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HRA forgives part of 2009 AHIF loan for troubled Rental Reclaim property; owner unable to make repairs

Hennepin County Board of Commissioners (committees) · April 22, 2026
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Summary

The Hennepin County HRA voted to forgive part of a 2009 Affordable Housing Incentive Fund loan tied to a long‑vacant Rental Reclaim 1 property at 620 23rd Avenue North after staff said the nonprofit owner cannot afford necessary repairs.

The Hennepin County Housing and Redevelopment Authority approved staff recommendations on April 21 to forgive a portion of a 2009 Affordable Housing Incentive Fund (AHIF) loan associated with Rental Reclaim 1. The scattered‑site portfolio includes three addresses (12 units total). One property, 620 23rd Avenue North, has experienced repeated break‑ins, vandalism and stripping of plumbing and wiring; staff said it is currently not habitable and is valued at about $1.

Housing staff told the HRA that Housing Inaction (the owner/operator) suffered a cyberattack and is not financially able to make the repairs needed to restore habitability. Staff recommended early forgiveness of the AHIF share related to the 23rd Avenue property and release of the associated mortgage note and declaration to lower barriers to a possible sale and rehabilitation. For a second duplex in the portfolio (2206 6th Street North) staff recommended accepting pro‑rata repayment and release of related affordability requirements; the fourplex on Emerson Avenue North would remain under existing terms.

Staff said the goal of releasing affordability requirements in this case is to allow a buyer to rehabilitate the property, and the city of Minneapolis and other project funders are taking similar actions to permit transfer or disposition. Housing Inaction will remain the owner in the near term and will continue to secure and board the property while a buyer is sought.

Commissioners asked clarifying questions about habitability, future steps and whether properties would sit vacant until a buyer appears; staff answered that the release is intended to attract a buyer who can invest in rehabilitation and that local partners are coordinating on next steps. The action passed by voice vote.