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HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 04-02-1979AGENDA PLYMOUTH H04SING AND REDEVELOPMENT AUTHORITY APRIL 2, 1979 6:30 p.m. I. Roll. Call II. Minutes of February 26, 1979 meetina II.I. Oath of Office for Rod Hillstrom. IV. Revised. 1977 Financial" Report for HRA V. Selection of a Replacement for Rod Hillstrom on the Housing Rehab Committee VI. Sect.. 235/265 Scattered Site Program - Progress Report VII. Sect. 8 - Progress Report VII. Housing Rehab IX. HRA Meeting Schedule for 1979 X. Petitions, Requests & Cowunitations A. Scattered Site Housing Proposal XI. Adjournment. CITY OF PLYMOUTH 3025 HARBOR LANE, PLYMOUTH, MINNESOTA 55441 TELEPHONE (612) 559.2800. DATE: March. 28, 1979, MEMO TO: HRA Commissiorter•s FROM: Milt Date. SUBJECT: Various Agenda Topics for April 2, 1979 HRA Meeting Oath of Office. for Rod Hillstrom By way of introduction, Commissioner -appointee Hillstrom has served on the Plymouth Housing Rehab Committee for tae past two plus years. Rod has also been active with the Plymouth Jaycees for several years in addition to previous involvement with Operation ID and the Mayor's Plymouth Citizens Action Council. He presently is employed with Super Valu Stores, Inc. as a project manager and engineer. He and his wife have lived in Plymouth since 1972. His present address is 12510 25th Ave. No. Revised 1977 Financial Report for Plymouth HRA The Consulting firm of Moen and'itenttila revised the 1977 Financial Statement for the Plymouth HRA as per the HRA directive of last year. Selection of a ReDlacement for Rod Hillstrom on the Housino Rehab Committee Commissioner Hillstrom would like to terminate his duties with the Plymouth Rehab Committee with his appointment to the HRA. His presentjob takes him out-of-town frequently during the middle of the week when the Housing Rehab Committee meets. As well, he would like to see some other citizen have the opportunity to serve in this position. In this regard, Mark Eckes, presently serving on the CDBG Citizen Advisory Committee as an alternative member) and who is also active with the Plymouth Historical Society, has expressed an interest in serving if so appointed. Section 235/265 Scattered Site Program - Progress.Report Over the last two mpnths, I have been in touch with the local HUD Area Office regarding repayment agreements and the Section 235/265 Program. Dick Buddigh, HUD Area counsel indicated to me in January that the Bloomington HRA had a request in to the Washington HUD office using a. repayment agreement or right of first refusal clause for this program. Now it appears that Washington has basically cleared the Bloomington approach. Dennis Daniels., Bloomington HRA Director, is sending me a copy of their submittal. When it arrives I will send a copy to each Commissioner for their perusal. W Connissioners ftrch 28, 1979 Page 2 Section 8 - Progress Report Presently Oe City's Section 8 Program is providing rent subsidy payments to 58 families at an average of $170/family. Eleven of the City's apartment projects are involved in the program. The apartments with the greatest numbers of Section 8 renters are Plymouth Colony with 14 renters; Fox Meadows with 9 renters; The Place with 8 renters; and, Four Seasons Villa and Villaqe Square with y renters each. Presently the waiting period is six to eight months. Applications come in at the rate of 3 or 4 .per week. Recently the Metro HRA has contacted our office to look into thee matter of "inter - jurisdictional mobility" as it relates to the -Section 8 program. This merely means that Section 8 prospective renters would be able to "move about" from community to community more readily by a process of exchanging certificates of participation among the nine HRA's operating in the metro area. These HRA's are as follows: Bloomington St. Louis Park Dakota County St. Paul Minneapolis South St. Paul Metro Cotancil Scott County Plymouth The push for this interchange of certificates between HRA's comes from the Secretary of Housing, Ms. Harris. A memo for the Metro HRA staff is attached to further explain the situation. The ,Metro HRA approach seems tenable to staff. A 5% set-aside of certificates for our HRA Section 8 program would be 3.6 certificates pe.- month. Wee do get a couple of inquiries per month from certificate holders in other communities wanting to move into Plymouth. I have told theft they will have to go to the bottom of the waiting list like anyone else. (This whole matter of 8 or 9 different jurisdictional districts does cause some confusion among certificate holders). Housing Rehab -Progress Report Within the last four weeks I have had 12 requests for applications for this program. Five applications have been submitted. Three of the five appear to qualify. Staff has inspected the homes of the three qualifiers. All three possible qualifiers are widows and require much needed improvements, i.e. electrical work (4)ne had an elec- trical fire just recently), plumbing and insulation. Work is also progressing on other already contracted projects, however, some work is not pr9gressino so satisfactorily. (If I'm not at the next HRA meeting, it'll be because I'm "doing my time" for shooting a certain contractor!). Several weeks ago I mailed out a two page questionnaire to homeowners receiving grant assistance. The questionnaire is attached. A11,four responses were about the same.. Everyone came off with a commendable rating. HRA Meeting Schedule for 1979 Presently HRA bylaws call for a regular meeting to be held the fourth Monday of each month. Staff suggests' that meetings this frequently may not be necessary and would recommend regular meetings be held every other inonth or quarterly. Special meetings could then still be held as deemed necessary by the Chairman or any two members of authority. Staff references the HRA Bylaws as attached. HRA Commissioners March. 28, 1979 Page 2 Scattered Siete Housing Proposal Recently staff has been contacted by :the firm of Isberg,..Ri.esenberg, Chelseth and Associates, Inc. regarding their involvement in the private development of scattered site housing utilizing Section 8 money. This firm presented to staff their written proposal on how they could assist the Plymouth NRA in the matter of scattered site housing. Enclosed is this firm's proposal for the Commissioners review. Staff in no way endorses this firm or its proposal but does wish to give the Commissioners every opportunity to examine proposal's of this nature. As well, staff will invite Mr. Riesenberg to a future HRA Meeting should the Commissioners desire. The April 23rd HRA meeting might be an appropriate meeting for this item to be discussed. ATTACHMENTS I. Addendum to a Purchase Agreement (used by Bloomington HRA) 2. Memo from Metro Council regarding Interjurisdictional Mobility 3. Survey Letter to Homeowners 4. Plymouth HRA Bylaws regarding meetings S. Proposal from Isberg, Riesenberg, Chelseth and Associates, Inc. (to HRA Commissioners only) OrA011RtOTON. Q.G !'m10 March 5, 19 79 Mr. :Milt Dale,. Associate Planner - Plymouth 9RA 3025 Harbor Lane Plymouth, '[moi. 55"1 Dear Milt: I want to share with you the attached report containing information which relates to your inquiry. I'm glad l could be of assistance to you in this matter. Let me know if I can be of any help to you in the future. My best. terely, Dave renberger U. S. Senator a. e Ya 4< y March 29, 1979 mofirasw= Mayor Howard J. Hunt 3400 Plymouth. Blvd. Plymouth, Minnesota 55441 bear Mayor ,Hunt: The Minnesota Housing Finance Agency (MHFA) was established to provide Ofordable housing for low -and moderate income households in Minnesota. The Agency provides assistance.in homeownership, home improveMert, and development of multi-fMily . rental houstng. Each year, the Department of Housing and Urban Development (HUD) allocates funds to the Agency under the Sectian 8 Housing Assistance Payments Program which provides rental assistance payments to Tow and moderate income households throughout the State. The Agency uses these Section 8 funds in the new construction or substan- tial rehabilitation of multi -family housing developments. For fiscal year 1979, funds have been allocated for approximately 1,000 dwelling units. NHFA began advertising for multi -family housing development proposals on January K. 1979, and by the deadline of February r-3 had received 152 applications requesting 9,700 units. We will not be able to fund all. of the proposals due to limited Section 8 funds. WFA staff visits each proposed site. After the site and proposal have been evaluated. the selection of proposals will take. place. This involves an examination of local market information., local Housing Assistance Plans, Farmers Home Administration FmNA) plans, HUD's Fair Share Plan, MHFA's Allocation Plan, and Regional Development Commission priorities and. recommendations. We are enclosing information on the applications received from your+commanity, em- phasizing that no selections have.yet been made for funding. The Board of the Agency will make selection decisions in late April. If you have any questions or comments or feel there is information the City has which would be useful to this Agency in making selection decisions, please call MHFA at (612) 296-7618.. Sinc 1 Jan>esl. o Execut i ve Director. JJS/kn `-- Enclosures AN EQUAL OPPORTUNITY EMPLOYER The following applications for multi-far-ily housing have been submitted to the Minnesota Housing Finance Agency. CITY Plymouth New Construction X REGION 11 Substantial Rehabilitation LOCATIOYCount,y Road 9 8 Evergreen lane ELDERLY No.. of Units Propos No. of Section 8 Units _ FA,ViYLY X No. of Units Proposed 75 1 No of Section 8 Units 75 New Construction _ L Substantial Rehabilitation LOCATION Highway 101 and County Road 6 ELDERLY No. of Units Proposed No. of Section 8 Units FAMILY X No. of Units Proposed. g No. of Section 8 Units 39 New Construction X South Shore Drive and 11th Av ue substantial Rehabilitation LOCATION __. ELDERLY No. if Units Proposed No. of Sectiun 8 Units^ FAMILY No. of Units Propos No. of Section 8 Units LOCATION County Road 9 8 Evergreen Lane New Construction _ X Substantial Rehabilitation ELDERLY X No. of Units Proposed -10 No. of Section 8 Units 60 FAMILY No. of Units Proposed No. of Section 8 Units New Construction X Substantial Rehabilitation LOACTI.ON_ Pilgram lane 8 Lancaster.Lane ELDERLY X No. of Units Proposed1l0 No. of Section 8 Units 110 FAMILY No. of Unit- Proposed_,_ No. of Section 8 Units MINNESOTA HOUSING FINANCE AGENCY APARTMENT.DEVELOP14ENT PROGRAM The Minnesota Housing Finance Agency (NNFA) was established by the Minnesota Legislature for the purpose of facilitating the purchase, construction, and rehabilitation of housing for families of low end moderate income. Under the MHFA Apartment Oevelopment Program, mortgage loans are made for the construction and substantial rehabilitation o.. multi -family hcusing for per- sons and families who meet the Agent~v'.s income eligibility limits. In, most cases, the housing is privately designed, constructed, and managed. MHFA. provides both the interim and permanent mortgage financing with funds raised through the sale of 14HFA tax-exEmpt revenue notes and bonds. This en- ables developers to obtain financing at rates Tower than those charged by con- ventional lending sources. Developments financed by the Agency are also eligible to receive: a. federal rent subsidy, Section 8 "Housing Assistance Payments". Under. the Section 8 Program, eligible tenants pay no more than 25% of their adjusted. income for rent. The Federal. Government makes up the difference. between the tenant's centribution and the approved rent.. When a development contains both Section 8 units and "market rate" units, families with extremely varied income levels can be served. There are no specific per unit construction cost or mortgage limitations under the 14HFA Apartment Development Program. However, there are income limits and rent limits for most units. WHO IS ELIGIBLE FOR A MORTGAGE? Limited dividend or non-profit sponsors are -eligible.. A lIaLted div%dend.spon- sor can be in the form of a general or limited partnership, corporation, joint venture, or trust. A sponsor and members of the development team should have sufficient experience to assure the Agency of the successful completion and operation of the development. The sponsor must be adequately capitalized to withstand the risks inherent in carrying out the proposed development. This re- quirement may limit the participation of non-profit organizations in the 14HFA Apartment Development Program. - 1 .'v: .. T.' .y3. . le< .'i' i...._...a^.4 Co. .W +rllw. ita •W w AN EQUAL QPPOR.TUNITY EMPLOYER 2. - WHAT TYPE OF MULTI- FAtMILY DEVELOPMENTS CAN DE FINANCED? 1. Elderiy as well as family housing (including mixtures of the two). 2. New construction and substantial rehabilitation. 3. Garden apartments, townhouses, and high rise buildings. 4. Housing for the developmentally disabled (only long-term financing available).. It is the objective of the Agency to finance high quality construction at as low a density as conditions permit. WHAT ARE THE TERMS OF THE MORTGAGE? A. PERMANENT FINANCING 1. Nortgage amount is computed on Total Development Costs. a. limited :profit developers, maximum of 90% (loan -to -value ratio). b. Non-profit developers, maximum of 1O0% (loan -to -value ratio). 2. Mortgage loans can be made for 30 or 40 years. Section 8 allowable rents vary according to the mortgage term,,, structure type, and geographic loca- tion. 3. The permanent interest rate depends on the rate at which iIHFA securities are sold. Generally the interestrate is less Char that in the conven- tional market. 4. A 1/2S MHFA financing fee is added to the permanent interest rate to cover administrative costs. B. INTERIM OR CONSTRUCTION FINANCING 1. Interim financing is based -upon the percentage of Total Development Costs to be financed. 2. The term covers the. construction period. 3.. At present, the construction interest rate is lower than rates charged by conventional lenders. 3 - WHAT ARE THE CHARACTERISTICS OF NHFA FINANCING? 1. High loan -to -value ratios. 2. Return on equity is limited to a maximum of 4%, although it may be increased to 6% per year from interest earned on the Development. Cost Escrow. The a4tual cash invested by the developer may be substantially less than " equityn. 3.. Builder's and sponsor's profit and risk allowance of 10%. 4. No "hopping" for money; financing is available and direct. S. The completed multi -family development receives a 503 real estate tax abate- ment. 6. 141FA must approve all rent increases. 7. MFA regulates developers much more closely than does the private sector. This includes limitations upon the developer`s profit, limitations on: tenant incomes, significant architectural review by the Agency: limitations o°t re- financing, affirmative action and equal employment opportunity requir t'ients, and regular accounting/reporting requirements. B. The interest rate on the permanent loan is temporary until bonds are sold which provide the funds for the loan. The interest rate is usually less than that available through conventional lenders. 9. An MHFA financing fee of 25 is mortgageable. WHAT IS THE 141FA PROCESS? A sponsor who is unfamiliar with the MHFA process should contact. the Agency for more information about the program or request an informational meeting. The sponsor completes the preliminary application indicating the proposed site and outlining the development concept and local market information. MHFA reviews the application and inspects the site. If the proposed development meets the Agency's needs and criteria and Section 8 funds are available, a se- lection letter is sent to the sponsor. From selection of the proposal to initial closing and start of construction usually involves five to eleven months. During this stage, the primary communi- cation channel is ;nrough the FIHFA Housing Development Officer CHDO) and the Processing Ment (sponsor's packager). The remainder of the MHFA process is dependent upon the length of the construction period ;:nd the term of the mortgage. For additional information or appl-cation forms, call the Apartment Development Division, Minnesota Housiag Finance Agency, (612) 296-7618.