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EDA Memo-Housing Replacement Program <br /> July 23, 1998 <br /> Page 2 1111 <br /> DISCUSSION <br /> When considering the implementation of a Home Improvement Loan Interest Subsidy Program, the EDA <br /> should consider the availability of TIF funds. The city has allocated$130,000 for 1998 to be used for <br /> Housing Rehabilitation related programs. So far this year, $5,600 of the allocated TIF funds have been <br /> used. The EDA also recently approved the purchase of an HRP home located at 6991 Pleasant View <br /> Drive for$62,000. <br /> The program proposes to allocate a total of$75,000 for purposes of subsidizing interest rates for home <br /> improvement loans. Of which, $40,000 will be used to subsidize and administer MHFA loans(i.e. provide <br /> approximately 25 reduced rate loans at$10,000). The proposed program would also allocate$35,000 to <br /> subsidize and administer Market Rate loans (i.e. provide approximately 22 subsidized loans at$10,000). <br /> The end result would be approximately$470,000 of increased value to the city's housing stock. <br /> The following is a breakdown of allocated Housing Rehabilitation TIF funds for 1998 and 1999: <br /> Allocated TIF funds for 1998 - $130,000 <br /> Remodeling Planbook - (5,000) <br /> HRP Property Appraisal - (300) <br /> HRP Property Appraisal - (300) <br /> Total Available TIF Funds $124,400 <br /> Proposed Home Improvement Loan Program $75,000 <br /> Approved Purchase of HRP Property $62,500 <br /> $137,500 <br /> Allocated TIF funds for 1999 $40,000 <br /> The EDA may also consider phasing in the allocation of TIF funds over a period of two years. This would <br /> allow for the purchase of the approved HRP property and allocate the remaining funds for the proposed <br /> Home Improvement Loan Program for 1998. The remaining funds needed for the program may then be <br /> allocated in 1999. However, this may deplete the allocated TIF funds for 1999 and eliminate the <br /> opportunity to purchase additional HRP properties. <br /> ACTION TO BE CONSIDERED <br /> Provide staff direction for implementation of the proposed Home Improvement Loan Interest Subsidy <br /> Program and set the proposed program on a future agenda for action or further discussion. <br /> Steve Dorgan ' <br /> Housing Inspector <br /> 717-4023 <br /> Attachments: Exhibit A: EDC Resolution 98-EDC-25 <br /> Exhibit B: Home Improvement Loan Interest Subsidy Program Guidelines • <br /> Exhibit C: TIF Funds Allocation Schedule for Housing Rehabilitation <br /> N:\DATA\GROUPS\COMDEWIOUSING\HOMELOAN\EDA REP\EDA7 27.98 <br />