7.1. HRSR 12-01-2017
Request for Action
To Item Number
Housing and Redevelopment Authority 7.1
Agenda Section Meeting Date Prepared by
General Business December 1, 2017 Colleen Eddy, Economic Development Specialist
Item Description Reviewed by
HRA Housing Rehabilitation Loan Program Amanda Othoudt, EDD
Administrative Agreement with CMHP
Reviewed by
Cal Portner, City Administrator
Action Requested
Approve, by motion, the HRA Rehab Owner-Occupied Housing Rehabilitation Program Administrative
Agreement with CMHP to administer the HRA housing program
Background/Discussion
At the August 5, 2013, regular meeting, the HRA approved hiring the Central Minnesota Housing
Partnership (CMHP) to serve as the HRA’s housing consultant to develop and administer an internally
funded Elk River housing program.
The loan program is now in its fourth year and has proved to be successful, with thirteen total projects
completed and two more projects in the works. Over $311,579 has been disbursed over the four-year
rehabilitation program period.
Staff continues to work with CMHP on marketing efforts; which consists of purchasing Facebook ads,
print ads in the Star News, posting on social media sites and holiday cards. Advertisements have been
displayed in the Star News over the past few months.
Financial Impact
As of October 30, 2017, the rehab loan balance available to lend is $143,632. No additional funds were
allocated in the budget for 2018.
Attachments
2018 Administrative Agreement
Administrative Agreement Exhibits A and B
Rehab Loan Report
HRA Loan Report
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity
FINAL
Housing & Redevelopment Authority In and For the City of Elk River
Owner-Occupied Housing Rehabilitation Program
ADMINISTRATIVE AGREEMENT
THIS AGREEMENT is effective as of this _1st__ day of _January , 2018, between
Central Minnesota Housing Partnership, Inc., a Minnesota non-profit corporation, located at 37
th
28 Avenue North, Suite 102, St. Cloud, MN 56303 (the “Administrator”), and 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, located at 13065 Orono Parkway, Elk River,
MN 55330 (the “HRA”).
RECITALS
A. The HRA has implemented an Owner-Occupied Housing Rehabilitation Program (the
“Program”) which will use HRA funds to assist in the rehabilitation of owner-occupied
single-family homes in a targeted area of city of Elk River.
B. Under the Program, the HRA will make loans to qualifying homeowners (“Loan
Applicants”) to assist in the rehabilitation of their homes.
C. The Administrator has communicated with the HRA and has agreed to administer the
Program in the approved targeted area, as described in the attached Exhibit A (“Targeted
Area”), which duties shall include the Program marketing and selection of Loan
Applicants, and the loan processing and closing of loans under the Program.
D. The HRA and the Administrator desire to enter into this Agreement to establish the
obligations and responsibilities of each party with respect to the Program.
AGREEMENT
1. Participation in Program. The HRA consents to the Administrator’s participation in the
Program. By participating, the Administrator agrees to the (i) administration of the
Program in the Targeted Area, (ii) identification and selection of Loan Applicants and
properties, and (iii) processing and closing of loans under the Program, all of which shall
be done and performed in accordance with the provisions, terms, conditions, limitations
and requirements set forth and contained in this Agreement.
2. Administrator Responsibilities. The Administrator has the following responsibilities:
A. Marketing and recruitment of qualified Loan Applicants and properties.
B. Processing of applications to determine approval or denial of Loan Applicant.
C. Performing initial property inspections of approved properties with applicable
inspection staff.
D. Preparation of scope of work and oversight of bidding process.
E. Program loan document origination.
F. Construction project oversight, draw inspections and contractor payment requests
and project closeout.
G. Preparation and submission of quarterly Program reports to HRA.
H. Maintenance and retention of records in accordance with HRA guidelines.
3. Reservation of Funds. The HRA shall allocate $100,000 per year for the Program to be
used as loan funds to eligible Loan Applicants and Administrative Fee payments to
Administrator. The Administrator shall not make, or commit to make, any loans under the
Program in excess of this allocation without prior written approval of the HRA. The HRA
has the authority to allocate additional funds to the Program at any time during the term
of this Agreement.
4. Administrative Fees. The Administrator will receive an annual Administrative fee of
$15,000 (15% of total Program fund allocation). Administrator will submit invoices for
payment to the HRA on a quarterly basis. The first quarterly invoice of $3,750 will be
submitted after this Agreement is executed to help offset initial Program administration
expenses. If the HRA allocates additional funding to the Program during the term of this
Agreement, additional Administrative Fee amount shall be 15% of additional funding
amount. The Administrator will not be compensated separately for necessary incidental
expenses such as, but not limited to, office space, administration, lodging, food,
telephone, internet, photocopies, faxes, and computer.
5. Representations and Warranties of Administrator. The Administrator certifies,
represents, covenants and warranties as follows:
A. It is a duly constituted entity in good standing and authorized to do business in the
State of Minnesota.
B. It has legal authority to enter into, execute, and deliver this Agreement, and has
taken all actions necessary and incident to its execution and delivery thereof.
C. It shall work affirmatively to ensure that all persons, regardless of age, race, color,
creed, religion, national origin, sex, marital status, status with regard to public
assistance, disability, sexual orientation, or familial status, will be given fair and
equal opportunity to participate in the Program.
D. It has not made any materially false statements or misstatements of fact in
communication with the HRA.
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6. Cancellation of Agreement. This Agreement may be canceled by the HRA or
Administrator at any time, with or without cause, upon thirty (30) days written notice to
other party. In the event of such a cancellation, the Administrator shall be entitled to
administrative fee payment, determined on a pro-rata basis, for work or services
performed.
7. Term of Agreement. This Agreement shall be effective as of the date first written above
and shall remain in effect until December 31, 2018, unless sooner terminated due to
project completion or in accordance with the provisions contained herein.
8. Record Keeping and Reporting. The Administrator shall supply such records and
receipts as are necessary for the HRA to verify complete and total compliance with the
Program. The Administrator shall retain all records in connection with each project and
will forward applicable files to the HRA for each project to set up loan payment schedule.
Pursuant to Minnesota Statutes § 16C.05, Subd. 5, the Administrator agrees that the
books, records, documents, and accounting procedures and practices of the Administrator
that are relevant to or arise as a result of the Administrator’s performance under this
Agreement, are subject to examination by the HRA and the state auditor or legislative
auditor for a minimum of six years. The Administrator shall maintain such records for a
minimum of six years after final payment.
9. Data Practices. The Administrator agrees, with respect to any data that is possesses
regarding the Program, to comply with all of the provisions and restrictions contained in
the Minnesota Government Data Practices Act (Minn. Stat. Ch. 13).
10. Liability. The Administrator and the HRA agree that they will be responsible for their
own acts and omissions and the results thereof to the extent authorized by law, and they
shall not be responsible for the acts and omissions of the other party and the results
thereof. Nothing in this Agreement shall constitute a waiver or limitation of any
immunity or limitation on liability to which the HRA is entitled. The parties agree that
these indemnification obligations will survive the completion or termination of this
Agreement.
11. Relationship of the Parties. The Administrator is an independent contractor. Nothing
contained in this Agreement is intended or should be construed in any manner as creating
or establishing the relationship of co-partners or a joint venture between the parties
hereto, nor shall the Administrator be considered or deemed to be an employee of the
HRA in the performance of this Agreement. The Administrator’ duties will be performed
with the understanding that Administrator has special expertise as to the services which
the Administrator is to perform and is customarily engaged in the independent
performance of the same or similar services for others.
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12. Compliance with Laws. The Administrator shall exercise due professional care to
comply with applicable federal, state and local laws, rules, ordinances and regulations in
effect as of the date of this Agreement.
13. Attorney Fees. In the event of any action to enforce or interpret this Agreement, the
prevailing party shall be entitled to recover from the losing party reasonable attorney fees
incurred in the proceeding, as set by the court, at trial, on appeal or upon review.
14. Entire Agreement. This Agreement, the HRA Owner-Occupied Housing Rehabilitation
Program Policies And Procedures attached hereto as Exhibit B, and any other exhibits,
and any addenda or amendments signed by the parties shall constitute the entire
agreement between the HRA and the Administrator, and supersedes any other written or
oral agreements between the HRA and the Administrator. This Agreement can only be
modified in writing signed by the HRA and the Administrator.
15. Third Party Rights. The parties to this Agreement do not intend to confer on any third
party any rights under this Agreement.
16. Choice of Law and Venue. This Agreement shall be governed by and construed in
accordance with the laws of the state of Minnesota. Any disputes, controversies, or
claims arising out of this Agreement shall be heard in the state or federal courts of
Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of
these courts, whether based on convenience or otherwise.
17. Conflict of Interest. The Administrator shall use reasonable care to avoid conflicts of
interest and appearances of impropriety in performance of this Agreement with the HRA.
In the event of a conflict of interest, Administrator shall advise the HRA and either secure
a waiver of the conflict or advise the HRA that it will be unable to provide the requested
services.
18. Work Products and Ownership of Documents. All records, information, materials and
other work products, including, but not limited to the completed reports, drawings, plans,
and specifications prepared and developed in connection with the provision of services
pursuant to this Agreement shall become the property of the HRA, but reproductions of
such records, information, materials and other work products in whole or in part may be
retained by the Administrator.
19. Amendments. Any amendments to this Agreement shall be in writing, and shall be
executed by the same parties who executed the original contract or their successors in
office.
20. Insurance. The Administrator will maintain insurance coverage for: Worker’s
Compensation (statutory limits), General Liability, Automobile Liability, Professional
Liability, and Excess or Umbrella Liability in an amount of not less than $1,500,000.00
per occurrence, and will provide information as to specific limits upon receipt of signed
Agreement. The Administrator shall provide HRA with a current certificate of liability
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insurance for all insurance coverage referenced above. Such certificate of liability
insurance shall list the HRA as an additional insured and contain a statement that such
policies of insurance shall not be canceled or amended unless thirty (30) days written
notice is provided to the HRA, or ten (10) days written notice in the case of non-payment.
21. Assignment. Neither HRA nor Administrator shall subcontract or assign this Agreement
or any rights under or interest in this Agreement, in whole or in part, without the other
party’s prior written consent. Any assignment in violation of this provision is null and
void.
22. Waiver. No waiver of any provision or of any breach of this Agreement shall constitute
a waiver of any other provisions or any other or further breach, and no such waiver shall
be effective unless made in writing and signed by an authorized representative of the
party to be charged with such a waiver.
23. Severability. In the event that any provision of this Agreement shall be illegal or
otherwise unenforceable, such provision shall be severed, and the balance of the
Agreement shall continue in full force and effect.
24. Authorized Agents. The HRA’s authorized agent for purposes of administration of this
contract is the ___________ of the HRA, or its designee. The Administrator’s authorized
agent for purposes of administration of this contract is the Executive Director, and this
Agreement shall be performed by or under his/her supervision.
25. No Discrimination. The Administrator agrees not to discriminate in providing products
and services under this Agreement on the basis of race, color, sex, creed, national origin,
disability, age, sexual orientation, status with regard to public assistance, or religion.
Violation of any part of this provision may lead to immediate termination of this
Agreement.
(THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK.)
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IN WITNESS WHEREOF, the HRA and the Administrator have caused this
Administrative Agreement to be executed by their duly authorized representatives in duplicate on
the respective dates indicated below.
ADMINISTRATOR:
Central Minnesota Housing Partnership, Inc.
By:
Its:
Date:
HRA:
Housing & Redevelopment Authority in and for
the City of Elk River, Minnesota
By:
Its:
Date:
By:
Its:
Date:
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Exhibit A
TARGETED AREAS
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Exhibit B
HRA OWNER-OCCUPIED HOUSING REHABILITATION PROGRAM POLICIES AND
PROCEDURES
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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
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10. DENIAL/COMPLAINT/APPEAL PROCEDURES 9
11. AMENDING POLICIES & PROCEDURES 10
4431144 MJM ELI 85-26
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.
• 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.
4431144 MJM ELI 85-26
• 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, bid 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.
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.
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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
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
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.
4431144 MJM ELI 85-26
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 HRA.
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 I% 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 CMHP. 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
• 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
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• Garages/Outbuildings
• Fences (new or repair)
• Water softeners
• Decks/Patios (new)
• Additions to structures
• Finishing basements
• Other rehabilitation items found suitable by CMHP rehabilitation staff
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
Note: 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. CMHP 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
CMHP. 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.
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
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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:
• General conditions
• Timeframe for completion
• Warranties
• Special conditions
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• 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, CMHP 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 10% 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 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
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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.
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
8
443114v4 MJM ELI 85-26
• 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.
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.
9
4431144 MJM ELI 85-26
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:
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 Housing Partnership, Inc.
3728 th 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 by Central Minnesota Housing Partnership, Inc.
on behalf of the HRA of Elk River.
10
4431144 MJM ELI 85-26
2017 Elk River HRA Homeowner Rehab Financial and Project Report December 2017
Updated: 11/27/17
Completed Projects
App. DateNameProject #Home AddressDate Current StatusLoan amountLoan rateLoan termLead Paint Recording Monthly
Approvedinspect.FeesPayment
Projects Under Construction
App. DateNameProject #Home AddressDate Current StatusLoan amountLoan rateLoan termLead Paint Recording Monthly
Approvedinspect.FeesPayment
2.25%
14 4/13/2017Linda & Daniel McClellanER-17810 Jackson Ave NW4/21/2017sent docs. to be recorded 11/27$6,534.005$650.00$46.00$115.24
Projects Ready for Construction
App. DateNameProject #Home AddressDate Current StatusLoan amountLoan rateLoan termLead Paint Recording Monthly
Approvedinspect.FeesPayment
7/25/20171811 Main St. NW7/31/2017waiting to send Notice to Proceed 11/22$21,640.004.25%15$46.00$162.79
Kyle & Jennifer TorfinER-18$400.00
15
Projects Bidding/Waiting for Approved Scope
App. DateNameProject #Home AddressDate Current StatusLoan amountLoan rateLoan termLead Paint Recording Monthly
Approvedinspect.FeesPayment
Approved Applications
App. DateNameProject #Home AddressDate Current StatusLoan amountLoan rateLoan termLead Paint Recording Monthly
Approvedinspect.FeesPayment
Projects Closed Applications
App. DateNameProject #Home AddressDate Current StatusLoan amountLoan rateLoan termLead Paint Recording Monthly
Approvedinspect.FeesPayment
8/24/2017Dianna AndersonER-18430 Rush Ave NW8/29/2017 closed application at Dianna's request 9/28
3/27/2015Kara & Joe HolmanER-81028 Main St. NW3/31/2015$567
file closed on 2/8/16
8/20/2014Lisa ConwayER-2236 Norfolk Ave. NW8/21/2014lost contact closed 2/11/15$567
8/9/2016
8/5/16David & Laura HartfielER-131017 Main St. NWDave asked to cancel his application 9/23/16
11/27/2017
BorrowerPrincipalInterest
Four year total rehab funds below:
Cunningham$1,151.33$314.67
$340,000
Hanson$953.58$246.43
Total loan amounts/rehab funds:
$311,579$10,206
Total LBP:
Hicks$1,989.42$1,109.27
Rehab balance:
$28,421
Hoops$208.91$143.46
Additional contribution
$50,000
Jungers$24,881.69$472.15
Principle
$67,547
Krieg$142.56$45.07
Interest
$7,870
Available to loan
Mahon$2,291.23$118.61
$153,838
Menning$3,694.36$823.66
Olesen$2,788.21$1,603.14
Sandhoefner$544.95$170.63
Stimpson$4,088.92$911.66
Swenson$2,812.14$1,602.87
Thompson$22,000.00$307.97
$67,547.30$7,869.58
$75,416.88Total principle and interest received to date
Borrower Loan Amount
Loan
Origination
Date
Maturity
Date
Monthy
Payment
Amount
Current Loan Balance
Cunningham 1420 5th Street NW 22,069.00$ 2/1/2017 1/1/2027 208.04$ Y $ 20,917.67
Hanson 319 - 2nd Street NW 25,000.00$ 8/1/2017 8/1/2027 241.40$ Y $ 24,046.42
Hicks 1205 4th St NW 25,000.00$ 4/1/2016 3/1/2031 175.67$ N $ 23,010.58
Hoops 806 Holt Avenue NW $ 24,645.00 10/1/2017 10/1/2032 176.18$ Y $ 24,436.09
Krieg 609 Gates Avenue NW $ 19,665.00 10/1/2017 10/1/2027 187.63$ Y $ 19,251.61
Mahon 501 - 6th Street 5,837.00$ 12/1/2015 11/1/2020 100.41$ Y $ 3,545.77
McClellan 810 Jackson Ave NW $ 6,534.00 12/1/2017 12/1/2022 115.24$ $ 6,534.00
Menning 525 - 8th St NW 18,657.00$ 9/1/2015 8/1/2025 173.77$ Y $ 14,816.92
Olesen 420 Main St 25,000.00$ 10/1/2015 9/1/2030 171.29$ N $ 22,211.79
Sandhoefner 730 Jackson Ave NW $ 25,000.00 9/1/2017 9/1/2027 238.53$ Y $ 24,455.05
Stimpson 606 Jefferson Lane NW 20,650.00$ 9/1/2015 8/1/2025 192.33$ Y $ 16,399.80
Swenson 602 Gates Ave NW 25,000.00$ 10/1/2015 9/1/2030 175.67$ Y $ 22,067.95
Totals 243,057.00$ 2,156.16$ 221,693.65$
ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY
REHABILITATION LOAN PROGRAM
Report Dated: November 22, 2017