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2.0. HRSR AGENDA 01-30-1996 • ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY AGENDA Tuesday, January 30, 1996 Elk River City Hall 5:00 p.m. ACTION ITEM NUMBER TAKEN 1. CALL JANUARY 30, 1996, HRA MEETING TO ORDER 2. CONSIDER JANUARY 30, 1996, HRA AGENDA 3. CONSIDER JANUARY 9, 1996, HRA MINUTES 4. CONSIDER AN APPLICATION TO MINNESOTA HOUSING FINANCE AGENCY(1996 FIRST TIME HOME BUYER PROGRAM) 5. CONSIDER THE 1995 HRA CASH ACTIVITY 6. ADJOURNMENT ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY • MEMORANDUM TO: HRA COMMISSIONERS FROM: WILLIAM RUBIN, HRA EXECUTIVE, j' DIRECTOR VI DATE: JANUARY 30, 1996 SUBJECT: AGENDA MEMO FOR JANUARY 30 HRA MEETING 4. Home Mortgage Program Since recent memory, the Minnesota Housing Finance Agency (MHFA) has made its Minnesota City Participation Program (MCPP) available di to local governments as a way to access mortgage revenue bond resources for first time home buyers. In the very near future, MHFA is expected to create a pool of mortgage revenue bonds in the range of$38 to $58 million for this program. Through MCPP, MHFA sells these bonds on behalf of cities. The proceeds of the bonds provide below market interest rate home mortgage loans for low- and moderate income home buyers that are entering the market for the first time. Applications for the 1996 program are due to MHFA beginning on February 1 and ending on February 15, 1996. As with previous programs, a qualifying income and a maximum purchase price guideline will apply. For 1996, the MCPP in Elk River will allow applicants with an adjusted gross income of$40,800 to qualify for this financing program. Please note that the adjusted gross income is calculated by taking the household's gross annual income and subtracting $1,000 per household resident. With that,a family of four cold have a gross income of$44,800 and qualify for the MCPP. The maximum purchase price of each housing unit acquired through the MCPP in Elk River is $95,000 (both new construction and existing housing stock). Single family detached homes, townhomes, condominiums, and duplexes (existing only) are eligible housing units under the MCPP. Mobile homes, recreational, or investment properties, etc., are not eligible for this program. P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425 Equal Opportunity Housing and Equal Opportunity Employment 410 In 1995, MHFA introduced a population-based allocation formula for its NICPP. As a result, the Elk River HRA was allocated approximately $256,500 in mortgage funds. A similar allocation can be expected for 1996. The Elk River MCPP includes five lenders to help originate home requests from first time home buyers: First National Mortgage, Heigi Mortgage, Norwest Mortgage, Inc., TCF Mortgage, and FBS Mortgage Corporation. All lenders have a presence in Elk River as TCF opened an interim office at 200 5th Street NW while its permanent facility in Elk Park Center is under construction, and First Bank, N.A. has an office at 631 Main Street. The HRA's only out-of-pocket costs are that of a modest fee to help the Department of Finance cover the costs associated with processing the housing pool allotment requests. A fee in the amount of$20 per $100,000 in allotment is required. For a $250,000 allotment, the processing fee is $60. This fee is not due with the submission of the application, but must be remitted with the allocation agreement which finalizes each city's 1996 allocation. A separate 1 percent application deposit must also be returned with the allocation agreement. 40 However, the deposit is fully refunded, approximately one month after MHFA's bond sale. The Elk River MCPP application is included in the agenda packet. Such things as the eligible organization (which is the HRA), originating lenders, program specifics, and new construction requirements, etc., are outlined in the application. There is no effort to target specific population groups, housing stocks, or exclusive "set- aside" arrangements with specific builders, developers, or realtors. Action Requested a. The HRA is asked to authorize an application to the Minnesota Housing Finance Agency for a "maximum allowable" allocation of its Minnesota City Participation Program (MCPP) funds for first time home buyer mortgages. b. The HRA is asked to designate five lenders for its 1996 MCPP mortgage program: - First National Mortgage - Heigl Mortgage - Norwest Mortgage, Inc. TCF Mortgage - First Bank, N.A. 5. 1995 HRA Cash Activity Please refer to the one-page summary from Assistant City Administrator Lori Johnson. 6. Other Business Check Register Enclosed in the agenda packet is the HRA check register. It contains two bills totaling $1,851.88. Action Requested The HRA is asked to approve the check register in the amount of $1,851.88.