Beginning in 2005, the for-profit owner of the Cardinals Apartments in Willmar, seven separate projects under the RD Section 515 program, sought to take the properties out of the federal program by engaging in an illegal end run around the prepayment process established by federal law. RD concluded there was nothing they could do about it, and the owner began operating the projects as market rate, imposing huge rent increases on the tenants. HJC sued the owner and RD on the tenants’ behalf, resulting in a settlement in which all the properties were restored to the section 515 program under new ownership by Southwest Minnesota Housing Partnership, affordable rents were restored and the private owner had to refund rent overcharges.
