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HomeMy WebLinkAboutEDA Resolution 10-EDA-261 EDA RESOLUTION 10 -EDA -261 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING CRITERIA FOR THE MOUNDS VIEW HOME DEMOLITION LOAN WHEREAS, the Mounds View Economic Development Authority (EDA) has Housing and Redevelopment Authority powers provided in Minnesota Statutes, Sections 469.001 to 469.047 and, WHEREAS, the purposes of Sections 469.001 to 469.047 are: (1) to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to_ protect the health, safety, morals, and welfare of the citizens of this state; (2) to clear and redevelop blighted areas; (3) to perform those duties according to comprehensive plans; (4) to remedy the shortage of housing for low and moderate income residents, and to redevelop blighted areas, in situations in which private enterprise would not act without government participation or subsidies; and (5) in cities of the first class, to provide housing for persons of all incomes; and, WHEREAS, pursuant to the purposes of Housing and Redevelopment Authority powers, in September 2010, the Mounds View City Council directed City staff to develop criteria for a new, one -year pilot home improvement loan program; and, WHEREAS, the Mounds View Home Demolition Loan would provide up to $10,000 at 3% interest for up to ten years to demolish blighted single family or duplex properties in Mounds View; and, WHEREAS, the goal of the Mounds View Home Demolition Loan is to remove the blighting influence of substandard homes in Mounds View so that adjacent property values in Mounds View are maintained and protected. Resolution 10 -EDA -261 Page 2 of 2 NOW, THEREFORE BE IT RESOLVED, the proposed criteria for the Mounds View Home Demolition Loan as presented in the attached Exhibit A, is hereby approved, established, and adopted by the Mounds View Economic Development Authority. Adopted this 22nd day of November, 2010 by the Mounds View Economic Development Authority J e Flahe esident (ATTEST) ti James Ericson, Executive Director 10 -EDA -261 Exhibit A M'�l.IS V! Y Economic Development Authority (EDA) Demolition Home Loan Criteria EDA Approved November 22, 2010 The purpose of this loan is to provide loans to demolish blighted single family or duplex properties in Mounds View. Loan Amount Up to $10,000 secured by a note mortgage Loan Security All loans will be secured by a mortgage in favor of the City. The loan may- be secured in a subordinate lien position behind the borrower's existing rime /A -rated fixed rate mortgage. Interest Rate The interest rate is fixed at 3 The monthly payment is fixed. Loan Term The maximum loan term is 10 years, however, the loan shall become due upon sale, transfer of title or refinancing of the p roperty, whichever occurs first. Eligible Properties Mounds View single family or duplex properties that qualify as blighted. See the Blight Qualification standard below. Demolition Bids Applicants are encouraged to first consider the Spring Lake Park/Blaine /Mounds View Fire Department's house burning /training program demolition option. If that option is not feasible, applicants must obtain three demolition bids. The demolition contractor will be required to obtain all necessary City permits, pay applicable fees and provide for appropriate handling and abatement of any hazardous materials encountered. All contractors must be licensed and insured. Blight Qualification (for Demolition Loan Only) Once a loan application is received, Mounds View's Code Enforcement/Housing Inspector will arrange, by appointment, an inspection of the interior of the home to establish blight qualification. In addition, the inspector will make a determination as to the potential presence of hazardous materials on the property and will obtain a statement from the interested participant about any knowledge of the property's use for production, storage, deposit, or disposal of any toxic or hazardous wastes or substances or asbestos products whatsoever, during the time the interested participant owned the property and before the date of interested participant purchased property. If a property satisfies the blight conditions as outlined herein, demolition procedures can continue. If the blight test cannot be met, the city will notify the interested person in writing indicating the reasons why the property cannot be considered as blighted. Application Loan Disbursement Process The Housing Resource Center's (HRC) NorthMetro Office is the program administrator. Please call the HRC's construction and loan consultants at 651- 486 -7401 to answer any questions about Mounds View's loan program and /or your project. GMHC Housing Resource Center NorthMetro Office 1170 Lepak Court Shoreview, MN 55126 Phone: 651 486 -7401 Fax: 651 486 -7424 DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL A CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM. Application Process: Completed applications will be processed by the Housing Resource Center (HRC) NorthMetro on a first -come, first- served basis, as funds are available until all program funds are committed. After loan approval you will be notified to come to the HRC for a loan closing to sign a Note and Mortgage. Rehabilitation Consulting: HRC consultants will be available to advise borrowers about proposed projects and conduct an optional initial home inspection. HRC will review bid(s) for reasonableness. Loan Costs: A credit report fee paid by applicant at time of application; mortgage registration tax and filing fee and title policy paid by borrower at closing. The title policy may be financed through the loan. Contractors Permits: Contractors must be properly licensed by the state of Minnesota when required. Permits must be obtained when required by city code. Total Project Cost: It is the borrower's responsibility to obtain the amount of funds necessary to finance the entire cost of the work. If the final cost exceeds the loan amount, the borrower must obtain the additional funds. Borrower's contribution to project cost must be paid prior to release of loan funds. HRC can direct borrowers to additional financing sources. Work Completion: Weather permitting, work must be completed within 120 days of loan closing. Demolition Home Loan Page 2 of 3 Disbursement Process: Loan funds will remain in escrow at GMHC until payment for completed work. The following items must be received before the funds can be released: 1. Final Invoice from each contractor showing all amounts paid and due. 2. Lien Waiver. Original from each contractor. 4. Completion Certificate signed by each contractor and the borrower. 5. Permits Closed. Have the inspector sign the permit card, or have the inspector leave a message at the HRC (651) 228 -1077. 6. Final Inspection and approval by the HRC. It may take up to 10 business days after receipt of above items to prepare checks. Payment checks to contractors must be countersigned by the borrower. Lien waivers must be provided before the funds will be released. Demolition Home Loan Page 3 of 3