$4,000,000.00

$0.00

$0.00

$11,700,000.00

$3,040,000.00

$649,356
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Delinquent Property Taxes

Other measures to prevent homeowner displacement

Sub-total:

(Enter sum of amounts entered)

Allocation of Administrative Expenses

As described in the HAF guidance, up to 15% of a HAF participant’s allocation may be used for 

administrative expenses. If the participant proposes to use HAF funds for administrative expenses, please 

specify the proposed expenses and amounts below, providing sufficient detail for Treasury to determine

whether the expense is within the definition of “qualified expenses” in the HAF guidance:

Expense Type Amount ($0.00)

Sub-total:

(Enter sum of amounts entered)

Points of Contact

Please replace Kasey Kier with the following point of contact:

Primary Contact

Name: Judi Mortenson

Agency/Office: Minnesota Housing

E-mail: Judi.Mortenson@state.mn.us

Phone Number: 651.297.2678

Term Sheet Minor Change

We uploaded a new term sheet with a minor change to the Mortgage Default 

Resolution and Mortgage Reinstatement term sheets that clarified that 

documentation must be provided for a loan modification, but it does not need 

to be from the loan servicer.

$108,614,356

$19,299,592

$3,000,000

$484,000

$375,000

$15,440,592

Staffing & Contingency

Marketing

Community Engagement

Vendors – End-to-end Services, 

Processing, Technology