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Home My WebLink About5451 - ADMIN Resolution - City Council - 1976/01/05• JANUARY 5, 1976 8E RESOLUTION NO. 5451 RESOLUTION ESTABLISHING ST. LOUIS PARK HOUSING REHABILITATION PROGRAM WHEREAS, the City Council has adopted a Community Development Program setting forth goals and objectives for the City, and WHEREAS, one of the goals of the City's Community Development Program is to provide safe and adequate housing for all citizens by eliminating potential sources of deteriorating housing, and WHEREAS, the objective toward meeting this goal is the implementation of a(Housing Rehabilitation Program which will facilitate the repair and general upgrading of deficient housing of St. Louis Park and enable compliance of all substandard houses with minimum housing code standards, and WHEREAS, a program has been designed which provides financial assistance in the form of interest subsidy for home improvement loans to be used for the purpose of repairing, rehabilitating and improving single family houses in St. Louis Park, and WHEREAS, in addition to protection and betterment of the City's housing stock, the Housing Rehabilitation Program will help protect neighborhoods against declining real estate values, assure the availability of safe, sound and attractive housing opportunities for all ages and provide for the over-all enhancement of homes, neighborhoods and the entire community. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that staff be and is hereby directed to implement a housing repair assistance program through the cooperation of eligible lending institutions that shall be known as the St. Louis Park Housing Rehabilitation Program, and BE IT FURTHER RESOLVED, that the Guidelines of the Housing Rehabilitation Program (Exhibit A) be made a part of this resolution and be used to determine the interest subsidy and eligibility requirements; AND BE IT FURTHER RESOLVED that this program shall be funded with monies appropriated for this purpose through the Community Development Program. Adopted by the City Council January 5, 1976. Attest: City Clerk inistration: Mayor Approved as to form and legality: City Attorney "-EXHIBIT A" GUIDELINES OF THE HOUSING REHABILITATION PROGRAM I. PURPOSE The objective of this program is to provide for the protection and betterment of the City's housing stock by providing financial assistance to owners and purchasers of single-family houses for the purpose of rehabilitating their property. II. FUNDING The City shall utilize Community Development Funds appropriated for the purpose of rehabilitation and upgrading of the housing stock of the City of St. Louis Park. III. ASSISTANCE Assistance shall be provided in the form of interest subsidies. The interest subsidy shall be the difference between the total cost of eligible rehabilitation work at market interest rates and the interest cost that would be incurred if the total cost of the rehabilitation work were borrowed at an interest rate of 3 percent. (The total subsidy is to be calculated pursuant to the formula set -out in Appendix I.) IV. PROGRAM REQUIREMENTS (a)- Loans under this program must be expended for the sole purpose of rehabilitating single-family houses, and the applicant must sign certification of that fact. (b) All rehabilitation work must be performed on houses located in the City of St. Louis Park. (c) The maximum principal amount of the home improvement loan shall be $10,000, exclusive of finance charges. (d) 'The maximum term of the loan shall be twelve years. 4 • • (e) There shall be no prepayment penalties. (f) All participating loan applications must be approved by the City of St. Louis Park before the City shall ensure pay- ment of the subsidy. (g) Improvements shall be completed within nine months of the date that the loan is issued. V. ELIGIBILITY (A) OWNERS - 1. The applicant must be the owner or the purchaser of a single-family house located in the City which is to be improved under the application. 2. Adjusted gross annual household income of the applicant shall not exceed $16,000 at the time of application. (B) PROPERTY - 1. All economically rehabilitatable, structurally sound single- family houses located in the City of St. Louis Park shall be eligible for rehabilitation under this program. (C) IMPROVEMENTS/EXPENDITURES - 1. All costs incurred by the property owner, and improvements made, in order to achieve compliance with the housing code of the City of St. Louis Park shall be eligible costs and improvements with respect to this program. 2. Certain other costs and improvements considered not to be luxurious in nature and listed in Appendix II shall be considered as eligible with respect to this program. • 4 • VI. PROCEDURES (A) Upon determination of the total costs of the eligible rehabil- itation work to be performed, the applicant shall apply to participating lending institutions for a home improvement loan. (B) Lending institutions shall provide assistance to the applicant relative to determining the proper and most advantageous loan on appropriate forms. (C) The lending institutions shall process the application in a normal manner. (D) Upon approval of the loan application by the lending insti- tution, the lending institution shall forward the applications to the City for review and approval, (E) Upon approval of the application by the City, the lending institution shall process the loan in a usual manner and upon issuance of the loan, the total interest subsidy shall be paid in full by the City to the lending institution and retained in a fiduciary capacity until released in the normal manner, (F) The property owner shall be responsible for execution and comple- tion of the construction pursuant to the guidelines and signed certificate. (G) The City shall periodically inspect the construction of improvements to ensure compliance with applicable City codes and program guidelines. (H) The property owner shall repay the home improvement loans to the lending institution according to the provisions of the loan agreement. • APPENDIX I Formulas for calculating interest subsidy and loan amount Interest Subsidy Loan Amount(L) = Rehab Cost Loan Amount(L) = Rehab Cost - Interest Subsidy Monthly Payment = P = Rehab Cost. = Loan Amount (L P = Principle i = Interest rate i(L)= Lender Interest Rate n = Time of Loan in Months Loan Amount(L) = Lender Loan Amount 1 i 1 [I - 1 l (1+.03) n .03 1 1 --- yr- - - (1+i(L) ) 71-1 1 A 1 1 - 1 (1 + i) n i 1(L) = Number from Annuity Table X 1 TZ A 1 12 A (3) A (L) From Above: = Annuity Table Number @ 3% for given n = Annuity Table Plumber @ i (L) for given n Rehab, Loan Cost ( A(3) ) 12 = Amount(L) ( A(L) ) Loan = Rehab Amount(L) Cost ( A (3) ) A(L) EXAMPLE Rehab Cost = i(L) = n = A(3) _ A(12) _ Loan Amount(L) _ $5,000 129 144 months (12 yr.) .0082779 .0131342 (5,000) (.0082779) .0131342 Round to nearest $50 Interest Subsidy = = $3,151 = $3,150 _ $3,150 • AN ,X I ANNUITY TABLE FOR FORMULA FOR CALCULATING INTEREST SUBSIDY AND LOAN AMOUNT Time INTEREST (n) In Months RATE 3% 7% 711% 8% 10% 10.5%10.8 i 12 .0846937 .0865267 .0867574 .0869884 .0879158 .0881486 .0882687 12,, % .0888488 24 .0429812 .0447726 .0449996 , .0452273 .0461449 .0463760.0465152 .0470735 36 .0290812 .0308771 .0311062 .0313364 .0322672 .0325024.0326442 .0332143 48 .0221343 .0239462 .0241789 .0244129 .0253626 .0256034 .0257486 .0263338 60 .0179687 .0198012 .0200379 .0202764 .0212470 .0214939 .0216428 .0222444 72 .0151937 .0170490 .0172901 .0175332 .0185258 .0187789 .0189318 .0195502 84 - .0132133 .0150927 .0153383 .0155862 .0166012 .0168607 .0170175 .0176527 96 .0117296 .0136338 .0138839 .0141367 .0151742 .0154400 .0156008 .0162528 108 .0105769 .0125063 .0127610 .0130187 .0140787 .0143509 .0145155 .0151842 120 .0096561 .0116108 .0118701 .0121328 .0132151 .0134935 .0136620 .0143471 132 .0089038 .0108841 .0111480 ,0114154 .0125199 .0128045 .0129768 .0136779 144 .0082779 .0102838 .0105523 .0108245 .0119508 .0122414 .0124175 .0131342 ,- APPENDIX II ELIGIBLE IMPROVEMENTS Exterior Finishing - Painting and Waterproofing - Asbestos, asphalt, composition and wood shingles or siding and brink, cement, metal, stone, stucco finishing. Interior Finishing - Painting and Papering - Plastering, wallboard composition and wood paneling, and acoustical, ceramic, plastic and metal tile. - Composition, linoleum, tile and wood flooring. Roofing - Repair or Replacement - Asbestos, asphalt, tile and wood shingles - Gutters and downspouts Plumbing - Installation or Replacement - Sink and bathroom fixtures and connections - Domestic water heaters Heating - Furnaces and boiler systems; pipes, ducts and radiation; and floor furnaces and wall heaters - Exhaust and ventilating fans Insulation - Blanket, batt, reflective, loosefill insulation - Storm doors and windows - Weatherstripping and other insulation Electrical - New and replacement of electrical wiring - Upgrading of electrical service - Fuse and circuit breaker units and installation. e •