2007-05-15_Agenda - Laserfiche WebLink

Home

one home transaction. This was to allow purchases of property to occur in a timely manner rather than delay 1 month for HRA approval. 2.0 Program Status: 2.1 Under the RHRA specific SHRP program, 4 homes have been purchased. Three of those homes are renovated and on the market. One of the homes (960 Lovell) has been on the market for more than 257 days which has increased the carrying costs as well as the amount of the gap funding. The total estimated 2 nd mortgage funds are $118,000 with a total permanent loss of $63,950. This is a total estimated investment of $181,950 and leaves only $18,050 for a gap on the remaining home that is still in the process of being renovated. (See attached spreadsheet). 3.0 Suggested HRA Discussion and Action 3.1 Market Value Impact – The current housing market has reduced the anticipated resale price (based upon an appraisal after the home is renovated) of the homes by an estimate 5%. This market reduction increases the amount of gap funding needed to sell the home under the existing criteria. 3.2 Buyer’s Market – Due to slowing of the real estate market, potential buyers (even moderate income first time buyers) have a larger pool of homes to choose from and are requesting that additional fees be paid by the seller. This impacts the SHRP homes as they tend to stay on the market longer which also increase the gap. 3.3 960 Lovell – The home at 960 Lovell is a challenge to sell due to its location, size and current asking price. If the HRA is interested, the home may be a good candidate for a land trust home. Rondo Community Land Trust has received funding from the County and Metropolitan Council to purchase homes within the suburbs. In discussion with Rondo, this home would meet their criteria for price and size and they also have a potential buyer. 3.4 Marketing – The program in the past has essentially marketed itself. However, due to the housing market the RHRA will need to increase their marketing for the program. Suggestions include: o Email to local area realtors o Email to local area bankers & mortgage companies o Provide information within the City Newsletter o Include flyers of homes for sale throughout city facilities o Provide information to school district offices for teachers and request flyers in students take home folders. 3.5 Evaluate Continuing Funding to the Program – The RHRA should discuss limiting any additional purchases under the program until all the homes are resold. After all of the homes are sold, the RHRA should reevaluate additional funding and how the program achieves the RHRA’s goals. Attachments: SHRP property summary Prepared by: Cathy Bennett (651-792-7015) Roseville SHRP Program (05-15-07) - Page 2 of 2