2007-04-17_Minutes - Laserfiche WebLink

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7.Public Hearing None. 8.Action Items: a.Right of First Refusal for Property at 1487 Applewood Court Ms. Bennett provided a brief summary of the development at Applewood Court in which the Roseville Housing and Redevelopment Authority (RHRA) purchased five lots and contracted with the Greater Metropolitan Housing Corporation to build single-family homes for first-time homebuyers that met various employment and income criteria. Second mortgages were provided to the homeowners by the RHRA to help make those homes affordable. Ms. Bennett explained that the RHRA has the right of first refusal on the five single-family properties at Applewood Court which gives the RHRA the option to purchase the home back from the homeowner and thus continue the long-term affordability of these homes. The homeowner at 1487 Applewood Court has indicated his intention to sell his home and has asked if the RHRA would like to exercise its right of first refusal. The homeowner is asking $348,500.00 purchase price for his property based on an appraisal of his home and market analysis study. Ms. Bennett indicated that the RHRA has no funding to act on the right of first refusal at this time; however, the RHRA will receive repayment on the second mortgage in the amount of $47,000.00 when the property is sold. Ms. Bennett recommended declining the purchase of the property at 1487 Applewood Court and using the second mortgage repayment to start building a fund for future affordable housing endeavors. Ms. Bennett noted that there was no cash outlay on the part of the RHRA in the construction of the homes themselves. The second mortgage on this home ($47,000.00) bridged the gap between the appraised value of the home and the affordable purchase price. Member Kelsey inquired as to the interest rate on the second mortgage (0%) and asked if there was any shared appreciation on these homes (no). Member Pust asked for clarification of the criteria homebuyers had to meet to purchase the homes at Applewood Court. Member Pust commented that this project seemed to benefit only five families rather than create ongoing affordable housing in the City. Ms. Bennett replied that the initial goal was to meet a housing need for first-time homebuyers that met income criteria; specifically targeting certain public service employees, renters and families with children. Bennett noted that all of the homebuyers met one or more of the criteria set by the RHRA. Ms. Bennett added that the original intention was to use the second mortgage repayments as a way to fund future second mortgage or down payment assistance either for the project or other affordable housing projects. Member Kelsey stated that this project was, in her opinion, a way to have continued affordability and wondered why shared appreciation wasn’t considered. Ms. Bennett replied that the RHRA didn’t approve shared appreciation because it wasn’t anticipated that the homes would appreciate in value so quickly. In addition, the RHRA didn’t want to deny homeowners appreciation on the homes, in light of the relatively large second mortgages that the homeowners would be required to pay back. 2