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HomeMy WebLinkAboutEDA Resolution 10-EDA-264 EDA RESOLUTION 10 -EDA -264 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING CRITERIA FOR THE MOUNDS VIEW EMERGENCY DEFERRED HOME 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 Emergency Deferred Home Loan would provide up to $7,000 at 0% interest to owner occupied single family, duplex and manufactured home properties in Mounds View; and, WHEREAS, the goal of the Mounds View Emergency Deferred Home Loan is to provide assistance to homeowners that are in hardship financial circumstances, are unable to get money from other sources and have a serious health and safety home repair situation that poses a threat to Mounds View residents if not addressed immediately. Resolution 10 -EDA -264 Page 2 of 2 NOW, THEREFORE BE IT RESOLVED, the proposed criteria for the Mounds View Emergency Deferred Home 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 e Fla resident (ATTEST) James Ericson, Executive Director 10 -EDA -264 Exhibit A MOUES VIA Economic Development Authority (EDA) Emergency Deferred Loan Criteria EDA Approved November 22, 2010 The purpose of this loan is to provide financial assistance to owner occupied single family, duplex and manufactured home properties that are in hardship financial circumstances, are unable to get money from other sources and have a serious health and safety home repair situation that poses a threat to residents if not addressed immediately. Loan Amount Up to $7,000 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 other loans. This criteria does not apply to manufactured home owners. Interest Rate The interest rate will be 0% deferred. Loan Term The loan shall become due upon sale, transfer of title or refinancing of the property, whichever occurs first. Income Limit The applicant's total gross annual household income shall not exceed 50% of the current year area median household income as defined by HUD per household size, as follows: Household Size Income Limit 1 $29,400 2 $33,600 3 $37,800 4 $42,000 5 $45,400 6 $48,750 7 $52,100 Loan to Value The borrower's combined mortgage debt including the Mounds View loan cannot exceed 100% of the property value based on the taxable market value as determined by Ramsey County for the current year. Applicants may also submit a third party appraisal that has been completed within the last 6 months. Such an appraisal is to be obtained by the applicant at their expense. Asset Limit The maximum gross assets of the borrower, excluding the residential property to be improved and a retirement account that is or was subject to penalty for early withdrawals before age 59 Y2, shall not exceed $25,000. Debt to Income 50% Eligible Properties Mounds View owner occupied single family, duplex or manufactured home properties Eligible Improvements Failure of the heating, electrical, ventilation, or plumbing /septic system; Roof leaks that have led to significant damage to the interior A structural failure of the foundation, walls, or roof that could cause collapse; Removing lead paint or the cause of a confirmed concentration of lead in the resident's whole blood (Environmental Intervention Blood Lead Level) Other emergency conditions that could cause the home to be or become uninhabitable will be considered by on a case -by -case basis Contractor Bid; Applicants must provide the Housing Resource Center's Construction Manager with one bid for each improvement project in an emergency situation if the construction manager deems the bid reasonable. All contractors must be licensed and insured. 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 Housinq 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. Emergency Deferred Page 2 of 3 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. 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. Emergency Deferred Page 3 of 3