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• <br />u <br />� <br />DATE: <br />TO: <br />FROM: <br />SUBJECT: <br />M E M O R A N D II M <br />May 14, 1992 <br />Steve Sarkozy <br />Craig A. Waldron <br />Firstar Loan Program <br />1• If you will recall, Firstar has asked us to modify the <br />interest rate on our loan program because the existing <br />interest rate actually made the MHFA program uncompetitive. <br />2. The City Council subsequently asked us to review other <br />options. We have reviewed the options with Mr. Ostlund from <br />Firstar, as well as representatives from the Minnesota <br />Housing Finance Agency. We reviewed the potential of <br />increasing the interest rate as well as simply buying down <br />the MHFA loans to a lower interest rate. (We would lose our <br />.investment with a buy down). <br />3. The option that we would recommend to the City Council is as <br />follaws: <br />A. That MHFA funds continue to be used for income levels <br />which are: <br />- up to $8500 - 3� <br />- $$,501 to $15,000 - 5� <br />- $15,001 to $21,000 - 7� <br />B. The City Firstar loan would then be used for income <br />levels from 21 OOl to 49 000 at the 7.5� blended <br />interest rate. (The normal interest rate from $21,000 <br />to �27,000 and $27,OO1 and above through NIIiFA is 9� and <br />9-3/4� respectively). Through utilizing this approach <br />we will be praviding more assistance to individuals in <br />the mid range area of the N�iFA program while still <br />addressing our concerns for the individuals in the <br />bracket between $27,000 and $49,000. <br />0 <br />t <br />