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HRA Res 2018-09 Modify Comp Hous Rehab Prog HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA – RESOLUTION NO. HRA 2018 - 09 A RESOLUTION MODIFYING THE COMPREHENSIVE HOUSING REHABILITATION PROGRAM 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 previously established, by HRA Resolution Nos. 3-1993, 4-1993, 16- 1995, 8-1996, 19-1997, 2-1999, 15-2000, 5-2002, 1-2003 and 10-2015 housing rehabilitation programs (collectively referred to as the "Comprehensive Housing Rehab Program") that, among other things, provide for the making of loans funded by the Authority in the City of Fridley. Section 2. Findings. 2.1.The Authority hereby finds that the Comprehensive Housing Rehab Program promotes the purposes of the Authority as those purposes are defined in Minnesota Statutes, Section 469.001, (the "Act"). et. seq.) 2.2.The Authority hereby finds that the Comprehensive Housing Rehab Program assists in the preservation, maintenance, and provision of adequate housing stock, and further finds that accomplishing this is a public purpose in that there are many residences in the City that require rehabilitation. 2.3.The Authority hereby finds that to accomplish the goals of the Comprehensive Housing Rehab Program: (i) the Multi-Family Exterior Improvement Loan Program requires changes to make it more attractive to facilitate greater participation; and (ii) there needs to be established a Senior Deferred Loan Program to make deferred home improvement loans available to senior residents for basic home improvements allowing them to remain in their homes. Section 3. Modification of Program. 3.1.The Authority hereby amends the Comprehensive Housing Rehab Program as follows: (i)Schedule A to this Resolution titled "Multi-Family Exterior Improvement Loan Program" is hereby approved and adopted and the provisions shall supersede any conflicting provisions contained in the Comprehensive Housing Rehab Program. \[This Schedule A restates and amends Schedule D to HRA Resolution 10-2015\]. HRA Resolution No. 2018 - 09 Page 2 (ii)Schedule B to this Resolution titled "Senior Deferred Loan Program" is hereby approved and adopted. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY TH IN AND FOR THE CITY OF FRIDLEY THIS 28 DAY OF JUNE, 2018. PATRICIA E. GABEL - CHAIRPERSON ATTEST: WALTER T. WYSOPAL - EXECUTIVE DIRECTOR HRA Resolution No. 2018 – 09 Page 3 SCHEDULE A TO HRA RESOLUTION NO. 2018-09 MULTl-FAMILY EXTERIOR IMPROVEMENT LOAN PROGRAM 1. Program Intent: The intent of this program is to make low-interest home improvement loans available to Fridley multi-unit property owners to make improvements to their buildings. 2. Interest Rate: 4.5%. 3. Amortization Type: Amortizing - Closed-end: requires borrowers to make monthly payments of Principal and Interest. 4. Loan Amount: Minimum: $5,000; Maximum: $ 50,000 up to 4 units. An additional $3,000 may be borrowed for each additional unit. 5. Total Project Cost/Match: It is the borrower's responsibility to obtain the amount of funds necessary to finance the entire cost of the work. In the event the final cost exceeds the requested loan amount, the borrower must obtain the additional funds and show verification of the additional funds in order to be approved for the loan. 6. Term: Minimum: 1 Year; Maximum: 10 years • Generally, one year per $1,000 borrowed • No prepayment penalties apply 7. Eligible Borrowers: All borrowers must be a legal resident of the United States, as evidenced by a social security number, or: • A legal business registered with the Minnesota Secretary of State and must have been in business for at least two (2) years • Properties held in a contract for deed are eligible as long as both parties, the purchaser and seller, both sign the mortgage and the contract for deed holder signs a letter giving their approval of the project. 8. Ineligible Borrowers: • A resident or business with no legal interest in the property. 9. Eligible Properties: 1-12 unit residential properties located within the geographical boundaries of the City of Fridley. 10. Ineligible Properties: • Dwellings with more than 12 units • Co-ops • Mobile Homes • Manufactured homes • Time shares • Properties used for commercial purposes 11. Ownership/Occupancy: Owner occupancy not required. 12. Loan-to-Value: Maximum: 110%. HRA Resolution No. 2018 – 09 Page 4 13. Income Limits/Requirements: No Income Limits. 14. Debt-to-Income Ratio: Max 50% (sole proprietorship only). There is no Debt-to-Income Ratio if the property is in the name of a business, but the property and business must show a positive cash flow from the most recent tax return. 15. Multiple Loans per Property/Borrower: More than one loan per property is permitted based upon the availability of funds and the borrower's ability to qualify. The cumulative outstanding balance of all loans in this Program on a property cannot exceed the maximum loan amount. 16. Eligible Improvements: • Improvements that correct City code violations • Improvements to the exterior of residential structures including but not limited to: siding, painting, exterior windows & doors, tuck pointing, driveways, parking lots, sidewalks, steps, exterior garage repair or replacement and roofing. 17. Ineligible Improvements: Work initiated before the loan has been approved and closed. Interior improvements and landscaping. Recreational items including gazebos, pools, hot tubs, saunas, lawn sprinklers, play ground equipment; Furniture and non permanent appliances; Funds used for working capital, debt management, or to refinance existing loans; Personal property items, and repairs to property used for business or trade purposes. Funds cannot be used to rent or purchase equipment needed to complete the project. 18. Sweat Equity/Homeowner Labor: Sweat equity is not permitted in this program 19. Pre-Property Inspection: None required. 20. Post-Install Inspection: Prior to the release of loan proceeds, the property is subject to inspection by a Center for Energy and Environment ("CEE") inspector or, where a permit is required, work must be signed off by a City inspector. 21. Contractors/ Permits: Contractors must be properly licensed to work in the City of Fridley. Permits must be obtained when required by city ordinance. 22. Bids: 1 bid is required. Bids must detail the scope of the work to be completed, the associated cost(s) and any rebates. Contractor must be properly licensed. 23. Work Completion: All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize extensions on a case by case basis as warranted. 24. Underwriting: Applicants will be evaluated on a first-come first-served basis and will be offered loan terms that are most favorable based on the applicants unique situation. In addition to CEE's standard underwriting criteria, applicants must: • Not have any payments more than 60-days late in the past 12 months (without reasonable explanation); • No Bankruptcy in the past 18 months (without reasonable explanation) • Be current on all mortgage payments • Be current on all real estate taxes HRA Resolution No. 2018 – 09 Page 5 25. Disbursement of Funds: Funds are held by CEE in a non-interest bearing account and payment is made to the contractor (or owner in sweat equity situations) upon completion of work. An inspection will be performed by the City and/or CEE to verify satisfactory completion of the work. The following items (and any additional as determined by CEE) must be received prior to final disbursement of funds: 1. Final invoice from contractor (or materials list from supplier) 2. Final inspection verification by CEE (if necessary) 3. Completion certificate(s) signed by borrower and contractor 4. Lien waiver for entire cost of work and 5. Evidence of required city permit, where applicable 26. Fridley Administrative Fees: $550.00. 27. Borrower/Applicant Fees: 1% origination fee, mortgage filing fees, title work, credit report, flood insurance and any other applicable closing costs associated with the loan. 28. Loan Servicing: CEE or Community Reinvestment Fund. 29. Residential Advisor Visit {"RAV"): CEE will assist any residential property owner in the City of Fridley with assistance in prioritizing and evaluating improvements to their property through a home visit. This service is available regardless of whether the homeowner chooses to obtain a loan. One RAV is permitted per household. HRA Resolution No. 2018 Page 6 SCHEDULE B TO HRA RESOLUTION NO. 2018-09 SENIOR DEFERRED LOAN PROGRAM Program Intent: The intent of the Senior Deferred Loan Program is to provide an 1. incentive for Fridley seniors to make home improvements that will allow them to remain in their homes and/or update the homes for a future sale. Interest Rate: 0%. 2. Amortization Type: Deferred (NOT FORGIVEN). 3. Loan Amount: Minimum: $5,000; Maximum: $25,000. 4. Total Project Cost/Match: It is the borrower's responsibility to obtain the amount of funds 5. necessary to finance the entire cost of the work. In the event the final cost exceeds the requested loan amount, the borrower must obtain the additional funds and show verification of the additional funds in order to be approved for the loan. Term: The Deferred Loan is due in full when the borrower sells, transfers ownership or 6. no longer occupies the property as the borrower's primary residence. • No prepayment penalties apply Eligible Borrowers: All borrowers must be a legal resident of the United States, as 7. evidenced by a social security number, and one borrower must be at least 62 years of age, including: • U.S. Citizens • Permanent Resident Aliens • Non-Permanent Resident Aliens • Tax identification numbers (ITIN) are not acceptable • Properties held in a contract-for-deed are eligible as long as both parties, the purchaser and seller, both sign the mortgage and the contract for deed holder signs a letter giving their approval of the project • Properties held in the name of a trust. Ineligible Borrowers: 8. • Residents with no legal ownership in the subject property • Non-real person entities (such as Partnerships, Corporations, Trusts, etc.) Eligible Properties: 1-4 unit residential properties located with the 9. geographical boundaries of the City of Fridley. Ineligible Properties: 10. • Non-owner occupied (aka Absentee Owned) • Properties with more than 4 units • Co-ops • Mobile Homes • Manufactured homes • Time shares • Properties used for commercial purposes HRA Resolution No. 2018 – 09 Page 7 Ownership/Occupancy: Owner Occupied. 11. Loan-to-Value: Maximum: 110%. 12. Income Limits/Requirements: None. 13. Debt-to-Income Ratio: Not Applicable. 14. Multiple Loans per Property/Borrower: More than one Senior Deferred Loan is permitted 15. based upon the availability of funds and the borrower's ability to qualify. The cumulative outstanding balance of all Senior Deferred Loans on the property cannot exceed the maximum loan amount allowed per program guidelines. Eligible Improvements: Most interior and exterior improvements. 16. Ineligible Improvements: Work initiated before the loan has been approved and closed. 17. Recreational items including gazebos, pools, hot tubs, saunas, lawn sprinklers, play ground equipment; Furniture and non-permanent appliances; Funds used for working capital, debt management, or to refinance existing loans; Personal property items, and repairs to property used for business or trade purposes. Funds cannot be used to rent or purchase equipment needed to complete the project. Sweat Equity/Homeowner Labor: Sweat equity is not permitted in this program. 18. Pre-Property Inspection: A property inspection will be performed prior to the loan closing 19. to determine project eligibility and prioritization. Post-Install Inspection: Prior to the release of loan proceeds, the property is subject to 20. inspection by a CEE inspector or, where a permit is required, work must be signed off by a City inspector. Contractors/Permits: Contractors must be properly licensed to work in the City of 21. Fridley. Permits must be obtained when required by city ordinance. Bids: 1 bid is required. Bids must detail the scope of the work to be completed, the 22. associated cost(s) and any rebates. Work Completion: All work must be completed within 120 days of the loan closing. 23. However, when warranted, CEE may authorize extensions on a case by case basis as warranted. Underwriting: Applicants must: 24. • Be current on all mortgage payments • Be current on all real estate taxes and assessments • Not have any unpaid judgments or liens • Not have a pending Bankruptcy or foreclosure HRA Resolution No. 2018 – 09 Page 8 Disbursement of Funds: Funds are held by CEE in a non-interest bearing account and 25. payment is made to the contractor (or owner in sweat equity situations) upon completion of work. An inspection will be performed by the City and/or CEE to verify satisfactory completion of the work. The following items (and any additional as determined by CEE) must be received prior to final disbursement of funds: 1. Final invoice from contractor (or materials list from supplier) 2. Final inspection verification by CEE (if necessary) 3. Completion certificate(s) signed by borrower and contractor 4. Lien waiver for entire cost of work and 5. Evidence of required city permit, where applicable Fridley Administrative Fees: $550.00. 26. Borrower/Applicant Fees: 1% origination fee, all applicable mortgage filing fees, title 27. work, credit report, flood insurance and any other applicable closing costs associated with the loan. Loan Servicing: CEE or Community Reinvestment Fund. 28. Residential Advisor Visit ("RAV'): CEE will assist any residential property owner in the 29. City of Fridley with assistance in prioritizing and evaluating improvements to their property through a home visit. This service is available regardless of whether the homeowner chooses to obtain a loan. One RAV is permitted per household.