7.2 HRSR 12-05-2016 City of
E1 � Request for Action
River
To Item Number
Housing and Redevelopment Authority 7.2
Agenda Section Meeting Date Prepared by
General Business December 5,2016 Colleen Eddy,Economic Development Specialist
Item Description Reviewed by
HRA Housing Rehabilitation Loan Program Amanda Othoudt, EDD
Discussion Reviewed by
Cal Portner, City Administrator
Action Requested
Receive information on the HRA Housing Rehabilitation Loan Program and discuss the redefined
targeted area and the revised Mortgage and Repayment Agreement
Background/Discussion
At the November 5th HRA meeting,members directed staff to provide more information on the number
of homes located in the proposed expanded area.
The new expanded area would incorporate about 150 homes:
Age of home Number in the Proposed Area
0-1850 18
1851 — 1930 20
1931 — 1961 38
1962— 1985 44
1986—2015 30
Also during the general meeting,members discussed including default language in the HRA
Rehabilitation Loan Program Policy and Mortgage and Repayment Agreement between the homeowner
and the HRA. Staff was directed to get legal counsel on the wording along with where to include it in the
Mortgage and Repayment Agreement document.
Staff added a 10-day late payment clause under bullet item#1 on the Mortgage and Repayment
Agreement.
Financial Impact
N/A
Attachments
• Proposed Targeted Area Expansion Map
• Revised Mortgage and Repayment Agreement
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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($ ).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 %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.
If the HRA has not received the full amount of any monthly payment by the end of 10 calendar
days after the date it is due,the Owner will pay a late fee to the HRA. The late fee will be 5.000%
of the overdue principal and interest payment. The Owner will pay this late fee promptly but only
once on each late payment.
2. Owner covenants and agrees with the HRA 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
THIS INSTRUMENT DRAFTED BY:
Central Minnesota Housing Partnership,Inc.
37 28`b Avenue North,Suite#102
St.Cloud,MN 56303
S-2
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