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HRA Meeting Minutes – Tuesday, October 21, 2014 Page 6 1 2 Ms. Kelsey introduced Marie Malrick from the Housing Resource Center to respond to any 3 questions of the HRA. 4 5 Member Etten asked for Ms. Malrick’s thoughts on declining numbers on loans, including 6 outside or inside trending, and what may or may not be affecting that decline. 7 8 Ms. Malrick stated that some decline may be due to changes that took place at that time (e.g. 9 income restrictions). 10 11 Ms. Kelsey clarified that, in 2008, there were still 14 loans that closed, and there were still 12 income restrictions in place. Ms. Kelsey opined that one challenge people may have is that 13 they may be planning more than $25,000 in rehabilitation to their homes, while some may be 14 overqualified based on income; however, is the City couldn’t fund all of their rehabilitation 15 costs, they would require two loans to cover. Even though interest rates are favorable now, 16 many people have found enough cash or home equity availability based on the low interest 17 rates available for home equity loans. 18 19 Ms. Kelsey noted her discussions with a homeowners association recently, and based on the 20 value of individual units – whether condominiums or townhomes – an individual unit may 21 need to borrow to make the unit more energy efficient (e.g. new windows), but the City’s loan 22 program would not allow them to qualify even if they qualified on an income basis. While 23 unsure of other reasons for the low response to the loan program, Ms. Kelsey stated that in 24 comparing the City’s loans and origination fees, they were often higher than other lenders, 25 even when using income-qualifying programs, with many of those lenders picking up part of 26 the closing costs. However, over time, Ms. Kelsey stated that the HRA had decided not to do 27 so. 28 29 Ms. Malrick concurred, noting that this would be a good comparison between MFHA loans 30 and Roseville HRA loans; since the HRC performed inspections, and the scope of the work 31 done for the Roseville HRA was more labor intensive for the construction side, even though 32 both loan programs virtually address the same components. 33 34 For the benefit of the HRA, Ms. Kelsey noted that construction management services of the 35 HRC was shown as a separate line item on their report, with the HRA subsidizing that based 36 on the scope of work and choosing contractors. 37 38 Chair Maschka questioned if the loan to value ratio had been an issue as well. 39 40 Ms. Malrick responded that just in reviewing the number of applications they’d seen to-date 41 this year, she did not consider that to be an issue overall. 42 43 Chair Maschka asked Ms. Malrick how she would consider changing the program and what 44 here thoughts were for the decline. 45 46 Ms. Malrick suggested the problem may be in a lack of marketing; noting that even though 47 they had a presence at the last Home & Garden Fair, they didn’t see any uptick of applications 48 or activity after that. 49 50 At the request of Member Elkins, Ms. Malrick advised that MN Housing had a lot of exposure 51 statewide, and more people are aware of that program; however, she noted that each loan 52 program had pros and cons; with Roseville loans actually being available for 4% versus the 53 MHFA at 5.99%. 54 55 Chair Maschka noted that $25,000 didn’t go far for remodeling in today’s climate.