AnnualReport2007

The Minnesota Home Ownership Center’s mission is to promote

sustainable ownership for low- and moderate-income Minnesotans

through the development and delivery of quality, standardized

education, counseling and related support services. We strive to:

EmpowER low and moderate-income households statewide to purchase and sustain affordable homes, with a major focus on those who face the greatest barriers and challenges to home ownership.

AssuRE wealth creation for low-income individuals and communities by teaching sound financial and credit management as part of home buyer and home owner education and counseling.

pREsERvE stability for families and children by preventing foreclosures.

ConsERvE public and private resources within the broader community by averting the negative ramifications that foreclosures present for neighborhoods and cities.

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Message from our

Minnesota faced unprecedented housing and mortgage challenges in 2007. According to ‘Foreclosures in

Minnesota: A Report Based on County Sheriff’s Sale Data’, more than 20,000 homes were lost to foreclosure

in 2007, a 71% increase over 2006. The same report projects over 28,000 foreclosures in 2008.

The Minnesota Home Ownership Center is leading the response to this mortgage crisis. Through our

partnerships with nonprofits, governments, and other stakeholders, we articulated and implemented a

statewide capacity building initiative, including: more than tripling the number of mortgage support

advisors engaged in foreclosure counseling; launching a comprehensive plan for increasing public education

through new outreach initiatives; and participating in a range of foreclosure-related research and initiatives.

Preventing foreclosures through counseling is a small fraction of the cost compared to those incurred by the

multiple stakeholders impacted by foreclosure. The average cost of providing a homeowner with foreclosure

counseling is about $1,000, compared to costs as high as $34,000 per foreclosure for local governments and

$59,000 for the mortgage industry.

Minnesota’s model for foreclosure counseling is unique in the country. No other state offers a centralized

support model with consumer services delivered locally. In 2008, the Center estimates that 20,000 impacted

homeowners will be assisted through our network of local providers.

While purchasing a first home may prove to be more challenging in the future, the Minnesota Home

Ownership Center remains committed to making sustainable, affordable new home ownership attainable

for Minnesota families and communities through our first-time home buyer education services. The current

mortgage crisis underscores the need for programs and services that offer potential buyers important,

trusted information, like our Home Stretch program. Working with Home Stretch providers, buyers learn how

to seek out reliable lenders and realtors; the responsibilities of home ownership; and how to plan financially

for achieving and sustaining their home.

Thank you for your partnership and support.

Mike Haley Julie Gugin

Chair, Board of Directors Executive Director

BoardChairExecutiveDirector

In 2007, the Minnesota

Home Ownership Center

provided key support

services to a statewide

network of 50 community

based agencies. These

agencies, in turn, delivered

pre-purchase, post-purchase

and foreclosure education

and counseling programs to

low- and moderate-income

households. Our model is

unique. No other state

has this centralized,

standardized approach

to home owner support

services.

2007 HIGHLIGHTS

2 Annual Report 2007

2007 HIGHLIGHTSEmpowered more than 13,000 low- and moderate-income families with the tools they need to purchase and sustain their homes. More than 4,400 households received foreclosure counseling and over 5,000 households participated in pre-purchase programs.

Embarked on a strategic planning process to determine the direction of the organization for the next five years.

Introduced a new logo and corporate identity, allowing the Center to implement a new branding protocol on its publications and materials.

Conducted dozens of trainings for network partners, including trainings on: the CounselorMax client management system, NeighborWorks® pre-purchase train-the-trainer certification, best practices for pre-purchase counseling, newly passed anti-predatory lending legislation and foreclosure counseling.

Created a refinance counseling program with accompanying program standards in response to new state legislation. Recruited 19 network partners to offer this service statewide.

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ForeclosurepreventionprogramWhen the number of Minnesota foreclosures dramatically increased in 2007, the Minnesota Home Ownership Center was uniquely positioned to respond to the crisis. Equipped with a strong network of non-profit and public agencies, foreclosure counseling services were already available in every county in Minnesota.

Faced with a dramatic increase in the need for foreclosure services, the Center needed to look no further than its network partners and build on its successful model of foreclosure counseling. The Center, in partnership with Minnesota Housing, the Family Housing Fund and Greater Minnesota Housing Fund, put a plan in place to increase the foreclosure counseling service capacity and to retool the service delivery model for greater efficiency. This service model helps families facing

foreclosure through in-depth counseling, budgeting and financial management, intervention and advocacy, emergency financial assistance, and referrals. Foreclosure counselors also assist home owners develop and negotiate a recovery plan with their lenders and creditors.

The result was an enhanced statewide foreclosure counseling system that could respond to escalating consumer demand efficiently and effectively. The initial implementation of this effort set the stage for the growth of the foreclosure counseling network in 2008.

20,404 Minnesota homes were lost to foreclosure in 2007

More than 4,400 Minnesota households received foreclosure counseling

Forty-eight percent of foreclosure counseling consumers avoided foreclosure

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Began multi-faceted implementation of a statewide outreach and education program to raise awareness about the availability of foreclosure counseling services. This included developing collateral print materials; conducting numerous speaking engagements locally and nationally; and piloting consumer outreach through the St. Paul Public libraries.

Hosted two Borrowers Workshops, offering 500 distressed home owners a forum to learn about foreclosure and their rights during foreclosure, meet with a foreclosure counselor, and discuss their mortgage options with their lenders.

Participated in the Minnesota Foreclosure Partners Council, a statewide collaborative of housing stakeholders dedicated to implementing coordinated strategies for foreclosure prevention and community recovery.

Secured funding to expand counseling capacity in Dakota, Washington and Hennepin counties.

Foreclosurepreventionprogram

2007KeyForeclosurepreventionEfforts

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Pre-Purchase Education & Counseling

More than 5,000 households participated in Home Stretch workshops, and more than 1,500 received pre-purchase counseling.

The Center maintained its commitment to emerging and underserved markets:

More than 10% of the 486 workshops hosted throughout the state • were held in language other than English

Eighty percent of households served earned under• 80% of the area median income.

Approximately 30% of Home Stretch participants• were single-headed households.

Homestretch:preparinghomeownersforsustainablehomeownership

A solid base of pre-purchase education and counseling helps to ensure that Minnesota families are fully prepared for the financial and practical responsibilities of home ownership. Home Stretch is the Center’s pre-purchase education and counseling curriculum provided to homebuyers. Delivered through both workshops and individual advising, homebuyers gain the knowledge they need to examine their personal finances, understand the pros and cons of home ownership, determine their readiness for home ownership, and understand the steps required to successfully purchase and maintain a home.

Homestretch

6 Annual Report 2007

Pre-Purchase Education & Counseling

More than 5,000 households participated in Home Stretch workshops, and more than 1,500 received pre-purchase counseling.

The Center maintained its commitment to emerging and underserved markets:

More than 10% of the 486 workshops hosted throughout the state • were held in language other than English

Eighty percent of households served earned under• 80% of the area median income.

Approximately 30% of Home Stretch participants• were single-headed households.

Homestretch

2007:Achallengingtimeforhomeownership

Home ownership is a means for families to build wealth, achieve stability, and support their children’s success in school and life. However, achieving and holding on to the American dream of home ownership became more difficult than ever in 2007. For low- and moderate-income families, the ability to achieve sustainable home ownership was challenged on a number of fronts.

At the same time, declining home prices and increased availability of housing stock created unforeseen opportunities for homebuyers. The Center and its network partners were ready to address the needs of homebuyers interested in entering home ownership through the right door, empowered with information. Home Stretch prepares households to make wise, informed decisions about home ownership. Educators and advisors address concerns buyers may have about mortgage risks and buying in the current economy.

newLeadershipforpre-purchaseprograms

In 2007, the Center undertook a number of steps designed to improve its nationally recognized, award-winning pre-purchase program:

Hired pre-purchase program director, Brooke Walker.

Began re-writing the Home Stretch manual and enhancing other program support materials.

Adopted national standards for home ownership education and counseling and trained network partners on these standards.

Implemented program review protocol that ensures timely support for agency partners and program excellence for consumers.

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“”

Our goal was to further strengthen Home Stretch,

an already highly regarded and effective program.

It became clear an important step would be to

revise the consumer manual. With the help of

Home Stretch providers, we began the process

of developing a manual that would more

accurately reflect home ownership today and

better serve consumers.

- Brooke Walker, Program Director

Kathie Davis, a long-time Home StretchProvider and friend of the Center, passed away in late 2007. Kathie was passionately involved in affordable housing issues with Partners for Affordable Housing and Resource Connections and throughout southeastern Minnesota. She will be fondly remembered for her dedication and devotion to those consumers she assisted throughout her career.

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ACORN HousingAfrican Development CenterAmerican Dream Services Anoka County Community Action ProgramArrowhead Economic Opportunity AgencyAustin Housing & Redevelopment AuthorityBi-County Community Action ProgramCarver County Community Development AgencyCCCS of The Village Family Service CenterCentral Minnesota Housing PartnershipChildren’s Home Society and Family Services City of Mankato, Economic Development AgencyCity of OwatonnaCity of St. Paul Planning & Economic DevelopmentCommunity Action Partnership of Suburban HennepinCommunity Neighborhood Housing ServicesCornerstone Community RealtyDakota County Community Development AgencyFamily Life Credit ServicesHeadwaters Regional Development CommissionHeartland Community Action AgencyHispanic Chamber of Commerce of MinnesotaInter-County Community CouncilKOOTASCA Community ActionLSS Financial CounselingNeighborhood Development AllianceNeighborhood Housing Services of DuluthNeighborhood Housing Services of MinneapolisNorthside Residents Redevelopment CouncilNorthwest Community Action AgencyOttertail-Wadena Community Action CouncilPartners for Affordable HousingPRG, Inc.Rochester-Olmsted Community Housing PartnershipSemcacSt. Paul Urban LeagueSouthwest Minnesota Housing PartnershipStrickland AssociatesTri-Valley Opportunity CouncilTwin Cities Habitat for HumanityUniversity of Minnesota Extension Service, Blue Earth CountyUniversity of Minnesota Extension Service, Dodge CountyUniversity of Minnesota Extension Service, Douglas CountyUniversity of Minnesota Extension Service, Grant CountyUniversity of Minnesota Extension Service, Pennington CountyWashington County Housing and Redevelopment AuthorityWest Central Minnesota Communities ActionWhite Earth Investment InitiativeWright County Community ActionYES Consulting

Designates a new provider

ThenetworkLosesaFriend

KathieDavis

2007networkproviders

The Center partnered with the St. Paul public libraries to begin its implementation of a statewide outreach and education plan to raise awareness about the availability of foreclosure counseling services. Library patrons were increasingly asking library staff about foreclosure resources. The Center created support tools for librarians to use when answering clients’ questions and materials that could be displayed throughout the library system. The materials stress that home owners facing mortgage crisis are not alone. The primary message directs home owners to foreclosure counseling services, but also includes practical steps that home owners can take themselves.

The campaign was an instant success. Requests came in to the Center from a variety of sources asking for additional materials. What began as bookmarks and posters to be used in a library setting soon became a self-mailing postcard, banners, utility-statement inserts and standalone handouts. By year end the Center had distributed over 100,000 marketing pieces.

In 2008 the Center will co-brand these materials with network partners and other community stakeholders as one element of a comprehensive outreach and education campaign.

Expandedoutreach&marketing

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10 Annual Report 2007

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$100,000andaboveCity of Minneapolis Department of Community Planning and Economic DevelopmentCity of Minneapolis Empowerment ZoneFamily Housing FundHennepin County Housing, Community Works & TransitThe McKnight FoundationMinnesota Department of Commerce

$51,000-$99,000City of St. Paul Planning and Economic DevelopmentGreater Minnesota Housing FundHousing Partnership NetworkMinnesota HousingU.S. Bancorp FoundationUSDA Rural DevelopmentWells Fargo Foundation Minnesota

$21,000-$50,000F.R. Bigelow FoundationFletcher Family FoundationThe Saint Paul FoundationWells Fargo Foundation on behalf of Wells Fargo Home Mortgage

$11,000-$20,000Bremer BankColdwell Banker BurnetFreddie MacM&I FoundationTCF Foundation

$1,000-$10,000Countrywide Home LoansGMAC-RFCHomestead Mortgage CorporationMarquette Financial CompaniesTCF National BankThrivent FinancialValspar FoundationWestern National Mutual Insurance Company

TheminnesotaHomeownershipCenterisfundedthroughthegenerouscontributionsofthefollowingcorporations,institutions,foundationsandgovernmentalagencies:Funders

12 Annual Report 2007

Financials

statementofActivitiesFor the year ended December 31, 2007

FinancialpositionFor the year ended December 31, 2007

AssetsCash and cash equivalents $1,296,385Accounts receivable 105,270Contributions receivable 268,750Prepaid expenses 2,495Equipment, less accumulated

depreciation of $27,196 23,531

$1,696,431

Liabilities and Net AssetsLiabilitiesAccounts payable and accrued expenses $252,015 Due to HECAT 250,000 $502,015

Net AssetsUnrestricted Undesignated $374,149 Board designated for: Mortgage foreclosure loan pool 167,683 Reserves 122,974 Total Board designated 290,657

Total unrestricted 664,806Temporarily restricted 529,610 $1,194,416

$1,696,431

Support and Revenue Contributions $1,139,001Grants and contracts 716,825Loan repayments 38,758Sales of workshop manuals 20,869In-kind contribution 13,225Interest 24,174Other 19,086 Total support and revenue $1,971,938

ExpensesProgram and services $1,300,669Management and general 77,729Fundraising 26,926 $1,405,324

Change in Net Assets $566,614

Net Assets, Beginning of Year $627,802

Net Assets, End of Year $1, 194,416

92% of our funding is used for program delivery (either directly by the Center or passed-through to support our network organizations). 6% of our budget is for administration (management) and 2% is dedicated to fundraising.

spendingFacts

92%programDelivery

6%Administration2%Fundraising

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BoardofDirectorsEduardoBarreraA.H.wilderFoundation

staceyBostwick,AdvisoryCouncilpRG,Inc.

DavidBoyce,secretarystonebridgeBank

marilynBruinuniversityofminnesotaExtensionservice

JoeCollinsCityofst.paulplanning&EconomicDevelopment

DavidEidewesternnationalmutualInsuranceCompany

JimErchulDayton’sBluffneighborhoodHousingservices

ChrisGallerminnesotaAssociationofREALToRs®

KarenGajeskiBremerBank

mikeHaley,presidentminnesotaHousing

LanceLarsonusDARuralDevelopment

DavidLindstromm&IBank

RonRankinCityofminnetonka

RobinpetersonColdwellBankerBurnet

ElfricporteCityofminneapolisCommunityplanning&EconomicDevelopment

BillsarvelaTCFnationalBank

victoriamurrayshipley,vicepresidentusBank

ToddsipeThriventFinancialBank

RichardsmithminnesotaHousing

susanstrasserwellsFargoBank

stephanieverginGreaterminnesotaHousingFund

LindawhiteFanniemaeminnesotaoffice

pamZagariaFamilyHousingFund

KarenDugglebyResearch Director

JulieGuginExecutive Director

BobbieHoffAdministrative Assistant

TeresaHowardIntern

EdnelsonMarketing & Communications Manager

BrianpaulsonIntern

DanasnellProgram Director

BrookewalkerProgram Director

DebbiewuerffelProgram Manager

Center staff