Laserfiche WebLink
Item No. <br /> Meeting Date: 9-8-98 <br /> Staff Report No. <br /> Type of Business:WK <br /> WK: Work Session;PH:Public Hearing; <br /> CA:Consent Agenda;EDAB:EDA Business <br /> Mounds View Economic Development Authority <br /> Staff Re ort <br /> To: Honorable Mayor, City Council Members <br /> From: Steve Dorgan, Housing Inspector <br /> Item Title/Subject: Home Improvement Loan Interest Subsidy Program <br /> Date of Report: September 3, 1998 <br /> SUMMARY <br /> At the City Council meeting on July 28, 1998, the Council received information regarding the <br /> implementation of an Interest Subsidy Home Improvement Loan program. The EDC has recommended <br /> guidelines for implementation of a proposed loan program(see Exhibit A). The recommendation included <br /> two separate components: <br /> 1. MHFA Home Improvement Loan Interest Subsidy <br /> Interest subsidies will be provided to existing Minnesota Housing Finance Agency(MHFA)home <br /> improvement loans with below market interest rates. Homeowners qualifying for MHFA loans <br /> would have loans subsidized to a 5% rate(maximum of a 3%subsidy). At the EDA meeting on <br /> April 27, 1998, the commission approved application to the MHFA for the"Community Fix-up <br /> Fund" as part of an overall Home Improvement Loan Program. The MHFA approved the city's <br /> application for the Community Fix-up Fund, which essentially increases the maximum household <br /> income limit from $49,000 to $69,920 for homes built prior to 1965. Qualifying home owners <br /> would include households with incomes of less than $69,920 and owning a home built before <br /> 1965. Qualifying homeowners with homes built after 1965 would be required to have a maximum <br /> income of$49,000 or less. <br /> 2. Market Rate Home Improvement Interest Subsidy <br /> A subsidy of 3% would be provided to market rate loans (i.e. Market interest rates at 11%would <br /> be subsidized to 8%). Subsidized market rate loans would be provided to homeowners that would <br /> not otherwise qualify for MHFA loans. <br /> Each component of the program is proposed to be administered by participating lenders. The city would <br /> provide funding to participating lenders for the purpose of buying down the interest rates of existing loan <br /> programs. <br /> DISCUSSION <br /> Program Guidelines <br /> At the City Council meeting in July, the council discussed several issues relating to the proposed program <br /> and requested further information be provided regarding the following issues: <br /> 1. Could the subsidy program be split into two separate programs? <br />