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HOUSING PRESERVATION
Through Rehabilitation
WE CANNOT BUILD OUR WAY OUT OF A
HOUSING SHORTAGE
We must also preserve and maintain aging housing stock.
Through great pa...
WHAT RESOURCES ARE AVAILABLE?
 Rehabilitation Loan Program
 Emergency & Accessibility Loan Program
 Impact Fund
 Great...
REHABILITATION LOAN PROGRAM (RLP)
 Available statewide through a network of lenders
 Funds up to $27,000 in rehab costs
...
EMERGENCY & ACCESSIBILITY LOAN
PROGRAM (ELP)
 Available statewide through a network of lenders
 Funds up to $15,000 in r...
IMPACT FUND
 Administrators must apply through the annual Super RFP
 Funds up to $10,000 in rehab costs*
 Loan is 0% in...
GREATER MINNESOTA HOUSING FUND
 Administrators must apply through the annual Super RFP
 Funds up to $8,500 in rehab cost...
SMALL CITIES DEVELOPMENT PROGRAM
 Communities must apply through an annual application to
DEED
 Owner Occupied Rehab is ...
FIX UP FUND
 Available statewide through approved lenders – traditional and
non-traditional
 More of a traditional loan ...
Rural Development
“Increasing economic opportunity and improving the
quality of life for all rural Americans.”
Rural Development
Discussion topics
• Brief overview of USDA Rural Development
• 504 Direct home loan/grant repair program...
Rural Development
What is USDA Rural Development?
• Three program areas: Business Programs, Housing
Programs, Utilities Pr...
Rural Development
What is USDA Rural Development?
• Community Programs – municipal water and sewer
projects, hospitals, cl...
Rural Development
504 Loan and Grant Program
• Objective of the program is to assist eligible, very low
income, owner-occu...
Rural Development
Home Repair Program
• Loans and grants for dwellings in need of repair
• Grant funds can only be used to...
Rural Development
Historical 504 Fund Usage
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2007 2008 20...
Rural Development
Who qualifies?
• Individuals or families that own and occupy single
family dwellings in need of repair.
...
Rural Development
Who qualifies? (cont.)
• Must lack personal resources to pay for the needed
repairs
• Asset limits apply...
Rural Development
Who qualifies for grants?
• Homeowners 62 years of age or older who are
unable to make payments on a 1% ...
Rural Development
Who qualifies for loans?
• Very-low income homeowners with homes in need of
repair
• Must have an accept...
Rural Development
Other highlights of Home Repair Program
• Loan/grant funds may be used in conjunction with funds
from ot...
Rural Development
Direct Home Loan Program
• Home loans for low and very-low income individuals and
families in rural Minn...
Rural Development
Guaranteed Home Loans
• Applications are made with approved local lenders or
mortgage companies
• Any le...
Rural Development
Websites for income limits, property eligibility, etc
Direct income limits and property eligibility:
htt...
Building Communities from the Ground Up
CASE STUDY:
 Who:
 Household size: 1
 Income: < $18,100
 Homeowner over age 62
 What:
 Leaking roof that caused sign...
CASE STUDY (CONT.):
 Sources:
MN Housing RLP 0% deferred forgivable
loan
$27,000
GMHF 0% deferred loan $8,500
Fix Up Loan...
CONTACT INFORMATION
Jackie Meixner, HRDC Angela Bokovoy, USDA RD
Housing Director Loan Specialist
218-333-6530 218-751-194...
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Housing rehabilitation

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IMPACT 20/20 Housing Summit
November 16, 2016

Published in: Government & Nonprofit
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Housing rehabilitation

  1. 1. HOUSING PRESERVATION Through Rehabilitation
  2. 2. WE CANNOT BUILD OUR WAY OUT OF A HOUSING SHORTAGE We must also preserve and maintain aging housing stock. Through great partnerships with agencies such as USDA Rural Development, Minnesota Housing Finance Agency, Greater Minnesota Housing Fund and Department of Employment & Economic Development, we can have an impact!
  3. 3. WHAT RESOURCES ARE AVAILABLE?  Rehabilitation Loan Program  Emergency & Accessibility Loan Program  Impact Fund  Greater Minnesota Housing Fund  Small Cities Development Program  Fix Up Fund  USDA RD Section 504  Weatherization  Local Communities
  4. 4. REHABILITATION LOAN PROGRAM (RLP)  Available statewide through a network of lenders  Funds up to $27,000 in rehab costs  Forgiven after 15 years  Mobile homes in mobile home parks ARE eligible (forgiveness period drops to 10 years)  Lenders receive compensation of 14% of the loan amount, up to $3,000, on closed loans Household Size 1 2 3 4 5 6 7 8 Income Limit $18,100 $20,600 $23,200 $25,800 $27,900 $29,900 $32,000 $34,000
  5. 5. EMERGENCY & ACCESSIBILITY LOAN PROGRAM (ELP)  Available statewide through a network of lenders  Funds up to $15,000 in rehab costs  Forgiven after 15 years  Mobile homes in mobile home parks ARE eligible (forgiveness period drops to 10 years)  Repairs must be true emergencies and/or accessibility improvements – MHFA determines repair eligibility on a case- by-case basis  Lenders receive compensation of 10% of the loan amount, up to $1,200, on closed loans Household Size 1 2 3 4 5 6 7 8 Income Limit $18,100 $20,600 $23,200 $25,800 $27,900 $29,900 $32,000 $34,000
  6. 6. IMPACT FUND  Administrators must apply through the annual Super RFP  Funds up to $10,000 in rehab costs*  Loan is 0% interest, no monthly payments  Loan must be repaid within 30 years  Income Limits - $61,700, excluding 11 County Metro & Rochester MSA*  Administrators can receive compensation up to $500 (included in the borrower’s loan amount)* *Disclaimer – this is how the HRDC designed our Impact Fund program. Administrators can tailor their program as they see fit (administrators will disclose their program design in the Super RFP application). Example – a lower income niche could be targeted and a different loan maximum could be established.
  7. 7. GREATER MINNESOTA HOUSING FUND  Administrators must apply through the annual Super RFP  Funds up to $8,500 in rehab costs  Loan is 0% interest, no monthly payments  Loan must be repaid within 30 years  Income Limits – 80% AMI, adjusted for household size  Currently there is no lender compensation
  8. 8. SMALL CITIES DEVELOPMENT PROGRAM  Communities must apply through an annual application to DEED  Owner Occupied Rehab is one of several eligible activities for which a community can apply  Funds up to $25,000 in rehab costs*  Loan is forgiven over 10 years*  Income Limits – 80% AMI, adjusted for household size*  Lender compensation is a line item in the application – cannot exceed 15% of rehab costs *Disclaimer – this is how the HRDC has generally administered SCDP projects. Communities can tailor their program as they see fit (program design will be disclosed in the application to DEED). Example – a lower income niche could be targeted, a lower loan maximum could be established, and the repayment terms can be different (some communities require repayment).
  9. 9. FIX UP FUND  Available statewide through approved lenders – traditional and non-traditional  More of a traditional loan program  Several different options: Through the Super RFP, administrators can apply for grant funds to provide a reduced interest rate based on a targeted program. The HRDC currently has 1% and 3% interest rates available, in addition to the traditional interest rates for Fix Up.
  10. 10. Rural Development “Increasing economic opportunity and improving the quality of life for all rural Americans.”
  11. 11. Rural Development Discussion topics • Brief overview of USDA Rural Development • 504 Direct home loan/grant repair program • 502 Direct and Guaranteed home loan purchase programs
  12. 12. Rural Development What is USDA Rural Development? • Three program areas: Business Programs, Housing Programs, Utilities Programs • Over 40 programs total • 12 area offices and state office in St. Paul • Invested nearly $2.3 billion throughout Minnesota since 2009
  13. 13. Rural Development What is USDA Rural Development? • Community Programs – municipal water and sewer projects, hospitals, clinics, libraries, emergency service vehicles, and much more. • Business Programs – Loan and grant programs for job creation and job retention….business loans, revolving loan funds, energy efficiency and renewable energy, etc. • Housing Programs – Home ownership and repair, multi- family housing, etc.
  14. 14. Rural Development 504 Loan and Grant Program • Objective of the program is to assist eligible, very low income, owner-occupants pay for repairs and improvements to single family homes, making the home safer and more sanitary, or to remove health and safety hazards.
  15. 15. Rural Development Home Repair Program • Loans and grants for dwellings in need of repair • Grant funds can only be used to remove identified health & safety hazards or to make home accessible to household members with disabilities • Applications are filed with Rural Development area offices
  16. 16. Rural Development Historical 504 Fund Usage $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ 504 Grants $ 504 Loans
  17. 17. Rural Development Who qualifies? • Individuals or families that own and occupy single family dwellings in need of repair. • Property must not have a value in excess of the applicable area loan limit (NW MN-$216,840) • Have an adjusted income that does not exceed the applicable very-low income limit for the county (See website link on last slide) • Live in a rural area, defined as community with population of 20,000 or less
  18. 18. Rural Development Who qualifies? (cont.) • Must lack personal resources to pay for the needed repairs • Asset limits apply -- $ 20,000 elderly; $15,000 non- elderly • Must be U.S. Citizen, permanent resident or qualified alien • Posses legal capacity to incur loan obligation
  19. 19. Rural Development Who qualifies for grants? • Homeowners 62 years of age or older who are unable to make payments on a 1% loan • Limited to removal of identified health and safety hazards or to make accessible to household members with disabilities • Maximum life-time grant is $7,500 • Maximum loan/grant combination is $27,500 • Grant must be repaid if home sold or title transferred within three years of grant approval
  20. 20. Rural Development Who qualifies for loans? • Very-low income homeowners with homes in need of repair • Must have an acceptable credit history • Maximum loan is $20,000 • Fixed interest rate of 1% with a term up to 20 years • Mortgage required for loans over $7,500 • Appraisal required for loans over RD loans over $7,500 and when the total indebtedness is over $15,000
  21. 21. Rural Development Other highlights of Home Repair Program • Loan/grant funds may be used in conjunction with funds from other public or non-profit sources • Remember, grants are available only to homeowners 62 years of age or older
  22. 22. Rural Development Direct Home Loan Program • Home loans for low and very-low income individuals and families in rural Minnesota to provide modest, decent, safe, and sanitary housing. • Income limits apply (based on family size & county) http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityA ction.do?pageAction=state • Loan limits apply - vary by county • Enhanced affordability from payment subsidy, longer terms, minimal lender closing costs.
  23. 23. Rural Development Guaranteed Home Loans • Applications are made with approved local lenders or mortgage companies • Any lender licensed in MN can originate loans and reserve funds. Must go through lender approval process. • Interest rate is negotiated between lender and applicant and Rural Development guarantees the loan
  24. 24. Rural Development Websites for income limits, property eligibility, etc Direct income limits and property eligibility: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAc tion=sfp&NavKey=property@11 USDA Website: https://www.rd.usda.gov/
  25. 25. Building Communities from the Ground Up
  26. 26. CASE STUDY:  Who:  Household size: 1  Income: < $18,100  Homeowner over age 62  What:  Leaking roof that caused significant water damage, including mold growth  Landscaping around the house sloped toward the house, adding to the water issues  Old single pane windows  High levels of radon  Numerous other repairs  Total project cost: $48,903
  27. 27. CASE STUDY (CONT.):  Sources: MN Housing RLP 0% deferred forgivable loan $27,000 GMHF 0% deferred loan $8,500 Fix Up Loan 1% interest rate $6,665 USDA Rural Development Grant $6,738  Result:  Amortized Monthly Payment: $58  10 year term
  28. 28. CONTACT INFORMATION Jackie Meixner, HRDC Angela Bokovoy, USDA RD Housing Director Loan Specialist 218-333-6530 218-751-1942 ext. 4 jmeixner@hrdc.org angela.bokovoy@mn.usda.gov

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