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REQUEST FOR ECONOMIC DEVELOPMENTAUTHORITYACTION <br />Date:6/18/2017 <br />Item No.:6.a <br />Department ApprovalExecutive DirectorApproval <br />Item Description: Authorize Contract Services for the Roseville Housing Rehabilitation Loan <br />Program and Housing Construction AdvisoryServices <br />B <br />ACKGROUND <br />1 <br />At the Roseville Economic Development Authority (REDA) meeting onJanuary 9, 2017,information <br />2 <br />was provided regardingconcern overthe financial status of the Greater Metropolitan Housing <br />3 <br />Corporation’s (GMHC) Housing Resource Center (HRC).The REDA was made aware that the GMHC <br />4 <br />Board would make amore conclusive decision regarding long term operations of their HRC by the end <br />5 <br />of March2017, which wasthenextended to the end of Mayof 2017.As of today,the GMHC Board <br />6 <br />has not made any conclusive decisions regarding the long-term operation of the Housing Resource <br />7 <br />Center. At the April 18, 2017 REDA meeting,the Board decided to maintain the residential <br />8 <br />rehabilitation loan program and construction advisory program for homeowners in Roseville. <br />9 <br />Authorization was given for staff to negotiate aservice agreement with the Center for Energy and <br />10 <br />Environment (CEE),whichrecently merged with Neighborhood Energy Connection (NEC). <br />11 <br />From discussions with CEE, regarding loan origination and servicing of the loans,the REDA will need <br />12 <br />to maintain a contract with Community Reinvestment Fund, Inc. (CRF),the loan servicing agent. CRF <br />13 <br />has been servicing all of the Roseville loans since 1998,but the contract for servicinghas been between <br />14 <br />CRF and GHMC. This arrangement has proven to be challenging at times when it comes to <br />15 <br />supervisionof the loan performance and accounting needs related to maintaining the financial books and <br />16 <br />auditing of the loans. REDA staff has agreed that it would be best to have the contract directly with <br />17 <br />CRF to have more oversight of the fundsand loan performance. <br />18 <br />CRF fees in the past have been$10.00for initial set-up of the loan and a monthly servicing fee of $6.00. <br />19 <br />However these rates have not been raised since 1998.CRF is currently in the process of updating and <br />20 <br />renegotiating all their contracts due to recent software upgrades and other technology changes. CRF is <br />21 <br />in the process of finalizing the launch of theserecent upgrades and it is possible that the initial set-up fee <br />22 <br />and monthly servicing fee may increase.At the end of each month all loan repayment account balances <br />23 <br />will betransferred to the City minus the loan servicing fees. <br />24 <br />PO <br />OLICY BJECTIVE <br />25 <br />The housing loan and technical services program are key toolsin fighting blight and maintaining <br />26 <br />housing values across the City. <br />27 <br />Page 1of 2 <br /> <br />