Loading...
HomeMy WebLinkAbout1993-011 EDAR1 Commissioner Kristen Mann introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 93 11 RESOLUTION APPROVING GUIDELINES FOR RENTAL TO OWNER CONVERSION PROGRAM WHEREAS, the Economic Development Authority in and for the City of Brooklyn Center (EDA) desires to undertake housing programs and activities in order to preserve existing housing and neighborhoods, to eliminate blighting influences and to redevelop substandard property in the City; and WHEREAS, the Brooklyn Center EDA has determined that, due to numerous factors including market and income tax law changes, many single- family rental properties in the City of Brooklyn Center are experiencing deferred maintenance and a general disinvestment in the properties; and WHEREAS, it is the desire of the Brooklyn Center EDA to encourage and foster the highest possible maintenance of single family properties in the City of Brooklyn Center; and WHEREAS, the Brooklyn Center EDA has determined that one of the means to encourage a high level of home maintenance is to encourage owner occupancy of single- family properties; and WHEREAS, the Brooklyn Center EDA has determined it is in the best interest of the City of Brooklyn Center to provide financial incentives to persons desiring to purchase and rehabilitate nonhomestead and single family rental property, initially on a pilot project basis; and WHEREAS, the Brooklyn Center EDA has authorized a rental to owner conversion program in its 1993 annual budget; and WHEREAS, the City Council of the City of Brooklyn Center has granted concept approval to the rental to owner program at its February 22, 1993 City Council meeting; and WHEREAS, the activities to be included in the rental to owner program are authorized by Minnesota Statutes Chapter 469. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center that the following activities and program guidelines are hereby approved for the EDA's rental to owner conversion program: 1. The rental to owner program shall be limited to the identified target area (ITA), which is the area bounded by 57th Avenue on the north, 53rd Avenue on the south, Logan Avenue on the west and the Mississippi River on the east. EDA RESOLUTION NO. 93 -11 2. REHABILITATION GRANTS Rehabilitation grants will be available to eligible home buyers who are purchasing and rehabilitating absentee -owned properties in the identified target area. The rehabilitation grants will be made for the purpose of improving the property and will be made in amounts up to $5,000, not to exceed the cost of improvements. The grant may be considered as a portion of the borrower's required down payment as permitted by the Federal Housing Administration (FHA). Rehabilitation grants will be made available on a first -come, first served basis to qualifying applicants. In lieu of repayment of the rehabilitation grant, the grant recipient will make an alternative investment in the form of neighborhood community service. The specific service and sponsor shall be approved by the Brooklyn Center EDA and shall be evidenced by a down payment grant agreement, a copy of which is attached to this resolution. The amount of time volunteered for the community service is valued at $20.00 per hour for the purpose of this program and the work must be completed within two (2) years from the date of closing on the home. A grant recipient receiving a $5,000 rehabilitation grant will volunteer 250 hours. The grant recipient must complete and sign a grant application, obtain the signature of the sponsor for community service, and attach a copy of the proposed down payment grant agreement to the application. This application, along with a copy of the purchase agreement and bids for the rehabilitation work to be performed on the house, must be submitted to the program administrator three (3) weeks prior to closing. City building inspections staff shall assist the grant recipients in the preparation of the scope of work for the home improvements eligible for grant assistance under the program. Improvements that may be made using grant funds are energy and code related items, general improvements or upgrades and deferred maintenance items. Items that must be repaired first are those items identified by an FHA appraiser. EDA RESOLUTION NO. 93 -11 The scope of work shall be approved by City building inspections staff. All work included in the rehabilitation grant shall be performed by a general contractor licensed by the State of Minnesota. The grant recipient must complete the improvements on the property in an amount equal to or greater than the amount of the rehabilitation grant. 3. CLOSING COST GRANTS Borrowers who qualify to receive a rehabilitation grant may also qualify for a closing cost grant of up to $1,500. This grant may be used towards payment of eligible closing costs. Eligible closing costs include credit reports, appraisal fees, origination fee, discount points, and recording fees. Ineligible costs include expenses such as insurance, taxes, escrows and other prepaid costs. Closing cost grants will be made available on a first -come, first served basis. 4. ELIGIBILITY REOUIREMENTS First -time home buyers with qualified incomes who are purchasing absentee -owned properties located within the identified target area and who are receiving their mortgage from the Minnesota Housing Finance Agency or another recognized financial institution will be eligible to participate in the program. A first -time home buyer is defined as someone who has not owned and occupied their primary and principal place of residence during the three (3) years prior to applying for this program, excluding mobile home ownership. The borrower must occupy the property as their primary and principal place of residence for a minimum period of five (5) years after closing. The borrower's annual adjusted household income cannot exceed the limits established by the Minnesota Housing Finance Agency for participation in the Minnesota City Participation Program. Calculation of annual adjusted household income shall be calculated according to standards established by the Minnesota Housing Finance Agency for the Minnesota City Participation Program. EDA RESOLUTION NO. 93 -11 5. PROGRAM ADMINISTRATION The program administrator for the rental to owner program shall be the City's community development specialist. Thompson Associates, Inc., shall serve as project coordinator for the rental to owner program and will assist and counsel program applicants with regard to their eligibility and participation in the rental to owner conversion program. Thompson Associates, Inc., shall provide additional program administrative assistance, including preparation of collateral material, landlord and tenant education regarding the program as per the terms of the contract between the City of Brooklyn Center and Thompson Associates, Inc. The City's community development director is hereby authorized to make minor administrative modifications to the rental to owner program, as long as the administrative modifications do not alter the intent of the program. April 12, 1993 Date Every effort will be made in administering the program to coordinate the rental to owner conversion program with other available housing and mortgage programs, including the Minnesota Housing Finance Agency's Minnesota City Participation Program and Purchase Plus Program. Todd Paulson, President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Celia Scott and upon vote being taken thereon, the following voted in favor thereof: Todd Paulson, Celia Scott, Dave Rosene, Barb Kalligher, and Kristen Mann; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted.