10-22-1998 - Laserfiche WebLink

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To: Economic Development Commission Members I From: Steve Dorgan,Housing Inspector MEMORANDUM Subject: Update on Proposed Interest Subsidy Home Improvement Loan Program Date: October 21, 1998 I I 1 I SUMMARY At the City Council workshop meeting on September 8, the Council recommended staff continue to take necessary steps for the implementation of the proposed Subsidized Home Improvement Loan Program. As proposed,the program would use Tax Increment Funds(TIF)to finance subsidies and associated administrative costs. However,the City Attorney recently informed staff that TIF may not be used to subsidize interest rates for home improvement loans. According to legal stag Minnesota State Statutes dictate that TIF funds may not be used for the purposes of subsidizing interest rates for home improvement loans. Therefore, the proposed loan subsidy program may not use TIF funds for the purposes of subsidizing interest rates. At the October 12, City Council meeting, staff was directed to continue researching other funding sources, which the City may access to provide subsidies for the proposed program. One available option would be to apply for funding through the Metropolitan Council Livable Communities Housing Initiatives Fund. In recent conversations with Metropolitan Council stag City staff was informed that the Home Improvement Loan Interest Subsidy Program might qualify for funding through the"Super RFP" sponsored by the Metropolitan Council and the Minnesota Housing Finance Agency. Applications for the Super RFP will be sent out in November/98 and are due in February/99. As part of the application, the City may also apply for funding associated with other housing related programs(i.e. housing replacement program, remodeling counselors). The City may apply for the Super RFP and consolidate several programs into one application. If approved, the City may receive funding for the proposed interest subsidy program as well as several other programs. The funding sources associated with the Super RFP do require that most housing programs have income related eligibility requirements for households. These requirements typically have a maximum household income threshold that is 80% of the metropolitan area median income(approximately$45,000 for a familyoffour). If approved, some modifications to the income requirements of the proposed program may be necessary. Staff will continue work on obtaining financial assistance for the interest subsidy program programs. z 1 N • g p k z ? Steve Dort cousin Ins actor 717-4023 0 7 ..t..... N:IDATAIGROUPS'COMDK N1CUSINfVHOMBLOAMEDC6_2$9S >" D q u s i ? ? 0 L--. A 1, 19 J 0 i--