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Item No. /1 E Staff Report No.97—J97/ C' Meeting Date: 2/10/97 • Type of Business: Council Business WK:Work Session;PH:Public Hearing; CA:ConsentAgenda;CB:Council Business City of Mounds View Staff Report To: Mayor and City Council From: Jennifer Bergman, Housing Inspector Item Title/Subject: Consideration of Resolution No. 5088 authorizing the filing of an application under the Minnesota Cities Participation Program to fund a loan program for first time home buyers with the mortgage including rehaiblitation funds. Date of Report: February 6, 1997 Summary: Attached is a resolution for filing of an application under the Minnesota Cities Participation Program(MCPP) offered by the Minnesota Housing Finance Agency(MHFA). Through the MCPP, MHFA sells mortgage revenue bonds on behalf of cities to meet locally identified housing needs. The proceeds of these bonds provide below market interest rate home mortgage loans for low and moderate income first-time home buyers. A private lending institution will distribute the • mortgages for future residents on behalf of the City. Cities are allowed to tailor the programs to fit the needs of their community. The Minnesota Housing Finance Agency invites application from cities each year. The application deadline for this year is February 18. Background: The MCPP purchase/rehabilitation mortgage is one of the way in which the City Council has been working to implement the goals form the Mounds View Focus 2000 project. The City Council initiated this project in 1994 as a way to involved citizens in a visioning process to identify what issues were of concern to the community and what direction and what direction should be taken in addressing these issues. On e of the goals identified was to begin the rehabilitation of the City's housing stock. For the past two years, the applications filed by Mounds View have requested that a portion of the funds be used as a purchase/rehabilitation mortgage allowing buyers to purchase a home and upgrading it to meet their needs. For example, if a family finds a two bedroom home in need of repair but there family requires a three bedroom home. The purchase/rehabilitation mortgage would allow the family to purchase the home, add an additional bedroom and make the needed repairs to the house all encompassed into one mortgage. In 1995, the City of Mounds View applied for and received approximately $260,000 for the Minnesota Cities Participation Program. In 1996, we received approximately$275,000. Seven • families were able to take advantage of this program and purchase homes in the City of Mounds View . The program offers a reduced interest rate and, if eligible, down payment and closing cost