McKnight to Save Minnesota Repo Homes with $10 Million

by Peter Vernon on States

Neighborhoods in Minnesota battered by repo homes will be rejuvenated by the $10 million funding given by the McKnight Foundation to buy abandoned repo homes, repair them and sell them to responsible low-income families.

The McKnight Foundation split the $10 million between the Greater Minnesota Housing Fund and the Family Housing Fund, which were chosen to administer the money and use it to turn the repo homes into homes which are energy-efficient and would provide affordable shelter to families and individuals able to maintain the homes.

The McKnight Foundation, founded in 1953 in Minnesota and funded by William and Maude McKnight, has about $1.6 billion in assets and has been increased in 2008 with another $99 million. An estimated 11 percent of the money is being spent to sustain family stability through provision of affordable housing.

Kate Wolford, head of the McKnight Foundation, said the foundation is glad to be able to help community associations carry out their programs in reducing the number of abandoned repo homes across the state and provide Minnesota families with affordable housing.

Wolford also called on other foundations to consider investing in the rehabilitation of repo homes as well as help stabilize Minnesota communities. The $10 million was given to the two housing groups in the form of home loan funds, which represent foundation investments that expect small returns of their capital within a set time.

Tom Fulton, president of Family Housing Fund, said the entire $5 million will be added to his organization’s Home Prosperity Fund set up in 2008 to rehabilitate Twin Cities neighborhoods battered by repo homes.

The home fund, initially launched with a total of $16 million coming from US Bank, Wells Fargo, TCF Bank, Minnesota Housing and Thrivent Financial, has increased its funds to about $25 million after receiving another $3 million given by lender Wells Fargo, a $1 million funding from the foundation sponsored by Pohlad family and the $5 million from McKnight.

Minnesota mayors, including Saint Paul Mayor Chris Coleman, Minneapolis Mayor R.T. Rybak and Isanti Mayor George Wimmer, commended McKnight for the loan funds, all saying the loan funds would cut down Minnesota foreclosures and mitigate the effects of repo homes on Minnesota families.

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