266548 WHITE - CITV CLERK � /o���Q �
PIM`C - FINANCE 7 CDUIICll �V U
CANARY - DEPARTMENT G Y OF AINT PALTL
BLUk: '�OVOR File NO.
�
� - ` ' ution
r
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS, the Council of the City of Saint Paul adopted Council
F�.le No. 264630 on November 21, 1974, approving the Saint Paul
Rehab�.lattation Loan and Grant Program Concept and Guidelines and
ass3.gned the administration of the Housing Rehabilitation Program
to the Housing and Redevelopment Authority; and
WHEREAS, based upon actual experience in operating the program,
both the Housing and Redevelopment Au�hority Board of Commissioners -._
and the l�ayor' s Rehabilitation Advisory Committee have recommended
changes in the program concept and guidelines; now, therefore, be it
RESQ�,VED, that the Counci,l of the City of Saint Paul hereby
amends the Rehabilitation Loa,n and Grant Program Concept and Guide-
lines as follows:
T. Paqe 2, Definition 7, first paragraph, should be amended
to read: Income. Means for purposes of these guidelines
the term "annua� adjusted gross household incosne" (see
� definition 6 above) and includes the gross annual income
from all sources and befo=e taxes or withholding �
persess er-me�er-e�-the-fe�i�e-re,e�ag-irt-t�he-���ec�e�
e�eeept-ti�-the�e--sise��-�e-e�e�t�ded: of (1) the a licant;
(2� the members of the a licant' s fami who are over
e hteen ears of a e an are owner-occu ants o the
e e ro t • the a �.cant s s ouse i e or
s e s xesi n n the e �. le ro ert . The a � icant' s
ami nc u es t e a icant an an ot er erson or
ersons re ate b o marr a e o eration o the law
w o res e in t e e i le ro ert • non-bloo re ate
a ults who resi e w th a �.cant in a dwellin unit
contaa.ne n t e eli ib e ro ert ; an al ersons who,
bv operation o law, are members of a tenant cooperative
COUNCILMEN Requested by Department of:
Yeas Nays
Christensen
� gunt In Favor
Levine
Rcedier Against BY
Sylvester
Tedesco
President y�(t HOZZa
Form Approved by Ci��,.Attor y
Adopted by Council: Date �
� ,
Certified Passed by Council Secretary BY '
By ._
Approved by Mayor: Date Approve yor f o Co cil
By By
.
•.:
� t
.�
Page 2.
and reside in �he eli ible ro ert . If ownershi of
t e e �, i e r �rt rests in more t an one erson
the a licant is` eac owner an ami The a icant' s
income t ere or�, 1.s t e s`�1 p the ami inco es o
a a cants ah nc u es u�t s contri t�te or ai
•to the em ori a re ar� a s i`s a ami me er
who is over ez ht+een ears °o "a e' ut who, oes not ave
an ownersh interest in t e e i 1 e ro ert . Exc u ed
rom Income _ is:
IT, Page �4.>aft�r it�m j ��ddz' � � .
k. "Conditions of or omissions cancerning an
eligible property, : ownied fl�; ocCupied by ha`ndicapped
persons, whi:cli constitt�te ari archi`tectural barrier to
sueh handic.�pped gerson� anc�,/'or which limit the �'�"
accessibil�ty o�€� su�h.��hanc�i��.�ped ,persoit�s to the
properfi�y*" -
_._ .;.__
_ . _ ___
ZIT;s. . ,, , _ , __ - .
,��'"��&�,:'_�ef�.nition ���,"=`3�ft`�°'�A�i�T1ority. " insert:- .,.,
"�'aer pur-�oses af determining wher� the conditions ° ��;.
of or omiss,ions concerning an eligible property constitute '�
a "'violation of applicable codes which materially and
immediately endanger the health and safety of "Iiandicapped
occ.upants of the building i�nvolved" as those terms are
used in Definition 14 and these guidelines, codes shall
i.nclude the stan�.ards specified in the "American National
Standard Institute Tnc, ' s, Speci,�ications for Making
Bu�,Zdings and Faci.lities Accessi.ble to and Usable by,
the Physi.cally Handicapped, A1�iS� A 117�1-1961 (Reaffirmed
1971) and amendments and supplenents thereto."
-------�,.
Iy. Page 9, item 8 should be a�ended to read; City
rehabilztation grants ma,y be approved in conjunction
wi,th City rehabila.tation loans, �t�t-��--e�-apg��eaat
eern-�a��erd�-a-�?�tY-re�ieb#��ta�#en-�ea�i-the�t-�e��ed-ee*o*e�
t�e-��t�re-eeet-e.�-t�e-p�e�eeea-e�4gtb�e-txtp�e�c�eat
r+e��,-��ne�e�e�s�g-t�te-cer��e�#er�-e�-��►ee��ate-�ee�tk-e�d
WH17E -- CITV CLERK
PINK - FINANCE GITY OF SAINT PALIL Council
CA�VARV - DEPARTMENT
BLUE � - MAYOR File NO.
'. . �
� ��� � Council Resolution
. �.
Presented By '
Referred To Committee: Date
Out of Committee By Date
Page 3.
aa�etY-ha�a�sT-eeexp�ed-N�t�i-an-app��eer��9�e�i�e�
i�en�fn�-�e�ate�-experr�ea,-w#ti�sn-��5�-ef-ti�e-epp�teentls
�r�eeate=-t�e�-9�ek-a�p��eer�t-�r#��-r�et-�e-e�t4���e-�er-e-
g�a�t.
V. Page 9, item 10 should be amended to read: The
maxi,mum amount of the City rehabilitation grant shall
be the lesser of; (1) $5,000; (2) the actual cost of
the eligible improvement work. �3}-t�e-a�te��t--neeeaea��
te-��d�ee-tI�e-e�t�-reh�b#��tatten-�ean�rtnetpe��-ar�e�
��te�est-and f er-eti�e��i�e�ee��sg-�e�atee�-expen'e�-te-��5�
e�-t�e-e��gtb�e-g�ant-reetptent�-�enth�y-t�eeme.
Approved as to Funding:
r�� � i�-Yc��,�
Director, Finance and
Ma.nagement Services
COUIVCILMEN Requested by Department of:
Yeas Nays �
Christensen
H� Hunt In Favor
�. JRcedler Against BY
n��"_-a^_
�����
Tedesco
President � HOZZd ^
�C 2� ��j Form Approved by �y Att rney �
Adopted by Council: te �
Certified Pas by i Secretar � BY i t
By � �-� J
Approved �layor: ate Approved by M r for Submission to Council
By By
� � � �
_ .. � -7- 1
�,�. -- \ �_i J,� ��J 9 �1 i A.i�'�''i� �.�1 l.J .1 a �
• ���
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l t u i�
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���,�J�� . �a ; e ; Dec. is, i9�5
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� � I'f3� �`.� 1 �� � � � � � � � i'
� � : �ai�; P�+� � Gi��+ �Q�� c� � _
,
� � � �•'� � �C�II'1�1 i[?� C3�'l FINANCE ' _ .
Robert Sylvester , c1�i�man, mcik�s �t�e �ct1oLF�ing �
re�or� on C. F. � O;ai����ce
� Resal�tion .
�] oth�r
i. � � �-�. : Amendments to the St. Paul Rehabilitation Loan anc�
Grant Program Concept and Guidelines.
-' Please be advised that this Resolution was approved
by the Fiaance, Management and Personnel Committee
_ at its meeting December 17, 1975.
� , Remove this item from the calendar of. action to be
taken by this committee.
Cr'-_ .:=�:--. ' S'" , _'��i FJ_,;U": S,li'tiT r r>L'i_, ..f!'�r��:SJTa. 55.�}?
_ • ' . . (��'
,;
REPORT TO THE HON. LAWRENCE D. COH��. MAYOR
�V��
FRQM: Thomas S. Kelley, City Administrator
DATE: Novembe r 2 I , I 975
REGAR�UING: Arr�ndments to the St. Pau l Rehab i I i taf i on Loan
= and Grant Program Concept and Guidelines
ACTION REQUESTED: App rova J of 'resoJ ut i on for subm i ss i on to Counc i l .
RATIONALE �'OR THIS ACTION: Exper i ence i n ppe rat i ng the p rogram
has indica#ed .the need' for amendments
to the initiallY aPProved: guid�fines.
SOURCE: Commun i ty Deve l oproent Sect i on :
Mr. Williaro Q. Pattan
ATTACHNiENTS: Reso l ut ion an d p roposed amendments to the St. Pa u l
Rehabiiitation Loan and Grant Program Concept and
Guidelines.
� ,� I �
. �����
• CITY OF SAINT PAUL REHABILITATION LOAN AND GRANT PROGRAM
CONCEPT AND GUIDELINES
Approved by City Council Resolution No. 264630, November 21, 1974.
Definitions
For purposes of these guidelines, the terms defined in this section have the
meaning ascribed to them.
l. Housing related expenses. Means the normal and ordinary expenses related
to homeownership, including, but not limited to, principal and interest
paid on any outstanding indebtedness, including the pri,ncipal and interest
paid on a City rehabilitation loan, used to finance the purchase, cor.struc-
tion, improvement, or rehabilitation of residential housing and related
taxes, special assessments, insurance, maintenance costs, utility expenses
and the like.
2. Neighborhood rehabilitation project plan. Means a plan developed in whole
or part by a neighborhood organization or association or a nonprofit or
redevelopment corporation for the concentrated rehabilitation of a specified
neighborhood area within the City of Saint Paul and approved by the Planning
� Commission and City Council. For further explanation see Appendix I.
3. Nei�hborhood rehabilitation program. Means a program, prepared and/or
considered by the City Planning Department and approved by the Planning
Commission and the City Council, for concentrated rehabilitation within
specific geographic areas. Such a program may be based in whole or part on
approved neighborhood rehabilitation project plans. For further explanation,
see Appendix I.
4. Authority. Mea�s the Housing and Redevelopment Authority, as designated by
the City Council, pursuant to Minnesota Laws, 1974, Chapter 351, Minn. Stat.
462.445 (4) (2) and 462.581 (8) , and other provisions of Minn. Stat. 462.415
to 462.711 to cooperate with and act as an agent for the City of Saint Paul
in implementing, administering and carrying out the provisions of the City
of Saint Paul rehabilitation loan and grant program as authorized by and
consistent with Chapter 351 and these program guidelines as adopted by the
City Council.
5. Owner-Occupant. Means persons or families who are the f ee owners or contract
for deed purchasers of eligible properties and who occupy and, purs�ant to
Minn. Stat. Ch. 273, homestead such property.
6. Persons and families of low and moderate income. Means those natural persons
or families whose income is within the following income limits and categories.
For purposes of this Act, families shall include nonblood related adults and
. tenant cooperatives.
. .
ANNUAL ADJUSTED GROSS HOUSEHOLD INCOME CATEGORIES
- �
Low Interest Middle Interest Upper In.terest
Loan (%) Loan (%) Loan (%)
Famil Size (Low Income) (Low-Moderate Income) (Moderate Income)
1 person up to $ 7,200 $ 7,201 to $13,650 $13,651 to $14,500
2 persons up to $ 8,750 $ 8,751 to $13,650 $13,651 to $15,000
3 persons up to $10,�00 $10,001 to $13,950 $13,951 to $15,500
4 persons up to $10,300 $10,301 to ;14, ,250 $14,251 to $16,000
5 persons up to $11,850 $11,851 to $14,550 $14,551 to $16,500
6 persons up to 512,150 $12,151 to $14,850 $14,851 to $17,000
7 persons up to $12,500 $12,501 to $15,150 $15,151 to $17,500
8 persons up to $12,800 $12,801 to $15,450 $15,451 to $18,000
9 persons up to $13,100 $13,101 to $15,750 $15,751 to $18,500
10 persons (or more) up to $13,400 $13,401 to $16,050 $16,051 to $19,000
� � 1"t��7. Income. P4eans for purposes of these guidelines the term "annual adjusted '
gross household income (see definition 6 above) and includes the gross
��
annual income frum all sources and before taxes or withholding of �
�t�@�� ve-���ua�u
a. The income of any family member (other than the head of the household
or his or her spouse) who is under eighteen years of age or is a full-
�` �•�S time student; �
,.y.�
b. The first $300 of the income of secondary wage earners other than those
included in paragraph 7a above;
c. An amount equal to $300 for each member of the family residing in the
household who is under eighteen years of age or who is eighteen years
of age or older and is disabled or handicapped and is not a fu11-time
wage earner, as determined by the Authority, or a full-time student;
d. Nonrecurring income, food stamps and other non-monetary income, as
determined by the Authority, and payments to volunteers under the
"Domestic Volunteers Service Act of 1973," Public Law 93-113, October 1,
1973; �
e. Five per centum of the person or family's gross income (ten per centum
in the case of elderly persons or families) ;
f. Such extraordinary medical or other expenses as the Authority approves
for exclusion including, but not limited to, all expenses incurred by
working parents or parent for child care in a licensed child care
facility;
g. An amount equal to the sums received by the head of the household or his
or her spouse from, or under the direction of, any public or private
nonprofit child pla.cing agency, for the care and maintenance of one or •
more persons who are under eighteen years of age and were placed in the
household by such agency.
_ 2 _
, • ������
�
8. Eli�ible loan recipients. Means those persons or families of low and
moderate income who are owner occupants of eligible properties and meet
other requirements and qualifications for a City rehabilitation loan as
set forth in these guidelines.
9. Eli�ible �rant recinients. Means those persons or families of low income
who are owner occupants of eligible properties and meet other requirements
and qualifications for a City rehabilitation grant as set forth in these
guidelines.
10. Citv rehabilitation loan. Means a loan made to eligible loan recipients
for eligible improvements and/or refinancing of existing indebtedness
under the City rehabilitation loan and grant program and includes loans
financed by "leveraging" and the use of bond proceeds, but does not include
those loans financed by "reserving."
11. Citv rehabilitation �rant. Means a grant to an eligible grant recipient
for eligible impro�sements under the City rehabilitatian loan and grant
• program.
12. EliQible nrouerties. Means residential housing and real property which
contains eight (8) dwelling units or less; meets the requirements set forth
in the "Eligible Properties" section of these guidelines; and is owned and
occupied by an eligible loan or grant recipient.
13. Eli�ible imnrovements. Means the repairs, rehabilitation, reconstruction,
conversions, modernization, replacement, remodeling, alternation or
improvements to eligible properties which are authorized to be made under
a City rehabilitation loan or grant as set forth in the "eligible improve-
ments and expenditures" section of these guidelines.
14. Immediate health and safetv hazards. Means those violations of applicable
codes which materially and immediately endanger the health and safety of
occupants of the building involved. Such violations include, but are not
limited to:
a. Heating systems that are unsafe due to: burned out or rusted out
heat exchanges (fire box) ; burned out, or plugged flues; not being
vented; being connected with unsafe gas supplies; or being incapable
of adequately heating the living space.
�
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.
b. Water heaters that are unsafe due to: burned out or rusted out
heat exchanges (fire box) ; burned out, rusted out, or plugged
flues; not being vented; being connected with unsafe gas supplies;
or lack of temperature and pressure relief valves.
c. Electiical systems that are unsafe due to: dangerous overloading;
damaged or deteriorated equipment; unproperly tapped or spliced
wiring; exposed uninsulated wires; distribution systems of extension
cords or other temporary methods; ungrounded systems, ungrounded
appliances in contact with earth.
d. Plumbing systems that are unsanitary due to: leaking waste systems,
fixtures and traps; lack of a water closet, lack of washing and
bathing facilities; or cross connection of pure water supply with
fixtures or sewage lines.
e. Structural systems, walls, chimneys, roofs, foundations, ceilings,
and floor systems, that will not safely carry imposed loads.
f. Refuse, garbage, human waste, decaying vermin or other dead animals,
animal waste, other materials rendering it unsanitary for human
occupancy, including lack of light or air. •
g. Infestation of rats, insects, and other vermin.
h. All existing handrails that are not permanently and solidly mounted
to provide safe service.
i. Lead paint that is peeling, chipping or exposed in areas that ma.y be
hazardous to children and others.
j. Conditions of windows, doors and other electrical, mechanical and
� structural items that are condusive to fire and safety hazards,
• Q K � ���� �� .
. .-��
15. Genera mvrovem ts. S�a11 only include additions, enlargements,
renovations or remodeling of existing roams or structures, interior
and exterior painting, decorating and outdoor remodeling, or the
provision for a garage or fence; and the finishing of spaces within
the property such as an attic, porch or basement. The addition of a
complete new function or room will only be permitted where required
by Code. Except as provided above, general improvements shall not
include materials, fixtures, .equipment or landscaping of a type or
quality which exceed that customarily used in the locality for
properties of the same general type as the property to be rehabili-
tated. General improvements shall also include kitchen equipment of
a permanent nature, including stove and refrigerator and the acquisition
of contiguous property, necessary to provide an adequate site for the
structure. �
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- �� � � �66�48
..,
16. Codes. Means applicable state, county or city health, housing, building,
� fire prevention, housing maintenance, and zoning codes and other public
standards applicable to housin , as determined by the City Council and the
'T'� � Authority. �pr �p�ir�.9¢S 1
�LL G��/'Mi/!in . . . .......
17. Levera�ing. Includes, for purposes of these guidelines, the terms "leverage"
or "leveraged" and refers to the process, whereby the Authority borrows
monies from private lenders or the Minnesota Housing Finance Agency (herein-
after MHFA) to be used to make City rehabilitation loans and/or for
refinancing of existing indebtedness under the City rehabilitation loan and
grant program.
18. City rehabilitation loan and grant program. For purposes of these guide-
lines refers to the City of Saint Paul rehabilitation loan and grant program
suthorized by Minnesota Laws, 1974, Chapter 351.
19. Reserving. Includes, for purposes of these guidelines, the terms "reserve"
or "reserved" and refers to the process, whereby the Authority acting on
behalf of the City of Saint Paul and with City Council approval, requests
that a portion of rehabilitation funds, available through the MHFA
rehabilitation loan and grant program, be set aside for use in a specific
geographic area. Such geographic area may include the entire City of
Saint Paul and/or specific neighborhood areas identified as part of an
approved neighborhood rehabilitation program.
20. Boz�d proceeds. Means those monies, to be used to assist in financing the
� City rehabilitation loan and grant program and available as a result of the
issuance and sale of general obligation bonds of the City of Saint Paul,
pursuant to Minnesota I,aws, 1974, Chapter 351. '
21. Redevelopment Corporation. Means limited dividend corporations created
pursuant to Minn. Stat. 462.591 to 462.711.
22. Contract. Means a written agreement to perform eligible improvement
work.
Eligible Persons and Families
1. To be eligible for a City rehabilitation loan, applicants must be persons
or families of low or moderate income; owner-occupants of residential
housing; must have the ability to repay the loan; and arei "acceptable credit
risks" as determined by the Authority or its designee. Applicants with
poor credit histories may be eligible if screening show sufficiently
extenuating circumstances in an applicant's credit behavior and income
patterns to give reasonable assurance of ability to repay the loan.
2. To be approved for a City rehabilitation loan or grant, the Authority
must first of all determine that the applicant is unable to afford and
secure rehabilitation funds from other sources, including private lender
programs at market interest rates, the Federal 312 and 115 rehabilitation
�
_ 5 _
. ,•.
loan and grant programs and the Minnesota Housing Finance Agency
rehabilitation loan and grant program. This determination shall be �
based on the availability of rehabilitation funds from such other
sources; the eligibility of the applicant for such funds; and shall be
further based on sufficient data showing that a rehabilitation loan,
for comparable correction of code violation work, from other sources,
would result in the applicant's housing related expenses being beyond
25% of his or her income. If it appears that an applicant is able to
afford and secure rehabilitation funds from other sources, the
Authority shall refer the applieant to the appropriate source or sourees.
After referral, if an otherwise eligible applicant can demonstrate that
he or she is not able to secure rehabilitation funds from other sources,
such applicant may then be approved for a loan and/or grant.
3. In the event an applicant for a City rehabilitation loan and/or grant
shall be rejected, the Authority shall furnish a written statement to the
applicant specifying the reasons for such rejection and the applicant's
right to an appeal and independent review and determination if the appli--
cant feels he or she is sggrieved by the decision and/or application of
these guidelines and the manner and time in which to do so.
Eligible Properties
1. The prop�rty must not be a nonconforming use under the City's Zoning
Ordinance and the use must be permitted under an Urban Renewal or �
Development District Plan if located in such an area.
2. A property shall not be eligible if it has been identified for public
acquisition for which funding is presently available unless that property
is being formally reexamined for potential rehabilitation, in which case
waivers shall be considered. Upon request by the owner of such property
and •tith the consent of the acquiring agency, the property may be formally
reexamined for potential retention in which case waivers shall be also
considered. Properties which are identified for conditional or possible
acquisitions are eligible.
3. The property must be at least ten years of age or in need of repair to
correct damages resulting from a natural disaster.
4. After rehabilitation, the property must be insurable through an established
public or private insurance program.
Eligible Improvements and Expenditures
1. City rehabiZitation loans shall be made primarily to rehabilitate eligible
properties so that they are in compliance with applicable code requirements.
2. Bringing an eligible property into full comp�iance with applicable codes
shall be required as a condition to making a City rehabilitation loan or �
grant, except if an applicant cannot afford to correct all code violations.
This determination shall be based on sufficient data showing that a City
rehabilitation loan and grant, to the extent an applicant is eligible, for
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. � .: � . �ss���
� correction of all code violation work and eligible general improvements�
allowed in item ��5 below, would result in the applicant's housing related
expenses being beyond 25% of his or her income.
3. As a condition for receiving financial assistance under the City
rehabilitation loan and grant program or any other public program,
including, but not limited to, the Federal 312 and 115 rehabilitation
loan and grant program and the MHFA rehabilitation loan and grant pro-
gram (including funds "reserved" by the authority), administered in
whole or in part by the Authority, the applicant shall call upon the
Authority in conjunction with Community Service Housing Code Inspection
Department to provide an inspection and written evaluation assessing
and outlining all violations of applicable codes, necessary to be
corrected if the property is to be in full compliance with applicable
codes and further assessing and outlining, when requested by the
applicant, other repair, rehabilitation or improvement items that are
eligible improvements under the City rehabilitation loan and grant pro-
gram or any other public program administered by the Authority. This
inspection and evaluation shall not be a mechanism which wfll require tt:e
applicant, except as• provided in item 2 above, to bring property into full
compliance with applicable codes and Legal action and assistance will be
taken only on those violations of applicable codes that immediately and
materially endanger the health and safety of the occupants of the
eligible property, as this standard is defined and interpreted in Minn.
Stat. Sec. 566. 18 (6).
� 4. To the extent an applicant is eligible for, can afford, and requests a
City rehabiLitation loan and is eligible for a City rehabilitation grant,
such loan and grant proceeds shall first be used to correct violations
of applicable codes which �onstitute i�anediate health and safety hazards.
5. If all violations of applicable codes which constitute immediate health
and safety hazards are corrected under City rehabilitation loan and/or
grant then eligible recipient may use up to 20% of the total loan amountA
he or she is eligible for, can afford and requests under this program,
for eligible general improvements. The remainder of any such loan
amount must be expended to correct violations of applicable codes. If
all code violations are to be corrected under a City rehabilitation loan
and/or grant, then the eligible recipient may use up to 40% of the total
loan amount he or she is eligible for, can afford and requests, for
eligible general improvements.
6. Upon the request of an eligible loan and/or grant recipient, the Authority
may make City rehabilitation loans (including refinancing) that will
result in the recipient's housing related expenses being beyond 25% of
his or her income, if the Authority determines that the recipient can
reasonably afford such loan amounts.
7. City rehabilitation grants shall only be approved to provide financing for
the correction of violations of immediate health and safety hazards.
� 8. All work performed must meet applicable codes.
9. Preference shall be given to rehabilitation work that decreases or does
not significantly increase consumption of energy and natural resources.
.. 7 _
Rehabilitation Loan and Grant Terms.
1. The interest rate of a City rehabilitation loan sha11 be determined by �
applyfng the "adjusted gross annual household income" categories to the
income of the eligible loan recipient. The Authority, from time to time,
based on the interest rate incurred on monies "leveraged" by the Authority
and the availability of bond proceeds to pay "interest differentials" as
that term is used in this Act, shall determine what the interest rate
will be for each of the "adjusted gross annual household income" cate-
gories but in every event such interest rate shall be established at a
2 point interest differential between each category with the "low income"
category receiving the lowest interest rate; the "low-moderate" income
category receiving the second lowest interest rate; and the "moderate
income" category receiving the highest interest rate. The Authority
shall review these "annual adjusted gross household" income figures from
time to time in order to recommend adjustment to the City Council.
2. In the event the housing related expenses, including the payment required
for the principal and interest of a City rehabilitation loan, of .the
eligibie loan recipient exceed 25% of the recipient's income, the interest
rate of the rehabilitation loan shall be reduced to the next lowest
interest rate category. Eligible loan recipients, whose income is in
the "upper interest loan-moderate income category," shall not however be
eligible to have the interest rate on their rehabilitation loan reduced
to lower interest rate categories.
3. Maximum loan terms, except in the cases of refinancing, shall be for
twenty years or the remaining economic life of the eligible property, � �
whichever is less, as deteYtnined by the Authority. In all cases,
approved loan recipients sha11 be encouraged to retire loans as rapidly
as their incomes will allow.
4. There shall not be any prepayment penalty in the event a City rehabilitation
Loan is prepaid at a date earlier than scheduled in the loan agreement.
5. Except as provided below, all City rehabilitation loans must be secured by
a mortgage or other recorded lien or appropriate document against the
elfgible property. Rehabilitation Loans to contract for deed purchasers
must either be:
a. Included as part of the refinancing of existing indebtedness as
provided for in these guidelines, with a mortgage as security;
b. Secured by the contract vendor's written agreement, included in the
written te mis of the appropriate lien or other document, to sub-
ordinate his or her legal and equitable interest in the property to
that of the Authority;
c. Secured by a note, lien or other appropriate document on the contract
vendee's equitable equitable interest in the eligible property.
If the eligible loan recipient is providing a land sales contract as
security, it must be recorded. An approved loan recipient shall not �
transfer the property during the term of the loan without the consent
of the Authority. Notwithstanding any of the above provisions to the
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� � ��6���
contrary, the Authority may make unsecured City rehabilitation loans of
� up to $3,500, in order to permit eligible improvement work which could not
otherwise be secured by an otherwise eligible applicant because of the
impossibility of providing security for a City rehabilitation loan, but
only after all reasonable efforts have been made to provide the necessary
security as outlined in "a -- c" above.
6. The maximum amount of a City rehabilitation loan except in the case of
refinancing shall be the lesser of and not exceed:
a. $17,400 per dwelling unit as set forth in the Department of Housing and
Urban Development's (HUD) Rehabilitation Financing Handbook 7375.1.
The Authority shall review this limit from time to time to recommend
potential adjustments to the City Council;
b. The actual cost of the eligible improvement work;
c. That amount which, when added to other debts secured by the eligible
property, would exceed the market value of the eligible property after
the eligible improvements are completed plus 10 per centum.
7. The following costs may be included in a City rehabilitation loan or grant:
a. Building permits and fees;
b. Architectural and other design services;
• c. Loan origination and servicing fees, fees and incidental costs, such as
appraisal fees, inspection fees, title reports, credit reports, record-
ing and f iling fees, etc.
�� 8. City rehabilitation grants may be approved in conjunction with City
�� L_ rehabilitation loans, b�� ��-aa—e���#ee�t-�carr-e�€---�--��T,� , �t�-' '�=�e�r�
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r 7 L'r' ��cllslvic �CC"�l.
9. To be eligible for a City rehabilitation grant, an applicant must have limited
assets available to pay for eligible improvements and an income not to exceed
the income limits of "very low--income families" for public housing as that
term is defined in the Title II of the Housing and Community Development Act
of 1974, amendments to the United States Housing Act of 1937, Sec. 201 (a) ,
Sec. 3 (2) , and approved by the Department of Housing and Urban Development.
The Authority shall review this income limit from time to time to recommend
potential adjustments to the City Council.
� 10. The maximum amount of a City rehabilitation grant shall be the lesser of:
�� r�yi (1) $5,000; (2) the actual cost of the eligible improvement work; {�3}--ti�e
0
�
� .
_ g _
11. City rehabilitation grants are provided under the condition that, if the
eligible property is sold or transferred within three years of the date on �
which the grant is made, the grant must be repaid in one of the following
amounts:
a. In full if sold or transferred within the first year;
b. Two-thirds (2/3) if sold or transferred during the second year;
c. One-third (1/3) if sold or transferred during the third year.
In making grants, the Authority shall require a lien or other appropriate
document to be filed on the property to reflect the above provisions. The
Authority shall adopt further administrative guidelines to provide for
hardship exceptions to these provisions, where there is no evidence of abuse
by grant recipients, forced by circumstances beyond their control, to sell
or transfer the eligible property within three years from the date on which
the grant was made.
Ref inancing
To the extent capital is available, as determined by the Authority, ref inancing
may be used to permit eligible improvement work which could not otherwise be
afforded or secured by an applicant. The Authority shall closely monitor
refinancing to insure that capital available to make City rehabilitation loans
is being primarily expended on eligible improvement work. Also, the Authority .
shall take precautions to insure that refinancing is not used for the purpose
of financing the purchase price for a property. Therefore, in all cases
involviiig refinancing of existing indebtedness secured by eligible properties
that have been recently purchased by the applicant, the Authority shall, as a
condition to making a City rehabilitation loan, satisfy itself that the applicant
has not made collusive prearrangements in order to obtain refinancing, which is
in reality purchase price financing.
The following provisions shall be used in implementing a refinancing program:
1. Refinancing of existing indebtedness secured by eligib.le singl�-family or
duplex properties at an interest rate affordable to the eligible loan
recipient, but not lower than 5%, will be permitted when such recipient's
principal and interest payments on existing indebtedness, combined with the
payment required for the principal and interest of a City rehabilitation
loan, exceed 20% of the recipz��nt's monthly income, provided that the
recip�ent obtains fee title by the time the refinanced loan is closed and a
satisfactory title insurance policy is obtained for the property.
2. To be approved for refinancing, the Authority must first of all determine
that the applicant is unable to afford and secure refinancing funds from
other sources, including private lender programs at market interest rates,
federal homeownership programs and the MHFA single-famil� residence program.
If it appears that an applicant is able to afford and secure refinancing
from other sources, the Authority shall first refer the applicant to the
appropriate source or sources. After referral, if an otherwise eligible �
applicant can demonstrate that he or she is not able to secure refinancing
from other sources, such applicant may then be approved for refinancing.
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. . .� �. � �ss���
3. To be approved for refinancing, the cost of eligible improvements must
� be equal or exceed 33% of the principal of the existing indebtedness
of the eligible property.
4. Refinanced loan terms may not exceed 30 years, or the remaining
economic life of the eligible property, whichever is less, as deter-
mined by the agency.
5. The Authority, with the consent of the eligible refinancing recipient,
may provide for a front end deposit by the recipient of up to 3 points,
to be placed in an interest-bearing escrow account for a specified
period of years, to be used by the recipient for maintenance and repair
of the eligible property over the specified period of years. Any monies
remaining in the account after expiration of the specified period of
years will be returned to the recipient.
6. All other provisions of these guidelines shall apply to City rehabilitation
loans or grants made as part of a refinanced mortgage or contract for deed
as set forth in this section.
Sweat Equity
1. Performance and completion of eligible improvements by eligible loan and
grant recipients, neighborhoods associations, organizations, cooperatives
• or collective contract groups ("Sweat Equity") will be permitted. How-
ever, close scrutiny 'shall be maintained to insure that such work is
carried out in a timely manner, without providing delays for the entire
rehabilitation process.
2. Al1 eligible improvements work approved under a City rehabilitation loan
or grant must be covered by a contract requiring full completion of such
work, including work being done directly by the eligible loan or grant
recipient ("Sweat Equity") , and the approved loan or grant amount must
be based on that figure. The contract must identify work being done by
the recipient; allow specific credit for this work; specify the time for
completion of work done by the recipient; and provide for the contractor's
completion of work not completed, within the specified ti�e, by the
recipient. Recipients performing work through "5weat Equity" shall be
permitted to draw upon their escrow account in order to pay for required
materials.
Contractor Performance
1. Nothing in these guidelines shall be construed to limit or restrict the
applicability of state or city laws relating to the home improvement
business or the repair, rehabilitation and improvement of residential
housing and real property and all persons and contractors performing
eligible improvements work under a City rehabilitation loan or grant
must be "licensed" as required by such laws.
�
- 11 �
2. To be eligible to be awarded a contract under the City rehabilitation •
program a contractor must:
a. First, be identified and placed on a list of eligible contractors
developed and maintained by the Authority. To be eligible for
such a list, contractors must attend a pre-qualification seminar
conducted by the Authority. The purpose of this seminar is to
inform contractors about the City rehabilitation loan and grant
program and to specifically instruct contractors concerning the
following:
1. The quality and workmanship standards required;
2. The contractors' role and the various contractor requirements
and procedures contained in the City rehabilitation loan and
grant program;
3. The business ethics required while under contract;
4. The proper rnethod of bidding contracts covered by this program;
5. The arbitration policy for resolving disputes arising from
contract execution.
b. Must demonstrate that they are equal employment opportunity employers.
3. All contractors being awarded a contract under a City rehabilitation loan .
or grant must provide the eligible loan or grant recipient and the Authority
with evidence of a 100% performance bond, in the full amount of such
contract, effective for two years beyond the date of completion and accep-
tance by the recipient and the Authority of the work. To the extent legally
permissible, these bonding requirements may be waived, or modified if the
Authority determines that the contractor is "bondable" and that such bonding
requirements will be met within 12 months of the date of the loan or grant.
4. All eligible improvements work performed pursua.nt to a City rehabilitation
loan or grant must be covered by an Authority approved warranty concerning
the quality of materials used and workmanship in performing such work. The
warranty system will be monitored and enforced by the Authority in coordin-
ation, where appropriate, with the MHFA.
5. All contractors performing eligible improvements work under a City
rehabilitation loan or grant must:
a. Carry all, adequate and required by law, insurances;
b. Possess all, necessary and required by law, licenses and permits
to perform contracted eligible improvements work.
�
-- 12 -
; � �����g
� 6. Final payment cannot be made to a contractor until the eligible loan or
grant recipient and the Authority have accepted the completed eligible
improvements work in writing. If the contractor requests periodic draws
on completed eligible improvements work, during the period of such work,
such draws must be accompanied by appropriate lien waivers concerning
the work completed and will be subject to a 10% holdback on the overall
eligible improvements work contract. Lien waivers must also be provided
prior to making final payment on the eligible improvements work contract.
7. The holdback shall be used to correct unsatisfactory eligible improvements
work and to defray any costs required to be incurred by using a replace-
ment contractor, should the first contractor be removed from the job.
8. The Authority shall provide necessary administrative assistance and
procedures so that minority contractors and sub-contractors are provided
equal opportunity to be awarded contracts to perform eligible improvements
work under the City rehabilitation loan and grant program.
Additional Administrative Responsibilities.
The Authority, in implementing, administering and carrying out the provisions
of the City of Saint Paul rehabilitation loan and grant program shall, in
addition to the duties, responsibilities, determinations, functions and other
provisions contained in these guidelines, be responsible for and carry out
• the following duties and functions:
1. Administer the City rehabilitation loan and grant program, in such a manner
so as to complement other public rehabilitation and related programs, and
not be competition with or as a substitute for any other public program.
Particular administrative emphasis shall be placed on encouraging lower-
income homeowners, who live in neighborhoods where the need for rehabilita-
tion is recognized, to avail themselves of the City rehabilitation loan
and grant program. To this end, based on the income limits being adopted
in these guidelines for various loan interest rate categories, the Authority
shall adopt procedures that will insure a loan approval ration of 2-1-1
(lower interest rate - middle interest rate - higher interest rate) over
the length of the program. This guideline, however, shall be adjustable
by the Authority based on rehabilitation needs and in reference to approved
neighborhood rehabilitation programs. Also, the Authority shall establish
a monitoring system, particularly during the early stages of implementation,
that will detect and advise the Authority, steering coirmnittee, and the City
Council of any trends inconsistent with the intent of Minnesota Laws 1974,
Chapter 351.
2. Adopt, consistent with the provisions of Minnesota Laws, 1974, Chapter
351 and the provisions of these guidelines, further administrative guide-
lines, procedures and/or rules and regulations necessary to implement
and administer this program. To this end the program shall be implemented
•
- 13 -
by the Authority with as few administrative rules and procedural steps
as possible and should be a eorresponding flexible program which meets �
real rehabilitation needs and satisfies the intent of Chapter 351. In
this regard, the Authority shall recotrnnend to the City Council necessary
changes in these guidelines on a continuing basis. These administrative
guidelines, procedures and/or rules and regulations shall include
provisions designed to insure that financing of rehabilitation through
this program will be available to eligible persons or families on a city
wide basis and in addition will be available to:
a. Eligible persons or families required to repair, improve, or rehabil-
itate housing because of an urban renewal or code enforcement program;
or if under court order;
b. Eligible persons or families unable to receive property insurance
because of physical hazards;
c. Eligible persons or families who have agreed to rehabilitate their
property in conjunction with and pursuant to an approved neighborhood
rehabilitation project, plan or program;
d. Eligible persons or families unable to afford rehabilitation loans
at a market rate of interest;
e. Eligible persons or families whose home contains violations of
applicable codes which constitute immediate health and safety hazards;
f. Eligible persons or families who have acquired property through or •
pursuant to an urban homesteading program;
g. Eligible persons or families required to rehabilitate their homes
under or pursuant to approved relocation plan.
3. Coordinate with the Mayor and City Council in their establishment of an
advisory committee composed of community group representatives, private
citizens, and public officials to act in an evaluation and advisory
capacity after implementation of this program.
4. Borrow or leverage monies pursuant to Minn. Stat. 462.415 to 462.711
and Minnesota Laws, 1974, Chapter 351, from grivate lenders and the
MfiFA to be used to make rehabilitation loans and to refinance existing
indebtedness under the City loan and grant program, in such amounts,
and under such terms and conditions, as the Authority, in coordination
with the City Council deems appropriate.
5. Make available, on a coordinated and comprehensive basis, other related
housing programs administered in whole or part by the agency, such as
urban homesteading, the hazardous building act (Minn. Stat. 463. 15-.261)
spot renewal, federal rehabilitation loan and grant and homeownership
programs and the MHFA rehabilitation loan and grant program (including
"reserved funds") to compliment approved neighborhood rehabilitation
, programs.
•
14 -
, �• ������
6. Provide necessary administrative and technical assistance in carrying
• out the provisions of the City rehabilitation loan and grant program.
7. Coordinate with the City Planning Department and the City Council in the
preparation and implementation of neighborhood rehabilitation programs
and upon direction of the Council:
a. Prepare appropriate documentation and submit reservation requests to
the MHFA for the reservation of MHFA rehabilitation funds to be
available on a City-wide basis and/or to be available for approved
neighborhood rehabilitation programs;
b. Set aside funds available through or as a result of the City
rehabilitation loan and grant program including bond proceeds or
"leveraged" funds for approved neighborhood rehabilitation programs.
8. Coordinate with and, to the extent legally permissible, contract with other
state public bodies as that term is defined in Minn. Stat. 462.421 (4)
such as the Community Services Housing Code Inspection Division and the
City Planning Department concerning the delineation of responsibilities
and functions in carrying out the provisions of Minnesota Laws, 1974,
Chapter 351 and these guidelines including but not limited to the exercise
of powers relating to the repair, closing, acquisition, or demolition of
hazardous, unsafe, unsanitary or unfit buildings; the inspection of
residential housing; and the authorization and delivery of public and
other related improvements.
• 9. Coordinate with, and to the extent possible, provide assistance, in
conjunction with the City Planning Department, to neighborhood organiza-
tions or associations to assist such groups in assessing the potential
for, in organizing, and in developing and formulating neighborhood
rehabilitation project plans; and in conjunction with the City Planning
Department, inform interested neighborhood organizations and citizens
on the specifics of the City and MHFA rehabilitation loan and grant
program and disseminate information concerning these progzams on a City-
wide basis.
10. Coordinate and contract with neighborhood organizations and associations
and non-profit and redevelopment corporations concerning the delineation
of authority, organization, association or carporation functions and
responsibilities as regards an approved neighborhood rehabilitation program.
To the extent legally and economically permissible, such a contract may
include an agreement by the Authority to reimburse such associations and
corporations for expenses and salaries incurred in carrying out such
functions and responsibilities.
11. Coordinate and contract with local lending institutions concerning their
involvement in the origination and servicing of City rehabilitation loans
and grants, but in all cases the final decision concerning the making of
a City rehabilitation loan or grant rests with the Authority.
12. Coordinate and contract with the City of Saint Paul concerning the receipt
• and use of bond proceeds, authorized by Minnesota Laws, 1974, Chapter 351, "
and made available to the Authority pursuant to Minn. Stat. 462.415 to
462.711 and Chapter 351.
- 15 -
13. Provide an adequate information and referral system, whereby persons and •
families who are potentially eligible for and desire to avail themselves
of other public and private programs and funds relating to rehabilitation
and homeownership including "reserved" or (excluding "leveraged" MHFA
funds) otherwise available MHFA rehabilitation and refinancing funds,
(instead of City rehabilitation loans and grants) are given full informa-
tion concerning the use and availability of such funds and programs and
proper referral to rehabilitation programs and administering entities.
14. Provide, upon completion of and acceptance by the eligible loan or grant
recipient and the authority of eligible improvements work, a "Certificate",
setting forth what violations of applicable codes and immediate health
and safety hazards have been corrected by the eligible improvements work
and what other eligible improvements work has been completed, and stating
that the completed eligible improvements work is in compliance with
applicable codes.
15. Provide,an appeal or review process and procedures and information so con-
cerning,wherein any person who feels he or she is aggrieved by the
application of these guidelines may appeal such grievance for independent
review and determination.
Use of Bond Proceeds.
1. Consistent with the provisions of Minnesota Laws, 1974, Chapter 351, and
these guidelines, bond proceeds shall be utilized by the Authority to pay •
the following costs and for the following purposes:
a. Interest Differentials. To pay the difference between the interest
rates on approved City rehabilitation loans and refinanced indebtedness
and the interest rate incurred on monies borrowed or "leveraged" by
the Authority and used to make and issue City rehabilitation loans and/or to
refinance existing indebedness, provided, however, that in no event
shall the payment of interest difference on any City rehabilitation
loan exceed 2 points.
b. Default Reserves, To be set aside and used, at a percentage rate not
to exceed 6% of the total amount of monies used to make City rehabili-
tation loans, and at a level and upon such terms and conditions
determined, as a result of negotiations with private lenders and the
MHFA, by the Authority, with the consent of the Council, to pay for City
rehabilitation loans and refinanced indebtedness defaults.
c. Administrative Costs and Technical Assistance, To pay, in an amount
approved by the City Council, for administrative and technical assistance
costs incurred by the Authority or its agents which are directly related
to the development, implementation, administration and carrying out the
City rehabilitation loan and grant program,
do Rehabilitation Grants. To provide and make a maximum of $150,000 in City
rehabilitation grants, consistent with the provisions of Chapter 351.
e. Rehabilitation Loans. To provide and make City rehabilitation loans, •
consistent with the provisions of Chapter 351.
-lb-
� : � � �ss54�
• 2. Any interest charged and received under a City rehabilitation loan that is
in excess of Authority costs, as regards that loan, may be used by the
Authority in making additional City rehabilitation loans or for any of the
purposes specified in (1) above.
i
•
,
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�� 2ss5��
• APPENDIX I
AREA IMPROVEMENT PROGR{�1M FOR RESIDENTIAL REHABILITATION
Recognizing the importance of structural conditions throughout an area to an
individual property and the value of any investment in the rehabilitation of
a residential structure, the City of Saint Paul will establish a program to
encourage the concentration of rehabilitation resources in limited areas with
the following objectives:
1 . Support and encourage eooperative neighborhood improvement efforts by
ensuring the availability of financing and technical assistance for area
improvement efforts.
2. Achieve substantial , visible improvement sufficient to strengthen
neighborhood stability and encourage continuing private reinvestment in
residential areas with substantial rehabilitation needs.
3. Through concentrated assistance, ensure that as many rehabilitation needs
as possible are met, including those which can be met exclusively through
the private market.
4. Reinforce existing sound neighborhoods and previous investment in
• neighborhood improvement by extending improvement eftorts to nearby areas
threatened by blight.
5. Coordinate completion of required public improvements and other co►n�nunity
development needs with area rehabilitation ef�orts where possible to
strengthen area-wide impact.
6. Maximize public/private cooperation in neighborhood improvement so that
increasingly the efforts of private citizens, neighborhood organizations,
lending institutions, the City, the State and other public agencies
reinforce each other in reaching the corr►xnnon objective of a high-quality
residential environment in City neighborhoods.
Rehabilitation Plan
The City Planning Coordinator will prepare a general plan for residential
rehabilitation in Saint Paul . This plan will indicate generally th�t portion
of the City for which concentrated rehabilitation effort is particularly
appropriate. The plan will identify criteria for the evaluation of area
rehabilitation project proposals, will indicate the range of activities which
should be considered for neighborhood or small area projects and will indicate
the specific informational requirements for a project plan.
The priority areas identified For rehabilitation activities will indica�te
those areas of the City where need exists for positive effort to encourage
• rehabilitation interest and will provide a basis for the coordination of
public irr�provement activities with residential rehabilitation efforts.
Identified priority areas then will be considered in the evaluation of
rehabilitation projects proposed by neighbonc�od organizations; however,
projects will not be restricted to the priority areas identified.
Page 2 APPENDIX I
The rehabilitation plan will also address the need for rehabilitation •
assistance throughout the City outside of concentrated project areas;
measures which may be needed to ensure that resaurces are available both
for area projects and for the remainder of the City; and measures other
than formally designated area projects which may be used to encourage
neighborhood cooperation or otherwise increase the effectiveness of
rehabilitation efforts throughout the City.
Neighborhood Rehabilitation Program
The City Planning staff, working with the Housing and Redevelopment Authority,
will prepare a program of specific area rehabilitation activities to be
undertaken. The program will be revised annually and forwarded to the City
Council by the Planning Commission. The program will include:
a. Neighborhood project plans and the estimated resources required for
each project. Each plan will specify how the technical assistance
and community organization assistance is to be provided and will
identify the local citizen organization with continuing responsibility
for the project.
b. Identification of any City and/or MHFA loan and grant funds to be
reserved or set aside for each project.
c. Identification of resources required for pre-project planning in some •
areas and reservation to be made for potential projects.
d. Indication of demands which proposed projects can be expected to make
on City staff for building inspection.
e. Identification of ineasures other than rehabilitation loans and grants
which can be programed for area projects including public improvements,
urban homestead, recycling acquisitions , etc.
While the intent of the annual program will be to ensure that project needs
and available resources are matched for a given year, reservations of loan
and grant funds for longer periods of time may be indicated.
Neighborhood Project Plans
Development of project proposals will be coordinated by the City Planning staff.
It is anticipated that wotential projects will , in some cases, be initially
proposed by local neighborhood organizations. In any case, area residents will
be expected to play a major role in the development of a projeet proposal or
plan. In those areas of the City where rehabilitation is identified as a high
priority need, a positive effort will be made to ensure that information and
assistance are available to residents as required to identify area needs and
develop project proposals.
�
. -. . �ss5��
, ' APPENL�IX I Page 3 .
• Where desirable, loan and grant resources may be reserved for potential projects
in a given priority area for a specified perio�l of time less than one year to
encourage interest on the part of residents. If, after the specified time
period, an adequate plan has not been developed with strong community support,
such a reservation would lapse.
Project Implementation
Where a project is established, techr..ical and corr�nunity organization assistance
and informational materials for rehabilitation will be provided to resident
groups as required to achieve broad participation and accomplish rehabilitation
work in a satisfactory and efficient manner. It will be the responsibility of
the Housing and Redevelopment Authority as the administrative agency for
neighborhood projects to ensure that the necessary technical and community
organization assistance is provided.
The City Planning staff will monitor and evaluate the progress of the rehabilita-
tion program and will propose revisions in the program as they become necessary.
In assisting neighborhoods with identification of desirable project areas and
in evaluating proposals for an annual program of area improvement activities,
the following factors will be considered:
� age of housing
structural condition of area housing
income profile of area population
incidence of home ownership
residential structure types
property values and value trends
area improvement needs that cannot be met through rehabilitation
neighborhood improvement efforts which go beyond rehabilitation and
increase the possibility of significant upgrading
public improvement and community facility needs and projects and
plans which may s�rengthen the improvement effort
other compl�mentary improvement programs potentially or actually in
effect which would strengthen rehabilitation impact
corr�nitment and interest of area residents
previous improvement activity
natural boundaries, adjacent sound neighborhoods and blighting
influences
It is understood that organized projects for which funds are reserved under the
City program need not constitute the entire range of locally-organized rehabili-
tation activity. Residents are to be encouraged to work cooperatively in
whatever way they find feasible and appropriate to achieve neighborhood improve-
ment, making use of available loan and grant assistance.
�
8/5/74
. �
APPENDIX II
. TYPICAL REHABILITATION LOAN PROCESS �s�548
SAINT PAUL REHABILITATION PROGRAM
The purpose of this Appendix is to describe a "typical" case and the procedures
to be followed for a homeowner to obtain a rehabilitation loan under the program
guidelines that are outlined in the previous documents. Certain assumptions were
made for purposes of describing this procedure. Those asswmptions include the
existence of a small "store-front" office in a neighborhood that has been identi-
fied and approved for a concentrated rehabilitation program. We further assumed
the office is staffed with two rehabilitation advisors, a part-time community
organizer and a part-time secretary. A rehabilitation loan officer would be
located at a central administrative office.
The process would begin when the homeowner contacts the co�nunity organizer (or
rehabilitation advisor) at the site office. The contact may result from the
homeowner obtaining information about the program at a rehabilitation "block
party." During this initial meeting, the organizer would describe the generai
rules, procedures and guidelines of the city rehabilitation program, screen the
homeowner for eligibiiity and attempt to determine the homeowner's interest in
rehabilitating his property.
Assuming that positive interest and eligibility are established during the
• initial contact, the organizer would ask the homeowner to fill out a data sheet
and schedule an inspection of the property by the full City Inspection Team.
The data sheet wouid be forwarded to the rehabi7itation loan officer for review
and a further determination of eligibility of the homeowner to receive a loan.
During this time, tfie City Inspection Team will have completed their work and
prepared a written list of all code violations found on the property. A copy of
the list wou d e sent to the homeowner and the rehabilitation advisor at the
site office.
A meeting between the homeowner and the rehabilitation advisor would be the next
step in the process. After determining the scope of general improvements desired
by the homeowner and deciding which code items are to be corrected, the rehabili-
tation advisor wii] instruct the homeowner to have a contractor prepare a
preliminary scope of work for bidding purpose. The homeowner would subsequently
select an approved contractor and obtain an informai bid from him.
After receiving an informal bid, the homeowner wou7d review the scope of work and
cost with the rehabi7itation advisor. Upon agreement by the homeowner to the
final scope of work, the contractor's bid would be obtained by the homeowner.
During the time that final bids are being prepared by the contractor, the site
office would fill out a preliminary loan application with the homeowner and the
property would be appraised by an independent reai estate appraiser. The "loa�
package" consisting of the final bids and scope of work, loan application and
appraisal are then delivered to the loan officer at a central location for process-
ing. During this processing, the loan application wou]d be reviewed and approved
(denied) by a Special Rehabilitation Review Comnittee.
� � .
. ,
Page 2 APPENDIX II . .'
• .
Assuming that the package is approved, a closing would be set between the
homeowner and loan officer. Upon closing, the contractor will be issued an •
order to proceed with the work. During the construction work, the rehabilita-
tion advisor will coordinate with the homeowner in monitoring its progress.
Completion of all construction work would be followed by a final inspection
by a group consisting of the homeowner, City Inspectors, and the rehabilitation
advisor. Items found to not be in compliance with city codes and the scope of
work would be corrected prior to final payout to the contractor by the loan
officer. Lien waivers will be obtained at the time of final payment. Partial
payments may be arranged, if the term of construction is anticipated to be
lengthy.
In order to provide you with a further understanding of the above process, a
graphical presentation is attached hereto. The Special Rehabilitation
Committee referred to would be made up of city staff and representatives of
the administrative agency designated by the City to implement the program.
�
�
� 7/11/74
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