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<br />REQUEST FOR HRA ACTION <br />DATE: 09/21/04 <br />ITEM NO: 8.c. <br />Staff Approval: Agenda Section: <br />CBAction <br />Consideration of Application for use of CDBG Funds (HF 0023) <br />Item Description: <br />1.0Background <br />1.1The HRA has approximately $370,000 available from past projects that were funded by <br />Federal Community Development Block Grant dollars. These dollars are considered <br />restricted funds and must be used for housing projects where there will be a direct benefit <br />to those with incomes at or below 80% of median incomes as defined by the US Housing <br />& Urban Development (HUD). <br />1.2Currently no specific program has been developed for use of these funds but discussions <br />have focused around the use of the funds for rental rehabilitation. Staff was directed to <br />prepare application guidelines and procedures for the HRA’s consideration and use of the <br />CDBG funds. <br />2.0Proposed Program Uses: <br />Staff is proposing two specific programs for use of the CDBG funds based upon the needs in the <br />City, the HRA Housing Plan, research of other communities programs, and restricted guidelines <br />for use of such funds. <br />Rental Rehabilitation Program <br />a. – The goal of the rental rehab program is to assist <br />landlords who rent to low to moderate income tenants to make necessary improvements to <br />their properties without increasing the rents which tend to displace residents. The program <br />would provide up to 50% of the cost of needed repairs in the form of a grant not to exceed <br />$10,000. For request over $10,000, the first $10,000 would be a grant and amounts over <br />$10,000 would be structured as a loan. The structure of the program would be to require <br />that over 50% of the tenants meet the income criteria and that the rents can not exceed the <br />annual Fair Market Rent Limits. For the grant funds a match is required (but does not <br />require the filing of a lien on the mortgage as a loan would). The grant is paid after the <br />improvements have been completed and signed lien waivers have been collected (much like <br />a rebate). The property owner would be required to sign an annual (for 5 years) affidavit <br />certifying that at least 50% of the rents are below the Fair Market Rent limit. If within the <br />first five years the rents increase above that limit, the grant will be required to be paid back. <br />(Staff is still researching with the HRC, County and HRA attorney what appropriate <br />CDBG Funds Proposal - Page 1 of 3 <br /> <br />