2010-06-15_packet - Laserfiche WebLink

Home

HRA Meeting Minutes – Tuesday, May 18, 2010 Page 2 metropolitan area. Mr. Huckleby advised that this pilot program, as part of the National Stabilization Trust, was in response to the foreclosure situation and the need for local government to control properties and return them as assets to the community as soon as possible by working with major lenders for a first opportunity to pursue properties at a discount before being offered to the general public, with on of the criteria being that all properties sold only to owner-occupants. Mr. Huckleby reviewed the work and coordination to-date with Executive Director Trudgeon and his staff to extend this program to Roseville as a development partner, with a program structured specific to the City of Roseville. Mr. Huckleby advised that this would involve City HRA staff meeting with developers before they were authorized to work in Roseville, review of their track record, and the location of homes, with a marketing plan to ensure developers met the City’s standards. Mr. Huckleby advised that he was cognizant of budget constraints of the City, and lack of resources to assist in financing for property purchase, with the First Look Program providing 95% of the after-market rehabilitation costs to developers, with no cost to the City of Roseville. Ms. Griffin reviewed more specifics of the program in working with thirty-six (36) for-profit and non-profit developers as part of their purchasing community; twenty (20) communities active in the program over the seven (7) county metropolitan area; the transparency of the process; on-line process for develops through the transaction desk of the National Stabilization Trust, with their response within a certain time frame; physical inspections of the property by developers prior to them making an offer and seeking financing, with approximately 30-40 days between the property going on line and closing with the developer. Ms. Griffin noted that the Land Bank had adopted community standards, including requirements for owner- occupancy, with each occupant required to place a five (5) year covenant to remain in the home, or to sell to another owner-occupant, which would run with the land; and demonstration by developers to meet federal hiring goals and how their involvement in the community will assist those communities (i.e., communities of color; MN Green Community Standards; adoption of HUD quality housing standards; and meeting local building code requirements). Ms. Griffin further advised that the developer was required to provide certification to meet FHA financing requirements; lead and asbestos remediation; along with reporting during the process for first time homebuyer qualifications; education for new homeowners; demographics tracked of resale and progress of properties, in addition to monthly spot inspections through a random sampling. Ms. Griffin advised that a municipality could lay additional restrictions on top of theirs, noting that Roseville had already adopted the majority of their program’s standards, with the exception of hiring restrictions. Mr. Huckleby advised that the program provided the financing, with income restrictions for resale to homeowners whose maximum earning is at 115% of the area median income to ensure that the affordable housing option is met; noting that they were in the process of expanding to greater Ramsey, Washington, Scott, Anoka, and Dakota Counties to cover the entire metropolitan area; with additional $10 million available for loan funds due to equity investor interest. Discussion among Commissioners, staff and presenters included the intent of the program as a revolving loan fund; specification of the area median income of 115% equaling $96,500 for a family of four (4); the Request for Qualifications (RFQ) process required for developers to provide some type of affirmative marketing program, with each property coming into the trust at below market value with discounted pricing allowing developers to provide substantial rehabilitation of the homes; clarification that this program is a market-rate loan program, with no subsidy provided, and developers following a very sophisticated process through their team for various expertise to review each property and determine resale potential and proof to the program that they can meet the criteria standards to price the property at the income level they hope to reach between $165 – 190,000 average for profit after rehab.