6.0. EDSR 04-12-1993 APPLICATION FOR FUNDING
• MINNESOTA HOUSING FINANCE AGENCY
1993 MINNESOTA CITY PARTICIPATION (MCPP)
(BALANCE OF STATE)
The following is an Application for Funding under MHFA's Minnesota City Participation
Program. As opposed to providing an application blank, this request is provided in the
form of an outline which includes areas and questions that must be addressed by the
applicant. This has been done to accommodate the variety of word processing systems
that may be used to respond to this offering. Entities responding to the MCPP should
carefully follow the format in the outline and type both each area or question for which
information is requested as well as a response, addressing each question in sufficient
detail.
Review the attached cover letter for details on program restrictions before completing
this application. Final determination of the total amount of program funds available and
individual allotments to be made will occur at an allocation meeting before final bond
sale. Any questions may be directed to Gene Aho in MHFA's Homeownership
Opportunity Division at 297-3129 or by dialing 1-800-657-3802 if calling from outside the
Twin City Metropolitan Area.
An application deposit in the amount of 1% of your funding request must accompany
this submission. This fee will be fully refunded upon sale of the sponsoring bond issue.
• Applications must be delivered to MHFA offices between 8:00 a.m., April
2 and 4:30 p.m., April 15, 1993 for funding consideration under the first
phase of this program.
I. ELIGIBLE Olt(;A\IZA 11O\
(a) Name and address of your organization.
(b) Name and phone number of your contact person.
(c) Designate a probable representative to attend the bond allocation meeting in
late April or early May. (You may change your designated representative at any
time before the meeting date by written notice to MHFA.)
(d) Type of organization (City Department, Port Authority, HRA, or EDA).
(e) Amount of funds requested, and the estimated number of loans to be provided.
(f) Information on any unused Mortgage Revenue Bond (MRB) or Mortgage Credit
Certificate (MCC) resources still available in your community (non-MHFA).
li. ORIGINA'L I\(; L.L:\1)ER
Cities must designate at least one lender who will take mortgage applications and
• process loans for your program. Attach a letter from each lender confirming their
willingness to partici ate jassauzgs2gram.
If desired, additional lenders may be designated later in your program term.
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(II. IIC)l_SING PLAN
Attach a copy of the "Housing Plan" developed for your community. At a
minimum, each plan must contain the following information:
(a) A description of your city's principal housing needs.
(b) The data sources or methods used to determine the described needs.
(c) The specific plan developed to meet your identified housing needs, including
the resources to be accessed, and the methods used to carry out the plan.
(d) Description of any target areas to be addressed in the plan.
CO How the plan will be implemented and the administrative capacity of your city
to do so.
Note: If you have already completed a Housing Plan in accordance with
Minnesota Statutes, Section 462C.03 within the past 12 months, you may attach
a copy in lieu of the above requirement. Housing Plans developed over 12
months ago are also acceptable, provided that the information contained
therein is still valid. and the plan is updated with appropriate attachments and
comments.
I v. pRoGRA\I SPECIFICS
Attach a description of your first-time homebuyer program proposal, including the
following information:
(a) How your program fits into your comprehensive housing plan.
(b) Borrower income limits. (See the attached cover letter for limitations.)
(c) Home purchase price limits. (See the attached cover letter for limitations.)
(d) Targeting of specific population groups, if any (e.g., minorities, handicapped,
business employees, etc.).
(e) Targeting of area or housing stock, if any (e.g., rehab areas, new construction
developments, etc.).
CO Any optional program enhancements such as subsidy funds, waived fees, use
of tax-forfeit properties, etc.
(g) Any proposed schedule for release of funds (whether immediate, delayed, or
on a proportional/divided basis).
(h) Why you feel this program is a good candidate for funding.
V. ECONOMIC \ LABILITY
Describe why you feel there is sufficient demand in your market to use the MCPP
funds requested in this application. Indicate the data sources used to project
• demand, such as:
MCPP-1-136A
2n 0+00
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4,
(a) Real estate sales over the past year.
(b) A shortage of single-family housing stock.
(c) Realtor, builder or lender survey information.
(d) Local business or industrial expansion.
\ I. \l:\\ C;C)\SI'IZIC;'IK)\ KI:L)t. IRE\11:\'1;S - (Greater \linneNota)
Complete this)section if your program involves the financing of newly constructed
homes.
If you wish to fund new construction development with MCPP funds, attach the
following information:
(a) Your city's efforts in promoting the improvement, preservation, or
financing of existing housing stock.
(b) Any exclusive "set-aside" arrangements of MCPP funds for specific builders,
developers, or Realtors, and terms involved. MCPP proposals which involve
these types of set-asides must include one of five specific "affordability
initiatives" (see attachment 1 in the cover letter). Include details on the
affordability initiative utilized.
(c) Outline the key reasons why the development of new housing is needed in
your community.
•
\ II. SIG\A'l'L RLS
Provide authorized signature(s) from the organization placing this application,
including printed or typewritten name, title and phone number.
•
MCPP-143M
?/1693
/ -.
It�/Of
lk River
$1,500,000 MINNESOTA CITY PARTICIPATION PROGRAM
APPLICATION FOR FUNDING
APRIL, 1993
1
REQUESTED BY: Elk River EDA
13065 Orono Parkway
Elk River, MN 55330
441-7420
720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
• 1993 MINNESOTA CITY PARTICIPATION PROGRAM
I . ELIGIBLE ORGANIZATION
(a) Elk River Economic Development Authority
13065 Orono Parkway
Elk River, MN 55330
(b) William Rubin
Economic Development Coordinator
(612)441-7420
(c) William Rubin
(d) Economic Development Authority (EDA)
(e) $1,500,000 requested
Number of Loans : 17
( f) Does not apply.
• II . ORIGINATING LENDER
First National Mortgage
729 Main Street
Elk River, MN 55330
Patsy Kropuenske
Vice President-Manager
( 612)441-7133
A letter confirming the willingness of First National
Mortgage to participate in the 1992 Elk River MCPP is
attached.
III . HOUSING PLAN
(a) Principal Housing needs:
o The need to maintain, preserve and strengthen
the City' s existing housing stock.
o Ongoing need for the orderly development of
residential subdivisions that are consistent with
the semi-rural character of the community.
111
• o The need to encourage a broad housing mix
(rental, first-time buyer, executive building
sites, elderly housing) within the community.
o The need to encourage new residential
subdivisions to replenish the number of available
building sites in the community
(b) Data Sources
o Growth Management Plan (adopted August, 1988)
o 1992 Annual Report - Building and Zoning
Department
o Regional Multiple Listing Service of Minnesota
o 1992 new construction summary - Building and
Zoning Department
(c) Plan to Meet Identified Housing Needs
o Encourage a broad mix of housing opportunities
by participating in local, State, or Federally
• assisted program.
o Encourage the acquisition and rehabilitation of
the City' s existing housing by participating in
available housing programs .
o Ensure orderly development patterns by only
extending utilities on a cost-effective basis .
o Adhere to an equitable assessment policy.
o Require that subdivision proposals demonstrate
a compatibility with natural features.
o Restrict inappropriate alteration of natural
contours and soils; restrict removal of natural
vegetation.
(d) Target Areas
None
(e) Administrative Capacity Implement Housing Plan
The City has numerous administrative resources
available to ensure that the 1993 MCPP is
successful. City staff has extensive experience
with a variety of housing programs. While the EDA
will oversee the 1993 mortgage program, building
code interpretation and zoning enforcement rests
• with the Building Inspectors, and the Building and
Zoning Administrator.
IV. PROGRAM SPECIFICS
(a) The 1993 MCPP is consistent with the City' s
Comprehensive Plan because the program helps
encourage a wide range of housing options in the
community. This includes the preservation of
existing homes plus the construction of new ones.
(b) Borrower limits for the Twin Cities Metropolitan
Statistical Area (MSA) is $40,800 . This is subject
to revision based upon Internal Revenue Service
issuing of new limits. An increase or decrease to
the maximum limits will affect the current program
limit of $40,800.
(c) The proposed home purchase price limits, based on
the 1992 MCPP Program is $95,000 (new construction)
or $85,000 (existing) . These limits, subject to an
adjustment to HUD' s safe harbor limits, will likely
be revised.
• (d) No targeting of specific population groups is
planned.
(e) No targeting of specific areas or of specific
housing stock is planned.
( f) No optional program enhancements are planned.
(g) To ensure that the financing of existing housing is
a priority over new construction activity, 25% of
Elk River' s MCPP funds must be used to finance
existing homes.
(h) Elk River is a good candidate for receiving 1993
MCPP funds . The City' s open spaces and recreational
opportunities are key factors in Elk River's
residential growth. The sale of existing homes plus
the construction of new ones are consistently strong.
V. ECONOMIC VIABILITY
According to the Regional Multiple Listing Service of
Minnesota, 235 existing homes were sold in Elk River
during 1992 . The median sales price for these homes is
• $96 ,094 . An additional 115 housing units were
constructed in Elk River in 1992 . Of the 115 units, 107
were single family homes.
• VI . NEW CONSTRUCTION REQUIREMENTS
Elk River continues to attract many new residents who
desire to purchase newly-constructed homes . A large
percentage of these buyers are entering the home
ownership market for the first time.
A stated goal of the City is to encourage a wide range of
housing options (rental, new construction, elderly, etc. )
in the community. This includes the construction of
single family homes for first-time buyers .
An advantage to new construction in Elk River is that of
value. Because building sites in Elk River are priced
lower than in the first and second ring suburbs, buyers
can obtain more amenities to homes .
No exclusive "set-aside" arrangements for specific
builders are planned.
To preserve the City's stock of existing homes, 25% of
the MCPP funds must be used for existing single family
homes .
William Rubin
Name of Person Who Prepared this Proposal
Signature
Economic Development Coordinator
Title
(612)441-7420
Telephone
•
•
13F�"'FIVED MAR 2 4 1993
•
FIRST NATIONAL BANK OF ELK SER
111
729 MAIN STREET • ELK RIVER, MINNESOTA 55330 • (612)441-2200
March 22, 1993
Bill Rubin
Economic Development Coordinator
City of Elk River
720 Dodge Ave. NW
Elk River, Mn. 55330
Dear Bill:
This letter is to confirm that the First National Bank of Elk River
411 will again this year act as your lender to handle the Elk River
City participation loans through the Minnesota Housing Finance
Agency.
We are pleased to be able to work with the City again this year, as
we feel this is a important program to aid in housing in our
community.
Thank you.
Sincerely,
Lied,
Duane E. Kropuenske
Executive Vice President
DEK:lcb
•
ZIMMERMAN OFFICE FIRST NATIONAL MORTGAGE FIRST NATIONAL SECURITIES
Mary & Main Street 716 Main Street 729 Main Street
Local: (612) 856-2266 Elk River, Minnesota Elk River, Minnesota
Metro: (612) 421-0463 (612)441-7133 (612)441-2200 ext. 68
¶1k
y°fTO: ECONOMIC DEVELOPMENT AUTHORITY
River FROM: WILLIAM RUBIN, ED COORDINATO
N ,
DATE: APRIL 6, 1993
SUBJECT: LOAN REQUEST FROM TESCOM
CORPORATION, INC.
INTRODUCTION
On Monday, April 5, 1993, the EDA Finance Committee met to
review a request from Tescom Corporation, 12616 Industrial
Boulevard, Elk River, Minnesota. The following committee
members were in attendance: Jim Simpson; Bill Birrenkott; Bud
Houlton; and Lloyd Brutlag (who arrived later in the meeting) .
Following a presentation by Ed Cunnington, Vice President of
Tescom, the Committee recommended approval of a $50,000 loan to
Tescom to be repaid over a ten year period. Further, the
Committee recommends that the interest rate for the loan be
fixed for the first four years at the current prime rate (6%) ;
the interest rate would be adjusted in the fifth year, but
locked again for three years at the prevailing prime rate; this
• adjustment would also occur for the final three years of the
loan.
BACKGROUND
Enclosed is a copy of a March 31, memo on the Tescom
Corporation loan request that was sent to the Finance
Committee. The EDA loan will be used by Tescom to supplement
other financing sources to construct and equip a new 28,000
square foot facility in the Industrial Park. Together with the
DTED grant-City loan in the amount of $250,000, the $50,000 EDA
loan will be used to assist the company with the purchase of
machinery and equipment.
As indicated in the March 31 memo, the cost of constructing the
new facility, equipping it, and remodeling the existing
facility, totals $2, 161,900 . Financing is coming from a
variety of sources : Industrial Revenue Bonds, DTED-City loan,
TIF, and Tescom' s primary lender - Norwest Bank.
ACTION REQUESTED
The EDA is asked to approve a $50,000 revolving loan to Tescom
Corporation. The rate and term of the loan is structured
pursuant to the Finance Committee' s recommendation. The loan
• will be secured by the filing of a mortgage against the
development site.
RECOMMENDATION
720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
411
I recommend that the EDA approve the $50,000 loan to Tescom
Corporation.
•
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