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12-07-2023 Housing & Redevelopment Authority Regular Meeting December 07, 2023 7:00 PM Fridley City Hall, 7071 University Avenue N.E. Agenda Call to Order Roll Call Action Items 1.Approval of Expenditures 2.Approval of the Minutes from the HRA Meeting of November 2, 2023 3.Designation of an Official Newspaper for 2024 4.Resolution No. 2023-16 Designating an Official Depository for the Year 2024 5.Resolution No. 2023-17 Adopting Changes and Additions to Housing Programs & Guidelines 6.Proposed 2024 Budget 7.Amendment to the Housing Programs Administration Contract with CEE Informational Items 8.Update on Housing Programs Adjournment Upon request, accommodation will be provided to allow individuals with disabilities to participate in any City of Fridley services, programs, or activities. Hearing impaired persons who need an interpreter or other persons who require auxiliary aids should contact the City at (763) 571-3450. 2 HOUSING & REDEVELOPMENT AUTHORITY (____ MEETING City of Fridley December 7, 2023 7:00 PM Fridley Civic Campus, 7071 University Avenue N.E. SIGN IN SHEET If you wish to address the HRA, please sign in so that staff or a member of the Council may contact you. Thank you. Name Email Phone Jufn!2/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Title Approval of Expenditures Background Recommendation Staff recommends the HRA approve the expenditures for the periodOctober 28through November 29, 2023. Attachments and Other Resources Check Reports Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 3 Jufn!2/ 4 Jufn!2/ 5 Jufn!3/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Title Approval of the Minutes from the HRA Meeting of November 2, 2023 Background Recommendation Staff recommends the HRA approve the minutes from the HRA meeting of November 2, 2023. Attachments and Other Resources HRA Minutes November 2,2023 Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 6 Jufn!3/ Housing and Redevelopment Authority November 2,2023 7:00 PM Fridley City Hall, 7071 University Avenue NE Minutes Call to Order Chairperson Showaltercalled the Housing and Redevelopment Authority meeting to order at 7:00 p.m. Present Elizabeth Showalter Gordon Backlund Troy Brueggemeier Rachel Schwankl Kyle Mulrooney Others Present Paul Bolin, HRA Assistant Executive Director Joe Starks, Finance Director Action Items 1. Approval of Expenditures Motionby CommissionerBacklundto approve the expenditures. Seconded by Commissioner Mulrooney. Upon a voice vote, all voting aye, Chair Showalterdeclared the motion carried unanimously. 2.ApprovalSeptember 7,2023, Meeting Minutes Motionby Commissioner Brueggemeierto approve the meeting minutesof September 7,2023as presented. Seconded by Commissioner Schwankl. Upon a voice vote, all voting aye, Chair Showalterdeclared the motion carried unanimously. 3.Approval of HRA Meeting Dates for 2024 Motionby Commissioner Mulrooneyto approve the HRA meeting dates for 2024 as presented. Seconded by Commissioner Brueggemeier. Upon a voice vote, all voting aye, ChairShowalterdeclared the motion carried unanimously. 7 Jufn!3/ Housing and Redevelopment Authority 11/02/2023 Minutes Page 2 Informational Items 4. Proposed 2024 Budget Joe Starks, Finance Director, provided background information on the budget process for the HRA, th noting that formal approval of the budget will be considered by the HRA at its December 7 meeting. He provided details on the proposed 2024 budget including revenue, expenditures, and other items of note. Commissioner Brueggemeier asked for more details on the deficit of $381,000 in the proposed budget. Mr. Starks replied that the deficit assumes that the entire $1,000,000 would be spent that rd was set aside for the 73 connection. He noted that the HRA does have a healthy fund balance and therefore it would not be abnormal to spend more than what was coming in. Commissioner Schwankl asked if the additional quarter percentage could be placed in Fund 20 or whether it would be Fund 1. Mr. Starks replied that there would be continued discussion on what that would be used for, but it would likely go into the Housing Loan Fund. He stated that the HRA will have additional discussion on that topic going forward. 5. Update on Housing Programs Mr. Bolin provided an overview of the October and year-to-date activity of the housing programs, noting that they are ahead of last year at this time. Adjournment Motion by Commissioner Brueggemeier to adjourn the meeting. Seconded by Commissioner Schwankl. Upon a voice vote, all voting aye, Chairperson Showalter declared the motion carried and the meeting adjourned at 7:14 p.m. Respectfully submitted, Melissa Moore City Clerk 8 Jufn!4/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Title Designation of an Official Newspaper for 2024 Background The Fridley City Charter Section 12.01 requires the designation of an official newspaper for the Fridley Housing and Redevelopment Authority. The official newspaper is used for publishing public hearings and other legal notices. Recommendation Staff recommend the approval of HRA Resolution No. 2023-15, designating the Minneapolis Star Tribune as the official legal newspaper of the Fridley Housing and Redevelopment Authority for the year 2024. Attachments and Other Resources HRA Resolution No. 2023-15 Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 9 Jufn!4/ Resolution No. 2023 - 15 Designating an Official Newspaper for the Year 2024 Whereas, the Charter of the City of Fridley requires in Section 12.01 thereof that the Fridley Housing and Redevelopment Authority, annually designate an official newspaper for the Housing and Redevelopment Authority. Now, therefore be it resolved, that the Minneapolis Star Tribun e is designated as the official legal newspaper for the City of Fridley for the year 2024 for all publications required to be published therein. Passed and adopted by the Housing and Redevelopment Authority in and for the City of th Fridley this 7 day of December, 2023. _______________________________________________ Elizabeth Showalter Chairperson Attest: __________________________________________________ Walter T. Wysopal Executive Director : Jufn!5/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Title Resolution No. 2023-16Designating an Official Depository for the Year 2024 Background Attached is a resolution appointing Wells Fargo Bank Minnesota N.A. as the Housing & Redevelopment 4. The service the HRA receives from Wells Fargo has been excellent. Wells Fargo is responsive to not only our requests for information, but also other banking issues that may arise. In today's world of increasing demands for electronic banking, Wells Fargo Bank provides a one-stop- ficient, as our banking needs are quite complex. collateralized. This assures deposits are safe and not subject to loss if the bank were to fail. This daily monitoring is critical, since the Authority can experience large swings in cash balances at different points throughout the year. Staff recommends a motion adopting a resolution designating an official depositoryfor the Housing & Redevelopment Authority for 2024. Recommendation Staff recommend the approval of HRA Resolution No. 2023-16. Attachments and Other Resources HRA Resolution No. 2023-16 Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 21 Jufn!5/ Resolution No. 2023-16 Designating an Official Depository for the Housing & Redevelopment Authority Whereas, I, Joe Starks, do hereby certify that I am the Finance Director-Treasurer of the Housing & Redevelopment Authority in and for the City of Fridley, a corporation organized under the laws of the State of Minnesota. I further certify that at a meeting of said corporation duly and properly called and held on the 7th day of December 2023, the following resolution was passed; that a quorum was present at said meeting; and that said resolution is set forth in the minutes of the meeting and has not been rescinded or modified. Now, therefore, be it resolved that Wells Fargo Bank Minnesota N.A. is hereby designated as a depository for the funds of this corporation. Be it further resolved that checks, drafts or other withdrawal orders issued against the funds of this corporation on deposit with said bank shall be signed by the following two individuals: Walter T. Wysopal, Executive Director Joe Starks, Finance Director and that said bank is hereby fully authorized to pay and charge to the account of this corporation any checks, drafts, or other withdrawal orders. Be it further resolved that Wells Fargo Banks as a designated depository of the corporation is hereby requested, authorized and directed to honor checks, drafts or other orders for the payment of money drawn in this corporation's name, including those drawn to the individual order of any person or persons whose name or names appear thereon as signer or signers thereof, when bearing or purporting to bear the facsimile signatures of the following two individuals: Walter T. Wysopal, Executive Director Joe Starks, Finance Director and Wells Fargo Banks shall be entitled to honor and to charge this corporation for all such checks, drafts or other orders, regardless of by whom or by what means the facsimile signature or signatures thereon may have been affixed thereto, if such facsimile signature or signatures resemble the facsimile specimens duly certified to or filed with Wells Fargo Banks by the City Clerk or other officer of this corporation. Be it further resolved that any and all resolutions heretofore adopted by the Housing & Redevelopment Authority of the corporation and certified to as governing the operation of this corporation's account(s) with it, be and are hereby continued in full force and effect, except as the same may be supplemented or modified by the foregoing part of this resolution. 22 Jufn!5/ Resolution No. 2023 16 Page 2 Be it further resolved that all transactions, if any relating to deposits, withdrawals, re-discounts and borrowings by or on behalf of the corporation with said bank prior to the adoption of this resolution be, and the same hereby are, in all things ratified, approved and confirmed. Be it further resolved that any bank or savings and loan may be used as depositories for investment purposes so long as the investments comply with authorized investments as set forth in Minnesota Statutes. Be it further resolved that the signatures of the following two named City/HRA employees are required for withdrawal of Housing & Redevelopment Authority investment funds from savings and loan associations: Walter T. Wysopal, Executive Director _______________________________________________ Joe Starks, Finance Director _______________________________________________ Be it further resolved that any brokerage firm may be used as a vendor for investment purposes so long as the investments comply with the authorized investments as set forth in Minnesota Statutes. I further certify that the Board of this corporation has, and at the time of adoption of said resolution, had full power and lawful authority to adopt the foregoing resolutions and to confer the powers therein granted to the persons named who have full power and lawful authority to exercise the same. Passed and adopted by the Housing & Redevelopment Authority in and for the City of th Fridley this 7 day of December, 2023. _______________________________________________ Elizabeth Showalter - Chairperson Attest: _________________________________________________ Walter T. Wysopal - Executive Director 23 Jufn!6/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Title Resolution No. 2023-17Adopting Changes and Additions to Housing Programs & Guidelines Background The special legislation will allow the Authority to collect approximately $560,000 annually for the next 5 years. The newmetro-wide.25% sales tax is expected to generate an additional $300,000 annually for housing programsthat target residents making between 60% and 110% of the area median income (AMI). Afteran August work session discussing potentialchanges and additions to the programs with the HRA and City Council Finance Director to fit the programs into existing and projected resources. The existing loan and grant programs have been very successful. In 2023, the Authority issued over $870,000 in loans and approximately $84,000 in grants. The success of existing programs and influx of additional funds led to staff suggesting the following Senior Deferred LoanProgram: Over the past 6years, the Senior Deferred Loan Program has issued 60 loans totaling $1,089,000. The program has been greatly oversubscribed, with funds being claimed within one month of availability. The program was started to help seniors make changes to their existing homes in order to be able to live in them longer or fix their homes up for resale. As the loans are deferred until the property ownership is transferred, it is impossible to project a repayment schedule for these loans. In fact, only one of the 60 loans has been repaid thus far and the program has erased a large surplus of funds the Authority had in its housing programs six years ago. Staff is recommending that this program continue to be funded at $200,000 per year, from the revenue being generated by the .25% sales tax. To ensure the funds are going to seniors with the most need, staff recommends that the funds go to those earning60% or less of the area median income (AMI). Applications for this program will be accepted starting in April in order for the payments to line up with receipt of the sales tax revenue. Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 24 Jufn!6/ Down Payment Assistance Loans: The intent of the program is to provide an additional incentive for first time home buyers to move to Fridley. While no interest is earned on the loan and no regular payments made, the Authority will eventually recover its funds to revolve back into the community. Staff is recommending the Authority budget $100,000 from the new .25% sales tax towards this program. Staff further recommends that an additional income tier be added to provide those making less than 80% AMI an additional $5,000 in assistance. Applications for this program will be accepted starting in April in order for the payments to line up with receipt of the sales tax revenue. Home Betterment Loans: The intent of the program is to provide interest free, deferred home improvement funding for homeowners earning less than 80% AMI. The maximum loan amount will be $25,000 and repaid upon sale of the property, cash-out refinancing or forgiven after 30 years. Staff recommends the Authority allocate up to $100,000 for this program to be paid funded from the special legislation that captures excess tax increment from Northern Stacks. Applications for this program will be accepted starting in April in order for the payments to line up with receipt of the sales tax revenue. Residential Paint Rebate Program: Intent of the program is to eliminate blight, preserve and improve appearance of neighborhoods by providing rebates of up to $500 for cost of materials and supplies for exterior painting of eligible homes, by low and moderate income families. Maximum rebate of $500 for single family homes, up to $350 per unit (not to exceed $1,400) for rental properties. Staff has identified the need to provide additional assistance to lower income senior households that do not have the physical ability to do their own painting and lack the financial resources to hire the work done. Staff is recommending that the Authority allocate $25.000 from the special legislation that captures excess increment from Northern Stacks. Applications for this program will be accepted starting in April in order for the payments to line up with receipt of the sales tax revenue. Front Door Grant Program: (and the City) by making improvements on the street side of their home. Grants are provided to pay for a portion of the improvements. Project tasks are considered either Basic or Beautification and the Grant amount varies based on type of work being completed. Projects must include at least one item from the Beautification Project list. Grant amount ranges from $1,000 up to $5,000. Over the past three years we have noticed a trend of residents using the program to replace their driveways. While that does improve the curb appeal, the intent of the program was to see more changes to the structure itself. In order to get more return on investment, staff is recommending that the program require two projects from the beautification list for a homeowner to be eligible. The list of beautification and basic projects follows: Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 25 Jufn!6/ Recommendation Staff recommend the approval of HRA Resolution No. 2023-17, modifying the Comprehensive Housing Rehabilitation Program (aka. HRA Loan Program) to incorporate changes as shown on Exhibit A. Attachments and Other Resources !HRA Resolution No. 2023-17 !Exhibit A Program Guidelines Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 26 Jufn!6/ Resolution No. 2023-17 Modifying the Comprehensive Housing Rehabilitation Program Whereas, the Housing and Redevelopment Authority in and for the City of Fridley (the has previously established numerous housing rehabilitation programs (collectively the making of grants and loans funded by the Authority in the City of Fridley; and Whereas, the Authority was the recipient of special legislation and the beneficiary of a new .25% sales tax approved by the Minnesota Legislature in May 2023; and Whereas, the Authority regularly reviews its Comprehensive Housing Rehabilitation Programs to identify areas for improvement in existing programs or the need for new programs based on changing demographics and funding; and Whereas, the Authority identified a need to modify and expand its current loan and grant programs to meet the needs of more homeowners at all income levels. Now, therefore be it resolved, that the Authority modifies and amends the Comprehensive Housing Rehabilitation Program as found on attached Exhibit A. Passed and adopted by the Housing & Redevelopment Authority in and for the City of th Fridley this 7 day of December, 2023. _______________________________________________ Elizabeth Showalter - Chairperson Attest: _________________________________________________ Walter T. Wysopal - Executive Director 27 Jufn!6/ EXHIBIT A-24 PROGRAM GUIDELINES This document includes guidelines for the FRIDLEY LOAN PROGRAMS Exhibit A-24 # Page 1 28 Jufn!6/ FRIDLEYLOAN PROGRAM GUIDELINES The Fridley Loan Programs are designed to supplement existing loan programs available from MHFA, CEE, private lenders and other housing resources. Center for Energy and Environment shall serve as the administrator for the Fridley Loan Programs and will secure the most beneficial financing based on the . Funding for these programs are provided by the City of Fridley Housing and Redevelopment Authority (HRA). Home Improvement Loan Interest Rate: 2% Amortization Type: Amortizing (Monthly Payments Required). Loan Amount: Minimum of $1,000 and Maximum of $50,000. Total Project Cost:The borrower must have sufficient funds necessary to cover the cost of the entire project as outlined in the bid(s). Additional funds may come from the applicants personal savings, gifts, or other non-City loans. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the minimum term is 1 year; the maximum term will be 20 years. Eligible Properties: 1-4 unit owner-occupied properties located within the City of Fridley, including . individual townhomes, twin homes, and condominiums. Properties held in a trust or Contract for Deed are eligible. Ineligible Properties: Properties with more than four units, cooperatives, manufactured homes, or properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Including but not limited to: Foreign Nationals, Non-Occupant Co-Borrowers, and Properties in the name of a business. Ownership/Occupancy: Owner- occupied only. Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should not exceed 110% of the property value. Half of the improvement value may be added to the initial property value. Value can be established by the Property Tax Statement,or an Appraisal dated within the past 12 months. Exhibit A-24 # Page 2 29 Jufn!6/ Income Limit: None. Debt -to -Income Ratio:50% Credit Requirements: 1) All mortgage payments must be current and reflect no 30 day late payments history in the past 12 month period (without reasonable explanation). 2) All real estate taxes must be current. 3) No outstanding judgements or collections. 4) Bankruptcy must have been discharged for at least 18 months prior to loan closing (without reasonable explanation). 5) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60-day late payments on credit report (without reasonable explanation). 7) No defaulted government loans. Multiple Loans per Property/Borrower: More than one loan per property/borrower is allowed, however, the outstanding balance(s) for this loan CANNOT exceed $50,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. Eligible Use of Funds: Most permanent interior and exterior improvements. The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only 1 bid is required. All contractors must be properly licensed or registered and permits must be obtained when required. Sweat Equity / Homeowner Labor: Work may be performed by property owners on a basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when not required, a post installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured with a mortgage in favor of the City of Fridley. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as underwriting guidelines. . Exhibit A-24 # Page 3 2: Jufn!6/ Work Completion:All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case-by-case basis. Mobile Home Improvement Loan Interest Rate: 2% Amortization Type: Amortizing (Monthly Payments Required). Loan Amount: Minimum of $500 and Maximum of $10,000. Total Project Cost:The borrower must have sufficient funds necessary to cover the cost of the entire or other non-City loans. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the minimum term is 1 year; the maximum term will be 10 years. Eligible Properties: Residential Mobile Homes located in the City of Fridley. Ineligible Properties: Properties which are not a Residential Mobile Home. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Including but not limited to: Foreign Nationals, Non-Occupant Co-Borrowers, and Properties in the name of a business. Ownership/Occupancy: Owner- occupied only. Loan - to - Value Ratio: N/A Income Limit: None. Debt - to - Income Ratio: 50% Commented \[AN1\]: Can someone get a mortgage for a Credit Requirements: 1) All loans secured to the property must be current and reflect no 30 day late manufactured home? payments history in the past 12 month period (without reasonable explanation). 2) No outstanding Commented \[JH2R1\]: Updated language judgements or collections. 3) Bankruptcy must have been discharged for at least 18 months prior to loan closing (without reasonable explanation). 4) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 5) Generally, no more than two 60- day late payments on credit report (without reasonable explanation). 6) No defaulted government loans. Exhibit A-24 # Page 4 31 Jufn!6/ Multiple Loans per Property/Borrower: More than one loan per property/borrower is allowed, however, the outstanding balance(s) of this program CANNOT exceed $10,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. Eligible Use of Funds: Most permanent interior and exterior improvements. The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only 1 bid is required. All contractors must be properly licensed or registered and permits must be obtained when required. Sweat Equity / Homeowner Labor: basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when not required, a post installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured with a lien in favor of the City of Fridley Housing and Redevelopment Authority. Borrower Fees: Borrower will be responsible for a 1% origination fee, document preparation fee, title filing and service fees, credit report fees and any applicable closing fee. Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as Work Completion:All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case-by-casebasis. Exhibit A-24 # Page 5 32 Jufn!6/ Senior DeferredLoan Interest Rate: 0% Amortization Type: Deferred Loan Amount: Minimum loan is $5,000. Maximum loan is $20,000. Total Project Cost: the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower is responsible to provide proof of having funds to pay for the remaining portion. Loan term: 30 years. If the borrower has not sold or,transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells or transfers title of the property or the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Properties: 1-4 unit owner-occupied properties located within the City of Fridley. Individual townhomes, twin-homes and condominiums are eligible. Properties held in a Trust or Contract for Deed are eligible. Ineligible Properties: Dwellings that are more than 4 units, cooperatives, manufactured homes, and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. At least one of the property owners must be at least 62 years of age. Ineligible Borrowers: Includes, but are not limited to nonresident owners, non-occupant co-borrowers, properties held in the name of a business. Ownership / Occupancy: Owner-occupied only. Loan- to-Value Ratio: 110% Income Limit: 60% AMI based on household size and Adjusted Gross Income from the most recent Federal Tax Return. If a tax return is not required to be filed, the income will be based on projected gross income. Debt- to-Income Ratio: N/A Multiple Loans per Property/Borrower: Multiple loans on a property are allowed ; however, the outstanding balance of ALL Fridley loans CANNOT exceed $75,000. ONLY ONE DEFFERED LOAN CAN BE OUTSTANDING AT A TIME. Exhibit A-24 # Page 6 33 Jufn!6/ Eligible Improvements: Most permanent exterior or interior improvements determined by a site visit. The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Improvements: Work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bidding: Only 1 bid is required. All contractors must be properly licensed or registered. Permits must be obtained when required by City ordinance. Sweat Equity: for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Property Inspection: Required. Eligible improvements will be determined through an analysis of the property. A CEE representative will perform the analysis to prioritize eligible improvements. Post Installation Inspection:Properties are subject to a post installation inspection by a CEE representative when a permit is not required. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds. Work Completion:All work must be completed within 120 days of loan closing. Extensions may be granted by CEE. Underwriting Decision: Must be current on all mortgages and property taxes, no outstanding tax liens or in the process of Bankruptcy or Foreclosure. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Exhibit A-24 # Page 7 34 Jufn!6/ Commented \[NA3\]: Suggestion for re- implies new construction to me... Home Betterment Deferred Loan Commented \[JH4R3\]: prefer. Interest Rate: 0% Amortization Type: Deferred Loan Amount: Minimum loan is $5,000. Maximum loan is $20,000. Total Project Cost: the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower is responsible to provide proof of having funds to pay for the remaining portion. Loan term: 30 years. If the borrower has not sold or transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells or transfers title of the property, or if the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Properties: 1-4 unit owner-occupied properties located within the City of Fridley. Individual townhomes, twin-homes and condominiums are eligible. Properties held in a Trust or Contract for Deed are eligible. Ineligible Properties: Dwellings that are more than 4 units, cooperatives, manufactured homes, and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Includes, but are not limited to nonresident owners, non-occupant co-borrowers, properties held in the name of a business. Ownership / Occupancy: Owner-occupied only. Loan- to-Value Ratio: 110% Income Limit: 80% AMI based on household size and Adjusted Gross Income from the most recent Federal Tax Return. If a tax return is not required to be filed, the income will be based on projected gross income. Debt- to-Income Ratio: N/A Multiple Loans per Property/Borrower: Multiple loans on a property are allowed if the outstanding balance does not exceed $25,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. ONLY ONE DEFFERED LOAN CAN BE OUTSTANDING AT A TIME. Exhibit A-24 # Page 8 35 Jufn!6/ Eligible Improvements: Most permanent exterior or interior improvements determined by a site visit. . The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Improvements: work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bidding: Only 1 bid is required. All contractors must be properly licensed or registered. Permits must be obtained when required by City ordinance. Sweat Equity: be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Property Inspection: Required. Eligible improvements will be determined through an analysis of the property. A CEE representative will perform the analysis to prioritize eligible improvements. Post Installation Inspection:Properties are subject to a post installation inspection by a CEE representative when a permit is not required. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds. Work Completion:All work must be completed within 120 days of loan closing. Extensions may be granted by CEE. Underwriting Decision: Must be current on all mortgages and property taxes, no outstanding tax liens or in the process of Bankruptcy or Foreclosure. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document Commented \[NA5\]: Is this rolled into the deferred loan or preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. is it a payment due at closing? Commented \[JH6R5\]: Due at closing, same asthe Sr. Deferred or other loans Emergency Deferred Loan Interest Rate: 0% Amortization type: Deferred Loan Amount: Minimum loan is $500. Maximum loan is $10,000. Exhibit A-24 # Page 9 36 Jufn!6/ Total Project Cost: the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower is responsible to provide proof of having funds to pay for the remaining portion. Loan term: 30 years. If the borrower has not sold or transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells, transfers title of the property or the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Properties: 14-unit owner-occupied properties located within the geographical boundaries of the City of Fridley. Individual townhomes, twin homes, and condominiums. Properties held in a Trust or Contract for Deed are eligible. Ineligible Properties: Properties with more than four units, cooperatives, manufactured homes, or properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Includes, but are not limited to nonresident owners, non-occupant co-borrowers, properties held in the name of a business. Ownership / Occupancy: Owner-occupied only. Loan- to-Value Ratio: 125% Income Limit: 110% AMI based on household size and Adjusted Gross Income from the most recent Federal Tax Return. If a tax return is not required to be filed, the income will be based on projected gross income. Debt- to-Income Ratio: N/A Multiple Loans per Property/Borrower: Multiple Emergency Deferred Loans are permitted based upon availability of funds. The cumulative outstanding balance of this program CANNOT exceed $10,000. The maximum outstanding balance of ALL Fridley loans is $75,000. More than 1 deferred loan can be outstanding for this program. Eligible Improvements: Those which address an emergency. An emergency is defined as an imminent condition that makes a house uninhabitable, dangerous to the occupants, or can cause severe health problems. Repairs that will remedy such emergency repairs are eligible. Examples of eligible repairs include, but are not limited to, water lines, sewer service, fire hazards, repair to exterior steps, railings, retaining walls, water seepage into basement, structural problems, or replacement of a furnace or hot water heater. Ineligible Improvements: Any improvement not addressing an emergency(as defined above). Bidding: Only 1 bid is required. All contractors must be properly licensed or registered with the MN Department of Labor. Permits must be obtained when required by City ordinance. Exhibit A-24 # Page 10 37 Jufn!6/ Sweat Equity: Not permitted. Property Inspection: Required. Eligible improvements will be determined through an analysis of the property. A CEE staff member will perform the analysis to determine the severity of the situation. Post Installation Inspection:Properties are subject to a post installation inspection by a CEE staff member when a permit is not required. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds. Work Completion:All work must be completed within 30 days of loan closing. Extensions may be granted by CEE. Underwriting Decision: This is a last resort program. The borrower must not be eligible for any other financing administered by CEE to obtain an Emergency Deferred loan. Borrower must be current on all mortgage payments and property taxes and not have a pending Bankruptcy or Foreclosure. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Down-Payment/Closing Cost Assistance Interest Rate: 0%. Loan Amount: $5,000 for households earning more than 80% but less than 110% AMI; $10,000 for households earning 80% AMI or less Amortization Type: Deferred Term: 30 years. If the borrower has not sold or transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells or transfers title of the property, or the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Borrowers: All borrowers must be legal residents of the United States. The homebuyer(s) MUST attend a Home Stretch workshop or other valid homebuyers course offered through an approved counseling agency by the US Department of Housing and Urban Development and provide evidence prior to closing. Borrowers must be considered a first- time homebuyer. Ineligible Borrowers: Including but not limited to: Foreign Nationals, Non-Occupant Co-Borrowers, and Properties held in the name of a business. Exhibit A-24 # Page 11 38 Jufn!6/ Eligible Properties: 14-unit residential properties located with the geographical boundaries of the City of Fridley. Individual Townhomes, twin-homes, and condominiums are eligible. Ineligible Properties: Non-owner occupied (aka absentee-owned), unless the property is the property being purchased and will become owner-occupied, dwellings with more than 4 dwelling units, Cooperatives, Manufactured homes, properties held in a Contract-for-Deed and properties used for commercial purposes. Ownership/Occupancy: Must be owner-occupied after time of purchase. Loan-to-Value: 110%. Income Limits: 110% AMI based on household size and adjusted gross income from most recent tax return. If a tax return is not required to be filed by the borrower(s) then income will be determined by the projected income over the next 12 months. Debt-to-Income Ratio: N/A Multiple Loans per Property / Borrower: Borrowers may only obtain one purchase assistance deferred loan from this program. If ownership changes, the new owner is eligible. If a previous recipient purchases a new qualifying home, they would be eligible again at that new property if the borrower(s) would be considered as a first-time homebuyer at that time. ONLY ONE DEFERRED LOAN CAN BE OUTSTANDING AT A TIME. Eligible Improvements: These funds may only be used for down-payment or closing cost related to the purchase of the subject property. Underwriting: Amount and approval of loan will be determined based on the 1st mortgage approval. In order to determine eligibility, CEE requires the following documentation from the 1st mortgage lender: 1)!Application 2)!Certification that all homebuyers have completed a Home Stretch or other Homebuyers course offered through a counseling agency approved by the US Department of Housing and Urban Development 3) A copy of the whole/complete Purchase Agreement 4) A copy of the Appraisal or determination of value 5) A copy of the Title Commitment 6) A copy of the 1st mortgage pre-approval/commitment letter 6) A copy of the 1st Mortgage loan estimate, prelim-closing disclosure Disbursement of Funds: Funds will be disbursed to the closing agent, for the benefit of the borrower, in coordination with the purchase closing. Exhibit A-24 # Page 12 39 Jufn!6/ Borrower Fees: Borrower will be responsible for mortgage filing and service fees, flood certificate, credit report fees and any applicable closing fee which may be financed in the loan amount. Multi-Family Improvement Loan Interest Rate: 2% Amortization Type: Amortizing (Monthly Payments Required). Loan Amount: Minimum of $5,000 and Maximum of $50,000 (city may allow higher amounts on a case- by-case basis). Total Project Cost:The borrower must have sufficient funds necessary to cover the cost of the entire vings, gifts, or other non-City loans. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the minimum term is 1 year; the maximum term will be 20 years. Eligible Properties: 112-unitresidential properties located within the geographical boundaries of the City of Fridley. Properties held in a Trust or Contract for Deed are eligible. Properties must be in compliance with Ineligible Properties: Properties with more than 12 units, cooperatives, manufactured homes, or properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States OR a registered business with the MN Secretary of State. A business must have been in business for at least 2 years. Ineligible Borrowers: A person or business with no ownership of the property. Commented \[AN7\]: Ownership/Occupancy: Owner- occupied or Absentee-owned. tenants being displaced due to our financing some sort of 'improvements' to a property? Loan - to - Value Ratio: 110%. Half of the improvement value may be added to the initial property value. Value can be established by the Property Tax Statement, or an Appraisal dated within the past 12 months. In Osseo we had a disreputable company buy several buildings, refuse to renew leases, renovate properties, and then double the rents. While improving properties is good to do, I think we Income Limit: None. should try to avoid that sort of scenario... Commented \[JH8R7\]: It is something to consider, but I Debt - to - Income Ratio: 50%. Not applicable if property is owned by a business but must show track. positive cash flow from most recent tax return or Profit and Loss Statement. Exhibit A-24 # Page 13 3: Jufn!6/ Credit Requirements: 1) All mortgage payments must be current and reflect no 30 day late payments history in the past 12 month period (without reasonable explanation). 2) All real estate taxes must be current. 3) No outstanding judgements or collections. 4) Bankruptcy must have been discharged for at least 18 months prior to loan closing (without reasonable explanation). 5) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60-day late payments on credit report (without reasonable explanation). 7) No defaulted government loans. Multiple Loans per Property/Borrower: More than one loan per property/borrower is allowed, however, the outstanding balance(s) for this loan CANNOT exceed $50,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. Eligible Use of Funds: Improvements that correct city code violations or health and safety concerns. Permanent Exterior Improvements including, but not limited to roofing, siding, windows, painting, doors, driveways, parking lots, awnings, sidewalks/steps, garage repair, security solar systems and tuck pointing. Interior improvements including but not limited to structural work, HVAC, accessibility improvements, plumbing, electrical, insulation, lawn sprinkler systems, flooring, permanent fixtures (cabinets/counters). Questionable improvements will be brought to the city for approval. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only 1 bid is required. All contractors must be properly licensed or registered and permits must be obtained when required. Sweat Equity / Homeowner Labor: Not permitted. Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when not required, a post installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured with a mortgage in favor of the City of Fridley. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Underwriting Decision: Applicants must have acceptable credit history, unless in the name of a business. CEE will approve or deny loans based on a credit report, income verification and other criteria as deemed necessary th Work Completion:All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case-by-case basis. Exhibit A-24 # Page 14 41 Jufn!6/ General Program Conditions Application Processing: Loans will be distributed on a first come first serve basis as borrowers qualify. Applicants must provide a completed application package including the following in order to be considered for funding. !Completed and signed application form !Proof of income !Bids or estimates for proposed projects !Other miscellaneous documents loan officers may require. Loan Security: All loans that will be secured with a mortgage will be in favor of the City of Fridley Housing and Redevelopment Authority. Program Costs: Loan origination, post installation inspection and remodeling advisor visit fees will be paid out of the Program Budget. Loan program marketing efforts will be billed directly to the Fridley HRA and is a separate expense should the city choose to commission CEE for marketing support. Disbursement Process: Payment to the contractor (or owner in sweat equity situations) will be made upon completion of work. An inspection will be performed by a City Inspector and/or CEE to verify the completion of the work. The following items must be received prior to final disbursement of funds: !Final invoice or proposal from contractor (or materials receipt from supplier); !Final inspection verification by a City Inspector (or CEE); !Completion certificate(s) signed by borrower and contractor; !Lien waiver for entire cost of work; !Evidence of city permit (if required) Exhibit A-24 # Page 15 42 Jufn!7/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Joe Starks, Finance Director/City Treasurer Title Proposed 2024Budget Background Staffwill present the Proposed 2024Budget for the Authority to reviewand approve. The proposed budgetincludes the General Fund, Housing Loan Program Fund and the various TIF Funds. The General Fund covers the bulk of the administrative and overhead costs of the Authority. It is also used to provide internal loans for development projects. The Housing Loan Program Fund covers the housing related programs and services (e.g., CEE programs).The budgets for TIF Funds are largely driven fromthe cash Recommendation Staff recommend the approval of the 2024HRA Budget. Attachments and Other Resources Proposed 2024HRA Budget Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 43 44 Jufn!7/ 45 Jufn!7/ 46 Jufn!7/ 47 Jufn!7/ 48 Jufn!7/ 49 Jufn!7/ 4: Jufn!7/ 51 Jufn!7/ Jufn!8/ AGENDA REPORT Meeting Date:December 7, 2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Assistant Executive Director Title Amendment to the Housing Programs Administration Contract with CEE Background Since 1996, the HRA has contracted with the Center for Energy and Environment (CEE) to administer the administrative functions for its loan programs, including marketing, application processing, underwriting, loan closing, and disbursements to the contractors. CEE is able to provide technical assistance to Fridley homeowners on such topics as remodeling, energy conservation (through the Home Energy Squad visits), indoor air quality and related subjects. The partnership with CEE allows the Authority to leverage outside dollars (e.g. Minnesota Housing Finance Agency, Met Council, Federal funds, etc.) and customize loan packages to meet individual homeowners circumstances. The attached Amendment extends our relationship with CEE through December 31, 2026, recognizes the changes and additions being made to the Fridley Housing Programs, and provides for an increase in the Annual Administrative Fee to cover the increased cost of setting up and managing the changes and additions to the Housing loan programs. Recommendation Staff recommends that the Authority approve the attached amendment to the housing programs administration contract with CEE. Attachmentsand Other Resources th 10Amendment to CEE Contract Exhibit A-24 Guidelines Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 52 Jufn!8/ AMENDMENT 10 to the LOAN ORIGINATION AGREEMENT Between HOUSING AND REDEVOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY And CENTER FOR ENERGY AND ENVIRONMENT Fridley Home Improvement Loan Program th The Agreement made the 18 day of February 2004 by and between the HOUSING AND REDEVOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, with offices at 7071 University Ave NE, Fridley, MN 55432ER FOR ENERGY rd AND ENVIRONMENT, with its offices at 212 3 Avenue North, Suite 560, Minneapolis, Section 2. Compensation of the agreement are amended to read: 2.1 Annual Administrative Fee: $ 5,000 Origination Fee (Home Improvement, Mobile Home, Multi-Family, Emergency Deferred, Sr. Deferred and the Home Betterment Deferred Loans: $750 Origination Fee (Down-Payment Assistance Loan): $950 Remodeling Advisor Visit / Prioritization: $250 Post Installation Verification / Last Resort Visit: $150 One Time Set Up Fee (Home Betterment Deferred Loans): $1,000 st The Annual Administrative Fee shall be payable on January 1 of each year the contract is active. Section 5. Term and Termination of the agreement shall read: 5.1 Unless earlier terminated as provided in the following paragraphs, this Agreement shall become effective on January 1, 2006 and continue through December 31, 2026. Exhibit A-24 shall replace Schedule A-21 All other sections of the contract shall remain as written in the original and amended agreements. IN WITNESS WHEREOF, the parties hereunder set their hands as of the date written below: HOUSING AND REDEVOPMENT CENTER FOR ENERGY AND AUTHORITY IN AND FOR THE CITY ENVIRONMENT OF FRIDLEY By ___________________________ By __________________________ Executive Director Chief Operating Officer C:\\Users\\MeetingsOfficeUser6\\AppData\\Local\\Temp\\tmp6F83.tmpT:\\Admin\\Contracts\\ACTIVE\\CEE Financial Resources\\Amendment Template.doc 12/1/2023 53 Jufn!8/ Date __________________________ Date _________________________ # By ___________________________ TAX ID 41-1647799 Asst. Executive Director Date __________________________ C:\\Users\\MeetingsOfficeUser6\\AppData\\Local\\Temp\\tmp6F83.tmpT:\\Admin\\Contracts\\ACTIVE\\CEE Financial Resources\\Amendment Template.doc 12/1/2023 54 Jufn!8/ EXHIBIT A-24 PROGRAM GUIDELINES This document includes guidelines for the FRIDLEY LOAN PROGRAMS Exhibit A-24 # Page 1 55 Jufn!8/ FRIDLEYLOAN PROGRAM GUIDELINES The Fridley Loan Programs are designed to supplement existing loan programs available from MHFA, CEE, private lenders and other housing resources. Center for Energy and Environment shall serve as the administrator for the Fridley Loan Programs and will secure the most beneficial financing based on the . Funding for these programs are provided by the City of Fridley Housing and Redevelopment Authority (HRA). Home Improvement Loan Interest Rate: 2% Amortization Type: Amortizing (Monthly Payments Required). Loan Amount: Minimum of $1,000 and Maximum of $50,000. Total Project Cost:The borrower must have sufficient funds necessary to cover the cost of the entire project as outlined in the bid(s). Additional funds may come from the applicants personal savings, gifts, or other non-City loans. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the minimum term is 1 year; the maximum term will be 20 years. Eligible Properties: 1-4 unit owner-occupied properties located within the City of Fridley, including . individual townhomes, twin homes, and condominiums. Properties held in a trust or Contract for Deed are eligible. Ineligible Properties: Properties with more than four units, cooperatives, manufactured homes, or properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Including but not limited to: Foreign Nationals, Non-Occupant Co-Borrowers, and Properties in the name of a business. Ownership/Occupancy: Owner- occupied only. Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should not exceed 110% of the property value. Half of the improvement value may be added to the initial property value. Value can be established by the Property Tax Statement,or an Appraisal dated within the past 12 months. Exhibit A-24 # Page 2 56 Jufn!8/ Income Limit: None. Debt -to -Income Ratio:50% Credit Requirements: 1) All mortgage payments must be current and reflect no 30 day late payments history in the past 12 month period (without reasonable explanation). 2) All real estate taxes must be current. 3) No outstanding judgements or collections. 4) Bankruptcy must have been discharged for at least 18 months prior to loan closing (without reasonable explanation). 5) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60-day late payments on credit report (without reasonable explanation). 7) No defaulted government loans. Multiple Loans per Property/Borrower: More than one loan per property/borrower is allowed, however, the outstanding balance(s) for this loan CANNOT exceed $50,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. Eligible Use of Funds: Most permanent interior and exterior improvements. The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only 1 bid is required. All contractors must be properly licensed or registered and permits must be obtained when required. Sweat Equity / Homeowner Labor: Work may be performed by property owners on a basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when not required, a post installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured with a mortgage in favor of the City of Fridley. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as underwriting guidelines. . Exhibit A-24 # Page 3 57 Jufn!8/ Work Completion:All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case-by-case basis. Mobile Home Improvement Loan Interest Rate: 2% Amortization Type: Amortizing (Monthly Payments Required). Loan Amount: Minimum of $500 and Maximum of $10,000. Total Project Cost:The borrower must have sufficient funds necessary to cover the cost of the entire or other non-City loans. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the minimum term is 1 year; the maximum term will be 10 years. Eligible Properties: Residential Mobile Homes located in the City of Fridley. Ineligible Properties: Properties which are not a Residential Mobile Home. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Including but not limited to: Foreign Nationals, Non-Occupant Co-Borrowers, and Properties in the name of a business. Ownership/Occupancy: Owner- occupied only. Loan - to - Value Ratio: N/A Income Limit: None. Debt - to - Income Ratio: 50% Commented \[AN1\]: Can someone get a mortgage for a Credit Requirements: 1) All loans secured to the property must be current and reflect no 30 day late manufactured home? payments history in the past 12 month period (without reasonable explanation). 2) No outstanding Commented \[JH2R1\]: Updated language judgements or collections. 3) Bankruptcy must have been discharged for at least 18 months prior to loan closing (without reasonable explanation). 4) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 5) Generally, no more than two 60- day late payments on credit report (without reasonable explanation). 6) No defaulted government loans. Exhibit A-24 # Page 4 58 Jufn!8/ Multiple Loans per Property/Borrower: More than one loan per property/borrower is allowed, however, the outstanding balance(s) of this program CANNOT exceed $10,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. Eligible Use of Funds: Most permanent interior and exterior improvements. The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only 1 bid is required. All contractors must be properly licensed or registered and permits must be obtained when required. Sweat Equity / Homeowner Labor: basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when not required, a post installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured with a lien in favor of the City of Fridley Housing and Redevelopment Authority. Borrower Fees: Borrower will be responsible for a 1% origination fee, document preparation fee, title filing and service fees, credit report fees and any applicable closing fee. Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as Work Completion:All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case-by-casebasis. Exhibit A-24 # Page 5 59 Jufn!8/ Senior DeferredLoan Interest Rate: 0% Amortization Type: Deferred Loan Amount: Minimum loan is $5,000. Maximum loan is $20,000. Total Project Cost: the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower is responsible to provide proof of having funds to pay for the remaining portion. Loan term: 30 years. If the borrower has not sold or,transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells or transfers title of the property or the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Properties: 1-4 unit owner-occupied properties located within the City of Fridley. Individual townhomes, twin-homes and condominiums are eligible. Properties held in a Trust or Contract for Deed are eligible. Ineligible Properties: Dwellings that are more than 4 units, cooperatives, manufactured homes, and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. At least one of the property owners must be at least 62 years of age. Ineligible Borrowers: Includes, but are not limited to nonresident owners, non-occupant co-borrowers, properties held in the name of a business. Ownership / Occupancy: Owner-occupied only. Loan- to-Value Ratio: 110% Income Limit: 60% AMI based on household size and Adjusted Gross Income from the most recent Federal Tax Return. If a tax return is not required to be filed, the income will be based on projected gross income. Debt- to-Income Ratio: N/A Multiple Loans per Property/Borrower: Multiple loans on a property are allowed ; however, the outstanding balance of ALL Fridley loans CANNOT exceed $75,000. ONLY ONE DEFFERED LOAN CAN BE OUTSTANDING AT A TIME. Exhibit A-24 # Page 6 5: Jufn!8/ Eligible Improvements: Most permanent exterior or interior improvements determined by a site visit. The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Improvements: Work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bidding: Only 1 bid is required. All contractors must be properly licensed or registered. Permits must be obtained when required by City ordinance. Sweat Equity: for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Property Inspection: Required. Eligible improvements will be determined through an analysis of the property. A CEE representative will perform the analysis to prioritize eligible improvements. Post Installation Inspection:Properties are subject to a post installation inspection by a CEE representative when a permit is not required. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds. Work Completion:All work must be completed within 120 days of loan closing. Extensions may be granted by CEE. Underwriting Decision: Must be current on all mortgages and property taxes, no outstanding tax liens or in the process of Bankruptcy or Foreclosure. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Exhibit A-24 # Page 7 61 Jufn!8/ Commented \[NA3\]: Suggestion for re- implies new construction to me... Home Betterment Deferred Loan Commented \[JH4R3\]: prefer. Interest Rate: 0% Amortization Type: Deferred Loan Amount: Minimum loan is $5,000. Maximum loan is $20,000. Total Project Cost: the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower is responsible to provide proof of having funds to pay for the remaining portion. Loan term: 30 years. If the borrower has not sold or transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells or transfers title of the property, or if the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Properties: 1-4 unit owner-occupied properties located within the City of Fridley. Individual townhomes, twin-homes and condominiums are eligible. Properties held in a Trust or Contract for Deed are eligible. Ineligible Properties: Dwellings that are more than 4 units, cooperatives, manufactured homes, and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Includes, but are not limited to nonresident owners, non-occupant co-borrowers, properties held in the name of a business. Ownership / Occupancy: Owner-occupied only. Loan- to-Value Ratio: 110% Income Limit: 80% AMI based on household size and Adjusted Gross Income from the most recent Federal Tax Return. If a tax return is not required to be filed, the income will be based on projected gross income. Debt- to-Income Ratio: N/A Multiple Loans per Property/Borrower: Multiple loans on a property are allowed if the outstanding balance does not exceed $25,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. ONLY ONE DEFFERED LOAN CAN BE OUTSTANDING AT A TIME. Exhibit A-24 # Page 8 62 Jufn!8/ Eligible Improvements: Most permanent exterior or interior improvements determined by a site visit. . The HRA shall be asked to approve uses of funds when eligibility is uncertain. Ineligible Improvements: work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bidding: Only 1 bid is required. All contractors must be properly licensed or registered. Permits must be obtained when required by City ordinance. Sweat Equity: be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or compensate for labor. Rental of equipment to complete the project is eligible. Property Inspection: Required. Eligible improvements will be determined through an analysis of the property. A CEE representative will perform the analysis to prioritize eligible improvements. Post Installation Inspection:Properties are subject to a post installation inspection by a CEE representative when a permit is not required. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds. Work Completion:All work must be completed within 120 days of loan closing. Extensions may be granted by CEE. Underwriting Decision: Must be current on all mortgages and property taxes, no outstanding tax liens or in the process of Bankruptcy or Foreclosure. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document Commented \[NA5\]: Is this rolled into the deferred loan or preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. is it a payment due at closing? Commented \[JH6R5\]: Due at closing, same asthe Sr. Deferred or other loans Emergency Deferred Loan Interest Rate: 0% Amortization type: Deferred Loan Amount: Minimum loan is $500. Maximum loan is $10,000. Exhibit A-24 # Page 9 63 Jufn!8/ Total Project Cost: the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower is responsible to provide proof of having funds to pay for the remaining portion. Loan term: 30 years. If the borrower has not sold or transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells, transfers title of the property or the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Properties: 14-unit owner-occupied properties located within the geographical boundaries of the City of Fridley. Individual townhomes, twin homes, and condominiums. Properties held in a Trust or Contract for Deed are eligible. Ineligible Properties: Properties with more than four units, cooperatives, manufactured homes, or properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States. Ineligible Borrowers: Includes, but are not limited to nonresident owners, non-occupant co-borrowers, properties held in the name of a business. Ownership / Occupancy: Owner-occupied only. Loan- to-Value Ratio: 125% Income Limit: 110% AMI based on household size and Adjusted Gross Income from the most recent Federal Tax Return. If a tax return is not required to be filed, the income will be based on projected gross income. Debt- to-Income Ratio: N/A Multiple Loans per Property/Borrower: Multiple Emergency Deferred Loans are permitted based upon availability of funds. The cumulative outstanding balance of this program CANNOT exceed $10,000. The maximum outstanding balance of ALL Fridley loans is $75,000. More than 1 deferred loan can be outstanding for this program. Eligible Improvements: Those which address an emergency. An emergency is defined as an imminent condition that makes a house uninhabitable, dangerous to the occupants, or can cause severe health problems. Repairs that will remedy such emergency repairs are eligible. Examples of eligible repairs include, but are not limited to, water lines, sewer service, fire hazards, repair to exterior steps, railings, retaining walls, water seepage into basement, structural problems, or replacement of a furnace or hot water heater. Ineligible Improvements: Any improvement not addressing an emergency(as defined above). Bidding: Only 1 bid is required. All contractors must be properly licensed or registered with the MN Department of Labor. Permits must be obtained when required by City ordinance. Exhibit A-24 # Page 10 64 Jufn!8/ Sweat Equity: Not permitted. Property Inspection: Required. Eligible improvements will be determined through an analysis of the property. A CEE staff member will perform the analysis to determine the severity of the situation. Post Installation Inspection:Properties are subject to a post installation inspection by a CEE staff member when a permit is not required. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds. Work Completion:All work must be completed within 30 days of loan closing. Extensions may be granted by CEE. Underwriting Decision: This is a last resort program. The borrower must not be eligible for any other financing administered by CEE to obtain an Emergency Deferred loan. Borrower must be current on all mortgage payments and property taxes and not have a pending Bankruptcy or Foreclosure. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Down-Payment/Closing Cost Assistance Interest Rate: 0%. Loan Amount: $5,000 for households earning more than 80% but less than 110% AMI; $10,000 for households earning 80% AMI or less Amortization Type: Deferred Term: 30 years. If the borrower has not sold or transferred title and still occupies the property 30 years from the date of the loan, the loan is 100% forgiven. If the borrower sells or transfers title of the property, or the property is no longer occupied by the borrower prior to 30 years, the loan is 100% due and payable. Eligible Borrowers: All borrowers must be legal residents of the United States. The homebuyer(s) MUST attend a Home Stretch workshop or other valid homebuyers course offered through an approved counseling agency by the US Department of Housing and Urban Development and provide evidence prior to closing. Borrowers must be considered a first- time homebuyer. Ineligible Borrowers: Including but not limited to: Foreign Nationals, Non-Occupant Co-Borrowers, and Properties held in the name of a business. Exhibit A-24 # Page 11 65 Jufn!8/ Eligible Properties: 14-unit residential properties located with the geographical boundaries of the City of Fridley. Individual Townhomes, twin-homes, and condominiums are eligible. Ineligible Properties: Non-owner occupied (aka absentee-owned), unless the property is the property being purchased and will become owner-occupied, dwellings with more than 4 dwelling units, Cooperatives, Manufactured homes, properties held in a Contract-for-Deed and properties used for commercial purposes. Ownership/Occupancy: Must be owner-occupied after time of purchase. Loan-to-Value: 110%. Income Limits: 110% AMI based on household size and adjusted gross income from most recent tax return. If a tax return is not required to be filed by the borrower(s) then income will be determined by the projected income over the next 12 months. Debt-to-Income Ratio: N/A Multiple Loans per Property / Borrower: Borrowers may only obtain one purchase assistance deferred loan from this program. If ownership changes, the new owner is eligible. If a previous recipient purchases a new qualifying home, they would be eligible again at that new property if the borrower(s) would be considered as a first-time homebuyer at that time. ONLY ONE DEFERRED LOAN CAN BE OUTSTANDING AT A TIME. Eligible Improvements: These funds may only be used for down-payment or closing cost related to the purchase of the subject property. Underwriting: Amount and approval of loan will be determined based on the 1st mortgage approval. In order to determine eligibility, CEE requires the following documentation from the 1st mortgage lender: 1)!Application 2)!Certification that all homebuyers have completed a Home Stretch or other Homebuyers course offered through a counseling agency approved by the US Department of Housing and Urban Development 3) A copy of the whole/complete Purchase Agreement 4) A copy of the Appraisal or determination of value 5) A copy of the Title Commitment 6) A copy of the 1st mortgage pre-approval/commitment letter 6) A copy of the 1st Mortgage loan estimate, prelim-closing disclosure Disbursement of Funds: Funds will be disbursed to the closing agent, for the benefit of the borrower, in coordination with the purchase closing. Exhibit A-24 # Page 12 66 Jufn!8/ Borrower Fees: Borrower will be responsible for mortgage filing and service fees, flood certificate, credit report fees and any applicable closing fee which may be financed in the loan amount. Multi-Family Improvement Loan Interest Rate: 2% Amortization Type: Amortizing (Monthly Payments Required). Loan Amount: Minimum of $5,000 and Maximum of $50,000 (city may allow higher amounts on a case- by-case basis). Total Project Cost:The borrower must have sufficient funds necessary to cover the cost of the entire vings, gifts, or other non-City loans. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the minimum term is 1 year; the maximum term will be 20 years. Eligible Properties: 112-unitresidential properties located within the geographical boundaries of the City of Fridley. Properties held in a Trust or Contract for Deed are eligible. Properties must be in compliance with Ineligible Properties: Properties with more than 12 units, cooperatives, manufactured homes, or properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States OR a registered business with the MN Secretary of State. A business must have been in business for at least 2 years. Ineligible Borrowers: A person or business with no ownership of the property. Commented \[AN7\]: Ownership/Occupancy: Owner- occupied or Absentee-owned. tenants being displaced due to our financing some sort of 'improvements' to a property? Loan - to - Value Ratio: 110%. Half of the improvement value may be added to the initial property value. Value can be established by the Property Tax Statement, or an Appraisal dated within the past 12 months. In Osseo we had a disreputable company buy several buildings, refuse to renew leases, renovate properties, and then double the rents. While improving properties is good to do, I think we Income Limit: None. should try to avoid that sort of scenario... Commented \[JH8R7\]: It is something to consider, but I Debt - to - Income Ratio: 50%. Not applicable if property is owned by a business but must show track. positive cash flow from most recent tax return or Profit and Loss Statement. Exhibit A-24 # Page 13 67 Jufn!8/ Credit Requirements: 1) All mortgage payments must be current and reflect no 30 day late payments history in the past 12 month period (without reasonable explanation). 2) All real estate taxes must be current. 3) No outstanding judgements or collections. 4) Bankruptcy must have been discharged for at least 18 months prior to loan closing (without reasonable explanation). 5) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60-day late payments on credit report (without reasonable explanation). 7) No defaulted government loans. Multiple Loans per Property/Borrower: More than one loan per property/borrower is allowed, however, the outstanding balance(s) for this loan CANNOT exceed $50,000. The outstanding balance of ALL Fridley loans CANNOT exceed $75,000. Eligible Use of Funds: Improvements that correct city code violations or health and safety concerns. Permanent Exterior Improvements including, but not limited to roofing, siding, windows, painting, doors, driveways, parking lots, awnings, sidewalks/steps, garage repair, security solar systems and tuck pointing. Interior improvements including but not limited to structural work, HVAC, accessibility improvements, plumbing, electrical, insulation, lawn sprinkler systems, flooring, permanent fixtures (cabinets/counters). Questionable improvements will be brought to the city for approval. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only 1 bid is required. All contractors must be properly licensed or registered and permits must be obtained when required. Sweat Equity / Homeowner Labor: Not permitted. Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when not required, a post installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured with a mortgage in favor of the City of Fridley. Borrower Fees: Borrower will be responsible for a 1% origination fee, title report, document preparation fee, mortgage filing and service fees, credit report fees and any applicable closing fee. Underwriting Decision: Applicants must have acceptable credit history, unless in the name of a business. CEE will approve or deny loans based on a credit report, income verification and other criteria as deemed necessary th Work Completion:All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case-by-case basis. Exhibit A-24 # Page 14 68 Jufn!8/ General Program Conditions Application Processing: Loans will be distributed on a first come first serve basis as borrowers qualify. Applicants must provide a completed application package including the following in order to be considered for funding. !Completed and signed application form !Proof of income !Bids or estimates for proposed projects !Other miscellaneous documents loan officers may require. Loan Security: All loans that will be secured with a mortgage will be in favor of the City of Fridley Housing and Redevelopment Authority. Program Costs: Loan origination, post installation inspection and remodeling advisor visit fees will be paid out of the Program Budget. Loan program marketing efforts will be billed directly to the Fridley HRA and is a separate expense should the city choose to commission CEE for marketing support. Disbursement Process: Payment to the contractor (or owner in sweat equity situations) will be made upon completion of work. An inspection will be performed by a City Inspector and/or CEE to verify the completion of the work. The following items must be received prior to final disbursement of funds: !Final invoice or proposal from contractor (or materials receipt from supplier); !Final inspection verification by a City Inspector (or CEE); !Completion certificate(s) signed by borrower and contractor; !Lien waiver for entire cost of work; !Evidence of city permit (if required) Exhibit A-24 # Page 15 69 Jufn!9/ AGENDA REPORT Meeting Date:December 7,2023 Meeting Type:Housing & Redevelopment Authority Submitted By:Paul Bolin, Asst. Executive Director Title Update on Housing Programs Background On a monthly basis, staff will provide updates from CEE loan programs, remodeling advisor visits and Home Energy Squad Visits. Attachments and Other Resources Chart of Loans Issued & Remodeling Advisor Visits Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 6: Jufn!9/ 27 35 3 58 1/11 12 21111/11 21111/11 1/11 12 11 43369/11 234 768861/67 1/11 16 36111/11 1/11 11 1/11 1/11 11 1/11 1/11 11 1/11 1/11 11 1/11 1/11 1: 29:771/83 983522/39 43369/11 248 1/11128:8:/112 1/111351488/11: 1/11369467/1121 1 71 Jufn!9/ -- 23/15 55/82 / 5498/87 55/82 59/27 22/29 23/15 22/29 / 33/46 22/29 66/99 66/99 22/29 22/29 / 78/17 22/29 33/46 // 22/29 / 78/17 22/29 /44/64 44/64 44/64 9:/52 78/17 33/46 44/64 22/29 44/64 55/82 - 33/46 66/99 72