HRA RES 2003-01 - 00013860RE50LUTION HItA 1 - 2003
� A RESOLUTION MODIFYING THE COMPREHENSIVE HOUSING REHABILITATION
PROGRAM
BE IT RESOLVED by the Board of Comm�ssioners (the "Commissioners") of the Housing and
Redevelopment Authonty m and for the Crty of Fridley, Mmnesota (the °'Authority") as follows
Section 1. Recitals
1 O1 The Authonty has previously established, by HRA Resolution Nos 3-1993, 4-1993, 16-1995, S-
1996, 2-1999, 15-2000, and 2-2002 housmg rehabilitahon programs (collectively referred to as the
"Comprehensive Housing Rehab Program") that, among other things, provide for the making of loans
funded by the Authonty m the Crty of Fndley
1 02 The Authority also adopted IIRA Resoluhon No 19-1997, which estabhshed a pohcy ("Loan
Subordmation Pohcy") for the subordmation of loans made through the Comprehensive Housmg Rehab
Program
1 03 It has been proposed that the Authority modify the Loan Subordmarion Policy, due to changmg
circumstances affechng residents ("Program Bonowers") who have rece�ved loans through the
Comprehensive Housmg Rehab Program
' Section 2. Findings.
2 Ol The Authonty hereby fmds that the Comprehensive Housmg Rehab Program promotes the
purposes of the Authorrty as those purposes are defined in Mmnesota Statutes, Sectron 469 001, et seq
(the "Act")
2 02 The Authonty herehy finds that the Comprehensive Housmg Rehab Program assists m the
preservahon, mamtenance, and provision of adequate housmg stock, and further finds that accomplsshmg
this is a public purpose m that there are many residences m the Crty that requue rehabrhtation
2 03 The Authonty hereby finds that the existmg Loan Subordmation Pohcy places impractical
constrauits on Program Borrowers who choose to refinance their first mortgage
2 04 The Autharity hereby fmds that modificatron of the ex�shng Loan Subordmarion Policy is
appropriate m order to mamtam a viable and attractive Comprehensive Housing Rehab Program
Section 3. Modificahon of Program.
3 Ol The Autharity hereby amends the Comprehensive Housmg Rehab Program as follows
Schedule A to HRA Resoluhon No 19-1997, is hereby rescinded and replaced with the following
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HRA Res No 1-2003
5CHEDULE A
5UBORDINATIONPOLICY
7ntraductton
Page 2
Tlae followzng polacy cove�•s all loans made ancl fu�tded by tFae Authority zsnder o�ae of the followaiag
programs
f Revolvang Loan Fund, as knowra as the S�ngle FamaCy Revolving Loan Prograna
2 Stngle Faniily Last Resort Loan Progran:
3 Multaple Fam:ly Last Resort Loan Program
4 Hyde Park Matclzing Deferred Loan Progranzs (Stngle Fa»iily and Multzple Famaly)
5 Hyde Park Matchang Last Resort Loan Progra»ts (Sangle Fanaaly a�7d Multlple Family)
Loa�a Subordtnataon Reauarements
The Authorzty wall subordanate ats secured debt under the followang conditzons
1 The borrower is current on the:r loan payments to the Authoraty
2 The borrower as cun•ent on all property taz payments arad spectal assess�nents for the
property
3 The borrower has faot fled for bartkruptcy subseguent to receapt of tlie Authoraty's loan
4. The borrower has not receaved not:ce of a foreclosure on the property
5, The borroweY Ls ata materaaZ compltance wath tTze teYms anci condltaons of the Authoratv °s
loata note and mortgage
6 The Authoraty wtll only subordanate tts clebt to a ftrst mortgage The Aa�thoraty wcll not
subordtnate ats mortgage to any other laen, ancludzng a home equaty locan, debt
consoladation loan, or izne of credtt
7 The borrower s7iall provade an aff davat, tn a form furnished by the Authoraty, statang that
the borrower wzlZ perform one of tiae following actavaizes
a Rate/Term Refnance — Bon�ower wtll ref:raance an exastnzg 1'� mortgage for c� lower
anterest rate or dafferent loan te�m Closang costs anctdental to the transactaon may
be :ncluded in the new mortgage In no case shall the combrned loan-to-vaZzae ratao
of the new first mortgage, the Authoraty's debt, and any other laens exceed 100% of
the appraased market value of the property, as deftned tn Sectcon 8
b. Cash-Out Refinance — Borrower wzll reftnance an excsting Is` naortgage and take cc�s7�
(equaty) out of the property The following restricito�:s apply under this prov[sion:
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HRA Res No 1-2003
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(i) If the borrower is using equity for more tmaprovements to the borrower's
principal residence, the borrower shall include a copy of a bid from a
licensed contractor and/or a list of materials from a buildeng supplaer. Any
improvenaents firaartced or paid for prior to tlie date of subordinatlon
request are not eligible. In no case shall the combined loa�a-to-value ratao
af the new first mortgage, the Authority's debt, and any oiker liens exceed
100% of the appraised market value of the property, as rFefined fn Section 8;
(zi) Zf the borrower is using equity far purposes other than as described in
7(b)(i), in no case shall the combined loan-to-value ratao of the new first
mortgage, the AutFaorUy's debt, and any other lee�es exceed 90% of tke
appraised market value of the praperiy, as deftned in Sectia�s 8;
(iii) If the borrower is using eguity for a combination of horae inaprovemenis
and other purpases, in no case shall the combined loan-to-value ratio of the
new first mortgage, the Authority's debt, and any other liens eacceer190% o�y"
the appraised markei value of the property, as defined in Sectmn 8.
8 01 To determane appraased market value, the borrower shall furnash an appraasal of tTze
pnncapal reszderace, dated wathan 90 days of the subor-clanataon request arad prepared by a
Minnesota kcensed real estate appraiser If the bonrower elects to take cash out of the
property as defzfaed an Sectton 7(b)(i), the appraasal shall anclude an esiam¢te of the "after
amproved" value of the property
9 01 The borrower shall furnash other anformatao�i requestecl by the Autkoraty or ats clxaly
auihorazecl agent, uicludzng but not lamated to HUD-1 Settlement State�saent, the appropYiate
tatle work and terms, proof ofpayment of property taxes/assessments, and Inforniatzon on llae
conditaons of the new loan
l0 01 Z7ae borrower shall sign an af�davat, furnashed by the Authority, attestartg to the
apphcable ie�ms and condaiaons referenced an thas Subordanatao�a Polacy Mast•epresentatcoh
of the facts co�ztaaned zn the affidavai shall be g�•ouncls foY accelerated payment of the
Authoraty's debt, at the Authora2y's electzon
PASSED AND ADOPTED BY THE HOU5ING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF FRIDLEY THIS 9� DAY OF JANUARY. 2003
ATTEST
W LI LIAM W B� S-� TU IVE DII2ECTOR
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LAWRENCE R COMMERS - CHAIl2PERSON