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HRA RES 1995-16 25 HRA RESOLUTION NO. 16 - 1995 RESOLUTION ESTABLISHING A COMPREHENSIVE HOUSING REHABILITATION PROGRAM FOR THE CITY OF FRIDLEY'S HYDE PARK NEIGHBORHOOD; ESTABLISHING THE AREA OF OPERATION; PROVIDING FOR THE DELEGATION OF CERTAIN POWERS AND DUTIES; AUTHORIZING THE EXECUTION OF A CONSULTING AGREEMENT BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY AND THE CENTER FOR ENERGY AND THE ENVIRONMENT BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority has established a Comprehensive Housing Rehabilitation Program for the City of Fridley's Hyde Park Neighborhood (the "Program") for the residents of the City of Fridley's Hyde Park neighborhood. 1.02. It has been proposed that the Authority enter into the necessary agreements to implement the Program by executing a Consulting Agreement (the "Agreement") with the Center for Energy and Environment (the "CEE") . Section 2. Findings. 2.01. The Authority hereby finds that its area of operation in which to implement the Program is the area within the territorial boundaries of the City as provided for in Minnesota Statutes, Section 469.002, Subd. 8 but that the Program will be limited to the residents of the Hyde Park neighborhood. 2.02. The Authority hereby finds that the adoption of the Program promotes the purposes of the Authority as those purposes are defined in Minnesota Statutes, Section 469.001, et seq. (the "Act") . 2.03. The Authority hereby finds that the Program will assist in the alleviation of shortages of decent, safe, and sanitary residential housing available within the City at prices affordable to persons and families of low or moderate income as described therein. 2.04. The Authority hereby finds that preservation of the quality of life in the City is dependent upon the maintenance, provision, and preservation of an adequate housing stock; that accomplishing this is a public purpose in that there are many residences in the City which require rehabilitation; that a need exists to provide in a timely fashion affordable housing to persons of low and moderate income as described in the Act and herein residing and expected to reside in the City; that many owners, would-be purchasers, or providers of residences are unable to obtain mortgage credit for rehabilitation of residences under current market conditions; and that in establishing its Program the Authority is acting in all • 26 Page 2 -- HRA Resolution No. 16 - 1995 respects to benefit the citizens of the City and to serve a public purpose in improving and otherwise promoting their health, welfare, and prosperity. Section 3. Authorization of Program. 3.01. The Authority hereby approves and adopts the Program as described in the Description and Guidelines on Schedule A attached to this Resolution. Section 4. Delegation of Power and Duties. 4.01. In accordance with the Act, specifically Minnesota Statutes, Section 429.012, Subd. 1(3) , and in accordance with the Description and Guidelines, the officers, agents, and employees of the Authority are hereby authorized to take such actions as may be necessary to implement the Agreement and operate the Program. 4.02. The Executive Director or Housing Coordinator are hereby authorized to execute all documents relating to the approval and closing of any loans provided for in the Program. 4.03. The Executive Director or the Chairman are hereby authorized to approve payments for Program loans and any costs or fees incurred as a result of implementing the Agreement. Section 5. Authorization for Execution of the Origination Agreement. 5.01. The Authority hereby approves the Agreement substantially in the form presented to the Authority and authorizes its Chairman and Executive Director to execute the Agreement on behalf of the Authority with such additions and modifications as those officers may deem desirable or necessary as evidenced by the execution thereof. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY THIS 10TH DAY OF AUGUST, 1995. • LAWRENCE R. COMMERS - CHAIRMAN ATTEST: W LLIAM W. BURNS - EXECUTIVE DIRECTOR 27 Page 3 -- HRA Resolution No. 16 - 1995 SCHEDULE A DESCRIPTION AND GUIDELINES COMPREHENSIVE HOUSING REHABILITATION PROGRAM FOR THE CITY OF FRIDLEY'S HYDE PARK NEIGHBORHOOD I. Matching Deferred Loan Program (Single Family) A. Loan Description Deferred payment loan up to $4,000. Loan will be issued at 1% (simple interest) and must be repaid upon sale of the home. Loan may be prepaid, in whole or in part (plus accrued interest) by borrower prior to selling their home. B. Funding Source Deferred Loan will be funded by the Authority. C. Program Administrator Center for Energy and Environment. D. Qualifications Income Limits: $55,000 Underwriting: Borrowers shall grant permission to the Fridley HRA and its duly authorized Program Administrator to conduct credit checks. Owners must be current on their real estate taxes and mortgage payments for the property to be improved. In addition, the borrower may not have any unpaid judgements or liens. Equity: The Deferred Loan will be secured by the borrower's residence by a separate mortgage. The Deferred Loan when combined with other indebtedness against the property may not exceed 115% of the value of the property. Property Type: Owner-occupied, 1 to 4 unit residential properties located in the Hyde Park neighborhood. E. Program Specifics The Deferred Loan must be matched on a dollar-for-dollar basis by the borrower. In any case, the Deferred Loan shall not exceed $4,000. The borrower may not receive more than $4,000 (aggregate) in assistance while residing in the property to be improved. 28 Page 4 -- HRA Resolution No. 16 - 1995 F. General Requirements This program is available to any homeowner in the Hyde Park neighborhood with an income up to $55,000 per year. For purpose of this program, income shall be defined as the average adjusted gross income for the two most recent years as shown on the borrower's federal income tax return. Borrower's must provide copies of their income tax returns with their applications. G. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Home Improvement Loan Program Procedural Guide. II. Matching Deferred Loan Program (Multiple Family) A. Loan Description Deferred payment loan up to $4,000 a unit; maximum $44,000 per building. Loan will be issued at 1% (simple interest) and must be repaid upon sale of the property. Loan may be prepaid, in whole or in part (with accrued interest) by borrower prior to selling their property. B. Funding Source Deferred loan will be funded by the Authority. C. Program Administrator Center for Energy and Environment. D. Qualifications Income Limits: None. Underwriting: Borrowers shall grant permission to the Fridley HRA and its duly authorized Program Administrator to conduct credit checks. Owners must be current on their real estate taxes and mortgage payments for the property to be improved. In addition, the borrower may not have any unpaid judgements or liens. Equity: The Deferred Loan will be secured by the borrower's property by a separate mortgage. The Deferred Loan when combined with other indebtedness against the property may not exceed 120% of the value of the property. Property Type: Residential rental property units, none of which are occupied by the owner. 29 Page 5 -- HRA Resolution No. 16 - 1995 E. Program Specifics The HRA Deferred Loan must be matched on a dollar-for-dollar basis by the borrower. In any case, the HRA Deferred Loan shall not exceed $4,000 per unit or $44,000 per structure. The borrower is limited to an aggregate loan amount of $4,000 per unit while in ownership of the property, or as otherwise restricted by the Authority. F. General Requirements This program is available to any rental property owner in the Hyde Park neighborhood. Owners will be required to provide a cashflow statement on the property and a personal financial statement. G. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Rental Rehabilitation Loan Program Procedural Guide. III. Last Resort Housing Program (Single-Family Only) A. Loan Description Deferred payment loan up to $10,000. Loan will be issued at 2% (simple interest) and must be repaid upon sale of the home. Loan may be prepaid, in whole or in part (with accrued interest) by borrower prior to selling their home. B. Funding Source Deferred Loan will be funded by the Authority. C. Program Administrator Center for Energy and Environment. D. Qualifications Income Limits: $55,000 Underwriting: This is a last resort program. Applicants shall be selected for this program only if they are unable to qualify for financing from any one or combination of programs offered under the Hyde Park Comprehensive Housing Program. The Authority and Program Administrator shall work in cooperation to identify all resources possible before an applicant can be considered �� for this program. 30 Page 6 -- HRA Resolution No. 16 - 1995 Equity: HRA loan will be secured by the borrower's residence by a separate mortgage. Property Type: Owner-occupied, 1 to 4 unit residential properties located in the Hyde Park neighborhood. E. Program Specifics The HRA Last Resort Loan is designed specifically for homeowners in the Hyde Park who can't qualify for a loan or a grant. Acceptable criteria include, but are not limited to: a) Borrowers who have existing debt-to-income ratios which exceed normal bank underwriting standards and therefore limit their ability to obtain credit. b) Borrowers who have little or no equity in their property to offer as security. c) Borrowers who have had credit problems, such as slow payment. Exceptions, to these guidelines would include pending bankruptcies or pending foreclosures, unpaid judgements or liens, non-payment of real estate taxes or assessments. Under these exceptions, the Last Resort Program would not provide assistance until these issues are satisfied. d) Other criteria as defined by the Authority from time to time. F. General Requirements This program is available to any homeowner in the Hyde Park neighborhood with incomes up to $55,000 per year who meet the criteria in Section III (E) . For purpose of this program, income shall be defined as the average adjusted gross income for the two most recent years as shown on the borrower's federal income tax return. Borrower's must provide copies of their income tax returns with their applications. G. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Home Improvement Loan Program Procedural Guide. All properties shall be inspected prior to the approval of any financing. The HRA will only disburse funds to the contractor/s directly after an inspection has been conducted and the homeowner signs a completion certificate.