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HomeMy WebLinkAbout11-08-2010EDA RESOLUTION 10-EDA-261 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING MOUNDS VIEW HOME IMPROVEMENT LOAN PROGRAM CRITERIA 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 proposed loan program would offer four separate home improvement loan options to Mounds View homeowners; and WHEREAS, the purpose of the four loan options are: (1) to provide loans to demolish blighted single-family or duplex properties in Mounds View; (2) to provide loans for general home repairs to owner-occupied single-family or duplex homes in Mounds View; (3) to provide loans to owner-occupied single-family or duplex properties in Mounds View that have been required by the City of Mounds View to bring their properties into compliance with the City Code; and (4) 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; and, Resolution 10-EDA-261 Page 2 of 2 WHEREAS, the goal of the proposed program is to improve the City of Mounds View’s housing stock in order to increase property values contributing to the City’s tax base. NOW, THEREFORE BE IT RESOLVED, the proposed Home Improvement Loan Program as presented in the attached Exhibit A, is hereby approved, established, and adopted by the Mounds View Economic Development Authority. Adopted this 8th day of November, 2010 by the Mounds View Economic Development Authority ___________________________ Joe Flaherty, President (ATTEST) ___________________________ James Ericson, Executive Director Economic Development Authority (EDA) Home Improvement Loan Program Criteria Draft 7 - November 8, 2010 Option 1 – Demolition Loan The purpose of this loan is to provide loans to demolish blighted single-family or duplex properties in Mounds View. 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. 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 prime/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. The loan is due upon sale, transfer of title or refinancing of the property. if the property ceases to be owner-occupied. 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. Page 2 of 6 Option 2 – General Home Repair Loan The purpose of this loan is to provide loans for general home repairs to owner-occupied single- family or duplex homes in Mounds View. Loan Amount From $1,000 to $15,000 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 the borrower’s existing prime/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 15 years. The loan is due upon sale, transfer of title, refinance or if the property ceases to be owner-occupied. Income Limit The applicant’s total gross annual household income shall not exceed 80% of the current area median household income as defined by HUD per household size, as follows: Household Size Income Limit 1 $45,100 2 $51,550 3 $58,000 4 $64,400 5 $69,600 6 $74,750 7 $79,900 8 $85,050 Loan to Value The borrower’s combined mortgage debt including the Mounds View loan cannot exceed 90% 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. Debt to Income 50% Eligible Properties Mounds View owner-occupied single-family & duplex properties Eligible Repairs Exterior repairs:  Exterior painting  Rafters, soffit and fascia repair  Window glass and screens  Railings and stairs  Landings and porches Interior repairs:  Energy efficiency improvements  Accessibility improvements for people with disabilities  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) Ineligible Improvements  Exterior repairs to condos and townhomes  New construction (additions)  Luxury items, such as swimming pools  Working capital, debt service or refinancing of existing debts Contractor Bids Applicants must provide the Housing Resource Center’s Construction Manager with two bids for each improvement project. All contractors must be licensed and insured. Page 3 of 6 Option 3 − Code Enforcement Loan The purpose of this loan is to provide loans for owner-occupied single-family or duplex properties in Mounds View that have been required by the City of Mounds View to bring their properties into compliance with the City Code. Loan Amount From $1,000 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 the borrower’s existing prime/A- rated fixed rate mortgage. Interest Rate The interest rate is 0%. The monthly payment is fixed. Loan Term The maximum loan term is 15 years. The loan is due upon sale, transfer of title, refinance or if the property ceases to be owner-occupied. 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. Debt to Income 50% Income Limit The applicant’s total gross annual household income shall not exceed 80% of the current area median household income as defined by HUD per household size, as follows: Household Size Income Limit 1 $45,100 2 $51,550 3 $58,000 4 $64,400 5 $69,600 6 $74,750 7 $79,900 8 $85,050 Eligible Properties Mounds View owner-occupied single-family or duplex properties Eligible Repairs Exterior repairs required by Mounds View’s Code Enforcement Officer such as:  Exterior painting  Rafters, soffit and fascia repair  Window glass and screens  Railings and stairs  Landings and porches Interior repairs are allowed only if they are related to life safety of the residents and required by Mounds View’s Code Enforcement Officer. This may include a structural failure of the foundation, walls, or roof that could cause collapse. Ineligible Improvements  Exterior repairs to condos and townhomes  Any repairs to mobile homes  Driveways, sidewalks and paved areas  “Junk” or debris removal, removal of inoperable vehicles, etc. Contractor Bids Applicants must provide the Housing Resource Center’s Construction Manager with two bids for each improvement project. All contractors must be licensed and insured. Other Code Enforcement Loan applicants may also apply for the General Home Repair Loan not to exceed a total loan amount of $15,000. Page 4 of 6 Option 4 − Emergency Deferred Loan 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 mobile home owners. Interest Rate The interest rate will be 0% deferred. Loan is due upon sale, transfer of title, refinance or if the property ceases to be owner-occupied. Loan Term The loan is due on sale, transfer of title, when the primary mortgage is paid off, or when the property ceases to be the owner’s primary place of residence. Income Limit The applicant’s total gross annual household income shall not exceed 50% of the current 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 90% 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 ½, 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. Page 5 of 6 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. Page 6 of 6 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. CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA MOUNDS VIEW CITY HALL Monday, November 8, 2010 6:30 PM 1. CALL TO ORDER 2. ROLL CALL: President Flaherty, Vice President Stigney, Commissioner Hull, Commissioner Mueller, Commissioner Gunn 3. APPROVAL OF AGENDA 4. PUBLIC INPUT: Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES: A. October 25, 2010, EDA Minutes 6. CONSENT AGENDA 7. EDA BUSINESS A. Resolution 10-EDA-261 Approving Mounds View Home Improvement Loan Program Criteria 8. REPORTS 9. NEXT EDA MEETING: Monday, November 29, 2010, at 6:30pm 10. ADJOURNMENT Corrections/Revisions made by Councilmember Gunn, Councilmember Mueller, City Administrator Ericson,, Community Development Director Roberts, and Economic Development Specialist Steinmetz PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 October 25, 2010 6 Mounds View City Hall 7 2401 Highway 10, Mounds View, MN 55112 8 6:01 P.M. 9 10 11 1. CALL MEETING TO ORDER 12 13 2. ROLL CALL: President Flaherty, Vice President Stigney, Commissioner Hull, 14 Commissioner Mueller, Commissioner Gunn, and Executive Director Ericson. 15 16 NOT PRESENT: None. 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: Mueller/Hull. To Approve the October 25, 2010, Agenda as presented. 21 22 Ayes – 5 Nays – 0 Motion carried. 23 24 4. PUBLIC INPUT 25 26 None. 27 28 5. APPROVAL OF MINUTES 29 30 A. September 27, 2010, EDA Minutes. 31 32 Commissioner Mueller requested a change on Page 2, Line 84, asking that it read, when the 33 property “was” sold. 34 35 MOTION/SECOND: Gunn/Mueller. To Approve the September 27, 2010, Minutes as 36 corrected. 37 38 Ayes – 5 Nays – 0 Motion carried. 39 40 6. CONSENT AGENDA 41 42 None. 43 Mounds View EDA October 25, 2010 Regular Meeting Page 2 44 7. EDA BUSINESS 45 46 A. Resolution 10-EDA-261 Approving Mounds View Home Improvement Loan 47 Program Criteria 48 49 Economic Development Coordinator Steinmetz explained at the September 7th Work Session, the 50 City Council directed staff to develop criteria for a new, one-year pilot program of home 51 improvement loan options. The EDA reviewed draft criteria for the program on September 27th 52 and requested that staff make several changes to the criteria. The EDC reviewed the draft criteria 53 on October 15th and made recommendations for changes to the criteria for the EDA to consider. 54 55 Economic Development Coordinator Steinmetz reviewed the changes with the EDA in detail. 56 City staff, the EDC and Suzanne Snyder (GMHC) share the concern that the EDA’s request to set 57 the loan to value ratio at 90% (instead of 110% as originally proposed by City staff) would 58 drastically limit the pool of Mounds View loan applicants. This is because many people who 59 would apply for these loans do not have 10% or more equity in their homes. The other two 60 loans, emergency loan and code enforcement loan, would stay at 100%. Staff further reviewed 61 neighboring communities home improvement loan program information. 62 63 Economic Development Coordinator Steinmetz indicated a change may need to be made 64 regarding the third party appraisals for these loans. At times this will be necessary and other 65 times will not. Staff recommended that the EDA approve Resolution 10-EDA-261 approving the 66 Mounds View Home Improvement Loan Program Criteria with the EDC’s recommended 67 changes. After this approval, city staff would begin marketing the program (in November and 68 December of 2010) for a program launch in January 2011. After the EDA finalizes the criteria, 69 Suzanne Snyder and Marie Malrick will discuss underwriting fees with City staff and then City 70 staff would present the information to the EDA at a future meeting. 71 72 President Flaherty requested further information on the third party appraisal situation. Economic 73 Development Coordinator Steinmetz noted information could also be gained off of the Ramsey 74 County property tax records or comparable residential real estate records and the City would not 75 have to be an official appraisal. 76 77 Commissioner Mueller questioned if Option 1, the demolition deferred loan, had to be 18% per 78 annum. She recommended this rate be reduced to 4% or prime, as 18% would be highly 79 prohibitive. Economic Development Coordinator Steinmetz indicated this information was taken 80 out of another document as a standard and could be changed by the EDA. The demolition loan 81 was due upon title change, when the primary mortgage was paid off, or when the owner no 82 longer ceases to live at the residence. Executive Director Ericson indicated the rate was selected 83 because it would encourage full repayment upon the sale of the property. 84 85 Mounds View EDA October 25, 2010 Regular Meeting Page 3 Commissioner Mueller expressed concern that the demolition assistance loans would make no 86 payments until the property was sold. She did not intend for this to be a condition within the 87 loan and felt interest payments could be made as this would become a revenue source for the 88 City. Commissioner Mueller requested the demolition loans not be deferred. Economic 89 Development Coordinator Steinmetz indicated a 3% interest rate could be set on this loan. She 90 explained the EDC’s recommendation was to help eliminate blighted property in the City. 91 92 President Flaherty questioned if the City was prepared to carry a demolition loan for 30 years. 93 He stated he was uncomfortable with the open-ended loan style. He requested the demolition 94 loans be structured in such a way that the City could recapture funds. 95 96 Vice President Stigney stated the loan was fine as is. The deferred loan program would assist the 97 City with removing blighted properties while creating improved residential homes. 98 99 Commissioner Hull didn’t feel people would apply for the demolition program if interest rates 100 were charged. Economic Development Coordinator Steinmetz noted staff originally 101 recommended a 0% interest deferred loan. She explained a member on the EDC was a banker 102 and suggested the City would not be flooded with requests due to the current market. 103 104 Commissioner Mueller suggested the demolition loan be split into two separate categories one 105 being for the property/homeowner, and the other for a private party or developer that would 106 acquire a property for redevelopment. She requested the loans be capped at 10 years with an 107 interest rate of 3%-5%. 108 109 Vice President Stigney agreed the Commission may need to work on this language further as 110 there was ambiguity when the property ceases to be the owner’s primary place of residence. The 111 two scenarios may benefit the program so long as the property were redeveloped once 112 demolished. 113 114 President Flaherty was in favor of removing the language “ceases to be the owner’s primary place 115 of residence” and suggested adding in the loan shall be due on the sale of the property, when the 116 primary mortgage is paid off, or 10 years, whichever occurs first. Executive Director Ericson felt 117 a loan limit was proper, but felt $10,000 would be difficult for a person to come up with after 10 118 years. 119 120 Commissioner Gunn questioned if 3% interest was being considered for this loan. 121 122 Commissioner Mueller disagreed with the 0% interest on the demolition loan. 123 124 President Flaherty questioned how Ms. Snyder or Malrick would recommend the Commission 125 proceed on this issue. 126 127 Mounds View EDA October 25, 2010 Regular Meeting Page 4 Suzanne Snyder, Greater Metropolitan Housing Corporation (GMHC) commented there was 128 agreement among the Commissioners to have the demolition loan not be deferred, but have a 129 repayment term. This made sense and would be better for the City. Principal only loans could 130 also be done with a 10 year repayment plan. Ms. Snyder indicated the program could still be 131 designed to be attractive to homeowners to assist with removing blight in the City. She was not 132 certain of a correct interest rate, but suggested prime plus a couple points. 133 134 Commissioner Gunn agreed with a principal only loan with a repayment plan. 135 136 Commissioner Hull indicated the major goal was to eliminate blight. Adding 3% interest on 137 these loans would discourage residents and redevelopment. He felt the program would create 138 more interest if left as proposed. 139 140 Ms. Snyder indicated the Commission would have to decide if they wanted to proceed with 141 deferred loans or create a repayment plan to recapture payments with 0% interest. This would be 142 the most attractive funds available, if at 0%. 143 144 President Flaherty questioned if the EDA wanted to close the open ended loan and if so, what 145 would the timeframe be. Also, the Authority would need to consider if these loans should have 146 interest. 147 148 Vice President Stigney requested the loans be closed. 149 150 Commissioner Hull was fine with the language as is. 151 152 Commissioner Gunn suggested the loans be closed after 10 years and if paid off before then, it 153 remain interest free. 154 155 Commissioner Mueller requested the loop be closed and charge interest. 156 157 President Flaherty stated he would be in favor of closing the loop as well. He requested further 158 options be brought back to the EDA with varying rates to be reviewed at the November 8th 159 meeting. 160 161 Commissioner Mueller questioned if the City would be regaining the interest and if this would 162 cover the Staff time spent to figure out the interest rate and monthly payments on each of these 163 loans. She felt the more simple the better on these loans. 164 165 Community Development Director Ken Roberts asked if the EDA had further comments on the 166 other two loans. 167 168 President Flaherty indicated he was fine with the other loans as is. 169 Mounds View EDA October 25, 2010 Regular Meeting Page 5 170 Commissioner Mueller stated the loan assistance qualifications regarding manufactured homes 171 should be reviewed. She felt it would be better to provide assistance to upgrade a manufactured 172 home but the City should be assured that the expense put into a manufactured home did not 173 exceed its value. Community Development Director Roberts stated each application would be 174 reviewed on a case by case basis. 175 176 President Flaherty thanked Staff for continuing to work with the EDA on the criteria. 177 178 Economic Development Specialist Steinmetz thanked the EDA for their comments this evening 179 and requested members continue to consider the main goal of this program was to reduce the 180 amount of blighted housing stock blight in the City of Mounds View. 181 182 Executive Director Ericson questioned if this issue should be discussed further in a work session. 183 The EDA was in favor of this suggestion. 184 185 B. Authorize Jack LaSota of Traffix Graphix to replace the vinyl on the two 186 existing monument entrance signs located along County Road 10 187 188 Economic Development Specialist Steinmetz indicated this was discussed by the EDA a year ago 189 to update the two monument signs on County Road 10. The signs have the former City logo and 190 could be updated to show the new logo. When previously discussed, there was not funding to 191 update these signs. Since that time, a donation was made by Bethlehem Baptist Church and the 192 City could use for economic development. 193 194 Economic Development Specialist Steinmetz reviewed the artwork options available and 195 recommended the EDA update these signs and authorize Jack LaSota of Traffix Graphix to 196 complete this work. The expense would be $1,280 total for both signs. 197 198 MOTION/SECOND: Mueller/Hull. To Authorize Jack LaSota of Traffix Graphix to replace the 199 vinyl on the two existing monument entrance signs located along County Road 10, choosing 200 artwork Option 1. 201 202 Ayes – 5 Nays – 0 Motion carried. 203 204 8. REPORTS 205 206 Economic Development Specialist Steinmetz indicated this week was Manufacturer’s Week in 207 the State of Minnesota. The Mounds View City Council was learning about Homeshield and 208 would be touring their facility on Tuesday, October 26th. 209 210 9. NEXT EDA WORKSESSION MEETING: Monday, November 1, 2010, at 6:00 p.m. 211 Mounds View EDA October 25, 2010 Regular Meeting Page 6 NEXT EDA MEETING: Monday, November 8, 2010, at 6:00 p.m. 212 213 10. ADJOURNMENT 214 215 President Flaherty adjourned the meeting at 7:05 p.m. 216 217 Recorded and transcribed by: 218 Carla Wirth 219 TimeSaver Off Site Secretarial, Inc. 220 November 4, 2010 TO: Economic Development Authority City of Mounds View cc: Heidi Steinmetz FROM: Suzanne Snyder, Program Director Greater Metropolitan Housing Corporation (GMHC) RE: Asset Limits on Home Improvement Loans Asset limits are generally used in home improvement loan programs that are structured as no-interest deferred loans. No-interest deferred loans are most often provided to very low-income populations who would find it a hardship to make loan payments. The purpose of adding an asset limit is to determine if a household has liquid assets beyond a certain value that have the potential to increase their payment ability. It is a means of further targeting the funds to those most in need. I would recommend including the asset limit that was originally proposed in the Emergency Deferred Program. Whereas loan programs that are interest-bearing installment loans generally do not impose an asset limit. These borrowers are repaying the loan in monthly payments with interest. Generally these programs have already limited the population that benefits from the low-interest by imposing income restrictions, such as the General Home Repair Loans and Code Enforcement Loans.