HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 05-23-2019MEETING AGENDA
PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY
THURSDAY, MAY 23, 2019 - 7:00 p.m.
WHERE: Parkers Lake Room
City of Plymouth
3400 Plymouth Boulevard
Plymouth, MN 55447
CONSENT AGENDA
All items listed on the Consent Agenda are considered to be routine by the
Housing and Redevelopment Authority and will be enacted by one motion.
There will be no separate discussion of these items unless a Commissioner,
citizen or petitioner so requests, in which event the item will be removed
from the consent agenda and considered in normal sequence on the agenda.
1. CALL TO ORDER - 7:00 P.M.
2. PUBLIC FORUM
3. CONSENT AGENDA
A. Approve HRA Meeting Minutes for April 25, 2019.
B. Plymouth Towne Square. Accept Monthly Housing Reports.
C. Vicksburg Crossing. Accept Monthly Housing/Marketing Reports.
D. HRA Funded Rehabilitation Program. Approve Procedural Guide changes.
4. NEW BUSINESS
A. HRA Strategic Plan. Discuss facilitation options.
B. HRA First Time Homebuyer Program. Procedural Guide changes
5. ADJOURNMENT
DRAFT MINUTES
PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY
April 25, 2019
MEMBERS PRESENT: Chairman Michelle Soderberg, Commissioners Robert
Huddleston, Jeff Kulaszewicz, and Matthew Plec
ABSENT: Commissioner Marty McCarthy
STAFF PRESENT: HRA Executive Director Steve Juetten, HRA Manager Jim Barnes,
Community Development Coordinator Matt Lupini, and Office Support Representative
Michelle Rumrey
OTHERS PRESENT: Jody Boedigheimer of Grace Management, Megan Sand Carr
from Sand Companies
1. CALL TO ORDER
Chair Soderberg called the Plymouth Housing and Redevelopment Authority meeting to
order at 7:03 p.m.
2. PUBLIC FORUM
Chair Soderberg opened and closed the Public Forum as there was no one present to speak.
3. CONSENT AGENDA
A. Approve HRA Meeting Minutes for February 28, 2019.
B. Plymouth Towne Square. Accept Monthly Housing Reports.
C. Vicksburg Crossing. Accept Monthly Housing/Marketing Reports.
MOTION by Commissioner Kulaszewicz, seconded by Commissioner Huddleston, to
approve the consent agenda. Vote. 4 Ayes. MOTION passed unanimously.
4. NEW BUSINESS
A. HRA Strategic Plan
HRA Manager Barnes informed the Board that Jon Gutzmann expressed concerns if he
would have sufficient time to commit to facilitating the update of the HRA Strategic Plan.
After discussing the matter, Mr. Gutzmann declined the invitation to be the facilitator. He
did provide names of others he would recommend. HRA Manager Barnes stated he has
done some initial research on the suggested names and one, Rebecca Ryan, would most
likely be too expensive. The other one is Kathy Bennet who has worked for the Urban
Draft Minutes
Plymouth Housing and Redevelopment Authority
April 25, 2019
Page 2
Land Institute (ULI). HRA Manager Barnes informed the Board he will contact Ms.
Bennet and provide the board with additional information.
HRA Manager Barnes reminded the Board about the previous discussion in January and
asked if the Board would like to continue the discussion tonight.
He stated a facilitator would help guide the Board through the planning process. HRA
Manager Barnes suggested talking about community engagement, social media and flash
votes.
HRA Executive Director Juetten said the flash votes are aimed at people who have signed
up to receive them. It is not as statistically valid as a survey because it is directed only at
people on the list.
Commissioner Kulaszewicz stated people who are not affected by the idea being presented
would probably not respond.
HRA Executive Director Juetten agreed and said inquires related to housing would be
beneficial to all.
Chairman Soderberg stated the flash vote would be one piece and an open house.
HRA Executive Director Juetten informed the Board Mayor Wosje is thinking about
conducting a city wide survey, as that has not been done in a few years, to determine how
the residents feel about the City. There would be housing questions included in the survey.
This data would be more statistically valid than the flash votes.
HRA Manager Barnes expressed the significance of reaching a broad spectrum of residents
to avoid a one sided response. Community engagement, open meetings, and focus groups
will be essential to determine which direction the HRA should go with the Strategic Plan.
He stated a facilitator will also assist in this process.
Commissioner Kulaszewicz said the surveys may provide the necessary information. He
said he is hesitant to spend money for a person to lead meetings and is struggling with what
the benefit will be for the Strategic Plan. He said staff keeps the Board informed about
what is happening related to housing in the community.
HRA Manager Barnes responded the facilitator gives an opportunity to receive an outside
perspective from someone who is not solely focused on Plymouth and its market. HRA
Manager Barnes stated he does visit other agencies to look into their programs however he
does not have the time available to properly evaluate all the areas in which those agencies
have been successful. He reminded the Board of the market study that was conducted and
validated the known needs of Plymouth's multi -housing market. The market study also
expanded that material into categories not yet explored.
Draft Minutes
Plymouth Housing and Redevelopment Authority
April 25, 2019
Page 3
Chairman Soderberg added the benefits to a facilitator leading the Strategic Planning are
the art, science, and process. An effective facilitator sets the framework to think about
ideas differently which will aid in obtaining a new product. An ineffective facilitator will
just regurgitate the same ideas. Chairman Soderberg suggested analyzing qualifications
and also to become comfortable with their process.
HRA Manager Barnes asked the Board if they wanted to begin reviewing the current
Strategic Plan or if it is premature to begin talking about it until we engage with a facilitator.
Commissioner Plec said it is premature. He said the vision statement is good and hits all
the points we want. He recommended shifting some of the goals and restated it is
premature to be discussing each line item.
HRA Executive Director Juetten agreed it is premature to discuss changing the Strategic
Plan. He advocated waiting to gain an understanding of how the City Council will be
formulating their methods as there is a new mayor and new leadership on the council.
Mayor Wosje has expressed proactive ideas in developing the City.
HRA Executive Director Juetten informed the Board the council has hired a consultant to
assist with economic development planning. There are two upcoming meetings: April 30
and May 21 for these high level ideas to be presented. Housing may also benefit from this
planning. HRA Executive Director recommended waiting to understand what the council
is planning before the HRA Board does something. He stated he does not want to delay
the Strategic Plan, however a pause could be helpful considering there is a new council in
place.
Chairman Soderberg said that in the meantime we can talk to a facilitator.
Chairman Soderberg inquired as to everyone's position on hiring a facilitator.
Commissioner Plec answered this is a good idea to revisit and he likes the idea of a
facilitator. He said he understands the trepidation of spending money; he does think it is
better to take a chance on an outside view.
Commissioner Kulaszewicz stated he could support hiring a facilitator after hearing the
other commissioners' points of view.
HRA Manager Barnes said the Board will have a chance to meet the persons being
considered.
Commissioner Huddleston said it is nice to have another set of eyes other than what the
council sees and that he would want that person to have transferable knowledge.
Draft Minutes
Plymouth Housing and Redevelopment Authority
April 25, 2019
Page 4
Community Development Coordinator Lupini stated a facilitator is a valuable asset and
this is a good process which is worth exploring.
B. Sand Companies. Request for financial assistance to cover a portion of City
imposed fees.
HRA Manager Barnes gave an overview of the staff report.
Chairman Soderberg asked if the $241,000 will come out of the current reserves and is
staff comfortable with that amount. She also asked what month do we balance reserves.
HRA Manager Barnes said the reserve analysis occurs in September. The senior building
reserves are separate and are completed in October.
Commissioner Kulaszewicz said he thought this area was already a TIF district and asked
why a new one is necessary.
HRA Manager Barnes said the entire site is in a TIF district at this point. It is a
redevelopment district that was created to assist with the demolition of a building, road
improvements, and soil corrections. All of the increment that could be generated is
committed. The proposal will be to remove the Sand parcel from the current TIF district
and create a new Housing TIF district to assist the development.
Commissioner Plec asked what is on the horizon besides Beacon and Sand for affordable
housing. He expressed concerns about having enough funding if there is another project.
HRA Manager Barnes replied the reserves are not the only tools we have. The other
tools include TIF, tax abatement and revenue bonds. At this point staff believes the
$500,000 currently in the reserves is sufficient.
Megan Sand Carr from Sand Companies requested a wording change in the resolution
from Sand Companies to Plymouth Element LLC because they are the owners of the
housing project which is a different from Sand Companies.
HRA Executive Director Juetten asked if Sand Companies will still be the management
company.
Ms. Sand Carr affirmed Sand Companies will still be the general contractor and the
property management company.
MOTION by Commissioner Plec, seconded by Commissioner Kulaszewicz, to adopt
Resolution 2019-03 as amended. Vote. 4 Ayes. MOTION passed unanimously.
C. HRA Owner Occupied Rehabilitation Loan Program Guideline changes.
Draft Minutes
Plymouth Housing and Redevelopment Authority
April 25, 2019
Page 5
Community Development Coordinator Lupini gave an overview of the staff report.
Commissioner Kulaszewicz inquired if there are statistics related to how many of the
loans have actually accrued to zero, how many are on the books for a while and how
many loans are repaid.
HRA Manager Barnes answered there is no statistical analysis at this time. He said it is
possible to determine how many loans have gone through the fu1120 years and been
forgiven. Generally speaking, there have been about 200 loans issued since the program
began and less than 10 percent have fulfilled the full 20 year term.
Commissioner Kulaszewicz asked if the money is returned.
HRA Manager Barnes said the money is returned as repaid loans.
Commissioner Kulaszewicz asked if the money was occasionally siphoned out for other
proj ects.
HRA Manager Barnes replied the money usually stays in the First Time Home Buyer and
Rehabilitation Loan programs.
Commissioner Kulaszewicz stated it is an elaborate process to figure out who will get a
loan and what it will be used for. He asked if there is someone to assist with this process.
HRA Manager Barnes answered Community Development Coordinator Lupini and our
Housing Inspector assist the clients with the paperwork process and determining what
improvements qualify.
Commissioner Kulaszewicz asked if there is a list of contractors provided.
Community Development Coordinator Lupini said we do maintain a list of contractors
who have worked on previous projects, but we do not make any recommendations.
Chairman Soderberg asked how the clients find out about the program.
HRA Manager Barnes replied mostly by word of mouth and publicizing in Plymouth
News. There may be advertising on social media in the future.
MOTION by Commissioner Kulaszewicz, seconded by Chair Plec, to adopt HRA Owner
Occupied Rehabilitation Loan Program Guideline changes. Vote. 4 Ayes. MOTION
passed unanimously.
D. Election of Officers. Chair, Vice -chair, Secretary.
Draft Minutes
Plymouth Housing and Redevelopment Authority
April 25, 2019
Page 6
MOTION by Chairman Kulaszewicz, seconded by Commissioner Huddleston
nominating Chair Soderberg as HRA Chair. Vote. 4 Ayes. MOTION approved
unanimously.
MOTION by Chairman Kulaszewicz, seconded by Chairman Soderberg nominating
Commissioner Plec as HRA Vice -chair. Vote. 4 Ayes. MOTION approved
unanimously.
MOTION by Chairman Soderberg, seconded by Commissioner Kulaszewicz
nominating Commissioner McCarthy as HRA Secretary. Vote. 4 Ayes. MOTION
approved unanimously.
5. ADJOURNMENT
MOTION by Chair Soderberg, with no objection, to adjourn the meeting at 7:54 p.m.
PLYMOUTH
TOWNE SQUARE
To: Jim Barnes
From: Phil Marston
®ate: May 15, 2019
RE: Plymouth Towne Square Monthly Report for April 2019.
The May 2019 Calendar and Newsletter are attached.
Rentals:
As of April 1"we had 99 occupied apartments.
Apartment Type
Occupied
Vacant
Deposits
Estimated Move in
1 Bedroom
60
0
0
2 Bedroom
1 -Bath
20
0
0
2 Bedroom
2 -Bath
19
0
0
Totals
99
0
0
Move-Ins/Move-Outs:
We had zero move in and zero move out during the month. As of April 30th all 99 apartments were
occupied.
Marketing
The wait lists remain open with 82 names on the 1 -bedroom list and 13 names on the 2 -bedroom list. We
receive inquiry calls daily and send applications out when requested.
15500 37th Avenue North • Plymouth, MN 55446-3250
Phone: (763) 550-9525 • Fax: (763) 551-0144
Owned by Plymouth Housing and Redevelopment Authority
P
PLYMOUTH
TOWNE SQUARE
Resident Services
Our monthly birthday party and resident meeting was held on Thursday April 18th with 31 residents in
attendance. We had an Easter brunch on Saturday April 20th with 28 people in attendance.
Building Issues
We replaced carbon monoxide detectors in the garage and also replaced the east side air intake actuators.
This is the system that blows out engine exhaust and replaces it with fresh air. No other issues to report.
15500 37th Avenue North • Plymouth, MN 55446-3250
Phone: (763) 550-9525 • Fax: (763) 551-0144
Owned by Plymouth Housing and Redevelopment Authority
Balance Sheet
PLYMOUTH TH 'TC3WNE SQUARE
459,247
As Of April 30, 2019
182,420
BUILDING
Ending Balance Total
ASSETS
1,077,233
CURRENT ASSETS
438,088
PETTY CASH -US BANK
500
US BANK OPER ACCT -
113,519
US BANK SEC DEP ACCT
66,292
INVESTMENTS -WORKING CAPITAL FUND
708,028
INVESTMENTS - NEW DEBT SERVICE
174,236
ACCOUNTS REC-TENANTS
71
DUE FROM CRY OF PLYMOUTH
26,667
INTEREST RECEIVABLE
2,000
ACCOUNTS REC-OTHER
941
PREPAID PROPERTY INSURANCE
3,496
PREPAID WORKERS COMP INSUR
421
PREPAID OTHER
4,139
TOTAL CURRENT ASSETS
1,100,309
FIXED ASSETS
LAND
459,247
SITE IMPROVEMENTS
182,420
BUILDING
5,767,619
BUILDING IMPROVEMENTS
1,077,233
FURN, FIXT & EQUIP -GENERAL
438,088
FURNITURE $ FIXTURES - HOUSEKEEPING
8,696
COMPUTERSIOFFICE EQUIPMENT
13,060
ACCUMULATED DEPRECIATION
(4,350,647)
TOTAL FIXED ASSETS
3,595,715
NON-CURRENT ASSETS
ACCRUED OTHER
TOTAL ASSETS
4,696,024
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE -TRADE
20,890
ACCRUED PAYROLL
4,780
ACCRUED COMPENSATED BALANCES
595
ACCRUED INTEREST
4,021
ACCRUED REAL ESTATE TAXES
11,204
BONDS PAYABLE -SERIES 2011A ST
295,000
ACCRUED OTHER
1,103
TOTAL CURRENT LIABILITIES
337,592
LONG-TERM LIABILITIES
SECURITY DEPOSITS
66,442
BONDS PAYABLE -SERIES 201 IIA LT
1,285,000
BOND PREMIUM
27,905
1,379,347
TOTAL LIABILITIES
1,716,939
EQUITY
RETAINED EARNINGS RSRVD FOR DS
136,846
RETAINED EARNINGS
734,577
NET INVESTMENT IN CAPITAL ASSETS
2,048,702
TOTAL EQUITY
2,920,126
CURRENT YEAR INCOME/(LOSS)
58,959
TOTAL LIABILITIES & EQUITY
4,696,024
Profit and Loss Variance
PLYMOUTH TOWNE SQUARE
Through April 30, 2019
MTD Actual Budget Var. YTD Actual Budget Var. Year Budget
INCOME
APARTMENT RENTAL REVENUE
56,672
56,448
2,224
233,902
225,792
8,110
677,376
HRA INDIVIDUAL
15,417
15,417
Q
61,667
61,668
(1)
185,000
GARAGE RENT
3,375
3,050
325
13,575
12,200
1,375
36,600
GUEST ROOM REVENUE
130
130
0
325
520
(195)
1,560
LAUNDRY REVENUE
938
885
53
3,475
3,540
(65)
10,620
APPLICATION FEE REVENUE
0
35
(35)
0
210
(210)
630
TRANSFER FEE REVENUE
0
0
0
0
500
(500)
500
INVESTMENT INCOME
625
500
125
2,645
2,000
645
6,000
MISCELLANEOUS REVENUE
823
100
723
1,166
400
766
1,200
TOTAL INCOME
79,979
76,565
3,414
316,754
306,830
9,924
919,486
EXPENSES
ADMINISTRATION
MANAGER SALARIES/WAGES
4,669
4,721
52
18,653
18,884
231
56,652
PAYROLL TAXES
592
966
374
2,268
3,864
1,596
11,596
HEALTH INSURANCE
1,353
1,790
437
5,670
7,160
1,490
21,477
WORKERS COMP INSURANCE
120
180
60
481
720
239
2,160
MAINTENANCE SALARIESIWAGES
3,931
5,451
1,520
16,601
21,804
5,203
65,412
EMPLOYEE COSTS
80
110
30
320
440
120
1,400
SEMINAR/TRAINING
0
255
255
0
255
255
255
CLASSIFIED ADVERTISING
0
0
0
420
0
(420)
0
BANK FEES
94
85
(9)
384
340
(44)
1,020
DUES, SUBS & MEMBERSHIPS
0
0
0
60
60
0
60
LICENSE & PERMITS
0
0
0
220
165
(55)
1,119
MILEAGE REIMBURSEMENT
65
53
(12)
258
210
(48)
630
POSTAGE/OVERNIGHT EXPRESS
55
0
(55)
105
35
(70)
135
PRINTING
0
20
20
0
80
80
240
MANAGEMENT FEES
4,840
4,840
0
19,360
19,360
0
56,060
PROFESSIONAL FEES
0
155
155
0
620
620
1,860
TELEPHONE EXPENSE
360
540
180
1,437
2,160
723
6,480
EQUIPMENT LEASE/REPAIR
104
265
161
379
1,060
681
3,180
OFFICE SUPPLIES
86
90
4
413
360
(53)
1,080
TOTAL ADMIN EXPENSES
16,351
19,521
3,170
67,030
77,577
10,547
232,836
LIFE ENRICHMENT
RESIDENT PROGRAM/ACTIVITIES
675
250
(425)
1,573
1,100
(473)
6,350
TOTAL LIFE ENRICHMENT EXPENSES
675
250
(425)
1,573
1,100
(473)
6,350
Profit and Loss Variance
PLYMOUTH TOWNE SQUARE
Through April 30, 2019
MTD Actual
Budget
Var.
YTD Actual
Budget
Var.
Year Budget
MARKETING
ADVERTISING
0
10
10
0
40
40
120
TOTAL MARKETING EXPENSES
0
10
10
0
40
40
120
HOUSEKEEPING
CONTRACT LABOR
1,372
1,509
137
5,779
6,036
257
18,108
CLEANING SUPPLIES
272
175
(97)
788
700
(88)
2,100
TOTAL HOUSEKEEPING EXPENSES
1,644
1,684
40
6,566
6,736
170
20,208
BUILDING & GROUNDS
CABLE TV EXPENSE
64
66
2
255
264
9
792
UTILITIES - ELECTRICITY
1,527
2,000
473
6,569
8,400
1,831
25,700
UTILITIES - GAS
1,626
2,200
574
11,763
12,200
437
21,025
UTILITIES - WATER/SEWER
1,857
1,700
(157)
7,045
6,200
(845)
19,850
WATER SOFTENING SERVICE
479
525
46
1,880
2,100
220
6,300
DOORS, KEYS & WINDOWS
150
300
150
645
1,200
555
3,600
FIRE SYSTEM SERVICE
210
600
390
1,038
2,400
1,362
7,200
LAWN S ERVICE/LANDSCAP/S NOW RMVL
1,265
2,000
735
16,345
9,500
(6,845)
24,000
PEST CONTROL
0
0
0
290
150
(140)
730
TRASH REMOVAL
1,084
780
(304)
4,046
3,120
(926)
9,360
UNIT TURNOVER REPAIRS
0
3,806
3,806
0
15,224
15,224
45,675
ELEVATOR -REPAIRS & MAINTENANCE
613
790
177
2,454
3,160
706
9,480
REPAIRS & MAINTENANCE
2,846
2,405
(441)
3,390
9,620
6,230
28,860
BUILDING & GROUNDS SUPPLIES
4,655
1,700
(2,955)
9,508
6,800
(2,708)
20,400
HVAC - REPAIRS & MAINTENANCE
8,284
1,125
(7,159)
11,198
4,500
(6,698)
13,500
MISCELLANEOUS B & G EXPENSES
0
833
833
0
3,333
3,333
10,000
TOTAL BUILDING & GROUNDS
24,660
20,830
(3,830)
76,425
88,171
11,746
246,472
OTHER OPERATING EXPENSES
PROPERTY & LIABILITY INSURANCE
2,268
2,439
171
9,074
9,756
682
29,562
PAYMENT IN LIEU OF PROPERTY TAX
2,801
2,773
(28)
11,204
11,092
(112)
33,275
TOTAL OTHER OPERATING EXPENSES
5,069
5,212
143
20,278
20,848
570
62,837
TOTAL OPERATING EXPENSES
48,399
47,507
(892)
171,872
194,472
22,600
568,823
NET OPERATING INCOME I( LOSS)
31,580
29,058
2,522
144,882
112,358
32,524
350,663
DEPREC, INTEREST & OTHER
DEPRECIATION EXPENSE
15,750
15,750
0
63,000
63,000
0
189,000
AMORTIZATION EXPENSE
(527)
(527)
0
(2,108)
(2,108)
0
(6,320)
RESERVE/REPLACE CAPITAL EXPENSE
5,484
7,338
1,854
35,463
29,352
(6,111)
88,050
INTEREST EXPENSE
4,020
4,020
0
16,235
16,080
(155)
48,237
HRA SUBSIDY -TIF
(6,667)
(6,667)
0
(26,667)
(26,668)
(1)
(80,000)
TOTAL DEPREC, INTEREST & OTHER
18,060
19,914
1,854
85,923
79,656
(6,267)
238,967
NET INCOME / (LOSS)
13,520
9,144
4,376
58,959
32,702
26,257
111,696
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Mcksb—g Crossing
MEMORANDUM
To: Jim Barnes
From: Sara Paquette
Date: May 6, 2019
RE: Vicksburg Crossing Monthly Report for April 2019
Rentals:
As of April 30"', we have 93 occupied apartments with 1 vacant apartment, and we have 2 deposits at this
time, giving us a total of 0 apartments available to rent. We have one deposit that is for an anticipated
vacancy. The affordable apartment waiting list now has 70 names and we have been adding interested
people to the list. We have 36 people on our moderately priced 1 bedroom wait list and 29 people on our
moderately priced 1+ and 2 bedroom wait list.
Style Total #
Square Feet
Bedrooms
Occupied
Vacant
Deposits
Est'd Move in
Style A (23)
850 Sq Ft
1 Bedroom
23
0
0
Style C (8)
884 Sq Ft
1 + Den
8
0
0
Style C2 (8)
950 Sq Ft
1 + Den
7
1
1
5/1/2019
Style D 8
1187 Sq Ft
2 Bedroom
8
0
0
Style D2 4
1281 Sq Ft
2 Bedroom
4
0
0
Style E (7)
1055 Sq Ft
2 Bedroom
7
0
0
Style E2 3
1055 Sq Ft
2 Bedroom
3
0
0
Affordable
33)
725 Sq Ft
1 Bedroom
33
0
1
5/15/2019
TOTALS
93 1
1
2
3155 ViLeksburg Lane N • Plymouth, MN 55447 • Phone (763)559-1877 e Fax (763)559-0144 • www.ci.plymouth.nan.us
Owned by Plymouth IIousing and Redevelopment Authority 112111
EQUAL HOUSING
OPPORTUNITY
Move-Ins/Move-Outs:
We had two residents move in: one into a large 2 Bedroom (style D2). Another resident into a one
bedroom (style A). One resident transferred from a one bedroom + den (style C2) to another one bedroom
+ den.
Marketing
Traffic has picked up. We are getting more phone calls and scheduling more tours this month.
Resident Services
We had our annual volunteer appreciation lunch on Tuesday, April 9th. We had about 25 resident
volunteers attend the luncheon. We had egg bake, fruit and cake for dessert. We had a small thank you
gift at each place setting.
Healthy root Care visits the building one Wednesday a month. Residents sign up and they provide a
warm foot soak, nail trimming, foot massage and moisturizing and care for corns, calluses and hammer
toes. The cost for residents is $40.00.
Our monthly birthday party was on Thursday, April 25th. We decorate the room with birthday party
decorations, festive napkins and plates. We list the birthday people on a poster and we sing Happy
Birthday. We also give each resident a card on their birthday.
uildinIssues
In April we had our common area, hallways and stairwell carpet cleaned. We also clean occupied units
every three years if the resident would like their carpet cleaned.
Balance Sheet
As Of April 30, 2019
Ending Balance
ASSETS
CURRENT ASSETS
US BANK PETTY CASH
500
US BANK OPER ACCT
899,644
US BANK SEC DEP ACCT
70,157
INVESTMENTS - WORKING CAPITAL FUND
763,836
INVESTMENTS - DEBT SERVICE
(107,032)
ACCOUNTS REC-TENANTS
(440)
INTEREST RECEIVABLE
1,000
ACCOUNTS REC-OTHER
535
PREPAID PROPERTY INSURANCE
3,627
PREPAID WORKERS COMP INSUR
399
PREPAID OTHER
3,138
TOTAL CURRENT ASSETS
FIXED ASSETS
LAND
874,593
SITE IMPROVEMENTS
238,793
BUILDING
9,025,427
FURNITURE, FIXTURES & EQUIP -GENERAL
374,165
COMPUTERS/OFFICE EQUIPMENT
8,680
ACCUMULATED DEPRECIATION
(4,359,183)
TOTAL FIXED ASSETS
NON-CURRENT ASSETS
Total
1,635,365
6,162, 475
TOTAL ASSETS 7,797,840
Balance Sheet
VICKSBURG
CROSSING
As Of April 30, 2019
CURRENT YEAR INCOME/(LOSS)
TOTAL LIABILITIES & EQUITY
52,422
7,797,840
Ending Balance
Total
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE -TRADE
16,375
ACCRUED PAYROLL
5,848
ACCRUED COMPENSATED BALANCES
5,694
ACCRUED INTEREST
56,626
ACCRUED REAL ESTATE TAXES
19,996
ACCRUED OTHER
1,151
TOTAL CURRENT LIABILITIES
105,690
LONG-TERM LIABILITIES
SECURITY DEPOSITS
69,777
BOND PAYABLE -2012A
8,460,000
BOND DISCOUNT -2012A
(19,528)
8,510,248
TOTAL LIABILITIES
8,615,938
EQUITY
NET INVESTMENTS IN CAPITAL ASSETS
(2,610,917)
RESTRICTED FOR DEBT SERVICE
426,863
UNRESTRICTED
1,313,533
TOTAL EQUITY
(870,520)
CURRENT YEAR INCOME/(LOSS)
TOTAL LIABILITIES & EQUITY
52,422
7,797,840
Profit and Loss Variance
VICKSBURG CROSSING
Through April 30, 2019
MTD Actual Budget Var. YTD Actual Budget Var. Year Budget
INCOME
APARTMENT RENTAL REVENUE
99,509
97,820
1,689
392,976
394,600
(1,624)
1,180,000
APARTMENT RENTAL REVENUE - COUNTY
1,736
1,690
46
6,944
6,760
184
20,280
HRA SUBSIDY - TAX LEVY
4,583
4,583
0
18,332
18,332
0
55,000
GARAGE RENT
3,485
3,630
(145)
13,775
14,520
(745)
43,560
GUEST ROOM REVENUE
0
140
(140)
180
560
(380)
2,100
APPLICATION FEE REVENUE
0
35
(35)
140
140
0
420
TRANSFER FEE REVENUE
500
500
0
1,500
500
1,000
500
INVESTMENT INCOME
1,060
250
810
5,351
1,000
4,351
3,000
MISCELLANEOUS REVENUE
240
285
(45)
1,363
1,140
223
3,420
TOTAL INCOME
111,113
108,933
2,180
440,561
437,552
3,009
1,308,280
EXPENSES
ADMINISTRATION
MANAGER SALARIES
5,192
5,250
58
20,742
21,000
258
63,000
PAYROLL TAXES
710
929
219
2,547
3,716
1,169
11,148
HEALTH INSURANCE
1,588
1,521
(67)
6,644
6,084
(560)
18,248
WORKERS COMP INSURANCE
114
140
26
485
560
75
1,680
MAINTENANCE SALARIESIWAGES
5,170
4,529
(641)
19,171
18,116
(1,055)
54,348
EMPLOYEE COSTS
80
120
40
320
375
55
1,125
SEMINARITRAINING
0
200
200
0
200
200
200
CLASSIFIED ADVERTISING
0
0
0
424
0
(424)
0
BANK FEES
94
50
(44)
376
200
(176)
600
DUES, SUBS & MEMBERSHIPS
0
0
0
0
0
0
65
LICENSE & PERMITS
0
30
30
676
706
30
906
MILEAGE REIMBURSEMENT
41
57
16
234
228
(6)
682
POSTAGE/OVERNIGHT EXPRESS
11
15
4
42
60
18
180
PRINTING
0
9
9
0
36
36
108
MANAGEMENT FEES
4,480
4,480
0
17,920
17,920
0
53,760
PROFESSIONAL FEES
0
223
223
119
892
774
2,676
TELEPHONE EXPENSE
431
415
(16)
1,730
1,660
(70)
4,980
EQUIPMENT LEASE/REPAIR
328
179
(149)
837
716
(121)
2,148
OFFICE SUPPLIES
236
105
(131)
834
420
(414)
1,260
TOTAL ADMIN EXPENSES
18,475
18,252
(223)
73,100
72,889
(211)
217,114
LIFE ENRICHMENT
RESIDENT PROGRAWACTIVITIES
252
350
98
1,671
1,300
(371)
6,000
TOTAL LIFE ENRICHMENT EXPENSES
252
350
98
1,671
1,300
(371)
6,000
Profit and Loss Variance
VICKSBURG CROSSING
Through April 30, 2019
MTD Actual
Budget
Var.
YTD Actual
Budget
Var.
Year Budget
MARKETING
ADVERTISING
0
0
0
425
400
(25)
1,200
TOTAL MARKETING EXPENSES
0
0
0
425
400
(25)
1,200
HOUSEKEEPING
CONTRACT LABOR
1,019
1,045
26
4,465
4,410
(55)
13,690
CLEANING SUPPLIES
52
195
144
544
780
236
2,340
TOTAL HOUSEKEEPING EXPENSES
1,070
1,240
170
5,009
5,190
181
16,030
BUILDING & GROUNDS
CABLE TV EXPENSE
172
176
4
689
704
15
2,084
UTILITIES - ELECTRICITY
1,513
1,600
87
7,167
6,700
(467)
23,970
UTILITIES - GAS
1,132
2,000
669
13,024
11,500
(1,524)
24,500
UTILITIES - WATER/SEWER
1,258
1,250
(8)
4,711
5,000
289
15,850
WATER SOFTENING SERVICE
0
165
165
327
660
333
1,960
DOORS, KEYS & WINDOWS
0
162
162
123
648
525
1,944
FIRE SYSTEM SERVICE
953
180
(773)
2,281
1,890
(391)
6,570
LAWN SERVIC E/LANDSCAP/S NOW RVVL
1,080
1,000
(80)
10,335
8,400
(1,935)
22,500
PEST CONTROL
0
65
65
158
245
87
845
TRASH REMOVAL
1,262
950
(312)
3,911
3,800
(111)
11,400
UNIT TURNOVER REPAIRS
3,137
4,355
1,218
23,291
17,420
(5,871)
52,260
ELEVATOR -REPAIRS & MAINTENANCE
502
603
101
7,115
2,412
(4,703)
7,236
REPAIRS & MAINTENANCE
5,936
7,000
1,064
7,085
10,600
3,515
25,100
BUILDING & GROUNDS SUPPLIES
1,034
1,500
466
5,898
6,000
102
18,000
HVAC - REPAIRS & MAINTENANCE
225
3,000
2,775
2,380
4,500
2,120
13,500
MISCELLANEOUS B & G EXPENSES
0
833
633
0
3,333
3,333
10,000
TOTAL BUILDING & GROUNDS
18,203
24,839
6,636
88,494
83,812
(4,682)
237,739
OTHER OPERATING EXPENSES
PROPERTY & LIABILITY INSURANCE
2,360
2,539
179
9,442
10,156
714
30,766
PAYMENT IN LIEU OF PROPERTY TAX
4,999
4,960
(39)
19,996
19,840
(156)
59,525
TOTAL OTHER OPERATING EXPENSES
7,359
7,499
140
29,437
29,996
559
90,291
TOTAL OPERATING EXPENSES
45,360
52,180
6,820
198,135
193,587
(4,548)
568,374
NET OPERATING INCOME / ( LOSS)
65,754
56,753
9,001
242,425
243,965
(1,540)
739,906
DEPREC, INTEREST & OTHER
DEPRECIATION EXPENSE
25,417
25,417
0
101,668
101,668
0
305,000
AMORTIZATION EXPENSE
103
103
0
412
412
0
1,240
RESERVE/REPLACE CAPITAL EXPENSE
646
4,667
4,021
11,781
18,668
6,887
56,000
INTEREST EXPENSE
18,996
18,996
0
76,143
75,984
(159)
227,950
TOTAL DEPREC, INTEREST & OTHER
45,162
49,183
4,021
190,003
196,732
6,729
590,190
NET INCOME / (LOSS)
20,591
7,570
13,021
52,422
47,233
5,189
149,716
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Agenda Number 3L�
PLYMOUTH HOUSING AND
REDEVELOPMENT AUTHORITY
STAFF REPORT
TO: Plymouth Housing and Redevelopment Authority
FROM: Matt Lupini, Community Development Coordinator through Jim Barnes,
HRA Manager & Steve Juetten, Executive Director
MEETING DATE: May 23, 2019
SUBJECT: HRA Funded Housing Rehabilitation Program — Amend Procedural
Guidelines
BACKGROUND:
The Plymouth Housing and Redevelopment Authority (HRA) operates the Housing
Rehabilitation (Rehab) program that is funded through HRA General Funds. From time to time,
staff reviews the program guidelines to ensure consistency and compliance with applicable laws
and regulations. The guidelines were last revised in February 2016.
In 2016, the HRA committed $150,000 from the HRA reserves to supplement the Rehab
Program when CDBG funds are not available, or an applicant is over the CDBG income limits.
$61,659 has been spent from that total on two (2) loans, leaving $88,341 unspent of the original
commitment.
Staff has completed a review of the guidelines and recommends some updates that are discussed
below. The Procedural Guidelines document is attached for your review.
DISCUSSION:
Proposed Changes to the Housing Rehabilitation Program:
1. Amount of Assistance
Presently, homeowners may receive up to $30,000.00 in a deferred, zero -interest loan to
make eligible home improvements. Households with accessibility needs may receive a
maximum loan of up to $40,000.00 (or $10,000.00 more than their loan award) in order
to address general improvement needs plus accessibility improvements. Projects that
exceed the maximum loan amount due to extenuating circumstances must request a
waiver from the HRA Executive Director.
Since 2013, there have been 37 Housing Rehabilitation loans made — 35 with CDBG
funds and two funded by the Plymouth HRA. Of the two funded with HRA General
Funds, one was for exactly $30,000.00 and the other was given a waiver to exceed
$30,000.00.
Staff recommends increasing the maximum Rehab loan for the HRA funded Rehab
program to $40,000.00 on the basis of trends in the construction industry that necessitate
more expensive projects, coupled with an overall increase in recent total project costs in
the Rehab program. Projects benefiting those with disabilities may already receive up to
$10,000.00 in additional funding on top of their originally agreed-upon loan amount for
the purpose of financing accessibility -related project costs. Thus, the maximum total loan
amount for a single project at a home making accessibility -based improvements would be
$50,000.00.
The Board of Commissioners approved a similar increase in maximum loan amount for
the CDBG-funded Rehab program at the April 25 HRA meeting.
2. Formatting & Language
Miscellaneous formatting corrections and changes to outdated and/or redundant language
have been made throughout the document. None of these edits result in any change to the
functioning or administration of the program.
BUDGET IMPACT:
Funding for the Rehab Program comes from the HRA General Fund. There is no impact to the
General Fund, however, raising the maximum loan amount may impact the number of Rehab
projects completed within a program year.
RECOMMENDATION:
Staff recommends that the Housing and Redevelopment Board of Commissioners approve the
proposed changes to the HRA Funded Rehabilitation Procedural Guidelines.
ATTACHMENTS:
1. HRA Funded Housing Rehabilitation Program Guidelines
2. Housing Rehabilitation Loan Program Funding Staff Report (January 28, 2016)
Plymouth HRA
Housing Rehabilitation Program
Fq
PROCEDURAL GUIDELINES
a.rontuxiry
Adopted by the Plymouth Housing & Redevelopment Authority
Revised Fobw., ary 20' 6May 2019
TABLE OF CONTENTS
PART I. GENERAL PROGRAM DESCRIPTION
3
Program Overview
3
Program Goals
3
Program Administration
4
Purpose of the Program Guidelines
4
PART U. PROGRAM POLICIES
5
Responsibilities of the Homeowner
5
Responsibilities of the HRA
5
Application to the HRA
6
Eligibility Requirements
7
Eligible Dwellings
13
Denial of Eligibility
13
Eligible Improvements
14
Improvement Standards
17
Accessibility Improvements
20
Application/ Loan Processing
21
PART III. PROGRAM VERIFICATIONS/ DOCUMENTS
24
Pre -Approval Verifications
24
Pre -Construction Documents
24
Post -Construction Documents
29
PART IV: PROGRAM RULES
31
Lead Based Paint Hazard Requirements
31
Repayment of Assistance
31
Forgiveness of Indebtedness
32
Subordination Policy
32
Emergency Repair Funding
33
Modification/ Termination of Program
33
Additional Provisions
33
Counseling/ Training Requirements
36
Dispute Resolution
37
APPENDIX A
38
Definitions
38
2
PART I: GENERAL PROGRAM DESCRIPTION
Program Overview
Plymouth's Housing Rehabilitation Program is available to low and moderate -income
households to maintain, repair, and improve their homes.
The HRA funded deferred loan program allows applicants to receive up to
$30,000:00$40,000.00 in a deferred, zero interest loan to make eligible home improvements to
comply with minimum housing quality standards. Loans must be 100% repaid if the home is
sold, transferred, or no longer homesteaded within 10 years. After 10 years the loan principal
declines 10% a year until it is forgiven after 20 years.
The overall goal of this Housing Rehabilitation Program is to improve the safety, livability,
and the energy efficiency of homes owned by low and moderate -income families within the
City of Plymouth.
Dwellings improved under this program shall generally meet the performance requirements
and acceptability criteria set forth in this section except for such variations as are proposed by
the HRA..
Program Administration
This Program will be administered by the Plymouth HRA, which has been given the authority
to administer this Program by the Plymouth City Council. Funding of this Program is provided
through the HRA General Fund. This Program will follow all applicable State regulations and
in the event policies included in this Guidelines conflict with regulations, the State regulations
will prevail.
Purpose of the Program Guidelines
The purpose of these Guidelines is to establish policies for carrying out the Housing
Rehabilitation Program in a manner consistent with regulatory requirements and local goals
and objectives. The HRA is responsible for complying with all changes in regulations
pertaining to the program. If such changes conflict with these Guidelines, regulations will
have precedence.
THE REMAINDER OF THIS PAGE INTENTIONALY LEFT BLANK
PART II: PROGRAM POLICIES
Responsibilities of the Homeowner
• Complete, sign and submit the housing rehabilitation application as well as all additional
required supporting documentation
• Inform the HRA about any changes in their application or project
• Meet program deadlines
• Set-up initial meeting with HRA staff
• Set-up initial inspection with HRA inspector
• Review the Scope of Work
• Obtain bids and submit the bids to the HRA within 30 days of loan approval. Bids and
bidding process must adhere to cost reasonableness standards described on page 35 of this
document.
• Make house accessible to contractors
• Inform HRA of any issues related to work or changes in the scope
• Inform the HRA when contractors have completed work
• Sign Completion Certificate when they are satisfied with the work completed
Responsibilities of the HRA
• Outreach and Public Information
The HRA will be responsible for the promotion of the Housing Rehabilitation Program
within its boundaries. The HRA will exercise care in avoiding any advertising or outreach
method that may be deemed to systematically exclude potentially eligible applicants.
Access to program materials will not be denied to any person for any reason.
The HRA will market its own and other available home rehabilitation, energy reduction
and other home improvement and maintenance programs. Some possible marketing
activities that may be used are:
1. Regular promotions in the City's newsletter, area newspapers, and cable TV.
2. Program advertising (brochures/flyers) of HRA and other available programs at banks,
community centers, businesses that sell home improvement items, businesses with high
walk-in traffic, and City Hall.
3. Staff a booth at area remodeling fairs.
4. Post on the City of Plymouth's web site.
The program will include affirmative marketing efforts. The HRA will review its normal
outreach methods from time -to -time to ensure that the loan program is made available to
persons who otherwise might not apply for assistance.
11
• Inspection of Properties
The HRA is responsible for carrying out a minimum of two inspections of each approved
property. The first inspection shall be completed after the applicant is determined to be
eligible for the program. During this inspection a property inspection report will be
completed that will list all deficiencies in the dwelling and will be used to determine
whether sufficient fiinds are available to render the dwelling reasonably habitable, safe and
energy efficient. If the home was built before 1978 it will also be inspected for lead based
paint hazards and if required, a lead risk assessment will be ordered.
A final inspection shall take place after the work is finished to determine that all work has
been completed in a satisfactory manner consistent with these guidelines, the scope of
improvements and the contractors quote.
The HRA may conduct interim inspections of the property as necessary.
• Preparation of Scope of Improvements/ Work Proposal
The scope of improvements is based on the property inspection report and shall list all of
the eligible improvements that will be completed. The HRA will provide the homeowner
with copies of the scope of improvements. The scope will be prioritized based on the
urgency of the repairs. The repairs must be completed in the order reflected on the scope
of improvements.
• Additional Assistance Programs
To maximize available assistance from the Minnesota Housing Finance Agency (MHFA)
and other sources, the HRA will work directly with homeowners to assess and facilitate
their eligibility for other assistance. MHFA has several programs and other assistance is
often available through other agencies. Additional Rehabilitation Loan and/or Grant
Programs include:
1. MHFA Programs
a. Rehabilitation Loan Program
b. Fix Up Fund
2. Weatherization Assistance Program
3. Home Energy Loan Program
Application to the HRA
Normally, a first come first serve applicant selection process will govern the administration of
the program; however, where an applicant has an immediate safety or health need, that
applicant will be given priority.
Each application will be dated upon receipt. The receipt date shall be used as one of the criteria
for ranking of the application. It should be noted that an application is considered complete
when all materials used to determine eligibility are received by HRA staff.
The HRA shall adhere to the following guidelines:
1. The process must be uniformly applied during the entire funding year.
2. No eligible applicant shall be rejected on the basis of judgments as to personal character or
life-style.
3. Where no funds are available for assistance to applicants, the following procedure shall be
used:
a. Explain to the applicant that the funding for the current year has been either depleted
or allocated.
b. Inform the applicant of other possible funding sources, including local, state and federal
programs.
c. Send the applicant a letter indicating that the application has been placed on a waiting
list but that there is no guarantee of future funding. This letter should outline the other
possible avenues of obtaining home improvement fiends.
Eligibility Requirements
Applicants must meet all the requirements set forth in these Procedural Guidelines.
Ownership and Occupancy Requirements
The property must be the applicant's place of residence for a minim un of nine months in
any twelve-month period. An exception may be made for a disabled person or household
member who cannot move into the home until modifications are made.
The applicant must have a qualifying interest in the property although that interest may be
aggregated with the ownership interest of other individuals occupying the property as their
principal place of residence. A qualifying interest shall consist of:
1. A valid life estate. Such life estate must be recorded and must appear in the records of
the County; or
2. A one third interest in the fee title. Such interest maybe subject to a mortgage; or
3. A contract for deed in the property to be improved. Such contract for deed must be
recorded and must appear in the records of the County.
Ownership shall be based on the information recorded in the Hennepin County Recorder's
Office. All individuals having an ownership interest in the property to be improved must
sign the Repayment Agreement.
The applicant must be current on all mortgage payments, contract for deed payments,
homeowner's association dues and property taxes on the property to be improved. If any
of these payments are delinquent, they must be made current before the application can be
approved for funding. In addition, there shall be no outstanding mechanics liens filed
against the property.
C
The applicant must be capable of maintaining the home. This includes financial and
physical maintenance of the home. Applicants with significant financial and/ or physical
maintenance issues will be referred to appropriate service agencies.
• Annual Gross Household Income
Applicants must have an annual gross household income at or below 80% of the area
median income for the household size in effect at time of application.
Gross annual income is defined as the gross annual income from all funding sources (before
taxes and withholdings) of all individuals living in the housing unit for at least nine (9)
months of any twelve-month period and who do not pay rent.
Non-recurring types of income should be included as assets rather than income. Items for
inclusion under this category may include a single gift of cash from a person or persons,
cash sales of property, receipt of one-time survivor benefits, etc. A one-time sale of stock
does not count as income, but rather the proceeds are counted as assets.
• Inclusions In Gross Income
The below table presents the Part 5 income inclusions as stated in the Code of Federal
Regulations:
General Category
Statement from 24 CFR 5.609 paragraph (b) (April 1, 2004)
1. Income from
wages, salaries,
The full amount before
� any payroll deductions, of wages and salaries, overtime pay,
tips, etc.
commissions, fees, tips and bonuses, and other compensation for personal services.
The net income from the operation of a business or profession. Expenditures for business
expansion or amortization of capital indebtedness shall not be used as deductions in determining
net income. An allowance for depreciation of assets used in a business or profession may be
2. Business Income
deducted, based on straight-line depreciation, as provided in Internal Revenue Service
regulations. Any withdrawal of cash or assets from the operation of a business or profession will
be included in income, except to the extent the withdrawal is reimbursement of cash or assets
invested in the operation by the family.
Interest, dividends, and other net income of any kind from real or personal property.
Expenditures for amortization of capital indebtedness shall not be used as deductions in
determining net income. An allowance for depreciation is permitted only as authorized in
3. Interest &
number 2 (above). Any withdrawal of cash or assets from an investment will be included in
Dividend Income
income, except to the extent the withdrawal is reimbursement of cash or assets invested by the
family. Where the family has net family assets in excess of $5,000, annual income shall include
the greater of the actual income derived from all net family assets or a percentage of the value
of such assets based on the current passbook savings rate, as determined by HUD.
The full amount of periodic amounts received from Social Security, annuities, insurance policies,
4. Retirement &
retirement funds, pensions, disability or death benefits, and other similar types of periodic
Insurance Income
receipts, including a lump -sum amount or prospective monthly amounts for the delayed start of
a periodic amount (except as provided in number 14 of Income Exclusions).
S. Unemployment &
Payments in lieu of earnings, such as unemployment and disability compensation, worker's
Disability Income
compensation, and severance pay (except as provided in number 3 of Income Exclusions).
Welfare Assistance. Welfare assistance payments made under the Temporary Assistance for
Needy Families (TANF) program are included in annual income:
6. Welfare
Assistance
• Qualify as assistance under the TANF program definition at 45 CFR 260.31; and
• Are otherwise excluded from the calculation of annual income per 24 CFR 5.609(c).
7
• Exclusions from gross income
The below table presents the Part 5 income exclusions as stated in the Code of Federal
Regulations:
General Category
If the welfare assistance payment includes an amount specifically designated for shelter and
1. Income of
Children
utilities that is subject to adjustment by the welfare assistance agency in accordance with the
2. Foster Care
actual cost of shelter and utilities, the amount of welfare assistance income to be included as
Payments
income shall consist of:
3. Inheritance and
• the amount of the allowance or grant exclusive of the amount specifically designated
Insurance Income
for shelter or utilities; plus
• the maximum amount that the welfare assistance agency could in fact allow the family
for shelter and utilities. If the family's welfare assistance is reduced from the standard
4. Medical Expense
of need by applying a percentage, the amount calculated under 24 CFR 5.609 shall be
Reimbursements
the amount resulting from one application of the percentage.
7. Alimony, Child
Support, & Gift
Periodic and determinable allowances, such as alimony and child support payments, and regular
Income
contributions or gifts received from organizations or from persons not residing in the dwelling.
8. Armed Forces
All regular pay, special day and allowances of a member of the Armed Forces (except as
Income
provided in number 7 of Income Exclusions).
• Exclusions from gross income
The below table presents the Part 5 income exclusions as stated in the Code of Federal
Regulations:
General Category
Statement from 24 CFR 5.609 paragraph (c) (April 1, 2004)
1. Income of
Children
Income from employment of children (including foster children) under the age of 18 years.
2. Foster Care
Payments received for the care of foster children or foster adults (usually persons with
Payments
disabilities, unrelated to the tenant family, who are unable to live alone).
3. Inheritance and
Lump -sum additions to family assets, such as inheritances, insurance payments (including
Insurance Income
payments under health and accident insurance and worker's compensation), capital gains and
settlement for personal or property losses (except as provided in number 5 of Income
Inclusions).
4. Medical Expense
Amounts received by the family that are specifically for, or in reimbursement of, the cost of
Reimbursements
medical expenses for any family member.
5. Income of Live-in
Aides
Income of a live-in aide (as defined in 24 CFR 5.403).
6. Disabled Persons
Certain increases in income of a disabled member of qualified families residing in HOME -assisted
housing or receiving HOME tenant-basedrental assistance (24 CFR 5.671(a)).
7. Student Financial
The full amount of student financial assistance paid directly to the student or to the educational
Aid
institution.
8. Armed Forces
Hostile Fire Pay
The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.
9. Self -Sufficiency
a. Amounts received under training programs funded by HUD.
Program Income
b. Amounts received by a person with a disability that are disregarded for a limited time
for purposes of Supplemental Security Income eligibility and benefits because they are
set side for use under a Plan to Attain Self -Sufficiency (PASS).
c. Amounts received by a participant in other publicly assisted programs that are
specifically for, or in reimbursement of, out-of-pocket expenses incurred (special
equipment, clothing, transportation, childcare, etc.) and which are made solely to
allow participation in a specific program.
d. Amounts received under a resident service stipend. A resident service stipend is a
modest amount (not to exceed $200 per month) received by a resident for performing
a service for the PHA or owner, on a part-time basis, that enhances the quality of life
in the development. Such services may include, but are not limited to, fire patrol, hall
monitoring, lawn maintenance, resident initiatives coordination, and serving as a
member of the PHA's governing board. No resident may receive more than one such
stipend during the same period of time.
e. Incremental earnings and benefits resulting to any family member from participation
in qualifying state or local employment training programs (including training not
affiliated with a local government) and training of a family member as resident
management staff. Amounts excluded by this provision must be received under
employment training programs with clearly defined goals and objectives, and are
excluded only for the period during which the family member participates in the
employment training program.
10. Gifts
Temporary, nonrecurring, or sporadic income (including gifts).
11. Reparations
Reparation payments paid by a foreign government pursuant to claims filed under the laws of
that government by persons who were persecuted during the Nazi era.
12. Income from
Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head
Full-time Students
of household or spouse).
13. Adoption
Assistance
Adoption assistance payments in excess of $480 per adopted child.
Payments
14. Social Security
Deferred periodic amounts from SSI and Social Security benefits that are received in a lump
& SSI Income
sum amount or in prospective monthly amounts.
15. Property Tax
Amounts received by the family in the form of refunds or rebates under state or local law for
Refunds
property taxes paid on the dwelling unit.
16. Home Care
Amounts paid by a state agency to a family with a member who has a developmental disability
Assistance
and is living at home to offset the cost of services and equipment needed to keep this
developmentally disabled family member at home.
17. Other Federal
Amounts specifically excluded by any other federal statute from consideration as income for
Exclusions
purposes of determining eligibility or benefits under a category of assistance programs that
includes assistance under any program to which the exclusions of 24 CFR 5.609(c) apply,
including:
• The value of the allotment made under the Food Stamp Act of 1977;
• Payments received under the Domestic Volunteer Service Act of 1973 (employment
through VISTA, Retired Senior Volunteer Program, Foster Grandparents Program,
youthful offender incarceration alternatives, senior companions);
• Payments received under the Alaskan Native Claims Settlement Act;
• Income derived from the disposition of funds to the Grand River Band of Ottawa
Indians;
• Income derived from certain submarginal land of the United States that is held in trust
for certain Indian tribes;
• Payments or allowances made under the Department of Health and Human Services'
Low -Income Home Energy Assistance Program;
• Payments received under the Maine Indian Claims Settlement Act of 1980 ( 25 U.S.C.
1721);
• The first $2,000 of per capita shares received from judgment funds awarded by the
Indian Claims Commission or the U.S. Claims Court and the interests of individual
Indians in trust or restricted lands, including the first $2,000 per year of income
received by individual Indians from funds derived from interests held in such trust or
restricted lands;
• Amounts of scholarships funded under Title IV of the Higher Education Act of 1965,
including awards under the Federal workstudy program or under the Bureau of Indian
Affairs student assistance programs;
• Payments received from programs funded under Title V of the Older Americans Act of
1985 (Green Thumb, Senior Aides, OlderAmerican Community Service Employment
Program);
• Payments received on or after January 1, 1989, from the Agent Orange Settlement
Fund or any other fund established pursuant to the settlement in the In Re Agent
Orange product liability Iitigation,M.D.L. No. 381 (E.D.N.Y.);
• Earned income tax credit refund payments received on or after January 1, 1991,
including advanced earned income credit payments;
• The value of any child care provided or arranged (or any amount received as payment
for such care or reimbursement for costs incurred for such care) under the Child Care
and Development Block Grant Act of 1990;
• Payments received under programs funded in whole or in part under the Job Training
Partnership Act (employment and training program's for Native Americans and migrant
and seasonal farm workers, Job Corps, state job training programs and career intern
programs, AmeriCorps);
• Payments by the Indian Claims Commission to the Confederated Tribes and Bands of
Yakima Indian Nation or the Apache Tribe of Mescalero Reservation;
• Allowances, earnings, and payments to AmeriCorps participants under the National
and Community Service Act of 1990;
• Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from
spina bifida who is the child of a Vietnam veteran;
• Any amount of crime victim compensation (under the Victims of Crime Act) received
through crime victim assistance (or payment or reimbursement of the cost of such
assistance) as determined under the Victims of Crime Act because of the commission
of a crime against the applicant under the Victims of Crime Act; and
• Allowances, earnings, and payments to individuals participating in programs under the
Workforce Investment Act of 1998.
• Calculation of Household Income
Gross annual income shall be based upon annualized weekly or monthly income as of
the date of verification.
2. In cases where the gross income of the applicant's household is extremely low, the
applicant must demonstrate they are able to meet their monthly obligations. The
applicant must produce written verification of the household's monthly expenditures,
clearly itemizing the amount of money and its source, on all obligations, which may
include the following items: mortgage, contract for deed, insurance, loans, income,
property taxes, transportation expenses, charge accounts, health costs, food, utilities,
clothing and entertainment. These expenses shall determine the household maintenance
income.
3. Any income determination, which results in a net loss of income, must be considered
as $0 income. That is, an income loss from one source may not be subtracted from a
separate source of income for the purpose of determining total household gross annual
income.
4. Any educational loans, including VA benefits, which are paid directly to the individual,
must be included as income. Loans or scholarships, which are paid directly to an
educational institution, are not included as income.
5. If a current pay -stub does not provide conclusive verification of overtime or bonuses,
the loan administrator, through contacting an employer, may need to determine
projected bonus and/or overtime income. The amount of overtime or bonuses may also
be based on prior year's figures or average amounts awarded to other employees with
the same statics. The most recent IRS tax return may also be used for these purposes.
6. Self-employed persons must subunit signed copies of IRS tax returns for the previous
three years. Applications processed before April 15th of any given year may use the
IRS tax returns from the second and third proceeding years if their return for the first
preceding year is not available. Applications processed after April 15th of any given
year must use the IRS tax returns from the first and second preceding years. The
administering entity will determine gross annual income by averaging the income from
the two submitted returns.
10
7. For self-employed persons, normal out-of-pocket business expenses such as office
rents, telephone, etc. are generally deductible items. Property or equipment
depreciation is not deductible and must be added back to establish income for program
purposes.
Individuals who have been self-employed for less than two years must submit a profit
and loss statement detailing the business income and expenditures. An exception may
be made if the applicant prepares one that it is endorsed by a reputable third party and
includes a declaration that all information contained in the statement is accurate and
complete and that the applicant is aware that any errors or evasions may result in
prosecution. If the individual can produce a signed IRS return for one complete year
of self-employment and a profit and loss statement for the subsequent period, that will
be acceptable.
8. Income from rental properties, including rents from the property to be improved, shall
be included in the gross annual income. Expenses allowable for deduction for rental
purposes include a proportional share of the mortgage principal and interest payment,
utilities, taxes, insurance, and maintenance. In no event shall such deductions exceed
the gross rental income.
9. The Calculation of Gross Annual Income may not be based on a temporary condition
such as unemployment or temporary worker's compensation. If unemployment recurs
on a regular basis, gross annual income shall include the sum of wages and
unemployment compensation expected to be received by the household over the next
12 months. If worker's compensation is permanent income the insurance company
must verify it.
Gross Annual Income may not be based on temporary non-recurring unemployment of
a known duration, such as that due to lay-off, maternity leave, sabbatical leave, etc.
Rather, income shall be calculated based on the normal annual income of the
temporarily unemployed person. At that time, the household must be able to
demonstrate that it is both income eligible and capable of meeting its monthly
obligations as outlined.
Application of those who are unemployed for an unknown period of time shall not be
considered until the unemployed household member has exhausted all eligibility for
unemployment compensation and the employer indicates a callback date is mown.
10. The income earned from assets will be combined with income earned from other
sources to determine if the total income is under the appropriate income limit.
11. All applicants must be able to demonstrate that they are current on income tax payments
to the federal government by submitting signed copies of complete federal tax returns
for the three preceding years. Applicants who are delinquent, but who can be verified
as being current on a repayment schedule, will be regarded as being eligible in this
regard. Applicants who are required to file federal income tax returns but who have
11
not filed or applicants who are delinquent and are not current on a repayment schedule
are not eligible for program assistance.
• Asset Limits
Gross Assets must not exceed $25,000, which excludes one automobile. Gross Assets
include the cash value of accounts such as money-market accounts, personal savings
accounts, checking accounts, investment securities, stock, current market value of all
interest in real estate, annuities, life insurance policies, and certificate of deposits. It does
not include 401K funds, pensions, or other deferred compensation funds.
• Equity Limits
Applicants whose home equity exceeds the greater of 20% of the assessed property value
of the property or $20,000 shall not be eligible for the program. The HRA Executive
Director may approve a waiver of this equity limit at his/her discretion based on the
following criteria:
1. Applicant's Debt -to -Income Ratio (DTI)
2. Applicant's Documented Inability to Secure Private Financing
3. Urgency of Repairs Needed
4. Availability of Program Funding
Eligible Dwellings
PropertyType and Location
The property must be 1) located within the city limits of Plymouth; 2) in compliance with all
applicable zoning ordinances; 3) used primarily for residential purposes; and 4) contain no
more than two dwelling units, at least one of which must be owner -occupied. Improvements
can only be made to the owner -occupied unit, unless the improvement serves both units, such
as a roof. However, a condominium or townhouse may be considered eligible provided repairs
are done only within the unit itself.
Structure
The property to be improved must be an existing and permanent structure. An owner -occupied
mobile home on a permanent foundation located on land owned by the applicant is
eligible. Trailers or mobile homes located on land not owned by the applicant are not eligible.
Denial of Eligibility
The HRA will review and verify all applications for eligibility. Those applicants not meeting
the eligibility requirements will be sent a written notice explaining the reason(s) for denial and
outlining the appeal process as stated below.
Appeal of Loan Denial
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Appeals regarding interpretation of eligibility requirements may be made in writing to the
Housing Program Manager, HRA's Executive Director and then to the HRA Board of
Commissioners. Appeals that clearly do not meet eligibility requirements will not be
considered.
Eligible Improvements
Each improvement must be a pennanent general improvement. Permanent general
improvements shall include such alterations, renovations, or repairs upon or in connection with
existing structures, which correct defects or deficiencies in the property affecting directly the
safety, habitability or energy consumption of the property. A permanent general improvement
must be economically viable in terms of a determination that after the improvement is made:
1. The structure will have a remaining useful life such that the total amount of the repairs
required bringing the house up to Section 8 Housing Quality Standards may be
amortized over such life in an economically prudent manner.
2. The structure will be reasonably livable, safe and habitable. All materials used in the
rehabilitation work will be new, of same grade and quality, dimensions and design as
that originally installed. All work and materials must be applied in accordance with the
applicable manufacturer's list instructions and specifications. The owner shall select
colors and patterns of materials furnished by the contractor from readily available
supplier's selection. However, should the homeowner desire more expensive materials
to be used, the homeowner would pay the cost difference.
No funds shall be used in whole or in part for the purpose of refinancing or paying off an
existing indebtedness. All such funds must be used to finance improvements began after
the execution of a Work Contract prepared by the HRA and signed by the homeowner and
the contractor.
• Additions
The HRA may approve the construction of an addition only in the circumstances
indicated below:
1. Bedroom additions may be allowed in cases of severe overcrowding. For the purpose
of this program, a dwelling will generally be considered "overcrowded" if there is an
average of more than one person per room (excluding bathroom) in the dwelling, or as
otherwise approved by the HRA.
2. Bathroom additions may be allowed in cases of inadequate indoor bathroom facilities
only if no other space in the structure is appropriate for such facilities
3. In the case of applicants with impaired mobility, request for room additions will be
reviewed in compliance with procedures for loans including accessibility
improvements.
• Demolition
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Demolition of outbuildings is allowed only when such clearance is required by the local
building code. Loan funded improvements cannot otherwise be limited to demolition only,
except in circumstances determined as exceptional by the HRA.
• Sidewalks and Driveways
Reconstruction of sidewalks and driveways is allowed only on private property and only if
necessary to remove safety hazards or to preserve the structure of the home. Construction
of a new sidewalk or driveway may be allowed at the discretion of the HRA and only as
necessary for accessibility improvement for elderly or disabled household members.
• E.xte ors.
Exterior finishing (painting or siding) is allowed if there is deterioration of current exterior
finishing. Exterior finishing requested solely for cosmetic purposes will not be approved.
Should a determination be made that lead-based paint was used on the structure;
appropriate measures will be taken in accordance with applicable lead based paint
requirements.
• Energy Efficiency
Where property is not reasonably energy efficient, loan funds shall be used to the extent
necessary to increase such efficiency. Energy saving features shall be consistent with the
energy standards promulgated as part of the State building code, but such improvements
need not bring the unit or house into compliance with such energy standards.
• Smoke Detectors
Smoke detectors shall be installed in all dwellings being improved with loan funds, unless
detectors are already properly installed. All properties being improved shall contain
adequate smoke detectors following completion of the rehabilitation work. When interior
alterations, repairs or additions requiring a permit occur, or when one or more sleeping
rooms are added or created in existing dwellings, the individual dwelling unit shall be
provided with smoke detectors located as required for new dwellings; the smoke detectors
shall be interconnected and hard wired.
Exceptions: 1) Smoke detectors in existing areas shall not be required to be interconnected
and hard wired where the alterations or repairs do not result in the removal of interior wall
or ceiling finishes exposing the stricture, unless there is an attic, crawl space, or basement
available which could provide access for hard wiring and interconnection without the
removal of interior finishes. 2) Repairs to the exterior surfaces of dwellings are exempt
from the requirements of this section.
Power Source: In new constriction, the required smoke detectors shall receive their
primary power from the building wiring when such wiring is served from a commercial
source, and when primary power is interrupted, shall receive power from a battery. Wiring
14
shall be permanent and without a disconnecting switch other than those required for over
current protection. Smoke detectors shall be permitted to be battery operated when
installed in buildings without commercial power or in buildings that undergo alterations,
repairs or additions.
• Carbon Monoxide (CO)Alarms
Carbon Monoxide Alarms shall be installed within ten feet of each room lawfully used
for sleeping purposes. All CO alarms shall be certified by a nationally recognized testing
laboratory to conform to the latest Underwriters Laboratory (UL) Standards.
Power Source: CO alarms must be either hardwired into the electrical wiring, directly
plugged into an electrical outlet without a switch, or battery powered.
• House Numbers
Where the house numbers are not present or are not installed to applicable City codes and
ordinances, they shall be installed properly.
• Stoves and Refri erg ators
If a refrigerator does not have a freezer compartment, maintain a temperature low enough
so that food does not spoil over a reasonable period of time and is not sized correctly for
the household to meet Section 8 Housing Quality Standards consideration may be given to
replace or repair the refrigerator.
If a cooking stove or range with top burners is present but does not meet Section 8 Housing
Quality Standards, consideration may be given to replace or repair the stove or range with
top burners.
Repair or replacement of washers/dryers/dishwashers is not allowable.
• Water and Sewer
Loan funds may be used for the portion of improvements located on the property which
will bring an individual water supply system or an individual sewage disposal system
(including septic systems) into compliance with local, state or federal environmental and
sanitary standards provided no public utility service is available. Payments of applicable
SAC (Sewer availability charges) are an eligible expense.
Water drawn from a valid well must be potable (safe for drinking) and must be free of sand,
grit or other material which might damage the pump or plumbing. Water need not be free
from minerals that may make it cloudy nor must it be free from odor. No funds will be
disbursed by the HRA until water is struck. It is an eligible improvement to connect a house
to City water and/or sewer when conditions affecting the health of the residents are present
or when required by City Ordinance.
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• Garages
Work on detached garages is allowed only if the existing condition presents a clear and
imminent safety hazard. Repair or replacement of garage door openers will not eligible
unless the homeowner has a documented physical disability or if necessary for the safety
and security of the residents of the home.
Improvement Standards
• Sanitary Facilities
1. Performance Requirement: The dwelling unit shall include its own sanitary facilities,
which are in proper operating condition, can be used in privacy, and are adequate for
personal cleanliness and the disposal of human waste.
2. Acceptability Criteria: A flush toilet in a separate, private room; a fixed basin with a
sink trap and hot and cold running water; and a shower or tub with hot and cold running
water shall be present in the dwelling unit, all in proper operating condition. These
facilities shall utilize an approved public or private disposal system.
• Food Preparation
1. Performance Requirement: The dwelling unit shall contain suitable space and
equipment to store, prepare, and serve foods in a sanitary manner. There shall be
adequate facilities and services for the sanitary disposal of food wastes and refuse,
including facilities for temporary storage where necessary.
2. Acceptability Criteria: The unit shall contain the following equipment in proper
operating condition: an oven, a cooking stove or range; a refrigerator of appropriate
size for the family and a kitchen sink with a sink trap and hot and cold running water.
The sink shall drain into an approved public or private system. Adequate space for the
storage, preparation and serving of food shall be provided. There shall be adequate
facilities and services for the sanitary disposal of food wastes and refuse, including
facilities for temporary storage where necessary (e.g. garbage cans).
• Space and Security
1. Performance Requirement: The dwelling unit shall afford the homeowner adequate
space and security.
2. Acceptability Criteria: A living room, kitchen area, and bathroom shall be present, and
the dwelling unit shall contain at least one sleeping or living/sleeping room of
appropriate size for each two persons. Exterior doors and windows accessible from
outside the unit shall be lockable.
• Thermal Environment
16
1. Performance Requirement: The dwelling unit shall have and be capable of maintaining
a thermal environment healthy for the human body.
2. Acceptability Criteria: The dwelling unit shall contain a safe heating system which is
in proper operating condition and can provide adequate heat to each room in the
dwelling unit to ensure a healthy living environment. Unvented room heaters which
burn gas, oil or kerosene, are unacceptable.
•' Illumination and Electricity
1. Performance Requirements: Each room shall have adequate natural or artificial
illumination to permit normal indoor activities and to support the health and safety of
occupants. Sufficient electrical outlets shall be provided to permit use of essential
electrical appliances. Electric fixtures and wiring must ensure safety from fire.
2. Acc tep ability Criteria: Living and sleeping rooms shall include at least one window.
A ceiling or wall type light fixture shall be present and operable in both the bathroom
and kitchen area. At least two electric outlets shall be present and operable in the living
room area, kitchen area, and each bedroom area.
• Stricture and Materials
1. Performance Requirement: The dwelling unit shall be structurally sound so as not to
pose any threat to the health and safety of the occupants and to protect the occupants
from the environment.
2. Acceptability Criteria: Ceilings, walls, and floors shall not have any serious defects
such as severe bulging or leaning, large holes, loose surface materials, severe buckling
or noticeable movement under walking stress, missing parts or other serious damage.
The roof structure shall be firm and the roof shall be weather tight. The exterior wall
structure and exterior wall surface shall not have any serious defects such as serious
leaning, buckling, sagging, cracks or holes, loose siding, or other serious damage
resulting in air infiltration or vermin infestation. The condition and equipment of
interior and exterior stairways, halls, porches, walkways, etc. shall be such as not to
present a danger of tripping or falling. In the case of a mobile home, the home shall be
securely anchored by a tie down device which distributes and transfers the loads
imposed by the unit to appropriate ground anchors so as to resist wind overturning and
sliding.
• Interior Air Quality
1. Performance Requirement: The dwelling unit shall be free of pollutants in the air at
levels that threaten the health of the occupants.
2. Acceptability Criteria: The dwelling unit shall be free from dangerous levels of air
pollution from carbon monoxide, sewer gas, fuel gas, dust, and other harmful air
pollutants. Air circulation shall be adequate throughout the unit. Bathroom areas shall
have at least one operable window or other adequate exhaust ventilation. Any room
used for sleeping must have at least one operable window.
• Water Supply
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1. Performance Requirement: The water supply shall be free from contamination.
2. Acceptability Criteria: The unit shall be served by an approved public or private
sanitary water supply that is sanitary and free from contamination.
• Lead Based Paint
1. Performance Requirement: The dwelling unit shall be in compliance with HUD Lead
Based Paint regulations, 24 CFR. Part 35, issued pursuant to the Lead Based Paint
Poisoning Prevention Act. 42 U.S.C. 4801 and all successive amendments.
2. If the property was constructed prior to 1978, the applicant will be furnished the HUD
Lead Based Paint Notice on the hazards of lead based paint poisoning. Documentation
of receipt of the notice shall be included in the file.
3. Acceptability Criteria: Same as Performance Requirement.
• Acces.q
1. Performance Requirement: The dwelling unit shall be usable and capable of being
maintained without unauthorized use of other private properties, and the building shall
provide an alternate means of egress in case of fire.
2. Acceptability Criteria: The dwelling unit shall be usable and capable of being
maintained without unauthorized use of other private properties. The building shall
provide an alternate means of egress in case of fire (e.g. windows that satisfy standards
for egress).
• Site and Neighborhood
Performance Requirement: The site and neighborhood shall be reasonably free from
disturbing noises and reverberations and other hazards to the health, safety, and general
welfare of the occupants.
Acceptability Criteria: The site and neighborhood shall not be subject to serious
adverse environmental conditions, natural or man made, such as dangerous walks and
steps; instability; flooding; poor drainage; septic tank backups; sewage hazards; mud
slides; abnormal air pollution, smoke or dust; excessive noise, vibration or vehicular
traffic; excessive accumulations of trash; vermin or rodent infestation; or fire hazards.
IM
Sanitary Condition
1. Performance Requirement: The unit and its equipment shall be in sanitary condition.
2. Acceptability Criteria: The unit and its equipment shall be free of vermin and rodent
infestation.
• Smoke Detectors
1. Performance Requirement: The unit shall have at least one battery-operated or hard-
wired smoke detector, in proper operating condition on each level of the unit. Smoke
detectors must be installed in accordance with and meet requirements of NFPA 74 and
succeeding standards. If the unit is occupied by hearing-impaired person(s), smoke
detector must have an alarm system, designed for hearing impaired persons.
Accessibility Improvements
• Permitted Accessibility Improvements
Accessibility improvements may include:
1. Structural Improvements: Construction, installation or modification of ramps,
handrails, kick plates and door widths; repair or replacement of doors; relocation of
doorways; installation of lever -action hardware; construction or expansion of rooms.
2. Exterior Improvements: Construction of exterior ramps, railing, walkways, landings
and porch extensions, site grading and other site iinprovpents.
3. Bathroom Improvements: Installation of elevated water closets, grab bars, shower
stalls, tub seats, hand-held showers, accessible sinks, electrical outlets, medicine
cabinets and other accessories, and modification or expansion of bathroom area to
allow a five-foot turning radius.
4. Kitchen Improvements: Construction, modification or replacement of cupboards or
shelves to provide access to sinks, cook tops, ovens or storage areas; installation of
accessible electrical outlets and switches, lever -action hardware, garbage disposals;
insulation of hot water pipes; modification or expansion of kitchen area to allow for a
five-foot turning radius in the workspace; installation of "lazy Susan's" in cupboards;
replacement of floor covering in order to improve wheeling surface.
5. Other Improvements: In exceptional circumstances - installation of central air
conditioning and/or stair glides or electric lifts when the handicapped person's doctor
in writing verifies the need for these improvements.
6. Improvements that are determined to be ineligible as accessibility improvements may
be funded under the other provisions of the Procedural Guidelines.
• Additional Funding for Accessibility Improvements
An additional $10,000.00 (up to a maximtun loan amount of $50,00 LOO
1-maxinuwa4e,m
of $40;000:09 -will be allowed to households with accessibility needs to address both
accessibility and general improvement needs. Although there is no fixed limit allowed for
accessibility improvements, serious health, safety, and code violations must be addressed
in addition to the accessibility improvements. A prioritization of the scope of
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improvements will be done by the program administrator in conjunction with the
homeowner to allow for the most urgent needs to be met.
• Standard Procedure for Compiling Accessibility Portion of Loan
A loan application that includes accessibility improvements must include the following:
1. An accessibility improvements inventory, containing a description of the accessibility
improvements to be made shall be included with the inspection report;
2. A letter describing:
a. the level and specific type of disability experienced by the handicapped person; and
b. the specific accessibility improvements requested;
3. Quotes from contractors;
4. Architectural drawings, if needed;
5. Any other materials requested.
• Requirements for Participation
Loans may be made to households with a handicapped person for accessibility
improvements if the conditions of the Procedural Guidelines have been fully satisfied. To
qualify for accessibility improvements the handicapped person must be a permanent
member of the household.
Application/ Loan Processing
• Acceptance Procedures
The HRA's objectives are to encourage necessary improvements whereby the structure will
be reasonably livable, safe, habitable, and energy efficient.
• Approval of Application
Upon approval of the application, the HRA will notify the applicant in writing.
2. The Repayment Agreement executed by the applicant and dated prior to work
completion will be held by the HRA.
• Expediency of Loan Processing
Loans shall be processed in a reasonable length of time in an efficient and accurate manner.
Each Loan shall be completed within six months, from start to finish, unless otherwise
authorized by the Plymouth HRA. The Repayment Agreement shall be filed by the
Program Administrator prior to work commencing.
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• Disbursement of Funds
The HRA will be responsible for disbursing funds to contractors who have performed
work. Payment for work completed will be made after the work is completed, inspected
and all of the required parties have signed a completion certificate. Partial payments may
be made if required by the contractor after an interim inspection and the homeowner has
signed a completion certificate for that portion of the project. Advance payments may be
made at the discretion of HRA staff and written approval from the homeowner when
required for ordering up -front cost items, such as windows or siding, and upon submission
of an invoice of materials ordered by the contractor.
• Disbursement Procedures
No disbursement of funds shall be made to a contractor until the HRA is in receipt of.
1. A Completion Certificate signed by the inspector, homeowner, and HRA administrator;
and
2. An original invoice from the contractor for the amount of the work performed; and
3. A properly completed Sworn Construction Statement; and
4. Lien waivers provided by the contractor/subcontractor(s) supplier for the amount of the
work performed; and
5. Any successful Clearance Tests, if necessary.
Upon receipt of the above items, payment may be made to the contractor. Payment will
normally be made within 15 business days after the HRA receives the invoice, signed
Completion Certificate and the lien waivers
• Delivery of Loan Funds
The HRA will disburse funds to contractors for completed work, in compliance with
Program Guidelines. No work shall start on any structure prior to the proper completion
of a Work Contract referring to specific work items under that particular loan, the
contractor's proof of insurance, license, W-9 form, and LBP certification if required.
• Requests for Changes in Loan Amount
At the discretion of the HRA, an expenditure of funds in excess of the approved amount
may be approved in the event of justifiable over -runs in the cost of improvements. The
HRA must document increases or decreases in the amount according to the following
procedures:
1. The HRA shall inspect the property to determine if the change is justified.
2. The HRA may authorize changes that meet program eligibility criteria when necessary.
Authorization will be given by the HRA signing the amendment request certificate.
3. In no case shall the amount of the loan exceed the maximum loan amount, except in
the cases of accessibility loans, lead-based paint issues, or where a serious health or
welfare conditions warrants a greater amount.
21
• Completion Procedures
No loan will be considered complete until the following steps have been accomplished:
1. Inspection of the Property - All improvement work, as specified in the rehabilitation
work summary, will be inspected for completeness, conformity to specification and
quality of workmanship. The HRA will require completion or correction of any item
found lacking. Fail -Lire of a contractor to comply with such a request for completion or
correction of work is considered grounds for withholding payment.
2. Recording of the Repayment Agreement — The loan amount identified on the
Repayment Agreement will be the maximum loan amount the homeowner is entitled.
Once the Repayment Agreement is executed the agreement will then be recorded by
the HRA with the Registrar of Deeds or the Registrar of Titles.
3. Completion Certificate - following the final inspection and successful completion of
work, the homeowner, inspector, and the HRA Administrator will sign a Completion
Certificate prior to any payment being made to a contractor.
THE REMAINDER OF THIS PAGE INTENTIONALY LEFT BLANK
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PART III: PROGRAM VERIFICATIONS/ DOCUMENTS
Pre -Approval Verifications
• Income Verification
All sources of income listed on the application will be verified by the HRA. The following
is a list of acceptable forms of income verification evidence:
1. Written verification from employers or other income providers.
2. Copies of four recent checks or check stubs, which must include the year-to-date
earnings.
3. All applicants must submit complete federal income tax returns for the last three years
unless household income is not taxable.
4. Two most recent bank statements for checking and savings accounts.
5. Income derived from rent must be verified by the renter in writing or by examining
copies of checks or rent receipts.
The material used to verify income must not be more than 90 days old at the time of
approval. If the material is more than 90 days old, all income(s) must be re -verified before
an application can be approved.
• Asset Verification
All assets listed on the application must be verified by the HRA. The following is the only
acceptable form of asset verification evidence:
1. Written verification from banks, insurance companies or other asset holders; and
2. Copies of bank statements, insurance policies, premium notices, financial statements
and the like.
The date of document used in verifying assets must not be more than 90 dans previous to
the date of approval. If it is more than 90 days old, assets must be re -verified before an
application can be approved.
• Mortgage Status Verification
The HRA will ensure that the mortgage(s) and/or contract for deed(s) on the property to be
improved are current. If payments are delinquent, the applicant must be given four weeks
to make them current. The date of the document used in verifying the mortgage and/or
contract for deed must not be more than 90 days previous to the date of approval. If it is
more than 90 days old, the mortgage status must be re -verified before a loan application
can be approved.
23
• Title Verification
1. The following information will be obtained from the County Recorder regarding each
property:
a. The full name of all owners of record, exactly as they appear on the title;
b. Whether it is Torrens or Abstract.
2. Upon obtaining this information, the HRA will determine that the applicant
individually or in the aggregate has a qualifying interest in the property consisting of
at least:
a. A valid life estate. Such life estate must be recorded and must appear in the records
of the County; or
b. A 1/3 interest in the fee title. Such interest may be subject to a mortgage; or
c. A contract for deed to the structure being improved.
3. In addition, the applicant(s) must occupy the property as the principal place of
residence. To consider a property the principal place of residence, an individual must:
a. Reside in the property at the time of application (except where extraordinary
circumstances have made the property temporarily uninhabitable or in the case of
a disabled person or household member who is unable to move into the property
until needed accessibility modifications are made); and
b. Occupy or intend to occupy the property for at least 9 months of the year.
4. For the purpose of complying with ownership requirements, the borrower may
aggregate his/her interest in such property with the ownership interest of other
individuals occupying the property as their principal place of residence.
Pre -Construction Documents
• Rehabilitation Application
The application must be filled out completely and signed and dated by the Applicant.
• Individual Data Confidentiali
The applicant's rights as a subject of data are fully described in this form. One form should
be given to the applicant and a signed and dated copy should be included in the file.
• Property Inspection Report
1. This report must include the following items:
a. General condition of the structure
b. Structural soundness
c. Plumbing systems including: water supply, waste disposal, fixtures and piping
systems
d. Heating systems
24
e. Electrical systems
f. Roof
g. Energy efficiency including: insulation, infiltration, windows, doors and
ventilation
h. General Exterior Conditions
i. General Interior Conditions
2. An explanation should be provided for any deficiency that appears on the inspection
report but does not appear on the rehabilitation work summary for correction.
3. The inspection report must be signed and dated by the inspector performing the
inspection.
4. Major infractions of the City building codes constituting a health and/or safety
hazard or seriously diminishing the habitability of the residence will be noted
and explained to the applicant.
• Scope of Improvements and Work Proposal
This listing of all eligible improvements should be kept on file in case the homeowner
requires additional copies. Copies will be sent to the homeowner along with a mandatory
cover letter encouraging the consideration of minority or women -owned contractors and
including information on how to access such contractors. A copy of this letter will also be
included in the file.
The Scope should allow contractors the opportunity to submit alternates or amendments to
work items.
• Rehabilitation Work Summary
The HRA, in conjunction with the homeowner, determines the work to be done with the
funds available. If the homeowner disagrees with the HRA's choice of improvements,
items may be waived by the homeowner, in writing, at the discretion of the HRA. The
rehabilitation work summary list includes:
1. The improvements to be done by item, and contractor performing work and a
breakdown of costs by item and contractor.
2. The total cost of the work to be performed shall be listed. The maximum loan amount
shall not exceed the lesser of:
a. $30;801:0940,000; or
b. The actual cost of the work performed
EXCEPT that when the project involves accessibility improvements, lead based paint
improvements, or when health and welfare conditions warrant, where the maximum
loan amount maybe $40;000:0050,000.00.
25
3. The maximum loan amount requirement may be waived at the discretion of the HRA
Executive Director for extenuating circumstances if the amounts authorized above are
insufficient to bring the home up to minimum property standards.
• Contractor Proposals
The homeowner must obtain a minimtun of two proposals for all of the authorized
improvements before work can begin. A Repayment Agreement must also be signed and
notarized before work start-up. All proposals must conform to the minimum standards of
the specifications. The lowest bid will be accepted unless customer specifies they are
paying the difference between the low bid and the high bid.
• Work Contract
Work contracts will be completed between the contractor submitting the lowest acceptable
proposal and the homeowner. A copy of each proposal must be included in the Work
Contract and shall be completed within the time frame specified on the Work Contract.
The HRA may grant an extension as needed. If the contractor does not begin or complete
the work within the time frame specified, the work contract may be canceled and a new
contractor selected.
• Amendment Request Certificate
This form outlines all changes in the approved loan amount, either additions or
subtractions, by each contractor. It must be signed by the contractor and the homeowner
and approved by the HIAA. Every effort will be made to keep amendment requests to a
minimum; however, it is appropriate to use the amendment request as a means of dealing
with unforeseeable circumstances.
• Sworn Construction Statement
Any firm or individual contracted to perform work on the residence must submit a sworn
construction statement prior to any work taking place on the property. The sworn
construction statement must list all subcontractors and/or suppliers contributing to the work
for which the invoice is being submitted and must be signed by the contractor holding the
Work Contract. The contractor's signature must be notarized. The purpose of this form is
to ensure that the contractor holding the Work Contract is liable for any failure to pay
subcontractors/suppliers involved in the project.
• Acknowledgment of Receipt of Pre -Construction Doctunents
The applicant's file will contain a signed and dated receipt from the applicant,
acknowledging that the HUD approved infonnation on the dangers of lead based poisoning
has been received. Also this acknowledgment states applicant received a blank copy of a
Work Contract, an improvement of work procedures form, a copy of the Repayment
Agreement, an individual data confidentiality statement, an authorization to release
information form and information on minority and women owned businesses.
Not
• Environmental Assessment
This form provides information pertaining to environmental assessment, historical
preservation, air quality, wetland protection, zoning classification, flood plain
management, hazardous facilities, noise, farmlands, and site source aquifers.
• Repayment Agreement
The Repayment Agreement must be included in the loan package. As specified in the
provisions of the Repayment Agreement, the homeowner shall be required to notify the
HRA immediately upon the sale, transfer, conveyance or cessation of residency of the
property.
1. The Repayment Agreement provides that in the event that the improved property is
sold, transferred, or otherwise conveyed by the homeowner within the specified time
period, the homeowner would be required to pay the full amount of the loan within ten
(10) years from the date from the approval date of the application, if the property ceases
to be the homeowner's principal place of residence. Should the homeowner retain the
property longer than 10 years but less than 20 years, he/she shall pay an amount equal
to a 10% reduction each year after the 11 t" year until the 20th year when the full amount
is forgiven. The Repayment Agreement is a lien on the improved property, in favor of
the HRA, as security for the loan amount. In the event of the death of the homeowner,
this lien may pass to his/her heirs provided they continue to occupy the property as
their principle place of residence.
2. The HRA will exercise extreme care in the execution of the Repayment Agreement
document to ensure that the lien is valid.' Any inaccuracy or omission may have a
negative effect on the validity of the lien.
Prior to the approval of the loan package the HRA must ensure that the Repayment
Agreement is properly completed in as much as:
a. The property description must be exactly as it appears in the property records. If
the applicant owns property other than the property to be improved, only the
description of the property to be improved should be included.
b. The record names (the names exactly as they appear in the property records) must
be used by all signatures required.
3. The following is a brief discussion of the signatures required under particular property
ownership situations:
a. Any JOINT TENANCY --signatures of all joint tenants are required.
b. Property held by ONE SPOUSE -- signatures of BOTH spouses are required.
c. Property held in LIFE ESTATE -- signatures of the applicant (life estate holder)
and all of the remaindermen.
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d. Property being purchased on CONTRACT FOR DEED -- signatures of the
applicant and all individuals who are aggregating their interest to meet the
ownership requirement; and the fee title holder (and spouse or others, as applicable)
of the property; and the signatures of any intervening vendees of the contract for
deed.
e. All required signatures must be notarized; including the "mark" of a signatory who
is unable to write (such a mark must be witnessed by at least two persons other than
the notary). Additional acknowledgments may be added to the Repayment
Agreement form to accommodate any necessary notarizations.
4. The Repayment Agreement will show the maximum loan amount. Should less than the
maximum loan be needed, the applicant will only be required to repay the actual
amount expended for improvements. An amendment to the Repayment Agreement
will need to be signed upon closure of the file where the exact dollar amount on the
original Repayment Agreement is not the actual amount used.
5. The Repayment Agreement and any Amendments to the Agreement shall be filed with
the proper recording office in such a manner as to create• a valid lien against the
property. It is the responsibility of the HRA to record the Repayment Agreement.
6. If any loan funds are used for purposes other than an eligible improvement upon an
eligible property or if the homeowner application is found to contain a material
misstatement of fact, the homeowner shall be liable for repayment of all or part of the
originally approved loan fiinds. In addition, any fraudulent use of funds may subject
the recipient to fines and/or imprisomnent under the Minnesota Criminal Code.
Post -Construction Documents
• Contractor Invoices
Invoices must be obtained from each firin or individual contracted to perform work on the
residence (a general contractor can submit invoices on behalf of a subcontractor). Invoices
must be provided for all payments, interim or final. Invoices submitted to the HRA must
be originals and not copies. Payments are typically processed the following Monday
providing that the invoice was received by 4:30 pm on Wednesday.
• Lien Waivers
A copy of all lien waivers referred to in the sworn construction statement, plus the lien
waiver from the contractor holding the Work Contract must be included in the file. The
original lien waivers, which must be secured before any payment is released, are to be
passed onto the homeowner following closeout of the file.
W.
• Completion Certificate
The homeowner, inspector, and grant administrator should sign this form when the work
is completed. If the approval of more than one inspector is required, then copies of the
inspection notice(s) should be attached.
• Complaint Record
This form should be used to document any complaints brought to the attention of the HRA,
pertinent to the administration/implementation of the program and the response of the HRA
to the complaint
• Acknowledgment of Receipt of Post -Construction Documents
After work has been completed, this form would be sent to the homeowner with documents
such as the lien waiver(s) and copy of recorded Repayment Agreement. The homeowner
would acknowledge receipt of the documents and return the form to the HRA for inclusion
in client's file.
THE REMAINDER OF THIS PAGE INTENTIONALY LEFT BLANK
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PART IV: RULES
Lead Based Paint Hazard Requirements
• The following procedure will be followed for all homeowners:
A. Discussion of the Lead Based Paint (LBP) requirements will take place at the initial
meeting with HRA staff as well as receipt of the Lead Hazard Information pamphlet.
The Certification of Receipt of LBP information will be signed by the applicant and
kept in the applicant's file.
B. The Rehabilitation Inspector will perform a visual assessment during the regular
rehab inspection. The Visual Assessment will identify the presence of any interior
and exterior deteriorating paint. The inspector will document the presence of any
deteriorated paint.
C. If deteriorated paint is found in a home built before 1978 and lead hazard reduction
work may be needed because painted surfaces will be disturbed during rehab, the
appropriate level of lead testing and other action will be initiated. The HRA can also
assume there is LBP and treat appropriately rather than test.
D. If further evaluation is needed, the HRA will contract with a certified Risk Assessor
to perform the necessary tests to determine if and where there is a lead hazard risk.
The Assessment report identifies the presence and location of LBP and the areas that
should be addressed. Costs of hiring a Risk Assessor can be rolled into the Rehab
loan.
E. If LBP is found, the homeowner will be notified of the presence and location of LBP
by the HRA. As a condition of receiving funding, LBP hazards must be addressed and
lead safe work practices will be required for all rehab work that disturbs painted
surfaces. Appropriate lead hazard reduction measures must also be incorporated into
the Scope of Improvements. Clearance of the unit will also be required. A copy of the
clearance reports will be given to the homeowner and kept in the homeowner's file.
Repayment of Assistance
Repayment of the deferred payment loan shall occur upon the earliest of:
Sale, transfer, or conveyance of the property
The property ceases for any reason to be the loan applicant's principal place of residence.
At the time of repayment, the HRA will prepare and execute a Satisfaction of Repayment. The
Satisfaction of Repayment will be sent to the Title Company (if one is involved in the
transaction), who will be responsible for recording the Satisfaction with the County. If a Title
Company is not involved the Satisfaction of Repayment will be sent to the homeowner and it
will be the Homeowner(s) responsibility to record the Satisfaction of Mortgage with the
County.
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Forgiveness of Indebtedness
Indebtedness of the principal shall be forgiven at a rate of 10% of the original principal amount
per year commencing at the end of the tenth year of the HRA loan. The loan will be completely
forgiven after the twentieth year. At the time of the forgiveness, the HRA will prepare and
execute a Satisfaction of Repayment. The Satisfaction of Repayment will be recorded with
Hennepin County by the HRA and a copy of the Satisfaction will be sent to the homeowner.
Subordination Policy
A. The following information must be provided before a request for loan subordination can
be considered:
• Current first mortgage balance, interest rate and term.
• Proposed loan amount, interest rate and term.
• Reasons for new financing and use of proceeds by amount. If financing will be used
for home improvements, specific information on the proposed home improvements
must be provided.
• Good Faith Estimate
• Copy of appraisal
• Types and amounts of any other indebtedness on property. Including balance, rate and
term.
• Household's verified income and size.
• Full name, address, telephone number, contact person and e-mail address of new
lender.
• Date subordination agreement is needed (must be at least two weeks from the date of
the request).
B. Information provided will be analyzed to determine the appropriateness of subordination
of the HRA's mortgage. All of the following criteria must be met before subordination
can be approved:
• All current and proposed property liens, including the Housing Rehabilitation Loan,
equal less than 95% of the appraised value of the property.
• The subordination is necessary to refinance the principle balance of existing prior
liens on the property and will facilitate a rate reduction, tern reduction and/or
principal reduction phis any costs to finance additional eligible home improvements.
No cash may be taken out as a result of refinancing. However, the fees incurred to
refinance will be an allowable expense.
• All home improvements must be eligible under the Home Rehabilitation guidelines
and the homeowner is required to submit documentation of cost for all improvements
as a condition of the subordination.
• The uses for the new financing must be justifiable as an appropriate use of public
funds to warrant subordination of the public finding.
• The household income of the homeowner must not be greater than 125 percent of
current CDBG maximum income guidelines.
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The borrowcr(s) must correct any errors and omissions relating to their loan as a
condition of the HRA granting a subordination request. This requirement would
include but not be limited to documents that are not signed (but the intent was to have
them signed), documents with clerical errors and/or documents that are missing or
destroyed.
C. If the above criteria are not met, the HRA will not subordinate its mortgage. The client
will then need to obtain financing that is subordinate to the HRA's mortgage, pay-off the
HRA's loan as a condition of the new financing, obtain non -mortgage financing, or forgo
the additional financing.
D. Appeals regarding interpretation of subordination requirements may be made in writing
to the HRA's Executive Director and then to the HRA Board of Commissioners.
Requests for appeal which clearly do not meet the subordination requirements, will not be
considered.
Funding for Emergency Repairs
The HRA will also set aside a portion of the budgeted rehab funds to be used for Emergency
Repair Grants. The amount of funds will be set by staff based on anticipated demand for the
program and balance of rehab fund. The guidelines for Emergency Repair Grants shall be the
same as those contained herein except as specified in the Emergency Repair Grant Program
Summary (a separate document).
Modification and Termination of Program
The Plymouth HRA may amend the Procedural Guidelines from time to time by issuance of
revised pages, which shall be effective as of the date of issue, or such later date as the
amendment shall specify. Administrative memoranda may also be issued which discuss policy
interpretations, clarification of procedures and other administrative matters.
Additional Provisions
• Maximum Loan to Value
The lien identified in the Repayment Agreement must be collectable. All existing
mortgages, contracts for deed, and other encumbrances, including the Repayment
Agreement, must not exceed 110% of the market value of the property. Market value will
be determined by the most recent assessed value of the property. If the homeowner has a
current appraisal, the appraisal may be used to determine the market value of the property
if necessary to show sufficient equity. This requirement may be waived at the discretion
of the HRA Executive Director.
• Previous Rehabilitation Loans
No property shall be eligible for a housing rehabilitation loan if it has been improved with
a Plymouth HRA rehabilitation loan within the 10 -year period immediately preceding the
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date on which application for such a loan is made. An exception may be made in
extraordinary circumstances from damage to the property as a result of events beyond the
control of the applicant or relating to health and safety concerns, such as fail -Lire of
plumbing, heating or electrical systems, or as determined by HRA staff. In such
circumstances, provided that funding is available, the applicant can receive assistance
limited to correcting the damaged or failed system(s) only. No other eligible work can be
carried out until the full 10 -year period has elapsed.
Applicants with a previous rehab loan from over 10 years ago will be limited to essential
repairs such as correcting health and safety hazards or repair of major systems, such as
plumbing, electrical, or heating failure. Until the previous rehabilitation loan is forgiven,
no additional work will be allowed unless it is determined by HRA staff to be essential.
• Previous Foreclosures
Applicants will be determined ineligible for future assistance if they had a previous
Rehabilitation loan from the HRA in which the assistance they received was forfeited due
to foreclosure of the property within the previous 5 years. If the foreclosure occurred over
5 years from the date of the new Rehabilitation application and the applicant has re-
established their credit from a reliable first-tier mortgage company, they may be considered
for eligibility to the loan program again.
• Total Amount of Assistance
The total amount of assistance received through the Plymouth HRA for all HRA programs
including the Housing Rehabilitation, First Time Homebuyer, and Emergency Repair
Grant Programs cannot exceed $40;99950,000.00. This limit may be waived on a case-by-
case basis at the discretion of the HRA Executive Director.
• Home Maintenance and Housekeeping
Homeowner must be capable of maintaining the home. Loans will not be approved if the
condition of the home demonstrates that the homeowner is not able or willing to properly
maintain a home. This requirement includes housekeeping problems as well as neglectful
maintenance.
• Flood Insurance
The administering entity will comply with the flood insurance purchase requirements of
Section 102 (a) of the Flood Disaster Protection Act of 1973, Pub. L. 93-234, 87 Statute.
975, approved December 31, 1973. Section 103 (a) requires the purchase of flood
insurance in communities where such insurance is available as a condition for the receipt
of any federal financial assistance for construction or acquisition purposes for use in any
area that has been identified by the Secretary of the Department of Housing and Urban
Development as an area having special flood hazards. The phrase "federal financial
assistance" includes any form of loan, guarantee, insurance payments, rebate, subsidy,
disaster assistance, loan, or any other form of direct or indirect federal assistance.
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• Local Codes
Each improvement must be made in compliance with all applicable health, fire prevention,
building and housing codes and standards. However, no application for a loan shall be
denied solely because the improvements will not bring the property into full compliance
with all such codes and standards.
Further, when work is done on any system within the house, upon completion of the work,
that entire system must meet applicable codes and standards. The entire structure may still
contain other systems that are not up to applicable codes and standards, on the condition
that no work was done on these systems.
• Federal, State and Local Regulations
Nothing in the Procedural Guide shall be construed in such a manner as to conflict with,
alter, or amend any Federal, State and Local regulations.
• Certifications
1. The HRA is legally authorized and constituted to administer the Housing Rehabilitation
Loan Program in the State of Minnesota.
2. No payments, fees or remuneration of any type whatsoever have been solicited or
received from any applicants or qualified homeowners.
3. After reasonable inspection, the HRA has no knowledge that any improvement covered
by the loan is in violation of any applicable zoning law or regulation.
4. Any employee of the City of Plymouth who is authorized to sign or countersign checks,
drafts or to certify vouchers shall be covered by a surety bond of not less than
$1,000,000; such an employee must be an authorized signatory as evidenced by a
written instrument of the governing body.
5. The HRA shall maintain documentation accounting for all funds received through the
collection of liens as prescribed in the Repayment Agreement.
• Prohibition of Service Fee Charges
No applicant shall be charged any application, processing, or other fee.
• Cost Reasonableness Standards
1. To ensure that cost reasonableness standards as outlined in OMB Circular A-87 are
complied with, all proposed work will be described in a Scope of hnprovements (see
page 22) in such detail that competitive bids may be readily obtained. The Scope of
Improvements will specify brand, type, and/or quality of the materials to be used as
appropriate.
2. Homeowners shall provide the Scope of Improvements to each contractor when
obtaining bids. A minimum of two directly comparable bids must be received for each
work item in the Scope of Improvements. Bids must specify brand, type, and/or quality
of materials included and must itemize costs for each item in the Scope of
Improvements. Contractors may suggest additional work needed and/or- list optional
upgrades, but those items must be listed separately from the Scope of Improvements
work items in the bid. All bids must be signed and dated by the Contractor.
3. The HRA Inspector will use the Scope of Improvements when making inspections to
determine compliance with the Scope and City codes.
• Sweat Equity
With HRA approval, the homeowner, or other individuals acting on homeowner's behalf,
may perform some or all of the improvements without compensation for labor. The
performer of the work must demonstrate competence to the HRA as to his/her skill and
ability to perform specified work by a designated date. This may be accomplished by means
deemed appropriate by the HRA on a case-by-case basis, and may include providing copies
of professional licensing, conducting a verbal interview with a City Housing Inspector,
and/or other methods. Homeowners with a history of failure to complete previous
construction work, or of non-compliance under City codes and ordinances or the terms of
this program, will not be eligible to perform sweat equity.
All purchases of project materials must receive prior approval from the HRA or they will
not be eligible for reimbursement through the Rehabilitation Loan.
Counseling/ Training Requirements
• Credit Counseling
Those clients in need of credit counseling will be referred to Community Action
Partnership of Suburban HennepinHennepin County (CAP-HCSH). CAP-HC8H is a non-
profit 501c (3) community action agency serving Plymouth and a number of other west
suburban communities. Homeowners who appear eligible for one of MHFA's programs,
but who indicate they have a mortgage delinquency or other credit problems, will first be
encouraged to participate in a credit counseling program.
After credit problems have been satisfactorily resolved, the deferred loan applications can
be forwarded to Hennepin County Housing, Community Works and Transit for eligibility
assessment of MHFA programs.
Applicants for MHFA's Fix -Up Fund and Deferred Loan Program will be referred to a
local lender. All applications rejected for MHFA funding may be eligible for City
assistance according to CDBG guidelines. Homeowners unwilling to pursue counseling
assistance or who are unwilling to resolve existing credit issues independently will find
City funding restricted to certain essential improvements. Funding for these applicants
would be limited to the following repairs in the priority given:
1. Emergency health and safety.
2. Public sewer and water hook-up.
35
3. Major structural work, where the home's structural integrity (i.e. foundation, beams,
walls and roof) is compromised and is in need of prompt repair to prevent further
damage or deterioration to the home.
4. Major internal systems (i.e. plumbing, heating, water, electrical) that are functional but
need replacement or upgrading under current code requirements. Other code violations
• Home Maintenance and Weatherization Training
Clients in need of this training will be urged to attend, as classes are available. Funding
may be restricted to the essential improvements cited above for clients who are unwilling
to attend these or other workshops sponsored by Community Action Partnership of
Subufban ennepin Count X (CAP-HCSH).
• Human Service Counseling
Clients in need of counseling will be referred to appropriate human service agencies for
assistance. If the client refuses the referral and staff determines counseling is required in
order to allow the rehab to proceed, no further assistance will be allowed.
Dispute Resolution
Occasionally a party (homeowner or contractor) may have a reason for disputing an HRA
action. In the event that such a dispute does occur, the disputing party should submit his/her
comments in writing to the Housing Program Manager with a request for action to see if the
problem can be resolved administratively.
If the problem cannot be resolved administratively within a 30 -day time period, the disputing
party will state his/her position, in writing, to the HRA's Housing Program Manager. He/she
may request that the issue be placed on the agenda of a regularly scheduled HRA meeting or
may be heard by a designee(s) of the HRA. The party will then be given the opportunity to
appear before the HRA and request specific action to resolve the dispute. The issue will be
put on the agenda within 30 days of the date the written request was submitted to the
Administrator.
UEO
APPENDIX A: DEFINITIONS
• Accessibility Improvements
Improvements to a dwelling, designed to enable a disabled person to function
independently in a residential setting, such as provisions for adequate space for
maneuvering, access and egress, (both in exterior and interior spaces), and installation of
equipment to facilitate ease of use.
• Applicant
An individual or household submitting an application for a loan
• Application
The form used to request assistance for the City of Plymouth's Housing
Rehabilitation funds.
• Assets
Cash, bank accounts, bonds and cash value of insurance policies, cash value of recreational
vehicles and any other personal property excluding automobiles, clothing and furniture.
• Calculation of Need Form
The form based on similar information and calculations as developed by the Minnesota
Housing Finance Agency in the use of their Rehab Loan Program and funding guidelines.
• CAPSH
Community Action Partnership of Suburban Hennepin. A non-profit agency working in all
of Suburban Hennepin County to assist low-income people with services to individuals
through outreach, energy assistance programs, homeownership services and financial
counseling.
• CDBG
The Community Development Block Grant Program, an annual entitlement program
provided to the City of Plymouth through the U.S. Department of Housing and Urban
Development (HUD)
• City
The City of Plymouth
• CEE
The Center for Energy and Environment, a non-profit agency that administers Reliant's
Weatherization Assistance Program.
• Date of Loan Approval
The date all required parties sign the repayment agreement.
37
Debt -to -Income Ratio
The debt -to -income ratio (DTI) is derived by dividing the total of household's fixed
monthly expenses by the household gross monthly income.
• Disabled Person
A person who has a permanent physical condition which substantially impairs the ability
to function independently in a residential setting, or which substantially limits the ability
to become employed or to participate in the community. A person with a condition such
as chronic emphysema, arthritis, heart disease and other "invisible" conditions not
requiring the use of devices to increase mobility shall not be deemed a handicapped
person, unless a licensed physician verifies in writing that a particular condition does
substantially limit the ability to function independently in a residential setting, to become
employed or to participate in the community.
• Elevated Blood Level
A lead content of 10 ug/dl (micrograms per deciliter) with a lead content of 20 ug/dl
(micrograms per deciliter) in one test triggering an inspection.
Emergency Situation
A condition requiring immediate and urgent attention, which threatens or imperils the
health and/or safety of the applicant household, such as the failure of plumbing, heating
and electrical systems or a system being "red flagged" by a utility company. The written
opinion of the City Building or Housing Inspector detailing a code or safety violation or
violations may, at the discretion of the Housing Specialist, be an acceptable definition of
an emergency situation.
• Guidelines
The set of standards, criteria, and specifications to be used in administering the Program.
• Hennepin County Housing, Community Works and Transit
The TIennepin County Housing, Community Works and Transit; a Hennepin County
agency that processes MHFA housing rehabilitation loans.
• Household
All persons residing in one housing unit; which may include one or more families, a single
person, a married couple, or two or more unrelated persons.
Household Gross Income
The annual income of all residents of the applicant's household, as determined in
accordance with these guidelines.
• Housing Rehabilitation Deferred Loan
The commitment of funds on behalf of qualified homeowners for the purpose of making
eligible improvements to eligible properties.
• HRA
The Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota;
which administers Plymouth's Housing Rehabilitation Program.
• HUD
The United States Department of Housing and Urban Development. The principal
Federal agency responsible for implementing certain federal housing and community
development programs.
• Lead Based Paint
Any paint surface with lead content greater than, or equal to, 1 mg/cmz, 0.5% by weight,
or 5,000 parts per million.
• Loan Documents
Consists of all applicable documents listed as follows:
• Homeowner Application for Deferred Loan
• Authorization to Release Infonnation
• Individual Data Confidentiality
• Lead -Based Paint Poisoning Notification (if applicable)
• Federal Income Tax Returns for the two previous years
• Income Verification
• Asset Verification
• Recent Bank Statements
• Mortgage Status Verification (if applicable)
• Association Dues Status Verification (if applicable)
• Title Verification
• Property Inspection Report
• Scope of Improvements/Work Proposal
• Contractor Bids
• Work Contract
• Amendment Request Certificate (if applicable)
• Contractor Bills
• Sworn Constriction Statement
• Lien Waivers
• Completion Certificate
• Data on Individual Loans
• Repayment Agreement
• MHFA
The Minnesota Housing Finance Agency; a Minnesota. State agency that administers a
variety of housing rehabilitation loan programs.
• Mortgage
The conveyance of an interest in real property given as security for the payment of a loan_
39
• Program
The HRA's Housing Rehabilitation Program
• Homeowner (borrower)
An individual or household meeting the requirements of the Eligible Recipients section
who receives a loan.
• Repayment Agreement
A document that places a lien against borrower properties improved with program funds.
The precise terms of the lien are spelled out in the Repayment Agreement.
• Resident
A person, other than a renter, living in the household for at least nine months of the year.
• Satisfaction of Repayment
A document releasing a Mortgage lien, indicating the borrower has paid the debt in full.
• Work Contract
A program document executed by the borrower and the contractor which establishes the
tenns and conditions under which program funded work will be carried out. The HRA is
NOT a party to the contract.
Agenda Number
PLYMOUTH HOUSING AND
REDEVELOPMENT
AUTHORITY
STAFF REPORT
TO: Plymouth Housing and Redevelopment Authority
FROM: Spencer Agnew, HRA Specialist through Jim Barnes, HRA
Manager and Steve Juetten, Executive Director
MEETING DATE: January 28, 2016
SUBJECT: Housing Rehabilitation Loan Program Funding
INTRODUCTION:
The Plymouth HRA Housing Rehabilitation Loan Program (Rehab Program) has
experienced a substantial increase in the number of households assisted over the past year.
As a result the program has currently committed all available funding for the 2015 program
year (July 1, 2015 to June 30, 2016) and has begun adding new applicants to a waitlist.
This report provides background on the Rehab Program and suggests that the HRA Board
consider adding supplemental funding to the program so that additional households may
be assisted.
BACKGROUND:
The HRA has operated the Rehab Program since 1975. Since 1988 (the most recent year
for which digitized records are available) the program has assisted 202 households,
resulting in over $2.5 million invested in improvements to the Plymouth housing stock.
While the program is available city-wide, the majority of loans have been made in areas of
Plymouth with older housing stock (see attached map).
The Rehab Program is funded through annual Community Development Block Grants
(CDBG) from the Department of Housing and Urban Development (HUD). The 2015
program year budget for the Rehab Program is $269,176, which includes a 2015 allocation
of $106,760 as well as $162,416 in funds carried over from prior grant years. Additionally,
program income is occasionally received through pay-offs of outstanding loans.
The Rehab Program offers a zero interest, 20 -year deferred loan of up to $30,000 to assist
moderate income Plymouth homeowners with needed home repairs. Loans are forgivable
after twenty years if the loan recipient continues to own and reside in the property,
otherwise loans are repaid at the time of sale or if the property is no longer their primary
residence. Only households with annual gross income at or below 80% of the area median
are eligible to participate. The current income limit for a household of four in the Twin
Cities is $65,800.
Eligible improvements through the Rehab Program include repairs necessary to preserve
the structure or improve the safety and energy efficiency of the home, such as roofing,
siding, windows, electrical, plumbing, heating, and insulation. Cosmetic remodeling and
building additions are not eligible for funding through the program.
The Rehab Program has historically assisted an average of seven households per year.
However, over the past six months the program has assisted seventeen households, with
ten loans completed and an additional seven loans in progress.
PROPOSED FUNDING:
As a result of the increased activity all remaining program funds are currently committed
and the Rehab Program will not be able to assist additional households until additional
funding becomes available. Staff have begun adding new applicants to a waitlist, which
currently has three households. Additional funding will become available if and when
program income is received, or when 2016 CDBG funding becomes available in August,
2016.
Because the Rehab Program has experienced a historically high amount of activity and
because the program results in a direct investment into the Plymouth housing stock, Staff
recommends that the HRA Board consider using some of the HRA reserves to
supplement program funding and allow additional households to be assisted. The HRA
reserves currently have an unrestricted fund balance of $1.9 million. Staff recommends
that the HRA commit $150,000 from the reserves to supplement the -Rehab Program
when CDBG funds are not available.
RECOMMENDATION:
Staff recommends that HRA Board of Commissioners discuss adding supplemental
funding to the Rehab Program from the HRA reserves to be utilized when CDBG
funds are not available.
ATTACHMENTS:
1. Map of Housing Rehab Loans 1988 -present
Agenda Number
PLYMOUTH HOUSING AND
REDEVELOPMENT AUTHORITY
STAFF REPORT
TO: Plymouth Housing and Redevelopment Authority
FROM: Matt Lupini, Community Development Coordinator through Jim Barnes,
HRA Manager & Steve Juetten, Executive Director
MEETING DATE: May 23, 2019
SUBJECT: HRA First Time Homebuyer Program — Amend Procedural Guidelines
BACKGROUND:
The Plymouth Housing and Redevelopment Authority (HRA) operates the First Time
Homebuyer (FTHB) that is funded through Community Development Block Grant (CDBG)
funds. From time to time, staff reviews the program guidelines to ensure consistency and
compliance with applicable laws, current market conditions and industry standards. The
guidelines were last revised in July 2014.
Staff has completed a review of the guidelines and recommends some updates that are discussed
below. The Procedural Guidelines document is attached for your review.
DISCUSSION:
Proposed Changes to the Housing Rehabilitation Program:
1. Amount of Assistance
Presently, homebuyers may receive up to $25,000.00 in a deferred, zero -interest loan to
assist in the purchase of homes within the City of Plymouth. Projects that exceed the
maximum loan amount due to extenuating circumstances must request a waiver from the
HRA Executive Director.
Since 2014, there have been 11 FTHB loans made by the Plymouth HRA, which averages
2.2 FTHB loans over this timeframe. While staff does not track the total number of
applications (including those that were denied), it is clear that the popularity and
accessibility of the program has declined in recent years. Further, the average loan
amount in that time was $18,383, with two (2) loans meeting the $25,000 maximum.
Between 2000 and 2007, the FTHB program made 83 loans for new home purchase in the
City of Plymouth — an average of approximately 10 loans per year in that period.
The current maximum loan amount is not necessarily prohibitive to home purchase in
Plymouth, but based on rising prices of area homes (whether they be townhomes,
condominiums, or single-family), a larger maximum amount may be necessary for the
program's continued operation. On May 10th, 2019, there were 15 homes in Plymouth for
sale under $200,000, per TheMLSonline. All of them were townhomes or condominiums
with two or fewer bedrooms.
Per Zillow, the median price of homes sold in Plymouth is $331,600. The Metropolitan
Council currently lists an affordable home purchase price of $234,500 for a family at
80% of the Area Median Income (AMI) — less than half of the median home price in
Plymouth. Since a family must not exceed the 80% AMI level to qualify for the FTHB
program, Plymouth home prices necessitate an increase in the maximum loan amount.
Staff recommends increasing the maximum FTHB loan to $35,000.00 on the basis of the
lack of activity in the program and steadily increasing listing prices for Plymouth homes.
2. Debt to Income (DTI) Ratio
Presently, the FTHB program requires that applicant's Housing Debt to Income (DTI)
ratio be at least 25%, but not exceeding 37%. Applicants exceeding the maximum DTI
ratio must request and be granted a waiver by the HRA Executive Director.
In conversations with lenders participating in either or both the Plymouth FTHB program
and the Minnesota Housing's Start -Up for First Time Homebuyers program, it is clear
that the DTI ratio as it currently exists serves as an impediment to potential Plymouth
homebuyers accessing primary sources of funding for home purchase.
A recently approved applicant experienced a situation wherein the maximum DTI ratio of
37% would have required a home purchase price of $159,000 or lower. As shown, homes
in Plymouth — even townhomes or condominiums — rarely sell for less than $200,000. A
waiver was granted by the HRA Executive Director to allow this specific applicant to
exceed a DTI ratio of 37% (up to 45%). Current Minnesota Housing mortgage loan
programs allow a DTI ratio of up to 50%, dependent on credit score. While the FTHB
program does not consider credit score, it does seem as though industry standard across
homebuyer programs is a maximum DTI of at least 45%.
Staff recommends increasing the FTHB program's maximum DTI ratio to 45% on the
basis of current limits impeding access to primary sources of funding for home purchase.
3. Formatting & Language
Miscellaneous formatting corrections and changes to outdated and/or redundant language
have been made throughout the document. None of these edits result in any change to the
functioning or administration of the program.
BUDGET IMPACT:
Funding for the FTHB Program comes from the federal CDBG program, so there is no impact to
local funding. However, raising the maximum loan amount may impact the number of FTHB
projects completed within a program year and make more individuals eligible for the program.
RECOMMENDATION:
Staff recommends the Housing and Redevelopment Board of Commissioners approve the
proposed changes to the Rehabilitation Procedural Guidelines.
ATTACHMENTS:
1. First Time Homebuyer Program Guidelines
FIRST TIME HOMEB UYER PROGRAM
GUIDELINES
CITY OF PLYMOUTH
HOUSING AND REDEVELOPMENT AUTHORITY
3400 Plymouth Boulevard, Plymouth, MN 55447
Revised July WUMay 2019
EQUAL HOUSING
OPPORTUNITY
TABLE OF CONTENTS
PART I: GENERAL PROGRAM DESCRIPTION
Program Overview
1
Program Goals
1
Program Administration
1
Purpose of the Program Guidelines
2
PART II: PROGRAM POLICIES & PROCEDURES
Financial Assistance
2
Responsibilities of the First Time Homebuyer
3
Responsibilities of the Lender
4
Responsibilities of the HRA
4
Application to the HRA
5
Summary of the Application Process
5
Eligibility Requirements
6
Denial of Eligibility
6
Eligible Dwellings
6
Applicant Outreach
7
Applicant Pool
7
Selection from the Applicant Pool
7
Lender Outreach
7
PART III: PROGRAM RULES
Lenders
8
Declarations of Restrictive Covenants
8
Lead Based Paint Hazard Requirements
8
Repayment of Assistance
9
Loan Forgiveness
9
Subordination of Mortgages
9
Targeted Funding
10
Modification and Termination of Program
10
APPENDIX A
Definitions
11
PART I: GENERAL PROGRAM DESCRIPTION
Program Overview
The Plymouth Housing and Redevelopment Authority (HRA) operate an assistance program for
homeownership funded by the City of Plymouth's Community Development Block Grant (CDBG)
Program. The HRA operates this program on behalf of and as the agent of the City of Plymouth.
The First Time Homebuyer Program provides financial assistance for low- and moderate -income
Households to become homeowners.
Administration of the First Time Homebuyer Program and the functions and responsibilities of the
HRA staff shall be in compliance with the U.S. Department of Housing and Urban Development
(HUD) CDBG regulations as well as all Federal, State and local nondiscrimination laws and with
the rules and regulations governing Fair Housing and Equal Opportunity in housing and
employment.
The HRA shall not deny any Family or individual the equal opportunity to apply for or receive
assistance under the First Time Homebuyer Program on the basis of race, color, gender, religion,
creed, national origin, age, familial or marital status, handicap or disability, sexual or affectional
orientation or reliance on public assistance.
The Plymouth HRA's office is accessible to persons with disabilities. Accessibility for the hearing
impaired is provided by the Minnesota Relay Service and the City of Plymouth TDD.
Program Goals
The First Time Homebuyer Program has the following two goals:
a. Assist low- and moderate -income families to purchase homes within the City of
Plymouth by providing assistance with down payment, closing costs and mortgage
principal reduction.
b. Promote responsible home ownership.
Program Administration
The Program will be administered through the Plymouth HRA. Interested applicants should
contact the Plymouth HRA staff by calling (763) 509-5410, emailing housing@plymouthmn.gov,
or appearing in person at 3400 Plymouth Boulevard, Plymouth, MN 55447.
Purpose of the Program Guidelines
The purpose of these Guidelines is to establish policies for carrying out the First Time Homebuyer
Program in a manner consistent with HUD requirements and local goals and objectives contained
in the Consolidated and Annual Action Plans. The HRA is responsible for complying with all
changes in HUD regulations pertaining to the CDBG program. If such changes conflict with these
Guidelines, HUD regulations will have precedence. Applicable regulations include:
➢ 24 CFR Part 5: General Program Requirements
➢ 24 CFR Part 8: Nondiscrimination
➢ 24 CFR Part 570: Community Development Block Grant
➢ 24 CFR Part 35: Lead Based Paint Regulations
PART II: PROGRAM POLICIES & PROCEDURES
Financial Assistance
The HRA provides financial assistance to homebuyers to more readily secure a first mortgage.
The Program assistance may be used to:
♦ Pay up to 50 percent of the amount the homebuyer(s) is required to provide toward the down
payment under the particular mortgage program they are utilizing, not to exceed $5,000.
♦ Pay up to 100 percent of the homebuyer's eligible closing costs not to exceed $5,000.00
7,500.00. Borrowers are not permitted to use Program funds for interest rate buy downs unless
documentation is provided from the lender that shows the buy down is necessary to secure
their primary mortgage. Eligible closing costs do not include optional insurances (i.e. optional
owner's insurance policy etc.).
♦ Reduce the mortgage principal up to 10% of the purchase price, not to exceed $20,000
♦ The applicant (s) Housing (DTI) Debt to Income Ratio must be at least 25%, but cannot exceed
45-3-7% of their gross monthly qualifying income.
The financial assistance will be provided at a minimum amount of $3,000.00 and a maximum
amount of $25-,000 0035,000.00. In certain situations, the HRA Executive Director may allow
assistance in excess of the maximum at their discretion. The HRA will make a determination on
the amount of assistance for which an applicant qualifies. The HRA will make this
determination after reviewing the applicant's verified income and assets, estimated Closing Costs,
purchase agreement, and lender's recommendations for financial assistance in compliance with
uses described above. Lenders must provide a pre -approval letter indicating the maximum amount
of financing the borrower would qualify for from the first mortgage lender.
The HRA will verify an applicant's income and assets through third party written verifications as
provided by either the lender or as sought by the HRA. The HRA may re -verify income and asset
information provided by the lender. The HRA will calculate the applicant's Gross Annual Income
using pay stubs and recent tax returns or third party verification as defined in Appendix A to ensure
the Applicant(s) qualifies as a low- or moderate -income Household as required by CDBG
regulations and to determine the maximum amount of assistance.
Financial assistance will be provided at the time of Closing on the property with the following
conditions:
♦ Selected applicants must meet the requirements of this Program and be eligible for the financial
assistance throughout the entire application process.
♦ The housing unit to be purchased and the purchase price must be accepted by the HRA as
meeting the intent and requirements of the program.
♦ The financial assistance provided by the HRA is in the form of a no interest deferred payment
loan that is due and payable 30 years from the initial purchase date or when the house is sold,
transferred or no longer the primary place of residence, whichever occurs first.
♦ The homebuyers must enter into a second mortgage and execute a Promissory Note with the
HRA providing for repayment of the indebtedness 30 years from the initial purchase date or
when the house is sold, transferred or no longer the primary place of residence, whichever
occurs first.
Responsibilities of the First Time Homebuyer
The responsibilities of the prospective homebuyers are to:
♦ Complete, sign and return the Application, Authorization for the Release of Information form,
and other certification and verification forms within the time frame specified.
♦ Register and attend the Home Stretch - Home Buyers Workshops offered by Community
Action Partnership of Hennepin County (CAP -HC). Classes must have been completed within
12 months prior to closing. Classes offered through other agencies or realtors may be
substituted with prior approval of the HRA. Applicants must also attend an individual
counseling session with a Housing Counselor at CAP -HC. If CAP -HC recommends that the
applicant is not ready to purchase a home, the HRA may not provide assistance until the
applicant has satisfied staff concerns. The applicant will be provided with a certificate of
attendance. A copy of this certificate should be forwarded to the lender and the HRA.
♦ Select a lender approved by the HRA for participation in the Program.
♦ Complete the pre -approval process.
♦ Select a real estate agent, if one is desired.
♦ Select a dwelling in Plymouth for purchase that is owner -occupied or vacant and is an eligible
dwelling under the Program.
♦ Provide information throughout the process as required by the lender or HRA.
♦ Execute a purchase agreement.
♦ Execute the lender's mortgage and related documents.
♦ Execute the HRA's Mortgage and Promissory Note.
♦ Have the seller execute the HRA's disclosure to seller form.
♦ Close on the property within the time frame specified.
♦ Execute other required forms within the time frame specified or required.
♦ Take occupancy of the dwelling within 30 days after Closing, homestead the property, and
continue to occupy the dwelling as your Principal Place of Residence.
♦ Make principal, interest, property tax and insurance payments as required.
♦ Reimburse the HRA in accordance with the HRA's Mortgage and Promissory Note should the
First Time Homebuyer trigger repayment through sale, moving, transfer of ownership, or
foreclosure within 30 years or default on any other tenns of these documents.
Responsibilities of the Lender
The lender must:
♦ Verify the prospective homebuyers income and assets to determine that the Family meets the
requirements of the Program and submit a copy of the verification to the HRA. These copies
must be submitted to the City at least five working days prior to the applicant signing a
purchase agreement.
♦ Compute the Mortgage, Down Payment, Mortgage payments and Closing Costs of Acceptable
Loans approved by the Program to determine the most cost-effective and appropriate form of
financing for the First Time Homebuyer to use.
♦ Provide a title search and review the documents.
♦ Provide the HRA with a pre -approval letter stating the maximum mortgage amount the
applicant is approved for.
♦ Provide the HRA other verification materials as requested by the HRA.
♦ Process a mortgage consistent with the Program.
♦ Meet all deadlines in a timely fashion, especially those that relate to the Closing. All
documents must be completed at least 10 days prior to the Closing and be delivered to the HRA
at least seven days before the Closing.
♦ Appraise property to determine the loan -to -value ratio.
Responsibilities of the HRA
The responsibilities of the HRA for the Program are to:
♦ Establish Program requirements and administer the Program.
♦ Send applicants the application form, the authorization for release of information form and
other certification and verification forms.
♦ Review the Application and other material for eligibility.
♦ Establish the pool of eligible participants and make selections for participation in accordance
with the selection provisions.
♦ Notify applicants when ineligible.
♦ Direct prospective buyers to register for the CAP -HC homebuyer workshops and provide
information and forms related to the Program.
♦ Provide liaison services involving the prospective buyer, lender and any real estate agent that
might be involved in the transaction.
♦ Review appraisal, purchase agreement, eligibility and mortgage for consistency with the
Program requirements.
♦ Prepare and execute the HRA mortgage and promissory note.
4
♦ Provide financial assistance according to Program guidelines to the applicant at the time of
Closing.
♦ Service the HRA mortgage.
♦ Modify or terminate the Program as may be appropriate or required.
Application to the HRA
It is the responsibility of each applicant to assure that the HRA receives his or her application.
Only applications with original signatures will be accepted. At the time of application, applicants
must provide the HRA with the following information and meet the eligibility requirements:
♦ Names of all Family and household members
♦ Address and telephone number
♦ Social Security numbers of all adults
♦ Date of birth of all Family members
♦ Number of adults in Family
♦ Number of children in Family
♦ Total Gross Annual income from all sources (i.e. employment, social security income, child
support, etc.) with pay stubs and three years of tax returns as documentation
♦ Bank statements, financial statements and all other document(s) that verify Gross Assets.
♦ Employer's name (Company Name)
♦ Address and phone number of each employer
♦ Length of time (in years and months) at present address
♦ Last three previous addresses
♦ Indication if applicant ever owned a home
Summary of the Application Process
The following is a summary of the application process.
♦ The applicant registers for and attends the homebuyer workshop series through Community
Action Partnership of Hennepin County (CAP -HC).
♦ The applicant arranges for and attends a private housing counseling session with Community
Action Partnership of Hennepin County (CAP -HC).
♦ The applicant selects a participating lender and applies for mortgage pre -approval.
♦ The applicant completes and submits a First Time Homebuyer application and authorization
for release of information form to the HRA with a mortgage pre -approval letter from the lender.
♦ The applicant searches for a home in Plymouth.
♦ The applicant enters into a Purchase Agreement and contacts the lender.
♦ The lender authorizes appraisal of home.
♦ The lender confirms applicant's mortgage eligibility and approves purchase.
♦ The lender contacts the HRA with supporting documentation.
♦ The HRA arranges for a lead-based paint hazard inspection of the property, if the dwelling was
built prior to 1978.
♦ The HRA reviews appraisal, Purchase Agreement, Good Faith Estimate, and eligibility
verification for consistency with program goals and requirements.
♦ The HRA issues an approval letter.
♦ The HRA prepares the closing documents required by the City's Program Guidelines.
♦ The HRA attends the Closing. At the Closing, the HRA has the borrower sign the required
closing documents and financial assistance is provided in the form of a second mortgage.
Eligibility Requirements
To be eligible to participate in the Program, the applicant must meet the following requirements at
the time of application and throughout the process up until Closing.
♦ Must qualify as a Family, as defined in Appendix A.
♦ Must be a U.S. citizen or have legal immigration status.
♦ Must be a First Time Homebuyer, as defined in Appendix A.
♦ Must not have a Gross Annual Income that exceeds the maximum income limits which are
revised annually to reflect the current year's CDBG maximum income limits.
♦ Must not have Gross Assets exceeding $25,000.00, which excludes one automobile.
♦ Borrowers are required to invest at least $1,000.00 of their own monies towards the purchase
price of the home. Funds from public program(s) cannot be used as part of the Homebuyers
minimum portion of the down payment.
♦ Must meet the requirements of a Lender and qualify for a first mortgage.
♦ Must fulfill the Program obligations in a timely manner and must remain eligible to participate
based on the program requirements and those of the lender through the time of Closing.
♦ Must not have a previous loan through the Plymouth HRA that ended in foreclosure or any
other loan that ended in foreclosure within the previous five years.
♦ Must meet the requirements as specified elsewhere in these Guidelines.
Denial of Eligibility
The HRA will review and verify all applications for eligibility. Those applicants not meeting the
eligibility requirements will be sent a written notice explaining the reason(s) for denial of Program
participation.
Appeals regarding interpretation of eligibility requirements may be made in writing to the Housing
Program Manager, HRA's Executive Director and then to the HRA Board of Commissioners.
Appeals that clearly do not meet eligibility requirements will not be considered.
Eligible Dwellings
To be eligible the property must meet the following requirements:
♦ Be located within the City of Plymouth.
♦ Be a single-family dwelling, a townhouse unit, or a condominium unit.
♦ Be a conforming use as defined by the Plymouth Zoning Ordinance.
♦ Be free of lead-based paint hazards at the time of Closing.
The HRA may require an inspection of the dwelling for compliance with the Plymouth Housing
Code (Uniform Housing Code). The HRA will require an inspection of all dwellings built prior to
1978 for compliance with HUD's lead-based paint hazard regulations. If lead-based paint hazards
are found, lead clearance will be required prior to Closing.
Applicant Outreach
The HRA will publicize and disseminate information to make known the availability of
homeownership assistance on a regular basis through a variety of media and by other suitable
means. The availability of assistance will be communicated to other service providers and Realtors
in the community and advise them of the guidelines so that they can make proper referrals for the
Program. Realtors will be encouraged to provide additional services to eligible clients to ensure
their successful utilization of the program.
Applicant Pool
The applicant pool for the Program shall consist of all those who have completed and returned to
the HRA a complete application, written verification from their lender of pre -approval, and who
are determined by the HRA to be eligible.
Selection from the Applicant Pool
As funds are available, applicants will be selected from the applicant pool on a first come, first
serve basis. Eligible applicants will be selected for funding when they or their lender notify the
HRA of the applicant's approved purchase agreement and mortgage. If funding is limited and
more than one applicant is at the purchasing stage, the HRA will provide funding to the applicant
who qualifies for the most preference points.
Preference points have been established to meet the goals of the HRA. Each preference category
is worth one (1) point. The maximum points any one Family could receive are five (5) points.
Families with the highest point totals will be selected first. In the event of a tie, a drawing or
lottery will be held to rank the applicants within each of the preference categories.
♦ Applicant with dependents under age 18
♦ Live in Plymouth at least 90 days prior to Closing
♦ Head or co-head has primary, long-term employment in Plymouth
♦ Currently holding a Plymouth Section 8 Voucher
♦ Never owned a home (versus having owned a home over three years ago)
Selection from the applicant pool is tentative and conditional. Families selected for participation
must fulfill the Program obligations in a timely manner and must remain eligible to participate
based on the program requirements and those of the lender through the time of Closing.
Lender Outreach
The HRA will solicit lender participation as needed. The HRA will review requests from lenders
to be approved as a participating lender of the First Time Homebuyer Program. The lenders must
be FHA and MHFA approved and exhibit a willingness to provide mortgage products to low- and
moderate -income Households.
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PART III: PROGRAM RULES
Lenders
All lenders must be a Minnesota Mortgage Program Lender as approved by Minnesota Housing.
Applicants should check the Minnesota Housing website at www.mnhousing.gov to determine
whether a lender is approved to participate in the Plymouth FTHB program Lenders and their
representatives must also be willing to participate in the Plymouth First Time Homebuyer
Program. Applicants should ask the lender if they have received the City of Plymouth's Program
Guidelines and if they are familiar with the process.
It is the applicant's responsibility to make arrangements for obtaining pre-qualification(s) or pre -
indication of approval and for making an application for a mortgage. A letter from the lender
indicating the amount of the mortgage for which the applicant pre -qualifies must be provided with
each application. The same lender must be used when the applicant goes for pre -approval of a
mortgage prior to the purchase of a home, so it is recommended that the applicant selects the lender
carefully. .
Declarations of Restrictive Covenants
From time to time, declarations of restrictive covenants may be placed on properties as a condition
of First Time Homebuyer assistance. Declarations of restrictive covenants are placed on select
properties to ensure that these properties are owned by low- and moderate -income households in
the future, even after subsequent sales. Declarations of restrictive covenants may also restrict the
resale price of select housing units in an attempt to keep the units affordable.
Lead Based Paint Hazard Requirements
♦ All applicants purchasing a dwelling built prior to 1978 will be provided with a lead based
paint brochure and must sign a certification of receipt of the brochure.
♦ As a condition of funding, the applicant will be required to purchase a home free of Lead Based
Paint (LBP) hazards If the dwelling was built prior to 1978 a visual assessment for
deteriorated paint will be done by City staff. Applicants will be informed that the inspection
is only to determine the presence of deteriorated paint and they may also want to obtain a
complete Home Inspection from a certified Home Inspector.
♦ If deteriorated paint is found the HRA will contract with a certified Risk Assessor to perform
the necessary tests to determine if there is a lead hazard risk. A copy of a clean Lead Risk
Assessment report must be submitted to the HRA before the home is approved for assistance.
If the applicant refuses, the property will not be eligible for assistance. The applicant will need
to find another house that is or will be made LBP risk free in order to qualify for assistance.
♦ If LBP risks are found, stabilization of the defective paint, cleanup and clearance will be
required before funds are approved for assistance. The presence of LBP risks should be treated
like any other defect found during an inspection and may be negotiated between buyer and
seller. Clearance will be required before the home can be safely occupied and will assure that
there are no remaining lead hazards.
Repayment of Assistance
Repayment of the deferred payment loan shall occur upon the earliest of:
♦ Sale, transfer or thirty years from the initial purchase date, when the HRA Mortgage becomes
due and payable.
♦ The property ceases for any reason to be the homebuyer's principal place of residence.
♦ Default on the mortgage with the HRA or any superior mortgage on the property.
At the time of repayment, the HRA will prepare and execute a Satisfaction of Mortgage. The
Satisfaction of Mortgage will be sent to the Title Company, who will be responsible for recording
the Satisfaction with the County. The HRA will send the homeowner a copy of the Satisfaction
as well as the original Promissory Note indicating it has been satisfied.
Loan Modification
Generally, the HRA will require that all First Time Homebuyer loans be repaid. However, the
HRA may modify loan agreements and/or waive repayment if the homeowner can document a
hardship. Hardship may include the homeowner not having the resources to pay the HRA's loan
back (requires a denial letter from one or more financial institutions) or the property value
declining since the HRA's loan was taken out. In addition, the HRA may consider forgiving a
portion or the entire loan amount if the homeowner is facing foreclosure and if forgiving the loan,
or a portion thereof, will assist the homeowner in restructuring their mortgage so they can remain
in the home.
The HRA will not consider forgiveness of the loan for the reasons stated above if the homeowner's
reason for selling is to purchase a larger home unless there is severe overcrowding in the home.
Severe overcrowding means that there are more than two persons per sleeping room in the home.
A living room is considered a sleeping room for this purpose.
Hardship requests shall be made in writing to the Housing Program Manager and will be reviewed
on a case-by-case basis. If the Housing Program Manager denies a hardship request, appeals
regarding interpretation of the hardship provisions may be made in writing to the HRA's Executive
Director and then to the HRA Board of Commissioners, which has the final say in the request.
Appeals that clearly do not meet the hardship requirements will not be considered.
Subordination of Mortgages
The HRA may subordinate the First Time Homebuyer Program loan. The HRA will review and
respond to all requests for subordinations within two weeks of the application date. The following
information must be submitted before a request for subordination will be considered.
♦ Effective date of current first mortgage, current first mortgage balance, interest rate and term
♦ Proposed loan amount, interest rate and term.
♦ Reasons for new financing and use of proceeds by amount. If financing will be used for home
improvements, specific information on the proposed home improvements must be provided.
10
♦ Good Faith Estimate.
♦ Copy of appraisal.
♦ Most recent assessor's market value of property.
♦ Types and amounts of any other indebtedness on property, including balance, rate and term.
♦ Date the First Time Homebuyer loan was filed with County and the document number.
♦ Household's verified income and size.
♦ Full name, address, telephone niunber, contact person and e-mail address of the new lender.
♦ Date subordination agreement is needed (must be at least two weeks from the date of the
request).
Information provided will be analyzed to determine the appropriateness of subordination of the
HRA's mortgage. The following criteria must be met before subordination of the loan will be
considered.
♦ All current and proposed property liens, including the First Time Homebuyer loan, equal
less than 95 percent of the appraised value of the property.
+ The subordination is necessary to refinance the principle balance of existing prior liens on
the property and will facilitate a rate reduction, term reduction and/or principal reduction
plus any costs to finance additional eligible home improvements. No cash may be taken
out as a result of refinancing. However, the fees incurred to refinance will be an allowable
expense.
♦ All home improvements must be eligible under the Home Rehabilitation guidelines and the
homeowner is required to submit documentation of cost for all improvements as a condition
of the subordination.
♦ The uses for the new financing must be justifiable as an appropriate use of public funds to
warrant subordination of the public fiinding.
♦ The household income of the homeowner must not be greater than 125 percent of current
CDBG maximum income guidelines.
♦ The borrower(s) must correct any errors and omissions relating to their loan as a condition
of the HRA granting a subordination request. This requirement would include but not be
limited to documents that are not signed (but the intent was to have them signed),
documents with clerical errors and/or documents that are missing or destroyed.
If the above criteria are not met, the HRA will not subordinate its mortgage. The client will then
need to either obtain financing that is subordinate to the HRA's mortgage, pay off the HRA's loan
as a condition of. the new financing, obtain non -mortgage financing, or forgo the additional
financing.
Appeals regarding interpretation of this Subordination Policy may be made in writing to the HRA's
Executive Director and then to the HRA Board of Commissioners. Appeals that clearly do not
meet the subordination requirements will not be considered.
11
Targeted Funding
At various times, the HRA may target Program funding for purchases in specific developments.
Applicants purchasing in those developments would receive Program funding prior to all other
applicants.
Total Amount of Assistance
The total amount of assistance received through the Plymouth HRA for all HRA programs
including the Housing Rehabilitation, First Time Homebuyer, and Emergency Repair Grant
Programs cannot exceed $40,00050,000. This limit maybe waived on a case-by-case basis at the
discretion of the HRA Executive Director.
Modification and Termination of Program
The HRA may modify or terminate the Program as it deems appropriate or as required by HUD.
Once the HRA has provided financial assistance and the mortgage executed, financial assistance
shall not be rescinded except as provided for in the executed HRA mortgage and promissory note.
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12
APPENDIX A
DEFINITIONS
Acceptable Loans — Conventional, Fannie Mae, FHA, VA and ARM's that at a minimum are at
a fixed rated for the first seven years.
Applicant — An individual or household submitting an application for a loan.
Application — The form used to request assistance for the City of Plymouth's First Time
Homebuyer funds.
ARM — An Adjustable Rate Mortgage is a mortgage that offers an initial rate that is fixed for a
certain number of years of repayment; the rate then adjusts every year thereafter for the
remaining life of the loan.
CAP -HC — Community Action Partnership of Hennepin County. An agency working in all of
Hennepin County to assist low-income people with services to individuals through outreach,
energy assistance programs, homeownership services and financial counseling.
CDBG — A Community Development Block Grant Program; which is an annual entitlement
program provided to the City of Plymouth through the U.S. Department of Housing and Urban
Development (HUD).
City — The City of Plymouth.
Clearance — A Lead Based Paint Certification that all lead issues'have been remediated.
Closing - The consummation of the real estate transaction. The Closing includes the delivery of a
deed, financial adjustments, the signing of notes, mortgages, and the disbursement of funds
necessary to complete the sale and loan transaction.
Closing Costs - Those costs required by the lender to be paid by the buyer for various fees, credit
report cost, insurance, etc. at time of Closing on property.
Consolidated and Annual Action Plans — HUD requires the City of Plymouth to submit a 5 year
Consolidated Plan and an Annual Action Plan to guide housing, homelessness and Community
Development activities.
Conventional Mortgage — A type of residential mortgage loan, usually from a bank or savings
and loan association, with a fixed rate and term. It is repayable in fixed monthly payments over a
period usually 30 — 40 years or less, secured by real property, and not insured by the Federal
Housing Administration or guaranteed by the Veterans Administration.
Down Payment — A type of payment made by a home buyer, indicating intention to purchase real
estate offered for sale and obtain financing from a bank or mortgage company.
DTI - Debt to Income Ratio — Indicates the percentage of income that goes toward housing costs,
including mortgage principal and interest, mortgage insurance premium, hazard insurance
premium, property taxes, and homeowners association dues (when applicable).
13
Family — A group of individuals who live or will live under one roof.
Fannie Mae — A privately owned and operated corporation that buys mortgages from such lenders
as banks and savings and loans, packages the, and resells them on the open market.
FHA — Federal Housing Administration. A Federal agency that administers many loan programs,
loan Guarantee programs, and Loan Insurance programs designed to make more housing available.
First Time Homebuyer - A Family who has not owned a dwelling of any kind within the
preceding three years from the date of application or who has been displaced due to a divorce
situation. (A Family purchasing a dwelling with a Contract for Deed is not eligible to participate
in this Program.)
Good Faith Estimate — Document disclosing the approximate closing costs a mortgage applicant
will pay at or before the mortgage settlement date.
Gross Annual Income - The Gross Annual Income of a Household for the purposes of this
program is as defined for purposes of reporting under Internal Revenue Service Form 1040 for
individual Federal annual income tax purposes as per 24 CFR 570.3 and 26 CFR.
Gross Assets - The current market value of the following minus existing indebtedness: (Typically,
it does not include 401Kfunds, pensions, or other- deferred compensation funds)
1. Cash on hand
2. Cash in checking accounts
3. Cash in savings accounts, including accounts held in trust.
4. The cash value of life insurance policies.
5. Investment securities (government bonds, municipal bonds)
6. Stocks
7. Certificate of deposits and annuities
8. The current market value of all interest in real estate. Included in this determination is
any land in which any resident of the Household holds title or is selling on contract for
deed. The value of the contract for deed property shall be defined as 100 percent of the
outstanding balance on the contract at a time twelve months following the date of the
income and other asset verifications. The dollar amount of the difference between the
outstanding balance at the time of verifications and the outstanding balance twelve
months later shall be included as household income.
9. All other property, exclusive of household furnishings, clothing, and one vehicle. This
section includes, but is not limited to business equipment, boats, snowmobiles,
motorcycles, farm stock and additional vehicles.
10. If the applicant owns a business, in full or in part, and that business is incorporated, then
the business equipment is not an asset. If the business is not incorporated, the business
equipment is then considered a personal asset. The value of the ownership of the
business by the applicant is a personal asset. If the applicant owns less than 100 percent
of the business, written notarized proof of the percent of ownership must be provided by
the applicant to the HRA.
Guidelines - The set of standards, criteria, and specifications to be used in administering the
Program.
Household — All persons residing in one housing unit; which may include one or more families, a
single person, a married couple, or two or more unrelated persons.
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Housing Counselor — A person who provides direct customer service primarily to groups,
individuals, households seeking information and assistance with housing issues.
HRA - The Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota;
which administers Plymouth's First Time Homebuyer Program.
HUD — U.S. Department of Housing and Urban Development. The principal federal agency
responsible for implementing certain federal housing and connnunity development programs.
Income — The amount of money or its equivalent received during a period of time in exchange for
labor or services, from the sale of goods or property, or as profit from financial investments.
Lead Risk Assessment — A report that describes the health -risk assessment, management process,
estimates of the costs of recovery, and summaries of possible defensive measures required per
HUD regulation CFR Part 35: Lead Based Paint Regulations.
Lender - Individual or firm that extends money to a borrower with the expectation of being repaid,
usually with interest.
Low Income Family — A Family whose annual income does not exceed the low-income limit as
established by HUD with adjustments for smaller and larger families.
MFHA — The Minnesota Housing Finance Agency; a Minnesota State agency that administers a
variety of first time home buyer loan programs.
Moderate Income Family - A Family whose annual income does not exceed 80 percent of the
median income for the area, as determine by HUD with adjustments for smaller and larger families.
Mortgage - The conveyance of an interest in real property given as security for the payment of a
loan.
Principal Place of Residence — To occupy the home as the primary residence on a permanent
basis.
Program - The HRA's First Tune Homebuyer Program.
Promissory Note - A written instrument containing a promise by the signer to pay an agreed
amount.
Purchase Agreement - An agreement between buyer and seller of real property, setting forth the
price and terms of the sale. Also known as a sales contract.
Reducing the Mortgage Principal Amount - A method of benefiting the buyer through the use
of a portion or all of the HRA provided financial assistance to lower the mortgage principal
amount. In effect, this assistance acts as a larger down payment and, helps to reduce the monthly
mortgage payments. The available amount of assistance is up to 10% of the purchase price to a
maximum of $20,000. Borrowers are expected to contribute at least 25% of their gross qualifying
income toward their monthly payment before Plymouth financial assistance can be used for
reduction of the mortgage principal.
Satisfaction of Mortgage — A document releasing a Mortgage lien, indicating the borrower has
paid the debt in full.
Second Mortgage - A loan on a property that already has an existing mortgage (the first
mortgage). The second mortgage is subordinate to the first.
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VA Loan — Department of Veterans Affairs, providing below-market financing with no down
payment to veterans of the U.S. Armed Services.
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