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Mounds View EDA September 27, 2010 Regular Meeting Page 3 each loan to protect the investments the City would be making in each home. Ms. Snyder 88 indicated the loan to value ratio could be readjusted to assure that the homes had more value 89 before receiving assistance. She noted some programs to establish tenure before allowing 90 homeowners to qualify for the program. 91 92 President Flaherty suggested a homeowner live in their home for at least one year before 93 qualifying for this program or have at least 10% equity. 94 95 Vice President Stigney agreed with this recommendation. He recommended that staff look into 96 adding a clause that would review the ongoing need of the loan over time. If the resident’s 97 circumstances were to change, perhaps interest could be repaid to the City. Ms. Snyder indicated 98 this would be a tedious process to reevaluate each loan along with the resident’s income. 99 100 Economic Development Specialist Steinmetz stated this was a pilot program and the City was 101 looking to try it for one year and see if there was interest among the residents. The City can 102 continue to review the regulations as the loans proceed. 103 104 Commissioner Mueller questioned how ownership would be established for each property. She 105 wanted to assure that homes were owner-occupied and not rental units. Marie Malrick, GMHC, 106 explained her organization would review the title and tax rolls to assure that the property was 107 owner-occupied. Utility bills could also be reviewed to assure the names were correlating. Ms. 108 Snyder stated a loan would be recalled if the owner was not living in the home. 109 110 Commissioner Mueller suggested the loan be deferred for three years with 10% paid back in year 111 four, 20% paid in year five with the total loan paid back in 10 years. This would assist in 112 replenishing the funds available to the City. Ms. Snyder indicated this was a legitimate request, 113 but felt an installment loan would be easier to establish with the borrower from the beginning. 114 These repayments could be no interest, low interest or only interest. She felt the emergency loans 115 at 50% the median income may not be able to make payments. 116 117 Vice President Stigney wanted to be assured that recently laid off employees did not receive 118 loans. He requested that yearly income be reviewed with each request. 119 120 President Flaherty suggested that the loans be deferred for five years and after which time, the 121 loan would require no interest payments. Ms. Snyder explained the loan would require 122 additional management and fees if set up on this schedule. 123 124 Commissioner Gunn indicated this was a pilot program and she did not want to see the program 125 become too complicated for the residents to receive a loan. She recommended the residents only 126 pay a 3% interest payment to assist with replenishing the funds. After the first year, the pilot 127 program could be reevaluated based on the needs and use of the program. 128 129