7.1 HRSR 07-07-2014 J,/
Ells
__ Request for Action
River
To Item Number
Housing and Redevelopment Authority 7.1
Agenda Section Meeting Date Prepared by
General Business July 7, 2014 Brian Beeman, Director of Economic
Development
Item Description Reviewed by
Approve Housing and Redevelopment Authority Jeremy- Barnhart, Deputy Director, CODD
(HR A) Housing Owner-Occupied Rehabilitation Reviewed by
Program Amendment and related Redevelopment
Plan
Action Requested
Approve by motion, making recommendation to the City Council to approve the Redevelopment Plan
and amendments to the existing Housing Rehabilitation program:
1) Resolution Approving Housing Rehabilitation Loan Program
2) The Elk River HRA Rehabilitation I,oan Redevelopment Plan
3) The Elk River HRA Owner-Occupied Housing Rehabilitation Program Policies and Procedures.
4) The HRA Rehab Owner-Occupied Housing Rehabilitation Program Administrative _Igreement with
CMHP to administer the new housing program.
5) The Elk River HRA Rehabilitation Loan Application
6) Elk River HRA Rehabilitation Loan Program Contractor Owner Agreement.
7) Elk River HRA Rehabilitation Program Mortgage and Repayment Agreement Owner-Occupied
Housing Rehabilitation Program.
Background/Discussion
At the May 5, 2014 regular meeting, the HRA recommended approval of a Housing Rehabilitation Loan
Program that includes Low to Moderate Income requirements. The HRA further directed staff to
proceed with development of a program without the Low to moderate Income (EMI) restrictions so as
not to limit the program based on income levels. The proposed actions amend the existing program to
provide a housing rehabilitation program for homes within a specific geographic area (greater downtown
area).
The Planning Commission on May 271h confirmed the redevelopment area is consistent with the
comprehensive plan, which is a requirement to establish a Redevelopment Area. With HRA's
recommendation, the City Council will hold a Public Hearing.
Jenny Moulton, the HRA's attorney from Kennedy & Graven will be present to explain any changes to
the policy and required documents.
Central Minnesota Housing Partnership (CMI IP) will administer the program over the next 3 years.
Financial Impact
The HRA transferred S 100,000 to fund the new housing program.
rwe
Attachments
• Resolution Approving Housing Rehabilitation Loan Program
• HRA Rehabilitation Loan Redevelopment Plan (New Document)
• HRA Rehab Loan Policies and Procedures, (Redline Copy)
• HRA Rehab loan Administration Agreement (Existing Agreement holds to form)
• HRA Rehab Loan Application, (Redline Copy)
• HRA Rehab Contract Owner Contract (Existing Agreement holds to form)
• HRA Rehab Mortgage & Repayment Agreement (Existing Agreement holds to form)
• Staff Report from May 5, 2014
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Resolution No. 14-03
A Resolution of the Housing and Redevelopment Authority in and for the City of
Elk River Approving a Redevelopment plan for an Owner-occupied Housing
Rehabilitation Program
WHEREAS, the HRA has proposed to undertake a program (the "Program") to assist in the
rehabilitation of owner-occupied single-family homes by making loans to qualifying homeowners in
a targeted area in the City of Elk River (the "City") pursuant to a Redevelopment Plan (the
"Redevelopment Plan") for the Program, adopted in accordance with Minnesota Statutes,
Sections 469.001 to 469.047 (the "HRA Act");
WHEREAS, the HRA has caused to be prepared and has previously approved the Owner-
Occupied Housing Rehabilitation Program Policies and Procedures (as modified, the "Procedures")
setting forth, among other things, the terms and conditions under which the HRA will make loans
to qualifying homeowners, a copy of which is on file with the HRA Executive Director, along with
related Program documents, including but not limited to an Administrative Agreement with Central
Minnesota Housing Partnership, Inc. to administer the Program (collectively, as modified, the
"Program Documents");
WHEREAS, the City Planning Commission has provided a written comment to this Board finding
that the Redevelopment Plan is consistent with the City's comprehensive plan; and
WHEREAS, the I-IRA has requested that the City hold a public hearing regarding the
Redevelopment Plan duly noticed in accordance with the lIRA Act.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of
the I lousing and Redevelopment Authority in and for the City of Elk River, Minnesota (the "I IRA")
as follows:
Section 1. Findings; Plan Adopted; Further Proceedings.
1.01. The Board finds that there exists a need in the City to provide financial assistance for the
rehabilitation of residential properties in the Project Area (as defined in the Redevelopment Plan);
that the Program will provide for the rehabilitation of owner-occupied housing property located in
the Project Area; and that the activities to undertake the Program, all in accordance with the
Procedures and the Redevelopment Plan, constitute a "redevelopment project" pursuant to
Minnesota Statutes, Section 469.()02, subd. 14(5).
1.02. The Board further finds that: (a) the land within the Project Area would not be available for
redevelopment without the financial aid to be sought under the Redevelopment Plan; (b) the
Redevelopment Plan will afford maximum opportunity, consistent with the needs of die City as a
44(1(}5v1 JSII I:1.185-26
whole, for the dev elopment of the Project Area by private enterprise; and (c) that the
Redevelopment Plan conforms to the general plan for the development of the City as a whole.
1.03. The Board further finds, declares and determines that the Board made the above findings
stated in this Section based on the supporting facts described in the Redev elopment Plan, which is
incorporated herein in its entirety.
1.04. The Redevelopment Plan is hereby approved and adopted.
1.05. The Board hereby transmits the Redevelopment Plan to the Council and recommends that the
Council hold the required public hearing and adopt the Redevelopment Plan.
1.06. Upon approval of the Redevelopment Plan by the Council, HRA staff and consultants are
authorized to take all actions necessary to implement the Redevelopment Plan.
Section 2. Approval of Program.
2.01. The HRA hereby reaffirms and approves the Procedures, as modified, and finds, determines
and declares that it is in the public interest of the residents of the City that the Program as described
in the Redevelopment Plan and the Procedures be undertaken by the HRA in accordance with the
HRA Act.
2.02. The Program Documents, as modified, are hereby in all respects approved, in substantially the
forms submitted, together with any related documents necessary in connection therewith, and the Chair
and Executive Director are hereby authorized and directed to execute the Program Documents, as
needed from time to time (including without limitation in connection with initiating the Program and
originating loans) on behalf of the HRA and to carry out, on behalf of the HRA, the HRA's obligations
thereunder.
2.03. The approval hereby given to the Program Documents includes approval of such additional
details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom
and additions thereto as may be necessary and appropriate and approved by legal counsel to the HRA
and by the Chair and Executive Director prior to executing said documents;and said officers are hereby
authorized to approve said changes on behalf of the HRA. The execution of any instrument by the
Chair and l-ixecutive Director shall be conclusive evidence of the approval of such document in
accordance with the terms hereof. In the event of absence or disability of said officers, any of the
documents authorized by this Resolution to be executed may be executed without further act or
authorization of the Board by any duly designated acting official, or by such other officer or officers of
the Board as, in the opinion of the City Attorney, may act in their behalf.
Passed and adopted this 7th day of July, 2014.
Stewart\X'ilson, I-IRA Chair
Attest:
Brian Beeman, I IRA Executive Director
446105v1 ISIS EL 185-2('
REDEVELOPMENT PLAN
FOR
OWNER-OCCUPIED HOUSING REHABILITATION
PROGRAM
HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF ELK RIVER, MINNESOTA
Approved by the City Council: July 7,2014
Adopted by the HRA Board: July 7, 2014
Drafted By:
KENNEDY & GRAVEN, CHARTERED (JSB)
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
(612) 337-9300
444465N2 JSB LL185-26
I. DEFINITIONS
The terms defined below have, for purposes of this Redevelopment Plan, the meanings
herein specified,unless the context specifically requires otherwise:
"City"means the City of Elk River, Minnesota.
"City Council"'means the City Council of the City.
"County- means Sherburne County, Minnesota.
"Governing Body means the duly elected City Council.
"HRA" means the Housing and Redevelopment Authority in and for the City of Elk River,
Minnesota.
"HRA Act"" means Minnesota Statutes, Sections 469.001 to 469.047.
"Project Area- means the area within the boundaries of the Redevelopment Project as
shown in Exhibit A.
"Public Redevelopment Costs" means all legally permissible costs incurred or to be incurred
by or on behalf of the HRA in carrying out this Redevelopment Plan, including but not limited to:
(a) the costs of any redevelopment activities consistent with this Redevelopment Plan or the
Program Procedures as originally adopted or subsequently amended; (b) costs of administering the
Program and the Redevelopment Project: and (c) debt service payments on any obligations issued to
finance Public Costs authorized by the Redevelopment Plan.
"Program"' means a program to assist in the rehabilitation of owner-occupied single-
family homes by making loans to qualifying homeowners in a targeted area in the City pursuant
to the Program Procedures.
"Program Procedures"" means the Elk River HRA Owner-Occupied Housing Rehabilitation
Program Policies and Procedures adopted by the HRA on the date hereof, as amended from time to
time.
"Redevelopment Plan means this Redevelopment Plan for the Redevelopment Project,
dated July 7, 2014, as it may be amended or supplemented from time to time.
"Redevelopment Project" means the target area for the Program, the boundaries of which
are described and depicted on the attached Exhibit A.
"State"means the State of Minnesota.
444465 2 JSB EL 15;-?6
7
II. STATEMENT OF NEED AND PUBLIC PURPOSE
The HRA finds that there is a need for redevelopment within the City and the Project Area
to prevent the emergence of blight, remedy blight and blighting conditions. promote the health,
safety and welfare of City residents, encourage related development and redevelopment in order to
protect and improve the tax base and general economic vitality of the City.
More specifically, the HRA has identified that redevelopment of the Project Area and
development of the Program is critical to the vitality and safety of the Project Area, and the City as a
whole.
The HRA has found that there exists a need in the City to provide financial assistance for the
rehabilitation of residential properties in the Project Area. The Program will provide for the
rehabilitation of owner-occupied housing property located in the Project Area. The policies and
procedures for the Program are as set forth in the Program Procedures which are incorporated herein
by reference.
The HRA finds that the Program is in the public interest of the residents of the City and
will enhance the properties in the Project Area. The Program is anticipated to provide a stimulating
effect in the Project Area. This Redevelopment Plan will facilitate the cooperation of State Public
Bodies, including but not limited to the City and the HRA, as contemplated by Section 469.041 of
the HRA Act. The HRA finds that these redevelopment activities are essential to prevent further
deterioration of the Project Area and the City as a whole, and that such efforts will also encourage
and are in fact necessary for the future economic development of the City.
The HRA specifically finds that: (a) the land within the Project Area would not be available
for redevelopment without the financial aid to be sought under this Redevelopment Plan: (b) the
Redevelopment Plan will afford maximum opportunity, consistent with the needs of the City as a
whole, for the development of the Project by private enterprise: and (c) that the Redevelopment Plan
conforms to the general plan for the development of the City as a whole.
The HRA further finds that the Project is a `'redevelopment project within the meaning of
Minnesota Statutes, Section 469.002, subd. 14 of the HRA Act.
III. STATUTORY AUTHORITY
The HRA is authorized under the HRA Act to undertake and administer the Redevelopment
Plan, the Program, and the Project, and to finance Public Redevelopment Costs through a property
tax levy authorized under the HRA Act and other revenues of the HRA.
IV. STATEMENT OF OBJECTIVES
The HRA seeks to accomplish the following general objectives within the Redevelopment
Project:
444465 2JSBELIS5_26
3
A. Promote the redevelopment of property within the Project Area in a manner
consistent with the Program and the City comprehensive plan, which property is currently utilized
by older housing stock.
B. Promote the development of the Project Area, including without limitation the
implementation of the Program.
C. Promote the concentration of appropriate residential. commercial and industrial
development within the Project area in order to maintain the area in a manner compatible with its
prominence in the City.
D. Construct, acquire or finance any public facilities, including sanitary sewer, water,
storm drainage and roads, deemed necessary and desirable by the City and the HRA for the
development or redevelopment of the Project Area and the City as whole.
E. Assist in development or redevelopment through the Program and provision of
public services, demolition and relocation, soil and terrain corrections or site improvements, or land
acquisition, all in cases deemed appropriate by the City and the HRA.
F. Employ any powers of the HRA under the HRA Act for the benefit of the Project in
such cases and upon such terms as the HRA may deem appropriate.
V. PROJECT AREA
The Project boundaries are described and depicted in the attached Exhibit A.
VI. PROPERTY ACQUISITION
The HRA may acquire such property, or interests therein, as the HRA may deem necessary
or desirable to carry out the objectives of the Redevelopment Plan. Acquisition may be
accomplished by in accordance with the HRA Act. The HRA has no current plans to acquire any
property pursuant to the Program Procedures or this Redevelopment Plan.
VII. REDEVELOPMENT PROJECT FINANCING
The HRA's initial financing plans relate to Public Redevelopment Costs in connection with
the Program. The HRA plans to finance the Public Redevelopment Costs related to the Program
primarily through a property tax levy authorized under the HRA Act. The HRA may also use
revenues from any other source available to it to pay any Public Redevelopment Costs.
[Remainder of this page is intentionally left blank.]
444-I65 2.ISIS III85-26
4
EXHIBIT A
Description of Project Area
The Target Area starts at the intersection of School Street and Freeport Street and travels south
including all homes abutting Freeport Street until the intersection with 3rd Street NW. At the
intersection of Freeport Street and 3rd Street NW it travels east until the intersection with Evans
Avenue NW including all homes south of 3rd Street NW. At the intersection of 3rd Street NW
and Evans Avenue NW it travels south until it interacts with Railroad Drive. All homes along
Main Street NW east of Evans Ave NW until Carson Court NW are included, along with all
homes on 2nd Street NW and 1st Street NW cul-de-sac's. At the intersection of Evans Ave NW
and Railroad Drive the target area boundary travels directly west over Highway 10 to the
Mississippi River. It travels up stream along the Mississippi River until the intersection with the
Elk River, it travels up stream on the Elk River until the Main Street NW bridge all homes on the
north side of the Mississippi and Elk River are included in target area. The boundary travels
along Main Street NW to the intersection with Rush Avenue NW and includes any abutting
homes. At the intersection of Main Street NW and Rush Avenue NW it travels north to Highway
10 and includes all homes east of Rush Ave NW. It then travels east along Highway 10
including all property to the south until the Quinn Avenue NW. It follows Quinn Avenue NW
north over the railroad tracks until School Street NW including all homes east of Quinn Avenue
NW. At School Street NW it travels east until the intersection with Freeport Street including all
homes south of School Street NW.
444465■2 JSB El.185-26
A-1
Map of Project Area
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Atititi, t 1 Attachment A:
i arget Area 1\s/lap
River April 9,2014
. „
444465v2,ISB EL.1.85-26
A-2
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ELK RIVER HRA
OWNER-OCCUPIED HOUSING
REHABILITA TION PROGRAM
POLICIES AND PROCEDURES
20/4
443114\4 NUN'EL185-26
TABLE OF CONTENTS
1. PROGRAM OBJECTIVES 1
2. EQUAL OPPORTUNITY/FAIR HOUSING/
AFFIRMATIVE ACTION 1
3. PROGRAM ADMINISTRATION 2
4. PROGRAM MARKETING 2
5. APPLICIATION PROCESS 2
6. ELIGIBILITY REQUIREMENTS/PROPERTY CONDITIONS 3
7. FINANCING TERMS & AMOUNTS 4
8. ELIGIBLE/INELIGIBLE REHABILITATION ITEMS 4
9. CONSTRUCTION PROJECT STEPS 5
10. DENIAL/COMPLAINT/APPEAL PROCEDURES 9
11. AMENDING POLICIES & PROCEDURES 10
44311444 N11NI F:l_1s;-2t
Elk River HRA
Owner-Occupied Housing Rehabilitation Program
1. PROGRAM OBJECTIVES
The Housing and Redevelopment Authority in and for the City of Elk River, Minnesota
(hereinafter referred to as the HRA") will provide financial assistance for the rehabilitation of
residential properties. The policies and procedures for distribution and eligibility are
incorporated in this document.
2. EQUAL OPPORTUNITY/FAIR HOUSING/AFFIRMATIVE ACTION
The HRA shall not deny assistance based upon race, color, creed, religion, national origin, sex,
marital status, reliance on public assistance, age, disability. or familial status. It is the policy of
the HRA to provide equal employment opportunity for all persons regardless of race, color,
religion, national origin, marital status, political affiliation, sexual orientation or gender identity,
status with regard to public assistance, disability, sex, or age.
The HRA responds affirmatively in its employment practices. Affirmative action applies to all
aspects of employment practices including, but not limited to: recruiting, hiring, placement,
promotion. demotion, transfer. training, compensation, benefits, layoff; recall. and termination.
The HRA seeks to do business with entities that encourage equal employment opportunity.
Fair Housing/Affirmative Action: It is the policy of the HRA to work affirmatively to ensure
that all persons regardless of race, creed, national origin, sex, marital status, age, handicap or
reliance on public assistance shall be treated equally and fairly for purposes of this Housing
Rehabilitation Program. Program promotion conducted by CMHP and the HRA shall be
inclusive and will exercise care to avoid promotion methods that may exclude eligible applicants.
All applicants will be provided with printed information on Fair Housing with their application
packet.
The HRA will not tolerate discriminatory practices within its jurisdiction. The following
practices have been declared to be discriminatory and unlawful under the Fair Housing Act:
• Refusal to sell, rent or to negotiate for the sale or rental of any property based on race,
creed, color, sex, religion, national origin, marital status, familial status, handicap, or in
regard to public assistance.
• Discrimination in terms, conditions, privileges and in services and facilities.
• Engage in any conduct which makes dwellings unavailable or denies dwellings to
persons.
443114v4 MJM EL185-26
• Make, print, publish or cause to make, print, or publish public discriminatory
advertisements.
• To represent that a dwelling unit is not for sale or rent when in fact it is.
• To engage in blockbusting.
• To deny access to membership or participation in, or to discriminate against any person
in his or her access to membership or participation in, any multiple-listing service, real
estate broker's association, or other service organization or facility relating to the
business of selling or renting a dwelling or in the terms or conditions or membership or
participation.
3. PROGRAM ADMINISTRATION
General/Field Administrator: The HRA has contracted with Central Minnesota Housing
Partnership, Inc. (hereinafter referred to as "CMHP"") for all housing rehabilitation field
administration services. CMHP is responsible for program delivery to include: marketing,
application processing and approval, inspections and suitability of housing rehabilitation, scope
of work preparation, hid packets, loan document origination, contract awards, interim
inspections, change orders, final inspections, recommendation of payment to contractors and
project close-outs. CMHP will provide the HRA with regular financial and progress reports.
4. PROGRAM MARKETING
CMHP, on behalf of the HRA, will conduct marketing and outreach as needed. Applicants may
be contacted for the program in the following ways:
• Conduct a community meeting to inform residents of the program availability and
application process, upon startup and annually when funds become available.
• Issue monthly news releases to local newspapers with information about the program and
community meetings.
• Direct mailing of program information to homeowners in the community
• Create marketing flyers and post them in prominent areas in the community
5. APPLICATION PROCESS
Applicants will be served on a first come, first served basis with those on the letter of interest list
being notified first of funding availability. Applications will be logged by date of receipt of the
application and not by request of an application packet. Applications will be processed in the
order that they are received. Applications will not be considered complete until all required
documentation is collected. CMHP will move forward with projects in the order that applications
are completed and approved. CMHP holds the right to close an application and move to the next
application in line if applicant is non-responsive to requests for application documentation. If an
applicant is not responsive to requests for information, CMHP will send a letter stating such,
along with a deadline to receive the information. If the requested information is not received by
the deadline, the application will be closed.
2
443114\,4 M.IM 1:1185-26
Misrepresentation: Any material misrepresentation on the part of an applicant revealed through
the application process or otherwise, may result in a determination of ineligibility. The applicant
shall be notified in writing of such determination by CMHP, and shall be given the opportunity
to request an informal review upon the matter.
Evidence of Fraud: Any administering party participating in the program shall refer evidence of
fraud, misrepresentation, collusion or other misconduct on the part of the applicant or contractors
in connection with the operation of the program to the State of Minnesota Attorney General for
investigation and legal action.
Approval/Denial letter: If the applicant or home does not meet the eligibility requirements,
CMHP will send a denial letter will be sent to the applicant. Any applicant receiving a denial
letter has the right to appeal through a set appeals process (see Section 10).
Applicants whose applications have been initially approved will be sent an initial approval of
funding letter. This letter will state the applicant's eligibility for the program and provide
information on next steps. The approval letter will not state or guarantee a specific amount of
funding. This will be determined through the construction bidding process. Receipt of an initial
approval also does not guarantee that the maximum amount of funding will be available.
6. ELIGIBILITY REQUIREMENTS/PROPERTY CONDITIONS
Property eligibility: requirements listed below will be verified through the application approval
process and initial inspection of the property:
• Homes must be located within the Target Area (see Exhibit A)
• Homes must be the principal place of residence of applicants. By definition, this means
you must live in your home a majority of the year (Over six months)
• Homes must be classified as homestead
• Homes must be a permanent structure on a permanent foundation (no mobile or
manufactured homes)
• Homes located within a 100-year flood plain are not eligible for rehabilitation
1
de ine-d by HUD for the Mini apfs .s-54 P;ui--Bloc- ri-ngtor , MN-WI MSA2
Homes with the following conditions will be a priority of the program. assuming applicant and
home meet all eligibility requirements:
• The home needs wiring updated because the existing wiring does not comply with the
applicable laws and regulations.
• The home has health and safety hazards such as lead based paint, asbestos, etc.
• The home does not meet HUD's Housing Quality Standards
• The home does not meet city code
• The home fails to provide suitable shelter in some other obvious manner as determined
by CMHP
4411441 MJM L1.185-26
Suitability for Rehabilitation: CMHP must make a determination that a specific home is a
suitable candidate for rehabilitation in order to receive program funding. The determination will
be based on structural viability, after rehabilitation market value. historical significance, cost of
rehabilitation and housing replacement cost.
Nuisance Standards: Homeowners must demonstrate compliance with the City of Elk River's
public nuisance ordinances. Properties improved using program funding must maintain these
standards throughout the life of the program loan or risk repayment, as determined by the I-IRA.
Housing Replacement Cost: When a home is determined to be unsuitable for rehabilitation due
to economic factors, other factors must be considered before denial of assistance to the
household. These factors include:
• Lack of other housing alternatives
• Cost of relocation
• Expense of housing alternatives
• Abnormal low market values due to depressed market
7. FINANCING TERMS & AMOUNTS
Loan rates: Loan rates escalate depending on amount of loan. 5 year loan will be set 2% below
prime rate, 10 year loan will be set 1% below prime rate, and 15 year loan will be set at prime
rate. All prime rates will be calculated on the date of bid opening.
• $5.000 to $10,000 must be 5 year loan
• $10,001 to $20,000 must be 5 or 10 year loan
• $20,001 to $25,000 can be 5, 10 or 15 year loan
Owners match: Projects can be above $25,000 but owners are required to cover remaining cost.
8. ELIGIBLE/INELIGIBLE REHABILITATION ITEMS
Loans are only allowed to address certain rehabilitation items. Rehabilitation items will be
discussed with applicants during the initial property inspection. Eligible rehabilitation items
include:
• Removal of health, safety and/or other hazards to bring the structure into compliance with
the property rehabilitation standards used by CMIIP. For example: electrical outlet
replacement, smoke/CO detectors, lead based paint remediation, etc. NOTE: these are
required if applicable to the project.
• Improvement/replacement of roofing, siding, plumbing, water supply, septic systems or
wiring may be eligible for repair
• Improvement of the structure's energy efficiency. For example: increasing
insulation, installing new windows and doors
4
443114\4\MJ\1 EL 185-26
• Modify or rehabilitate the housing unit to make it accessible for a disabled member of the
household. Accessibility Improvements may include: structural, exterior, bathroom,
kitchen and other improvements necessary to enable a handicapped person to function
independently in the residential setting.
• Landscaping
• Garages/Outbuildings
• Fences (new or repair)
• Water softeners
• Decks/Patios (new)
• Additions to structures and finishing of basements
• Finishing basements
• Other rehabilitation items found suitable by CMHP rehabilitation stall
Loans may not be used to address any of the following (except for necessary replacement
in connection with an eligible rehab item):
• Freestanding or built-in kitchen appliances unless needed to meet HQS standards
• Fireplaces or woodstoves (unless a health/safety issue)
• Window/door coverings (curtains, blinds, etc.)
• Air Conditioning (unless needed for medical purposes)
• Recreational items (swimming pools, tennis courts, saunas)
• Garage door opener (unless handicap accessible improvement)
• Driveways, sidewalks (unless health or safety issues)
• 200 amp service unless needed (then justify)
• Work begun or completed before the date of the Notice to Proceed order
• Improvements not consistent with established standards
• The refinancing of any existing mortgage or debt
:Vote: Above listed items may be part of a total project scope of work. but any costs with
the items are required to be covered by owners match funds.
9. CONSTRUCTION PROJECT STEPS
After approval of a homeowner's application, an initial inspection will be scheduled. CMIIP
staff will meet with homeowners and perform a visual Housing Quality Standards inspection and
discuss the homeowner's wishes. After the initial inspection a lead based paint risk assessment
will be requested. After the risk assessment is completed, CMHP will create a scope of work
based on the initial inspection and the lead assessment report. Once the homeowner has approved
the scope of work the project is ready to go out for bid.
All contractors participating in the program must have a Contractors Application Form on file at
CMI-{P. The application must contain proof of insurance coverage and copy of their MN
Contractors License. Contractors will be responsible for securing insurance of the amounts
specified on the application form.
5
4431 14v4 N1JM EL 185-26
Scope of work determination: CMHP will originate a rehabilitation scope of work from
information collected from the initial home inspection. Homeowners will participate in the
creation of the scope of work and will sign an owner approval form once they are satisfied with
the scope of work. A final scope of work should be completed and approved by the owner no
more than one month after the initial inspection. The final draft scope of work will be provided
to contractors through the bidding process.
Bid Solicitation: A homeowner may request the services of a specific contractor to bid on its
project. CMHP will provide homeowners with a list of local participating contractors. It is the
responsibility of the homeowner to select 2-4 contractors from the list to whom CMHP will send
project bid packets. In order for a contractor who is not on the list to be awarded a bid, the
contractor must furnish a Contractors Application Form and the required contractor license and
insurance documentation.
Bidding: Contractors will submit bids based on the bid specifications and approved scope of
work prepared by CMHP. Participating contractors will be allowed to bid on any and all
rehabilitation projects. However, CMHP will closely monitor the number of jobs that contractors
receive to ensure that work is carried out in a timely manner. CMHP will also take into account
homeowner's satisfaction of workmanship and will have the authority to remove contractors
from the participating contractor list.
Bid openings are typically scheduled 3 weeks from the date of mailing. Contractors will mail
bids to CMHP and they will be opened at the scheduled time and date by CMHP staff Bid
results will then be forwarded to the homeowners for review.
Bid Awards: It is the homeowner's responsibility to select a contractor a contractor to complete
the work. based on bid amounts and comfortableness with contractors. The Contract shall be
awarded to the owner's selection unless one of the following circumstances occurs:
• The contractor has failed to follow the procedures outlined in the instructions to bidders
• The contractor failed to bid according to the specifications and CMHP determines it is
impossible to compare the contractor's bid with the other contractors' bids
If the lowest bid is not selected, CMHP will review to make sure the bid selected by the
homeowner is responsible and reasonable and if CMHP determines that the bid is not responsible
and reasonable, the homeowner cannot enter into a contract with that contractor/bidder. If only
one bid is received, the bid will be compared to a cost estimate provided by CMHP to ensure
reasonableness.
Contractor Notification: CMHP will provide an award letter to the selected contractor and
unsuccessful bidder letters to those contractors not selected by the homeowner.
Contractor Contract: A rehabilitation contract will be executed between the homeowner and
the contractor. The contract will include the scope of work, contract amount, and outline the
terms for completion of the rehabilitation and will include the following:
6
443114v4 MINI FL185-26
• General conditions
• Timeframe for completion
• Warranties
• Special conditions
• Amount of contract
• Change order procedures
• Payment terms
• Termination procedures
Loan documents: CMHP will forward the Repayment Agreement to homeowners. Homeowners
will execute the repayment agreement in the presence of a Notary Public, and return the executed
document to CMHP, along with any required owners match funds. All documents must be
executed and returned to CMHP before a project can start. The Repayment Agreement will be
recorded with the Sherburne County.
Notice to Proceed: After receipt of the executed Repayment Agreement, receipt of owners
match funds, and confirmation of construction contract execution, the project can start. Upon
contractor request, CMI-IP will issue a Notice to Proceed to the contractor and provide a copy to
the homeowner. The notice will allow the contractor ninety (90) days from the date of the Notice
to Proceed to complete the specified work. Ninety (90) days will be the allotted amount of time
except under the following conditions:
• The work is weather dependent and weather conditions have not allowed for the
completion of the work
• The Notice to Proceed is issued too late in the building season to allow weather
dependent work to be completed on time
• The selected contractor is too heavily committed to perform the work within the
allotted time and informs the homeowner and CMHP of the situation. A work
schedule will be established that is acceptable to the homeowner, CMHP, and the
contractor
• Unforeseen difficulties develop with the approved work and force a delay
Failure to Start/Complete Project: Upon receipt of the Notice to Proceed, a contractor will
have 90 calendar days in which to complete the contracted work. Failure to begin work within
the first 60 days will be grounds to terminate the contract unless unforeseen weather issues affect
the start date.
The 90-day time period shall not be exceeded except through the issuance of a change order and
by approval of the homeowner. In the absence of a change order, a contractor who violates the
time period shall be penalized l 0% of the unpaid balance for each week that the contractor is in
violation.
Payment Procedures: All contractors will agree to the payment schedule established by CMHP
and the HRA. Typically draws will scheduled to provide for one draw for materials and a second
draw upon completion. Draw requests approved by CMHP must be submitted to the HRA at
least one week before the first Monday of a month to be paid in such month. Approved payments
7
4431144 NUM}1155-26
will be made by the HRA directly to the contractor and will be deemed advances of the Loan to
the Homeowner. Steps and conditions for contractor payment include:
• No pre-payments are allowable for any reason. Payment requests for materials will be
allowed only if contractor provides receipt for payment
• Draw inspections will be scheduled by CMHP and will include the contractor and
homeowner
• Progress payments will only be allowed for work that is completed
• Payments will be made only after the work is completed according to the
specifications in the scope of work, and is approved by the owner and CMHP. In
order for the contractor to be paid, a draw request form must be signed by the
homeowner
• Ten percent (10%) will be withheld from each partial payment. Final payment for all
work completed, including any withheld amounts, may be made after all work by a
contractor is completed, the final inspection has been conducted and CMHP,
homeowner and contractor have signed off on the work
Payments will be made only upon presentation of the following documents:
• Billing statement/invoice submitted to CMHP by contractor
• Homeowner signed draw form
• Signed lien waiver
• Sworn Construction Statement (final draw only)
• Completion Certificate (final draw only)
Change Orders: Change orders to the contract require the signature of the homeowner, the
contractor and CMHP. Change orders will specify what the change is and the increase/deduction
in the contract amount. Costs may be the responsibility of the homeowner and, if so, these funds
must be placed in the appropriate escrow account. Funds may not be eligible for change order
items if change order work is completed before approval of CMHP staff. Change orders will be
allowed only for the following reasons.
• To rectify hidden deficiencies discovered once work has started
• To change a specification due to unforeseen difficulties arising after work has started
• To address a deficiency that was inadvertently dropped from the project during scope
of work origination
• To approve changes in the contract time period
Owner Participation: Homeowners are expected to participate in their project by
communicating with contractors when they have questions about work items, scheduling or any
other concerns that may arise. It is expected that homeowners and contractors will communicate
any issues or problems that arise to CMHP staff. Homeowners are not allowed to complete work,
or perform "sweat equity". Only licensed contractors will be allowed to complete needed work.
NOTE: if a homeowner is a licensed contractor with a current license and insurance coverage,
they will be allowed to complete work on their home, and only materials will be covered by the
program.
8
4431 14v4 NUM EL 155-26
Termination of Contract: A contractor's contract may be terminated by the homeowner due to
the following circumstances:
• Poor work performance on the job site and the demonstrated inability to rectify poor
workmanship
• Contractor is causing undue damages to the property and showing an inability or
unwillingness to correct the damages. The cost of repairing damages will be deducted
from any money owed the contractor for work already completed
• Where collusion or fraud has been determined to exist on the part of the contractor
• Lack of sufficient insurance coverage
• Inability of the contractor to perform the work within the allotted time
• Irreconcilable and irresolvable differences between the contractor and the owner
The cost of repairing poor workmanship and the higher costs of awarding the bid to another
bidding contractor shall be deducted from any amount owed to the initial contractor for work
completed. In all cases, the contractor shall be given the opportunity to rectify the problem
before contract cancellation procedures are instituted. CMHP shall adhere to the following
procedures when negotiating a workmanship problem:
• A meeting will be scheduled at the job site with the contractor and homeowner to
attempt to come to a consensus about the problem and solution
• If problem persists, CMHP shall contact the contractor by certified mail notifying the
contractor that the workmanship is still poor and specifying areas that need to be
addressed to satisfy the contract. The letter will give the contractor fifteen (15) days
to make the required repairs
• Contractors who are removed from a contract shall be removed from the participating
contractor's list and shall be prohibited from bidding on projects.
Project Close-Out: At the time of project completion, the following steps will be taken to close
out the project:
• A final draw/ inspection will be scheduled to confirm that all work has been done
according the contract and to execute final draw form, final lien waiver and
completion certificate
• Draw requests will be submitted by CMHP for final payment
• Lead based paint clearance inspection is ordered and completed (if applicable)
• Close-out letter will be sent to homeowners and will include: copies of all recorded
loan documents, completion certificate and contractor documents
10. DENIAL/COMPLAINT/APPEALS PROCEDURES
Applicant Denial Procedure: If a household's application is denied for any reason, a letter of
denial will be sent to the household within 10 working days. The denial letter will clearly outline
the reason for denial and inform the applicant that an appeals procedure is available.
9
443114)/4 MJM ELI 85-26
Applicant Complaint Procedure: Initial applicant complaints about any aspect of service
delivery, staff, program restrictions or contractor relations/workmanship may be pursued
verbally or in writing to CMHP. The complaint shall be addressed by working with the
contractor and the applicant to resolve the problem within two (2) weeks.
Applicant Appeal Procedure: If a household is dissatisfied with the level of assistance they
have received, and where an applicant complaint cannot be resolved with CMHP, CMHP will
notify the applicant in writing that a written procedure for appeal is available. The appeals
procedure follows these steps:
1. The applicant who wishes to appeal the initial response must submit a request for appeal
in writing within thirty (30) days of the initial response. This request must state the
reason(s) for the appeal and should include any information that the applicant feels is
pertinent to the appeal.
2. All appeals should be addressed to:
Central Minnesota Ilousing Partnership, Inc.
37 28th Avenue North, Suite #102
St. Cloud, MN 56303
3. A Review Committee shall be established and made up of representatives from CMHP
and the HRA.
4. If the Review Committee concurs on the findings, CMHP shall respond to the applicant,
in writing, including the results of the review, an explanation of the findings and the next
step the applicant can take if he/she is still not satisfied with the response.
5. If the Review Committee does not concur on the findings, the appeal will be presented to
the HRA, whose written decision shall be final and presented to the applicant within
fifteen (15) working days.
11. AMENDING POLICIES & PROCEDURES
These policies and procedures may be amended during the course of the loan agreement, by
taking the following steps:
• The HRA or CMHP may recommend an addition, deletion or revision by contacting the
other party and stating the proposed change and reason for the proposed change.
• The proposed change will be presented. discussed and approved at an HRA meeting
Policies and Procedures prepared ht'Central Minnesota Housing Partnership, Inc.
on behalf of the HRA of Elk River.
10
443114v4 MJM 111 S7-26
Exhibit A
Targeted ed Area
Target area starts at the intersection of School Street and Freeport Street and travels south including all
homes abutting Freeport Street until the intersection with 3`d Street NW. At the intersection of Freeport
Street and 31d Street NW it travels east until the intersection with Evans Avenue NW including all homes
south of 3rd Street NW. At the intersection of 3rd Street NW and Evans Avenue NW it travels south until it
interacts with Railroad Drive. All homes along Main Street NW east of Evans Ave NW until Carson
Court NW are included, along with all homes on 2Id Street NW and 1`t Street NW cul-de-sacs. At the
intersection of Evans Ave NW and Railroad Drive the target area boundary travels directly west over
Highway 10 to the Mississippi River. It travels up stream along the Mississippi River until the
intersection with the Elk River, it travels up stream on the Elk River until the Main Street NW bridge all
homes on the north side of the Mississippi and Elk River are included in target area. The boundary
travels along Main Street NW to the intersection with Rush Avenue NW and includes any abutting
homes. At the intersection of Main Street NW and Rush Avenue NW it travels north to Highway 10 and
includes all homes east of Rush Ave NW. It then travels east along Highway 10 including all property to
the south until the Quinn Avenue NW. It follows Quinn Avenue NW north over the railroad tracks until
School Street NW including all homes east of Quinn Avenue NW. At School Street NW it travels east
until the intersection with Freeport Street including all homes south of School Street NW.
443114v4 M,IM EL 1 S5-26
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Document 1 ID PowerDocs://DOCSOPEN/443139/3
DOCSOPEN-#443139-v3-
Description
Elk River HRA RehabLoan APPLICATION
Document 2 ID PowerDocs://DOCSOPEN/443139/4
DOCSOPEN-#443139-v4-
Description
Elk River HRA Rehab_Loan_APPLICATION
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CENTRAL MINNESOTA HOUSING PARTNERSHIP, INC.
Elk River Housing and Redevelopment
Authority
Sample Application for Home Rehabilitation
Property Owners Name:
Property Owners Address:
Address to be improved:
City: State: Zip: Phone: Date:
Short Project Description:
Number of people in Household: Estimated Yearly Gross Household Income: $
Eligibility Requirements:
I own and live in the house to be remodeled
My home receives homestead credit on my Sherburne county taxes
- My home is at least 20 years old and was build in (year built)
a If home is older than 1978 lead assessment required
I have not begun my home improvement project
This home is my primary residence
Your application is not complete if you do not include:
1. Application
. Work requested checklist
3. Most recent Federal tax return
4. Proof of ownership copy of deed
5. Homeowners insurance binder (must show current dates of coverage)
6. Property tax statement (most recent)
7. Conflict of interest form (signed by all owners)
I agree with and understand the following:
I have read and am within the guidelines for the Ilousing Rehabilitation Loan Program. I
understand that if any information is incorrect or incomplete. my chances of receiving funding
will be delayed and/or hindered. I understand I cannot begin work before approval of my
application.
Signature: Date:
Application will be reviewed in the order they are received
Eligibility Criteria
1. Properties must be located within target area.
2. Applicant must have ownership of property and is current resident.
3. Applicant must not have started or completed work on the proposed project.
. s: ' ,.. .• .o-l-d-i 4mist-not e:-c=ep= 4--1-5 =ty-o- le area medi-a i� co i-e-a d 1 Y l
by !IUD - -. 1-i-s-S -Paul Bloomington, MN- MSA'
4. --`Proposed improvements must comply with Minnesota State Building Code for
rehabilitation work.
5. 6. 'Eligible improvements include exterior improvement to buildings, as well as interior
improvements related to safety, accessibility, habitability, and energy consumption, and
efficiency.
Work Requested (Check all that apply)
Eligible exterior improvements:
Windows and doors
- Painting, sandblasting or other facade improvements
Roofs
Foundations
Exterior lighting
Handicap Accessibility
Cement work (sidewalks and steps)
Landscaping
- Other:
Eligible safety, accessibility, habitability and energy efficiency improvements:
Heating
- Electrical
Plumbing
- Insulation
- Handicap accessibility
I Asbestos and lead abatement
- Other:
Ineligible improvements include:
• Refinancing debt or prior rehabilitation debt
• Security systems
• Furniture
• Recreational items (tennis courts, swimming pools, etc.)
• Appliances (unless needed to meet rehabilitation standards or livability)
*Loans are not available to remodel apartments or rental units
Financing Terms:
• 5 year loan at 2% below prime rate • $5,000 to $10.000 5 year loan
• 10 year loan at 1% below prime rate • $10.001 to $20.000 5 or 10 year loan
• 15 year loan at prime rate. • $20,001 to 525.000 5, 10 or 15 year loan
l'he amount of the loan should he$5,000 or more and no more than$25.000. Prime rates set on date of hid opening.
Conditions
1. If the applicant has received a loan(s) from Elk River HRA in the past, he or she is only
eligible for the difference between the maximum loan amount and the amount remaining to
be paid on previous loan(s).
2. Loans on the property sold by contract-for-deed are due when the title transfers or owner
no longer maintains property as primary residence.
3. All owners must join in the application including contract holders.
4. Loan applicants will pay recording fees.
Loan Application Review Process
1. CMHP staff will evaluate the loan application to determine eligibility.
2. Once staff makes a determination the building inspector or CMHP staff will conduct an
inspection of the property. At the inspection, there will be a determination if corrective
actions are necessary for the property to conform to rehabilitation standards.
Contact information:
Seth Kauffman
Phone: 320-258-0673
Email: Seth@Cmhp.net
Return completed application and all attachments to:
Central Minnesota Housing Partnership, Inc.
Attn: Seth Kauffman
37 28th Avenue North, Suit #107
St. Cloud, MN 56303
Note: Faxed or einailed applications will not be accepted
Please remember to complete all sections of the application and provide addresses where
requested. Failure to complete the application in full will delay your approval time, and
may lead to application denial.
Application Steps
1. Submit application
Work requested checklist
Most recent Federal tax return
Homeowners insurance (must show current dates of coverage)
Property tax statement (most recent)
Copy of warranty deed or contract for deed
Conflict of interest form (signed by all owners)
2. Housing inspection
Elk River house inspection required (any issues found must be addressed to
receive funding)
If home is older than 1987 lead assessment is required
CMIIP provides scope of work based on home inspection and list of contractors
in Elk River.
3. Scope of work
Returned with at least 2 bids
Sketches is applicable
4. Contract sent to homeowner with chosen contractor's and scope of work
-- Signed and notarized
5. Contracts signed by homeowner sent to contractor
6. Contracts reviewed by CMHP
Notice to proceed issued to contractor
Material and construction draws after notice to proceed issued
7. Closing inspection
CMHP
CONTRACTOR— HOME OWNER CONTRACT
ELK RIVER, MINNESOTA
WHEREAS, the Contractor has submitted a bid ("Bid ') to Central Minnesota Housing
Partnership, a Minnesota non-profit ("CMHP") and the administrator of the Owner-Occupied Housing
Rehabilitation Loan Program, a program of the Housing & Redevelopment Authority in and for the City
of Elk River, Minnesota, a public body, corporate and politic under the laws of the State of Minnesota
("HRA"), for work to be performed in connection with that Program, on the premises located at
Elk River, Minnesota("Premises") and owned by ("Owner"); and
WHEREAS, Owner desires to hire Contractor to perform the work as specified in the
Contractor's Bid at the Premises; and
WHEREAS, the Contractor desires to perform the work set forth in its Bid at the Premises.
NOW, THEREFORE, in consideration of the acceptance of the Bid by the Owner, the Contractor
and Owner agree as follows:
GENERAL CONDITIONS
1. Hold Harmless
Contractor shall defend, indemnify, and hold harmless the Owner, and HRA and CMHP,
from all liability, loss, expenses, and claims for damages, including attorneys' fees, made by
anyone in connection with Contractor's performance of obligations under this contract.
2. Independent Contractor
For the purpose of this Contract,the Contractor shall be deemed to be an independent
contractor, and not an employee of Owner, HRA, or CMHP. Any and all employees of the
Contractor or other persons, while engaged in the performance of any work or services
required to be performed under this Contract, shall not be considered employees of Owner,
HRA, or CHMP and any and all claims that may or might arise on behalf of said employees
or other persons as a consequence of any act or omission on the part of said employees or the
Contractor shall in no way be the obligation or responsibility of Owner, HRA, or CMHP.
3. Insurance
Before commencing work on the Premises, the Contractor shall submit certificates of
insurance to the Owner and CHMP for approval by the Owner and CMHP and shall be
endorsed to provide that the policies will not be canceled or changed until ten days after
written notice of change or cancellation has been delivered to Owner and CMHP. The
Contractor's certificates must show that at least the following insurance is in force:
Class of Coverage Bodily Injury Property Damage
(1) Manufacturer's & Contractors $1,500.000 $1,500,000
(2) Product Incl. Compl. Operations $1,500,000 $1,500,000
(3) Auto Owned, Hired or Leased $1,500,000 $1,500,000
(4) Worker's Compensation As required by law
The Contractor may satisfy these requirements through an umbrella policy. If any such
insurance is due to expire during the construction period, the Contractor shall not permit the
coverage to lapse and new certificates shall be furnished to Owner and CMHP.
4. Lien Waivers
The Contractor shall protect, defend and indemnify Owner from any claims of unpaid work,
labor. or material. Payment shall not be due until the Contractor has delivered to the Owner
complete release of all liens arising out of the Contractor or receipt in full covering all labor
and materials for which a lien could be filed, or a bond satisfactory to the Owner
indemnifying him/her against any lien.
5. Subcontractors and Assignments
No subcontractor or assignment of this Contract shall he made without the written consent of
the Owner and CMHP. Contractor shall furnish subcontractor lien waiver(s) upon payment.
6. Permits and Codes
(a) The Contractor shall secure all necessary permits and licenses required to perform the
work called for by this contract. and all such work shall be in compliance with all
building code regulations and all ordinances whether or not covered by the specifications
and drawings for the work.
(b) The Contractor agrees to comply with all applicable local, state, and federal laws,
regulations. ordinances, and policies.
7. Equal Emplo\ment Opportunity
(a) The Contractor shall provide equal opportunity to all persons. without discrimination as
to race. color, creed, religion, national origin, sex, marital status, age and status with
regard to public assistance or disability.
(h) To the extent feasible, the Contractor shall provide opportunities for training and
employment to lower income residents of the area v ith a household income at or below
80% of the area median income as defined by I IUD for the Minneapolis-St. Paul-
l3lool ington, MN-WI MSA, particularly residents of public or federally assisted
housing.
8. Proceed to Work and Completion of Work
Upon acceptance of this bid and submission of evidence of satisfactory insurance coverage,
the work will he started within seven calendar days ONLY AFTER A NOTICE TO
PROCEED ORDER is received by the Contractor. The contract shall be fully and
satisfactorily completed within 90 working days of the Notice to Proceed Order date. A
working day will be considered to be all days except Saturday, Sundays. and legal holidays.
Any modification of the above shall be set forth in Article 14 below.
9. Payments
(a) The HRA shall pay the Contractor in full after the work is satisfactory completed unless
prior arrangements have been made for progress payments. Progress payments shall be
limited to two, and shall be subject to ten percent(10%) retainage until final satisfactory
completion. Final payment of the Contract amount will be made only after final
inspection by CMHP and acceptance by the Owner of all work performed by the
Contractor.
(b) The Contractor agrees to pay any subcontractor within ten days of the Contractor's
receipt of payment from the HRA for undisputed services provided by the subcontractor.
The Contractor must pay interest of 1-1/2 % per month for any part of a month to the
subcontractor on any undisputed amounts not paid on time to subcontractor. The
minimum monthly interest penalty payment for an unpaid balance of$100 or more is
$10. For an unpaid balance of less than $100, the Contractor shall pay the actual penalty
due to the subcontractor. A subcontractor who prevails in a civil action to collect interest
penalties from the Contractor must be awarded its costs and disbursements, including
attorney's fees, incurred in bringing the action.
10. Warranty As to Workmanship and Materials
The Contractor shall remedy any defect due to faulty material or workmanship and pay the
Owner for any damage to other work resulting therefrom that appears within the period of
one year of final payment. Further, Contractor will furnish Owner with all manufacturer's and
supplier's written guarantees and warranties covering materials and equipment furnished
under this Contract.
This warrant) does not cover defects caused by or related to:
(a) Abuse, misuse, negligence or accident by parties other than the Contractor any
Contractor's subcontractors; or
(b) Normal deterioration due to wear or exposure.
11. Debris and Materials
The Contractor agrees that during the course of work the Premises shall be kept as clean and
orderly as is reasonable under the circumstances and shall remove all debris from the
Premises that results from the Contract work until completion of this Contract. All materials
and equipment that are replaced or removed in the course of work shall become the property
of the Contractor unless otherwise specified.
12. Access to Records
The Owner and CMHP shall have full access to all records relating to work performed under
this Contract. Any and all data received, collected, stored, created, used, maintained, or
disseminated by the Contractor shall be administered in accordance with the requirements of
Minn. Stat. Ch. 13. The Contractor does not have a duty to provide access to public data
when the same is available from the Owner, HRA or CMHP.
13. Modification
Any alteration, variation, modification, or waiver of the provisions of this Contract shall be
valid only after it has been reduced to writing, approved and signed by the Owner and CMHP
and attached to the original of this Contract.
14. Other Remedies:
The above conditions and warranties are in addition to, and not in limitation of any and all
other rights and remedies to which the Owner, or subsequent Owners, may be entitled, at law
or in equity, and shall survive the conveyance of title. and shall be binding on the
undersigned not withstanding any provision to the contrary contained in any instrument
heretofore or hereafter executed by the Owner.
15. Termination of Contract:
If either the Contractor or the Owner wishes to terminate this Contract for any cause, it shall
provide the other party with ten days notice and the Contractor shall be duly compensated for
any work satisfactorily completed at the point of termination.
16. This Contract consists of the bid and proposal set forth below. the general conditions as
outlined above, and the description of the work to be completed as shown on the Work Write-
up, attached hereto as Exhibit A.
BID AND PROPOSAL
For the consideration named herein, the undersigned Contractor proposes to furnish all work,
material and labor to complete the work in accordance with the attached Work Write-up
("Specifications"") and the General Conditions outlined above for the sum of$
OWNER CONDITIONS:
1. The Owner certifies that the HRA Owner-Occupied Housing Rehabilitation Loan
Program Funds shall be used for eligible improvements, and shall not be applied
toward any Specifications begun or completed before the date of the Notice to Proceed
Order.
2. The Owner shall permit the Contractor to use. at no cost, existing utilities such as light,
heat, power and water necessary to the carrying out the completion of the
Specifications. Further, Owner will cooperate with the Contractor to facilitate the
performance of the Specifications, including the removal and replacement of rugs,
coverings and furniture as necessary.
3. Materials and equipment that have been removed or replaced as part of the
Specifications shall belong to the Contractor unless otherwise specified.
4. The Owner understands and agrees that any and all disputes, of whatever kind of
nature, in conjunction with this Contract. are solely the disputes of the Owner and
Contractor to resolve without legal involvement, by lawsuit or otherwise.
5. The Owner certifies receipt of the EPA brochure entitled, "Renovate Right.-
6. The Owner is responsible for normal maintenance of the improvements to the Premises
as a result of the Contractor's performance of the Specifications. If a problem
occurs that the Owner believes is covered by the warranty. the Owner shall contract
the Contractor in writing, giving the Contractor sufficient information to enable him to
resolve the matter. In the event the Contractor fails to remedy the problem, then the
Owner shall contact CMHP.
7. The Owner understands and agrees with to the Contractor's performance of the
Specifications and agrees to permit the Contractor access to the Premises to the extent
necessary to complete the Specifications.
8. The Owner agrees that the improvements to the Premises specified in the
Specifications shall be inspected by CMHP before funds are disbursed.
ACCEPTANCE BY CONTRACTOR ACCEPTANCE BY OWNER
Firm Title Name of Owner(s)
Firm Address Address of Owners)
Signature of Authorized Representative Signature of Owner
Title Signature of Owner
Date Date
EXHIBIT A
Specifications
Mortgage and Repayment Agreement
(Elk River HRA Owner-Occupied Housing Rehabilitation Program)
This mortgage is exempt from Mortgage Registration Tax imposed by Minnesota Statutes, §287.035,
pursuant to Minnesota Statutes, §287.04,because the principal amount of the mortgage loan referred
to herein is made under an affordable housing program and the mortgagee is the Housing and
Redevelopment Authority in and for the City of Elk River,a Minnesota body corporate and politic.
THIS MORTGAGE AND REPAYMENT AGREEMENT (this "Mortgage"), is made and entered into this
20 (the "Effective Date"), by and between _ (the "Owner") the owner of the property
located at Elk River, MN 55 and legally described as set forth in the attached
Exhibit A (the "Property") and the Housing and Redevelopment Authority in and for the City of Elk River,
(the"HRA"), having its principal office at 13065 Orono Pkwy NW, Elk River, MN 55330.
NOW THEREFORE. in consideration of the Installment Loan described below and for other good and
valuable consideration,the parties do hereby agree as follows:
1. In accordance with the Elk River Owner-Occupied Housing Rehabilitation Policies and
Procedures (the "Procedures") and the Owner's Application dated _ , 20 (the
"Application"), both of which are incorporated herein by reference as if fully set forth herein, the
HRA has agreed to make to Owner a Housing Rehabilitation Loan. (the "Installment Loan"),
relating to the Property, in the amount of Dollars (S ). The Installment Loan shall
be disbursed directly to the contractor performing the work on the Property described in the
Application in accordance with the Procedures. The Owner agrees to repay to the HRA in the
Installment Loan plus interest thereon at the rate of 9,0 per annum in installments of principal
and interest of $ per month, beginning on . 20 , through and including
, 20 (the "Final Maturity Date") in accordance with the amortization schedule and
the Truth in Lending Statement signed by Owner both attached as Exhibit B. The Owner may
prepay the Installment Loan in whole, together with accrued interest thereon, to the HRA on any
business day.
2. Owner covenants and agrees with the LIRA that if the Property is transferred or otherwise
conveyed. voluntarily or involuntarily, either while the Owner is living or by reason of the death
of the Owner prior to the Final Maturity Date, the Installment Loan and all accrued interest
thereon shall be immediately due and payable and shall be repaid in full to the HRA.
3. As security for Owner's obligation to repay the Installment Loan and accrued interest thereon, and
the cost, including reasonable attorney's fees, of collecting the same. and subject to the terms and
conditions of this Mortgage, Owner hereby grants, and HRA shall and hereby does have, a
statutory mortgage on the Property in accordance with Minnesota Statutes, Section 507.15.
4. The Owner covenants with the HRA the following statutory covenants;
a. To warrant the title to the Property; subject to permitted encumbrances as set forth in
Exhibit C.
b. To pay the indebtedness as herein provided.
c. To pay all taxes.
d. That the Property shall be kept in repair and no waste shall be committed.
e. That the whole of the principal sum shall become due after default, in the payment of any
installment of principal or interest, or of any tax, or in the performance of any other
covenant, at the option of the HRA.
f. To pay principal and interest on prior mortgages.
5. If default be made in any payment or covenant herein, the HRA shall have the statutory power of
sale, and on foreclosure may retain statutory costs and attorney's fees.
6. For the protection of the HRA, the Owner will, during all the time until the indebtedness secured
by this mortgage is fully paid, maintain all risk property insurance, naming the HRA as an
additional insured, in an amount not less than the full insurable replacement value of the Property.
Said insurance shall be written by a company or companies licensed to do business in Minnesota
and rated Class A-:VII or better by A.M. Best Company. The term "full insurable replacement
value" shall mean the actual replacement cost of the Property (excluding foundation and
excavation costs and costs of underground flues, pipes, drains, and other items customarily
omitted from replacement cost valuation for insurance purposes), without deduction for
depreciation. The Owner will assign and deliver the policies of such insurance to the HRA so and
in such manner and form that the HRA shall at all times, until the full payment of said
indebtedness, have and hold the said policies as a collateral and further security for the payment of
said indebtedness, or at the option of the HRA will make such policies payable in case of loss to
the HRA as its interest may appear and will deposit them with the HRA, and in default of so
doing.that the HRA may, but has no obligation to, obtain such insurance from year to year, or for
one or more years at a time, and pay the premiums therefor. and that the Owner will forthwith
repay to the HRA the same, with interest at the mortgage rate, and that the same shall become a
part of the debt secured by this mortgage in like manner as the principal sum. The Owner may
retain any moneys received by him/her on the policies, but the same shall apply in part payment of
this mortgage.
7. This Mortgage shall terminate and shall be of no further force or effect upon payment in full of the
Installment Loan and accrued interest thereon.
8. The Owner will indemnify, save, and hold harmless the HRA, the City of Elk River, Minnesota,
Central Minnesota Housing Partnership. Inc., their officers, agents, and employees, from and
against any claim, cause of action, damage, liability, loss or expense, including attorney's fees
incurred by the HRA, made by any party in connection with or arising from (i) the presence. if
any, of hazardous wastes or pollutants on the Property; (ii) any loss or damage to property or any
injury to or death of any person occurring at or about or resulting from any defect in the Property,
(iii) the performance of, or failure to perform. this Mortgage. Nothing herein shall be deemed a
waiver of any statutory limitations of liability or immunity.
9. This Mortgage shall run with the aforesaid real estate and shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors. representatives, successors,
and assigns.
10. Any forbearance by the HRA in exercising any right or remedy shall not be a waiver of or
preclude the exercise of any right or remedy.
11. This Mortgage shall be governed by the law of the state of Minnesota. In the event that any
provision or clause of this Mortgage conflicts with applicable law, such conflict shall not affect
other provisions of this Mortgage which can be given effect without the conflicting provision. To
this end. the provisions of this Mortgage are declared to be severable.
12. This Agreement may be executed in any number of counterparts. each of which shall constitute
one and the same instrument.
In witness whereof the Owner has duly executed this Rehabilitation Program Mortgage and Repayment
Agreement.
Owner and Mortgagor:
(Name)
STATE OF MINNESOTA)
)ss.
COUNTY OF( )
The foregoing instrument was acknowledged before me this day of ,20 ,by
(Name)
Notary Public
S-1
Accepted and agreed to by:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF ELK RIVER
By
Its
By
Its
STATE OF MINNESOTA)
)ss.
COUNTY OF(
The foregoing instrument was acknowledged before me this day of , 20 , by
the , and the
, respectively, of the Housing and Redevelopment Authority in and for the City
of Elk River, a body corporate and politic organized and existing under the Constitution and laws of the
State of Minnesota, on behalf of said Authority
Notary Public
1111S 1NS I RUMEN 1.DRAFTED BY:
Central Minnesota I lousing Partnership. Inc.
37 28`h A\enue North. Suite#102
St. Cloud. MN 56303
S-7
Exhibit A
Legal Description of Property
A-1
Exhibit B
Amortization Schedule and Truth in Lending Statement
B-1
Exhibit C
Permitted Encumbrances
C-1
Elk, ,
_� Request for Action
',7 t,of (
Diver
To Item Number
Housing and Redevelop icnt Authority 7.1
Agenda Section Meeting Date Prepared by
General Business May 5, 2014 Brian Beeman, Director of Economic
Development
Item Description Reviewed by
Approve Housing and Redevelopment Authority Jeremy Barnhart, Deputy Director, CODD
(HRA) Housing Owner-Occupied Rehabilitation Reviewed by
Policies and Procedures, contract with Central
Minnesota Housing Partnership (CMHP), and
Authorize a Budget Amendment to Fund the
Program
Action Requested
Approve by motion, making recommendation to the City Council to approve:
1) Resolution Approving Housing Rehabilitation Loan Program
2) The Elk River HRA Owner-Occupied Housing Rehabilitation Program Policies and Procedures.
3) The I IRA Rehab Owner-Occupied Housing Rehabilitation Program Administrative Agreement with
CMHP to administer the new housing program.
4) The Elk River HRA Rehabilitation Iloan Application
5) Elk River HRA Rehabilitation Loan Program Contractor Owner Agreement.
6) Elk River HRA Rehabilitation Program Mortgage and Repayment Agreement Owner-Occupied
Housing Rehabilitation Program.
7) A budget amendment to transfer funds in the amount of S 100,000 from the HRA fund balance to the
HRA contractual services line item.
Background/Discussion
At the August 5, 2013 regular Housing and Redevelopment Authority (HRA) meeting, the HRA heard a
presentation about the housing programs in Coon Rapids Brooklyn Park. The HRA also approved hiring
the Central Minnesota Housing Partnership (CMHP) to serve as the HRA's housing consultant to
develop and administer an Elk River internally funded housing program and assist the city in applying for
the Small Cities Development Program grant. The HRA met in a series of workshops to discuss what
they would like to see in an Elk River housing program.
More recently, during an April 7, 2014 workshop, the HRA, by general consensus, agreed to fund the new
housing program at S100,000 per year, for the next three years, under contract with CMHP to administer
the program. It was also decided that no additional changes needed to be made to the proposed I dk River
Housing Owner-Occupied Rehabilitation Policies and Procedures. 'These policies and procedures are
provided for formal approval.
In addition, because the new program wasn't budgeted for in 2014, a budget amendment is necessary. It
was also suggested that in the future the $100,000 be funded through the HRA levy. The attached Budget
P O W E R E D H Y
NATURE
Revision Request Form will transfer funds in the amount of S100,000 from the HRA fund balance to the
contractual services line item.
The policies, procedures and related documents have been reviewed by the HRA's attorney. As a result of
that review the policies and procedures and related documents have been revised to reflect a condition
that qualifying homeowners must not exceed moderate income limits. Copies of the updated policies and
procedures and related documents are attached.
Because the attorney review resulted in a change in the documentation that would impose income
limitations on the program, the HRA is asked to consider whether it prefers to proceed with the program
on the current timeline with the income restrictions or delay the program to qualify it as a redevelopment
project in which no income limitations are imposed.
If the HRA_ prefers to proceed with the program on the current timeline with the income restrictions, the
HRA is asked to both approve budget amendment the policies & procedures and also make
recommendation to the City Council on the same.
Alternatively, if the HRA prefers to undertake the program without the income restrictions, the HRA is
asked to recommend to the City Council to call public hearing to consider a Redevelopment Plan to
undertake the Owner-Occupied Housing Rehabilitation Program in the 'Target Area. The alternative
action follows:
Alternative Action Requested
Recommend, by motion, the City Council call public hearing on June 16, 2(014 to consider a
Redevelopment Plan as part of the Owner-Occupied Housing Rehabilitation Program in the 'Target Area.
fenny Boulton, the HRA's attorney from Kennedy & Graven will be present to explain the HRA's
options in greater detail.
Financial Impact
$100,000 will be transferred from the fund balance to the contractual services line item. The balance is
currently S922,696.
Attachments
• Resolution Approving Housing Rehabilitation Loan Program
• HRA Rehab Loan Policies and Procedures, (Final & Redline Copy)
• HRA Rehab Loan Administration Agreement, (Final & Redline Copy)
• HRA Rehab Loan Application, (Final & Redline Copy)
• HRA Rehab Contract Owner Contract, (Final & Redline Copy)
• HRA Rehab Mortgage &Repayment Agreement, (Final & Redline Copy)
• Budget Amendment Revision Request Form
• Timeline for Approval of Redevelopment Plan and Project
C\Documents and Settings\jsb\Application Data\hummingbird\ \Temp\ll( (:50PI \-#44 2 6- 4-
IAk Itn-L•r I IR1 Rehab Lean S1'.\f F RI?PUR1'.docx