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Mounds View EDA November 8, 2010 Regular Meeting Page 2 Program Criteria 45 46 Economic Development Specialist Steinmetz reviewed with the EDA the proposed changes to 47 the Loan Program Criteria. She indicated the EDA has been discussing this item for several 48 months and the most recent draft has a summary of changes highlighted in yellow. An asset limit 49 was written in to Loan Option 4, which was recommended by the GMHC staff. Staff 50 recommends approval of the draft home improvement loan program criteria. If approved staff 51 would discuss administrative under writing fees with GMHC in further detail and would bring 52 forward an agreement to the EDA. 53 54 Commissioner Mueller asked if the demolition loan was for 10 years, or if it was due upon sale 55 of the property. She recommended these statements within the criteria be conjoined so as not to 56 appear there is an option. 57 58 Vice President Stigney questioned if the EDA should have greater knowledge of the GMHC fees 59 prior to advertising this loan program. Economic Development Specialist Steinmetz indicated 60 she would not begin marketing the program if the EDA advised. 61 62 Vice President Stigney asked how loans would be handled if defaulted on by a resident. 63 Economic Development Specialist Steinmetz indicated the City could potentially be out the 64 money. 65 66 Vice President Stigney questioned what action the City could take and if the City had no options, 67 he had a problem with the criteria in this program. Economic Development Specialist Steinmetz 68 indicated the City would be second in line to be paid if a home were to be foreclosed. 69 70 President Flaherty asked if the City had the right to put a lien on the property. Community 71 Development Director Roberts stated the loan was a lien. He indicated if the property were to 72 sell, the lien would be paid, but if foreclosed it potentially would be negated. 73 74 Commissioner Hull questioned how this type of program worked in other cities. Economic 75 Development Specialist Steinmetz stated all were written in the same manner and these loans 76 were never paid back first, prior to a home mortgage. She explained the City would be at a slight 77 risk with these loans. 78 79 Vice President Stigney wondered if a City loan could be tacked on to property taxes if defaulted. 80 Economic Development Specialist Steinmetz was uncertain if this was an option. 81 82 Vice President Stigney requested that GMHC fees be waived if a loan within the City were 83 defaulted. Economic Development Specialist Steinmetz indicated she would investigate this 84 further with GMHC. 85 86