Looking for ways to fight foreclosure crisis in North Minneapolis

According to the Hennepin County Sherriff’s Office, the number of foreclosed properties during 2007 in Minneapolis was 2,895. From January through May of this year, 1,353 homes were foreclosed. Communities in the North Minneapolis area have been hit especially hard by the foreclosure crisis.

The Northside Community Reinvestment Coalition (NCRC) – created this year – is working to ensure that the North Minneapolis community has fair and equal access to credit, capitol and banking services. NCRC is a coalition of existing groups that are involved in the Minneapolis housing crisis (including Habitat for Humanity, Hawthorne Area Community Council, Jewish Community Action, Northside Residents Redevelopment Council, Association of Community Organizations for Reform Now). NCRC hopes to target the foreclosure issue at its root, by monitoring existing banking and lending programs to make sure that they are appropriately serving North Minneapolis.

“NCRC brings all of us non-profit organizations together as a group – with one common goal. We’re sort of a watchdog operation here,” said Maureen Wilson of the Northside Residents Redevelopment Council.

NCRC has already met with Greater Metropolitan Housing Corporation (GMHC – pronounced “gimmick”) to discuss working with them on GMHC’s Sustainable Home Ownership Program (SHOP). GMHC is a business-sponsored, non-profit program aimed at providing affordable housing for low-income residents in the metropolitan area.

SHOP is a three-year program that would provide low interest mortgage loans, affordable housing and debt counseling to North Minneapolis residents who do not qualify for traditional loans (including foreclosure victims). GHMC owns property in North Minneapolis, some of which it has rehabbed, that it will offer to residents who qualify for the SHOP Program. At the end of the three years, GHMC hopes that their participants will be able to qualify for traditional mortgages and loans from regular banks.

NCRC and GMHC have met and are discussing how and whether they can collaborate on the SHOP Program.

“Right now we’re very happy with the program,” said Wilson, “but one of the biggest issues that we will be bringing to GMHC is ‘Who are you targeting?” In reviewing the SHOP Program, NCRC’s first priority is whether or not the program actually applies to the North Minneapolis community.

“If GMHC really wants to get help to people who’ve been hit by the foreclosure crisis, well, this program might not work, but we’re certainly willing to work with them on it,” said Jeff Skrenes, housing director for Hawthorne Area Community Council, a member of NCRC.

One of NCRC’s main concerns is that GMHC’s low-income initiative isn’t low enough to properly serve the community. Jeff Skrenes estimates that the average income of someone going through home foreclosure is $30,000 to $40,000. The North Minneapolis houses in the program will be in the price range of $125,000 to $150,000. According to Skrenes, the qualified buyer of these homes would need an average income of upper $30,000 to $50,000. Although this does not match the income of some North Minneapolis residents, says Skrenes, it may be the best price GMHC has to offer.

Another concerns is that GMHC plans to work with Anoka-based credit counselors for their program. NCRC has suggested that GMHC work with Northside-based agencies in order to keep the program community-oriented and redistribute funds within the Northside area.

If NCRC gives GMHC the stamp of approval and they agree to work together, Jewish Community Action (JCA), a member of NCRC, has agreed to raise $5 million in deposits for Franklin Bank, a Sunrise Community Bank. The deposits raised by JCA will then be used to fund GMHC’s program.

The source of funds for GMHC’s SHOP Program are Franklin Bank’s Socially Responsible deposit funds. This is an initiative to ensure Franklin customers that their deposits are being used to reinvest and provides loan and support for programs in the community.

“This issue is as diverse as each individual,” said Dorothy Bridges, CEO and President of Franklin bank, of the foreclosure crisis, “It’s our hope that through [GMHC’s] program, these people can get back on their feet and one day qualify to be a regular customer of Franklin bank.”

“It’s all about building relationships and allying with other community groups,” said David Snyder, community organizer of JCA.

Cass Sanford is a student at Mount Holyoke College and an intern with the Twin Cities Daily Planet.