Community Investment Advance Makes Rehabilitation of Historic Site Possible: A Case Study

last updated on Monday, November 2, 2020 in Affordable Housing

Member Profile

The mission of Greater Minnesota Housing Fund (GMHF) is to support the creation of strong communities and affordable homes. In 1996, GMHF was founded to address the unmet needs of small towns, rural areas and tribal communities in Minnesota. As of 2019, GMHF manages a $72M revolving loan fund and has invested more than $352M in Minnesota communities to date. Based in Saint Paul, Minnesota, GMHF is a certified Community Development Financial Institution (CDFI) with a Four-Star AA+ Policy Plus rating by AERIS, the financial rating system of the CDFI industry similar to Standard & Poor’s and Moody’s.

Challenge and Opportunity

Located about 20 miles south of Duluth Minnesota, Cloquet has a population of 12,000. Like elsewhere across the country, the community is challenged with urban pull and strives to maintain workers. Before inception of the project, the City of Cloquet had long identified a need for workforce housing.

The vacant Cloquet Middle School was identified for renovation and conversion into apartment homes. The Cloquet Middle School Apartments would be a creative, effective approach to affordable housing that would utilize existing resources and create 57 rental units targeted primarily to households with incomes between $37,980 and $56,430, and 7 apartments available to formerly homeless individuals or families.



Greater Minnesota Housing Fund leadership made a commitment to leverage its relationship with the Federal Home Loan Bank of Des Moines in 2018. GMHF utilized the FHLB Des Moines line of credit to provide a flexible funding source during the construction phase of the project. Once the project had moved to the lease up phase GMHF leverage funding from the Community Investment Advance (CIA) program of the FHLB Des Moines to carry the project to permanent the close of its permanent funding source.

Without this partnership, the rehabilitation and renovation of the historic Cloquet Middle School may not have occurred. Rehabilitation of historical properties are always challenging and require extra time to ensure the project qualifies for Historic Tax Credits to help fund the project. The flexible funding provided by the FHLB Des Moines line of credit as well as the fixed rate funding of the CIA program allowed GMHF to fund the construction draws and carry the project to its permanent funding phase. The financing partnership allowed for streamlining capital ensure success of the project.

Greater Minnesota Housing Fund


“This project turned a vacant former middle school into 57 affordable apartments, including 7 dedicated to housing formerly homeless individuals,” said John Rocker, GMHF Director of Lending. “Construction is scheduled to finish July 2020, and the apartments are being leased. Tenants have begun moving in and we expect the project to be fully occupied by Fall 2020.”

This is Greater Minnesota Housing Fund’s third conversion of an historic school to affordable housing, and the organization is now working with two new communities based on Cloquet’s successes.

For more information, please contact Tom Cronin, Chief Financial Officer at Greater Minnesota Housing Fund.