HomeMy WebLinkAbout1997 06-23 EDAP Regular Session • EDA AGENDA
CITY OF BROOKLYN CENTER
June 23, 1997
7 p.m.
1. Call to Order
2. Roll Call
3. Approval of Agenda
-The following items are considered to be routine by the Economic Development
Authority and will be enacted by one motion. There will be no separate discussion of
these items unless a Commissioner so requests, in which event the item will be removed
from the consent agenda and considered at the end of Commission Consideration Items.
a. Approval of Minutes
- Commissioners not present at meetings will be recorded as abstaining from the
vote on the minutes.
1. May 27, 1997 - Regular Session
• 2. June 9, 1997 - Regular Session
4. Commission Consideration Items
a. Resolution Accepting Quotations and Awarding Contract for Residential Structure
Removal for 53rd Avenue Development and Linkage Project
-Requested Commission Action:
- Motion to adopt resolution.
b. Options for EDA Housing Rehabilitation Deferred Loan Program
-Requested Commission Action:
- Commission discuss.
5. Adjournment
•
D r 7 j 0 W� offq,
R
MINUTES OF THE PROCEEDINGS OF THE
• ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER
IN THE COUNTY OF HENNEPIN AND THE
STATE OF MINNESOTA
REGULAR SESSION
MAY 27, 1997
CITY HALL
CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order by President Myrna Kragness at 8:15 p.m.
ROLL CALL
President Myrna Kragness, Commission members Kathleen Carmody, Debra Hilstrom, Kay
Lasman, and Robert Peppe. Also present: Executive Director Michael J. McCauley, Assistant
City Manager Jane Chambers, Public Services Director Diane Spector, City Attorney Charlie
LeFevere, and Council Secretary LeAnn Larson.
• APPROVAL OF AGENDA - AND CONSENT AGENDA
A motion by Commission member Carmody and seconded by Commission member Peppe to
approve the agenda and consent agenda as printed passed unanimously.
COMMISSION CONSIDERATION ITEMS
RESOLUTION APPROVING SETTLEMENT AGREEMENT FOR ACQUISITION OF 620
53RD AVENUE NORTH
RESOLUTION NO. 97 -16
Member Lasman introduced the following resolution and moved its adoption:
RESOLUTION APPROVING SETTLEMENT AGREEMENT FOR ACQUISITION OF 620
53RD AVENUE NORTH
The motion for the adoption of the foregoing resolution was duly seconded by member Peppe
and passed unanimously.
• 5/27/97 _1 _
DRAFT
ADJOURNMENT
A motion by Commission member Carmody and seconded by Commission member Hilstrom •
to adjourn the meeting at 8:18 p.m. passed unanimously.
President
Recorded and transcribed by:
LeAnn Larson
•
5/27/97 -2- •
DRAFT
MINUTES OF THE PROCEEDINGS OF THE
• ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER
IN THE COUNTY OF HENNEPIN AND THE
STATE OF MINNESOTA
REGULAR SESSION
JUNE 9, 1997
CITY HALL
CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order by President Myrna Kragness at 9:21 p.m.
ROLL CALL
President Myrna Kragness, Commission members Kathleen Carmody, Debra Hilstrom, Kay
Lasman, and Robert Peppe. Also present: Executive Director Michael J. McCauley, Assistant
City Manager Jane Chambers, Public Services Director Diane Spector, City Attorney Ron
Batty, and Council Secretary LeAnn Larson.
• APPROVAL OF AGENDA AND CONSENT AGENDA
A motion by Commission member Carmody and seconded by Commission member Hilstrom
to approve the agenda and consent agenda as printed passed unanimously.
APPROVAL OF MINUTES
A motion by Commission member Carmody and seconded by Commission member Hilstrom
to approve the minutes of the May 12, 1997 -- Regular Session as printed passed unanimously.
COMMISSION CONSIDERATION ITEMS
RESOLUTION AUTHORIZING ADMINISTRATIVE SETTLEMENT FOR ACQUISITION
OF PROPERTY IN THE 53RD AVENUE DEVELOPMENT AND LINKAGE PROJECT
RESOLUTION NO. 97 -17
Member Lasman introduced the following resolution and moved its adoption:
RESOLUTION AUTHORIZING ADMINISTRATIVE SETTLEMENT FOR ACQUISITION
• Date _ 1 _
DRAFT
OF PROPERTY IN THE 53RD AVENUE DEVELOPMENT AND LINKAGE PROJECT
The motion for the adoption of the foregoing resolution was duly seconded by member •
Carmody and passed unanimously.
RESOLUTION APPROVING RELOCATION CLAIM FOR PROPERTY IN THE 53RD
AVENUE DEVELOPMENT AND LINKAGE PROJECT
RESOLUTION NO. 97 -18
Member Hilstrom introduced the following resolution and moved its adoption:
RESOLUTION APPROVING RELOCATION CLAIM FOR PROPERTY IN THE 53RD
AVENUE DEVELOPMENT AND LINKAGE PROJECT
The motion for the adoption of the foregoing resolution was duly seconded by member Lasman
and passed unanimously.
ADJOURNMENT
A motion by Commission member Hilstrom and seconded by Commission member Carmody
to adjourn the meeting at 9:25 p.m. passed unanimously.
President
Recorded and transcribed by:
LeAnn Larson
Date -2- •
y�
Memorandum
To: Michael J. McCauley, City Manager
From: Tom Bublitz, Community Development Specialist
Date: June 17, 1997
Subject: Resolution Accepting Quotation and Awarding Contract for Residential Structure
Removal for 53rd Avenue Development and Linkage Project
Of the current properties in the 53rd Avenue Development and Linkage Project that are vacant,
two of them were suitable candidates for sale to house movers. The two properties are located at
512 -53rd Avenue North and 5309 Camden Avenue North. On June 3a, the final and remaining
group of homes will become vacant. There will be several more properties in this group which
should be suitable for sale and removal. The majority of homes in the 53rd Avenue
Development and Linkage Project are 1 /2 story homes. Because of the difficulty in physically
a 1
movin 1 /_ story homes along highway routes these es of prop erties are difficult to .
g g Y � types P P market
unless they are in exceptional condition. Most of the 1' /z story properties in the 53rd Avenue
Development and Linkage Project do not meet this criteria.
• With regard to the properties at 512 -53rd Avenue North and 5309 Camden Avenue North, six
house moving firms were invited to submit quotes to purchase and remove the single - family
homes and garages at 512 -53rd Avenue North and 5309 Camden Avenue North. Only one firm,
Ernst Machinery and House Movers, expressed interest and submitted a quote of $1,000 for the
property at 512 -53rd Avenue North.
Staff recommends acceptance of Ernst Machinery and House Movers' quote. The City has had
extensive experience with Ernst and they have performed very well in removing homes in the
past. A resolution accepting the quote from Ernst Machinery and House Movers is included with
this memorandum. A copy of the Specifications for Home Removal is available for review in the
Engineering department.
•
• Commissioner introduced the following resolution and
moved its adoption:
EDA RESOLUTION NO.
RESOLUTION ACCEPTING QUOTATIONS AND AWARDING CONTRACT
FOR RESIDENTIAL STRUCTURE REMOVAL FOR 53RD AVENUE
DEVELOPMENT AND LINKAGE PROJECT
WHEREAS, quotations for the sale of two houses in the 53rd Avenue Development
and Linkage Project area located at 512 -53rd Avenue North and 5309 Camden Avenue North were
accepted on June 17, 1997; and
WHEREAS, one quote was received from Ernst Machinery and House Movers
Corporation in the amount of $1,000 to remove the house and garage at 512 -53rd Avenue North;
and
WHEREAS, it is in the best interest of the EDA and the City of Brooklyn Center
to accept the quote from Ernst Machinery and House Movers Corporation in the amount of $1,000
for the removal of the home and garage at 512 -53rd Avenue North; and
• WHEREAS, specifications for residential structure removal for the properties in
the 53rd Avenue Development and Linkage Project area have been prepared by the Community
Development Department.
NOW, THEREFORE, BE IT RESOLVED by the Economic. Development
Authority in and for the City of Brooklyn Center as follows:
1. The proposal from Ernst House Movers in the amount of $1,000 for the removal of
the house and garage at 512 -53rd Avenue North is hereby accepted and the EDA
Executive Director is authorized to execute a contract with Ernst Machinery and House
Movers Corporation for the removal of the house and garage at 512 -53rd Avenue
North.
2. The specifications for residential structure removal for the 53rd Avenue Development
and Linkage Project are hereby approved by the EDA Board of Commissioners.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by commissioner
• and upon vote being taken thereon, the following voted in
favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
y�
Memorandum
To: Michael J. McCauley, City Manager
From: Tom Bublitz, Community Development Specialist
�
Date: June 17, 1997
Subject: Options for EDA Housing Rehabilitation Deferred Loan Program
Over the past several months, the EDA Board of Commissioners /City Council has received and
reviewed information relative to the eligible uses of Community Development Block Grant
(CDBG) funds, particularly as they relate to the Economic Development Authority's (EDA's)
home rehabilitation program. This memorandum will not attempt to duplicate material
previously presented to the EDA/City Council. The purpose of this memorandum is to
summarize some of the primary features of CDBG funding requirements and to offer some
options for the single - family rehabilitation program. Some of the background information
previously sent to the EDA is included as an attachment to this memorandum as a reference for
the EDA.
CURRENT STATUS OF EDA SINGLE- FAI MILY HOME REHABILITATION PROGRAM
• . The program is administered by Hennepin County staff. The Hennepin County Office of
Planning and Development accepts homeowner applications, determines income eligibility,
does the inspection and scope of work and coordinates the project.
. The rehabilitation program is funded at $60,000 for 1997. The maximum loan is $15,000, and
there are approximately 43 households on the waiting list.
. To qualify for the program, household income must be 80% of metro area median income or
lower. Current income limits are shown below:
1 Person $30,450
2 Person $34,800
3 Person $39,150
4 Person $43,500
5 Person $47,000
6 Person $50,450
•
• Memorandum to Michael J. McCauley
June 17, 1997
Page 2
. The current program provides a loan up to $15,000 with a 30 year lien period. For households
with incomes at 50% of median to 80% of median, the interest rate charged on the loan is three
percent for a term of ten years. For households at or below 50% of median, there is no interest
charged on the loans.
PRIMARY OBJECTIVES AND RESTRICTIONS ON CDBG FUNDS
+ The primary objective of the CDBG program from the federal perspective is to develop "viable
urban communities by providing decent housing and suitable living environment and
expanding economic opportunities, principally for persons of low and moderate income."
+ All CDBG projects must meet one of the three national objectives. The must either i
J Y O
principally benefit low and moderate income persons; (ii) aid in the prevention or elimination
of slums or blight; and (iii) meet other urgent community needs.
+ In addition to the national objectives, 70% of the total County -wide CDBG funds must be used
for low and moderate income benefit activities. The 70% requirement must be met at the
• County level, but it also impacts participating cities' ultimate use of CDBG funds.
OPTIONS FOR FUTURE USES OF CDBG FUNDS AND THE HOME REHABILITATION PROGRAM
Today there are many more options to obtain funding for home repair than there were in the mid-
to late- 1970's when the federal Community Development Block Grant (CDBG) program was put
in place. The Minnesota Housing Finance Agency (MHFA) provides rehabilitation loan
programs and there are nonprofit organizations in place such as the Center for Energy and the
Environment to assist homeowners in obtaining MHFA loans. Hennepin County has expanded
its role in providing loans through the MHFA "Fix Up Fund" program, and banks provide a
number of loan products including home equity loans. Not all these programs are accessible to
persons of low and moderate income; however, there now are more financing tools available to
homeowners so CDBG need not be the sole source of funding. Clearly, even if all the City's
annual allocation of CDBG dollars were dedicated to home rehabilitation, they could not meet
the increasing needs.
Some possible options for revising the home rehabilitation program are:
+ Consider using CDBG funds to "buy down" the interest rates on MHFA Fix Up Fund loans.
Presently, Fix Up Fund rates are between two and eight percent with most borrowers in the six
to eight percent range. Using CDBG funds to "buy down" the rates to five percent or lower
could leverage more rehabilitation dollars.
• . Kee the CDBG home rehabilitation program in lace but use t o
P p g p the funds o tar certain
neighborhoods such as those neighborhoods that are the focus of code enforcement efforts.
• Memorandum to Michael J. McCauley
June 17, 1997
Page 3
+ Refer persons with rehabilitation needs to existing MHFA programs, but keep a limited amount
of CDBG funds available for emergencies such as furnace replacement, roof repair, plumbing
and electrical repair, etc.
+ The EDA can also choose to eliminate the program completely and refer persons to existing
loan programs, including MHFA loans.
In deciding upon any option for the use of CDBG funds or revising the EDA's existing home
rehabilitation program, it is necessary to receive approval from Hennepin County before
implementing the changes.
•
•
Attachment A - Background Information
• HISTORY AND NATIONAL OBJECTIVES OF THE
COryll UTITY DEVELOPMENT BLOCK GRANT PROGRA.NH
Title I of the Housing and Community Development Act of 1974 created the Community
Development Block Grant (CDBG) funding program. The CDBG program replaced eight former
categorical grant and loan programs under which communities competed nationally for funds. These
included urban renewal, neighborhood development grants, open space and urban beautification,
historic preservation grants, public facility loans for water and sewer, and neighborhood facilities
grants and model cities supplemental grants.
The primary objective of the CDBG program from the federal perspective was to develop "viable
urban communities by providing decent housing and suitable living environment and expanding
economic opportunities, principally for persons of low and moderate income."
In addition, all CDBG projects and activities must meet one of three national objectives. They must
either:
► Principally benefit low and moderate income persons;
> Aid in the prevention or elimination of slums or blight; or
• > Meet other urgent community needs.
It should be noted that "urgent community needs" have been defined very narrowly and primarily
address natural disasters. CDBG funds have been used only once in the entire history of the program
in Hennepin County for "urgent community needs ". The use of funds for this need occurred after
a tornado struck the city of Dayton.
In the early years of the CDBG program there was a debate over whether all three of the program
objectives were equal or whether low- and moderate - income benefit was the principal objective. In
1983, Congress effectively settled the issue by stipulating that at least 51% of a grantee's program
funds must be used for low- and moderate - income benefit activities. That percentage has since been
raised to 70 %. The 70% requirement must be met at the County level.
Eligible community development activities are spelled out in the following excerpts from federal
CDBG regulations:
► Acquisition of real property for public purpose and disposition of property through sale,
lease, donation, or otherwise of the real property acquired with CDBG funds or retention
of property for public purposes, including reasonable costs of temporarily managing such
property or property acquired under urban renewal.
> Acquisition construction, reconstruction, rehabilitation or installation of public facilities
• and improvements. Examples of public facilities include facilities for use in providing
shelter for persons having special needs, shelters for the homeless, convalescent homes,
hospitals, nursing homes, battered spouse shelters, halfway houses for runaway children,
drug offenders or parolees, group homes for mentally retarded persons, and temporary
• History and National Objectives of the
Community Development Block Grant Program
Page 2
housing for disaster victims.
► Clearance activities, including demolition and removal of buildings and improvements,
including movement of structures to other sites.
► Public services which are directed toward improving the community's public services
and facilities, including but not limited to those concerned with employment, crime
prevention, child care, health care, drug abuse, education, fair housing counseling, energy
conservation, welfare or recreational needs. To be eligible for CDBG assistance, a public
service must be either a new service or a quantifiable increase in the level of an existing
service above that which has been provided by or on behalf of the unit of general local
government. The amount of CDBG funds used for public services shall not exceed 15%
of each grant.
► Interim assistance. The following activities may be undertaken on an interim basis in
areas exhibiting objectively determinable signs of physical - deterioration where the
recipient has determined that immediate action is necessary to arrest the deterioration and
• that permanent improvements will be carried out as soon as practicable:
a. The repairing of streets, sidewalks, parks, playgrounds, publicly owned utilities,
and public buildings; and
b. The execution of special garbage, trash, and debris removal, including
neighborhood cleanup campaigns, but not the regular curbside collection of
garbage or trash in an area.
> Payment of the non - federal share required in connection with a federal grant and aid
program undertaken as part of CDBG activities.
► Urban renewal completion. Payment of the cost of completing an urban renewal project
funded under Title I of the Housing Act of 1949, as amended.
Relocation. Relocation payments and other assistance for permanently and temporarily
relocated individuals, families, businesses, nonprofit organizations, and farm operations.
► Removal of architectural barriers. Special projects directed to the removal of material
and architectural barriers which restrict the mobility and accessibility of elderly or
handicapped persons to publicly- owned/privately -owned buildings, facilities, and
• improvements.
> Privately -owned utilities. CDBG funds may be used to acquire, construct, reconstruct,
rehabilitate or install utilities, including the placing underground of new or existing
distribution facilities and lines.
• History and National Objectives of the
Community Development Block Grant Program
Page 3
► Construction of housing. CDBG funds may be used for the construction of housing
assisted under Section 17 of the U.S. Housing Act of 1937.
Note: In general, CDBG funds cannot be used to construct housing. However, this
section refers to public housing where CDBG funds are used in conjunction with HUD
funds to build public housing.
Economic development. CDBG funds may be used to facilitate economic development
by:
a. Providing credit, including, but not limited to, grants, loans, loan guarantees and
other forms of financial support for the establishment, stabilization and expansion
of micro - enterprises.
b. Providing technical assistance, advice, and business support services to owners
of micro - enterprises and persons developing micro- enterprises.
• c. Providing general support, including, but not limited to, peer support ro
P in ams,
counseling, child care, transportation, and other similar services to owners of
micro- enterprises and persons developing micro- enterprises.
► Rehabilitation and preservation activities. CDBG funds may be used to finance
rehabilitation of:
a. Privately -owned buildings and improvements for residential purposes.
b. Low - income public housing and other publicly -owned residential buildings and
improvements.
c. Publicly- or privately -owned commercial or industrial buildings, except that the
rehabilitation of such buildings owned by a private for - profit business is limited
to improvements to the exterior of the building and the correction of code
violations.
d. Manufactured housing when such housing constitutes part of the community's
permanent housing stock.
• Rehabilitation of property under this provision provides repair directed toward an
accumulation of deferred maintenance, replacement of principal fixtures and
components of existing structures, installation of security devices,. including smoke
detectors and dead bolt locks, and renovation through alterations, additions to or
enhancement of existing structures, improvements to increase the efficient use of
• History and National Objectives of the
Community Development Block Grant Program
Page 4
energy in structures through such means as installation of storm windows and doors,
siding, wall and attic insulation, and conversion, modification or replacement of
heating and cooling equipment, including the use of solar energy equipment,
improvements to increase the efficient use of water through such means as water-
saving faucets and shower heads and repair of water leaks.
► CDBG funds may be used for rehabilitation services such as rehabilitation
counseling, energy auditing, preparation of work specifications, loan processing,
inspections, and other services related to assisting owners, tenants, contractors and
other entities participating or seeking to participate in rehabilitation activities.
► CDBG funds may be used for inspections and abatement of lead -based paint.
Code enforcement. Code enforcement in deteriorating or deteriorated areas where
such enforcement, together with public improvements, rehabilitation, and services
to be provided may be expected to arrest the decline of the area.
• > Historic preservation. CDBG funds may be used for the rehabilitation, preservation
or restoration of historic properties, whether publicly or privately owned.
► Special economic development activities. CDBG funds may be used for special
economic activities where the recipient has insured that the appropriate level of
public benefit will be derived pursuant to those guidelines before obligating funds
under this authority. Activities include the acquisition, construction, reconstruction,
rehabilitation or installation of commercial or industrial buildings, structure d
s an
g, ,
other real property equipment and improvements, including railroad spurs or similar
extensions.
► Special activities by community -based development organizations (CBDOs). The
recipient may provide CDBG funds as grants or loans to any CBDO qualified under
this section to carry out a neighborhood revitalization, community economic
development, or energy conservation project. Neighborhood revitalization projects
include activities of sufficient size and scope to have an impact on the decline of a
geographic location within the jurisdiction of the recipient.
Community economic development projects include activities that increase economic
opportunity principally for persons of low and moderate income, or that stimulate or
retain businesses or permanent jobs.
•
Energy conservation
b y projects which include activities that. address energy
conservation, principally for the benefit of the residents of the recipient's jurisdiction.
• History and National Objectives of the
Community Development Block Grant Program
Page 5
► Eligible planning, urban environmental design and policy planning- management-
capacity building activities. Planning activities which consist of all costs of data
gathering, studies, analysis, and preparation of plans and the identification of actions
that will implement such plans, including, but not limited to:
a. Comprehensive plans
b. Community development plans
c. Functional plans in areas such as:
1. Housing, including the development of a consolidated plan
2. Land use and urban environmental design
3. Economic development
4. Open space and recreation
5. Energy use and conservation
6. Flood plain and wetlands management
7. Transportation
8. Utilities
9. Historic preservation
d. Other plans and studies such as:
1. a Tans
Small area and nei b P
2. Capital improvements programs
3. Individual project plans (excluding engineering and design costs related
to a specific activity which are eligible as part of the cost of such activity)
4. The reasonable cost of general environmental/urban environmental
design and historic preservation studies
5. Strategies and action programs to implement plans, including the
development of ordinances and regulations
6. Analysis of impediments to fair housing choice
► Program administration costs. CDBG funds may be used for the payment of reasonable
administrative costs and carrying out charges related to the planning and execution of
community development activities assisted in whole or. in part with CDBG funds.
It should be noted that any or all of the activities in the preceding list of eligible activities
• must meet one or more of the national objectives to be funded.
• HENNEPIN COUNTY PRIORITIES FOR CDBG EXPENDITURES
As part of the planning process for the Community Development Block Grant (CDBG) program,
Hennepin County is required to develop a plan for expenditure of funds which includes CDBG, the
federal HOME program, Emergency Shelter Grant (ESG) program, and the Comprehensive Housing
Affordability Strategy (CHAS). The plan is intended to guide communities in the preparation of a
comprehensive vision of housing and community development.
COUNMVIDE HOUSING AND COMMUNITY DEVELOPMENT PRIORITIES
Below is a summary of the Consolidated Plan's countywide priorities.
HOUSING
Rental and Supportive Housin;: Planning, site acquisition, related infrastructure for development
of new units and rehabilitation of existing units for low- income households (less than 50% of median
income).
Homeownership.-Planning, site acquisition, related infrastructures, down payment assistance for low
income first -time homebuyers and rehabilitation of existing units occupied by low- income
households.
•
COMMUNITY DEVELOPMENT
Neighborhood redevelopment/revitalization, senior centers, removal of architectural barriers /ADA
compliance, lead -based paint abatement and planning activities to address housing and community
revitalization needs.
PUBLIC SERVICES
Services to senior citizens, disabled persons and youth, child care assistance and transportation
services.
In discussing the County's priorities with Hennepin County staff responsible for administering the
CDBG program at the Urban Hennepin County level, the following information and observations
were received:
> Rehabilitation of single - family homes and acquisition of blighted properties and
redevelopment of the lots continues as a priority at the County. Scattered site acquisition
and single- family rehabilitation activities are increasing, particularly in the inner ring
suburban areas.
> The general planning projects and handicap accessibility projects are decreasing. Many
of the outlying communities in Hennepin County have used CDBG funds to make their
• parks and other public facilities accessible. Most of these projects are now complete.
Also, the County noted a shift away from general planning -type projects. The County
• Hennepin County Priorities for
CDBG Expenditures
Page 2
is encouraging this shift away from general planning activities.
► In the outlying communities where new affordable housing is being developed, CDBG
is used as a "piece" of the development project.
► One of the needs indicated by Hennepin County staff is the need for multi - family
rehabilitation funds. The County is intending to start a pilot program for multi - family
housing rehab using federal HOME funds.
► County staff indicated HUD's current priority at the national level is to promote
economic development with CDBG funds. At the national level, HUD is using a
program called "Section 108" which allows CDBG funds to be used as a pledge to repay
bonds sold to promote economic development. Additionally, loan proceeds from
businesses benefitted by the Section 108 program are also used to pay back the bonds
sold to create the pool of money for the loans. To date, no 108 projects have been
done in the state of Minnesota.
• ► County staff indicated that at the national level there is the potential for Congress to
consolidate CDBG with the federal HOME program and essentially funnel the money
to the states.
► One of the options the County is looking at is the possibility of expanding their ability
to address rehabilitation needs by tapping into existing programs. For example, the
County is looking at the possibility of becoming involved with the Minnesota Housing
Finance Agency's Fix Up Fund. The Fix Up Fund is a long - standing TN4HFA program
which provides up to $15,000 as a loan to homeowners to do a wide variety of
rehabilitation projects on their homes. Homeowners with incomes as high as $43),000
can qualify for these loans and the interest rates float between two and eight percent (2-
8 %), depending on income. These loans are intended for homeowners that can afford to
repay a loan and target a different population than is targeted with CDBG funds.
However, the reason the County is looking at becoming more involved in the Fix Up
Fund program is to provide a wider range of rehabilitation services to Hennepin County
residents.
•
SUMMARY AND COMPARISON OF CITY OF BROOKLYN C ENTER AND TOTAL
URBAN HENNEPIN COUNTY CDBG EXPENDITURES (1975 -1995)
ticttv�ly'tty �13roQl�tyn Center; 1',ercentage . ` Total Ilrban Hennepin 1'ereentage
`1fntI E�cpe>ndl!tures �uutyp�endtures':
(1�75'199}I (19.75 :1�95j
Housing Rehabilitation $2,025,230 49.9 $20,733,607 30.2
Planning /Administration $197,697 3.7 $10,341,244 15.1
I'ublic Services $38,306 .4 $5,160,577 7.5
Public Facilities $88,267 1.5 $9,249,566 13.5
Neighborhood Revitalization $1,566,660 38.6 $11,154,351 16.3
Handicap Access $199,429 6.0 $4,359,413 6.4
Assisted Housing 0 0 $7,552,862 11.0
620
:T outs X4,1 1 : 5 : 589 .
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SUMMARY OF HENNEPIN COUNTY SINGLE FAMILY
REHABILITATION LOAN PROGRAMS
• COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
(CDBG) DEFERRED LOAN PROGRAM
Eligible Total Loan Repayment.
Eligible Applicants Eligible Properties Improvements Balance Allowed Fravisrons.
Annuaf household Own and occupy the Health and safety, Maximum loan 3Q 1"eacUen„zer
income cannot property to be energyeffrciency amount is $15,000. interesfand3%
�xceed_Sectton 8 improved. Must be habitability and,:if, An additional $5,000 loanswrthna
Income: Limits* current on property necessary, is available for payment iiue unless
....: ,
tax payments. Must - accessibility: accessible tne:housis sold;
have sufficient equity improvements. tiansferredarna
in the property to longecoccupted:_by
cover liens and = applrcant:� -
mortgages secured --
on property.
- -
'Section 8 Income Limits (effective December 27, 1996): 1 person - $30,450; 2 person - $34,800; 3 person - $39,150;
4 person - $43,500; 5 person - $47,000; 6 person - $50,450; 7 person - $53,950; 8 person - $57,400.
MHFA DEFERRED LOANS
TYPE ELIGIBLE APPLICANTS ELIGIBLE CONDITIONS ON LENGTH
_= = PROPERTIES - IMPROVEMENTS ._:REPAYMENT` : -'
MHFADeferred Annual adjusted gross Owner - occupied Permanent repairs, Ten yearsuuniess
•
Loan - income of $10,000 or less homes ncfudrrg additions, alterations, property rS soCd
_ --
cnobrle homes taxed as or renovations. Work awnershr rs
real estate_orRersoRal: meets applicable fransferredor-
property Cannatrhave codes borrowerno: onger_
had a MHFADeferred_ _ resides m property _-
_
Loan �nnthrngprevraus 5 : -
- _
years -_
_ ._.. .
Only ives a[inCess } ,
MHFA. Annual adjusted gross Propertymust:E7e: y p ermanent . F
Accessibility income of $18,000 in 11 pnncipal_resideRCe of modifications to meet property rs soCd,
Loam _ county metro area, - Eiandfcappedor high priority mobility, owriershrp i
$ in Greater disabledperson homemaking and self transfetredr or =
_ Minnesota area. :Property cannotseceive_. care needs of borrawecis rro4
Handicapped member anotheraccessrbrlrty handicapped member. tongerresides ►n
- -
- will reside there for two _loarrwrtfrrr5years propert}r
year minimum. Includes mabifehomes°; = = = -
taxed real estate or _
persona p e P arty
MHFA Annual adjusted gross Clwner- occupreo Oniy items necessary Ten years unless
Emerge — n y_Loan income of $10,000 or homes Must have to correct the property rs soCd� -
less. emergency! sftuatton _ - emergency. ownersbp is =
nagarding,faireL trailsferred7 or
mechanrcaf.systems.or borrowernar'onge
structure resides rrrpope.
MHFAHOME Annual adjusted gross Owner= occupied . Permanent repairs, Ten -years unless
• Deferred'Loam income of $10,000 or homes-; including additions, alterations, propertyrsaold
less. mobile -homes taxed :as or renovations. Rehab ownershfp-is
` real estate o. personal corrects a deficiency. transferred;; or.
property, Cannothave. Work meets borrowerrrcribri r
had. a -MHFA Deferred: applicable codes. residesm property: -
Loan within previous: After rehab, property
years:_ meets HQS. i
MHFA REVOLVING REHABILITATION LOAN
=.Eligible_ Total MHFA Loan Repayment _
Eligible Applicants Eligible Properties Improvements Balance Allowed
Provisions.. -
Annual adjusted_ Mobile homes if Permanent.repairs,. $10,000 for each Monthly payments E.
.gross income of owned as real additions alterations, revolving loan. Total at.least 20 OQ
$18,00(7 property. Owner- crrenova6ons MHFA revolving Three percent�3 %j
occupied. Cannot J. Rehab: corrects ;!..... ' loans cannot exceed interestfor a
.. have had a MHFA deficiency: Work $15,000. maximurrrpenod of
Revolving Loan meets applicable-:......:. 15yearsita repay:
Within previous 2 codes:
years on this = _
property
MHFA FIX -UP FUND AND ENERGY LOAN PROGRAMS
MHFA Fiz -Up Fund
Home lmprovementLoart Program MHFA Energy Loan Program -
Funding Maximum loan amount is $15,000 Maximum loan amount is $5,000
Applicant Own and occupy the property to be Own and occupy the property to be
improved improved
Income Eligibility Annual household income cannot exceed No income limit
$44,000
Assets No asset limit No asset limit
Eligible Repairs Health and safety, energy, same value Only those improvements increasing the
added improvements energy efficiency of a home
Term of the loan Term up to 15 years, annual interest rate Term up to five years, 8% annual
either 2 %, 4 %, 6% and 8% depending upon interest.
income
Other Program Good credit history. Current on property tax Good credit history. Current on property
Requirements payments. Able to meet debt to income and tax payments. Able to meet debt to
loan to value requirements. income and loan to value requirements.
•
FIX -UP 'FUND HOME ENERGY LOANS ACCESSIBILITY LOANS
PRINCIPAL LOAN AMOUNT AND LOAN Not to exceed $15,000, plus olhbr limitations $1,000 Minimum to $5,000 ninximum; Not to exceed $25.000, Including file original
LIMITS described In Procedural Manual and maximum Includes previously principal amount of any Accessibility Loan
worksheet on Page 5 of your Loan received Home Energy Loans for the previously received by the Borrower for Ore
Processing Clarifications same borrower on the same property same Properly
LOAN TERM (MATURITY) 6 months to 15 years 6 months to 5 years Minimum of 6 months to a maxirnurn of 20 years
MINIMUM MONTHLY PAYMENT $20.00 $30.00 $20.00
SECURITY Required on loans over $2,500.00, plus other Not required-- utilized only whon normal prudent Required on loans over $2,500.00, plus other
limitations in Procedural Manual practices indicate it is advisablo limitations In Procedural Manual
SIGNATURE ON NOTE All residents with Income age 18 or over Only those residents whose Income is relied Only those Residents whose income is being
upon for loan repayment relied upon for Loan repayment
ADDITIONAL CHARGES WHICH MAY BE • Mortgage registration tax and recording lees • Mortgage registration lax and recording fees • Mortgage registration lax and recording lees
COLLECTED FROM CONSUMER • $15.00 credit report lee • Cannot collect credit report lee • $15.00 credit report fee
LOAN RESERVATION PROCESS Per Procedural Manual. Use Seller Security Per Procedural Manual. Use Seller Security Per Procedural Manual. Use Seiler Security
Code or 4 -digit lender number Code or 4 -digit lender number Code or 4 -digit lender number
TYPICAL LOAN PACKAGE CONTAINS 1. Commitment leper /Note Submission 1. Commitment letter /Note Submission 1. Commitment lolter /Note Submission
Voucher Voucher Voucher
2. Note 2. Note 2. Nola
3. Application 3. Application 3. Application
4. Income Verification 4. Complete credit review; a credit history on 4. Income Verification
5. Complete credit report, Including credit first mortgage Is not required 5. Complete credit report, including credit
history on mortgage or contract for deed history on mortgage or contract for deed
6. Rescission Notice, Mortgage, Assignment 6. Written slalement from licensed physician
of Mortgage, or county case manager
7. Plans and specifications or detailed
description of Accessibility with a bid or
estimate
8. Rescission Notice, Mortgage. Assignment
of Mortgage
PROCESSING FEE $350 per loan $175 per loan $350 per loan
PRIOR APPROVAL REQUIRED NO NO Yes; package must Include:
1. A written statement Irom a licensed
physician or county case manager as
described on page 6 of [his chaplor
2. Completed MI IF Credit Application for a
I lorne Improvement Accessibility Loan
3. Roquirod credit roleroncos and Income
verifications
4. Plans and specifications or a detailed
description of Ilia Accessibility
Improvements, along with a bid or estimate
for said improvements
5. Contractor Warranty signed by contractors
paid for labor
INTEREST RATE 2% to 8% based on income 8% for all loans 8% for all loans
CREDIT APPLICATION MI IFA Credit Application for Home Improvement MHFA Credit Application for Home Energy MHFA Credit Application for a Fix -up Fund
Loan; while form, 4 pages (Form Number 310) Loan; blue form, 2 pages (Form Number 320) Accessibility Loan; green form (MHFA Form
330)
CONTRACTOR WARRANTY Required for all contractors (Form Number 310 Not required, used at lenders discretion. Required for all contractors (Form Number 310
Contractor Warranty) (Same form number is used) Contractor Warranty)
NOTE MHFA Home Improvement Loan Note; legal MFIFA Home Energy Loan Note; legal MHFA Fix -up Accessibility Loan Note; same
description Is necessary on both unsecured description Is necessary only on secured legal description disclosure requirements
and secured loans; note form is white with loans; note form Is white wish blue Ink apply; Note form is while with green Ink
black Ink
ELIGIBLE PROPERTY 1 to 4 dwelling units 1 dwelling unit only 1 to 4 dwelling units
EXCLUSIVE BUSINESS USE OF THE Not to exceed 15% of Ilia residence Not to exceed 15% of the residence Not to exceed 49% of the residence, only
PROPERTY Accessibility Improvements to the residential
portion of the Property are eligible
ELIGIBLE IMPROVEMENTS Permanent general improvements to Ilia Permanent improvements that Improve Ilia Only permanent Accessibility Improvements,
property per Procedural Manual energy efficiency of ilia property, as Identified with same eligibility requirements of Chapter 3,
In Procedural Manual Section III to apply, except design or
consultation services performed prior to the
date of Ilse Credit Application may be Iinanced
with an Accessibility Loan
INELIGIBLE IMPROVEMENTS Per Procedural Manual and page 3 of Credit • items related to new construction, such as Same list of Ineligible improvements applies,
Applicalion windows and doors for a room addition however, improvements may be made to the
• Fireplaces Items on [his list, If such an improvement
• Siding, roofing makes the Property morn accessible to the
• Non-energy items disabled Resident family membor
HOUSEHOLD INCOME LIMIT $46,000 Gross Income NONE NONE
INCOME DISCLOSURE Gross Income from all sources of all residents Gross Income from all sources relied upon for Gross Income, anticipated to be received in the
of Ilia household repayment of the loan 12 months following Ilia date of the Credit
Application, from oil Rosidents relied upon for
repayment of Ilia Loan
ADJUSTED INCOME CALCULATION Income Is adjusted for household size Income is not adjusted for household size Income is not adjusted for household size
INCOME VERIFICATION Must submit wrillen verification in accordance Verily in accordance with lenders normal Only those Residents whose income Is relied
with MHFA methods described in Procedural methods; do not have to submit with foan upon for Loan repayment
Manual
r .r i.,