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04-20-09 Agenda PacketCITY.OF RICHFIELD, MINNESOTA MONDAY, APRIL 20, 2009 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA L Call to order Roll call 1. Approval. of minutes Regular HRA Meeting March 16, 2009 Notes: 2. HRA approval of agenda 3. Consideration of accepting Urban Land Institute Housing Audit Report and Findings Staff Report No. 12 Notes: 4. Consideration of change to HRA Subordination and Satisfaction Policy for Foreclosure Purchase Incentive Program loans Staff Report No. 13 Notes: 5. Consideration of authorizing consultant services agreement with Greater Metropolitan Housing Corporation for 2009 Staff Report No. 14 Notes: 6. Consideration of subordination request of HRA transformation home loan at 7121 Oak. Grove Boulevard Staff Report No. 15 Notes: 7. -Consideration of Foreclosure Purchase Incentive Program Down-Payment Assistance Loan Agreement between HRA and Paul Senkyr for purchase of 6514- 12th Avenue Staff Report No. 16 Notes: 8. Consideration of Foreclosure Purchase Incentive Program Down-Payment v Assistance Loan Agreement between HRA and Juan Kosar for purchase of 6226 Washburn Avenue Staff Report No. 17 Notes: 9. Consideration of Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement between HRA and Tedd Herman and Jenna Lindeman for rehabilitation of 7233-10th Avenue - - Staff Report No. 18 Notes: 10. Executive Director report 11. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities. are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. J HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting March 16, 2009 CALL TO ORDER The meeting was called to order by Chair Sandahl at 7:03 p.m. ROLL CALL HRA Members Present: Sue Sandahl, Chair; Joan Helmberger; David Gepner; and Steven Quam. HRA Members Absent: Doris Rubenstein. Staff Present: John Stark, Acting Executive Director; Karen Barton, Assistant Community Development Director; and Nancy Gibbs, City Clerk. Item #1 ~ HRA APPROVAL OF MINUTES M/Gepner, S/Helmberger to approve the minutes of (1) Regular HRA Meeting of Februarv 17, 2009 and (2) Special HRA Meeting of Februarv 25 2009. Motion carried 4-0. Item #2 ~ HRA APPROVAL OF AGENDA Item #3 was removed from the agenda. M/Quam, S/Gepner to approve the aaenda as amended. Motion carried 4-0. HRA Meeting -2- March 16, 2009 Item #3 I CONSIDERATION OF ACCEPTING URBAN LAND INSTITUTE HOUSING AUDIT REPORT S.R. NO. 9 This item was removed from the agenda. Item #4 CONSIDERATION OF DIRECTING STAFF TO DRAFT CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN RICHFIELD HRA AND LANEL/SUSEE FOR PROPOSED CEDAR POINT PHASE II SENIOR HOUSING DEVELOPMENT AND AUTHORIZING PAYMENT OF $14,500 FOR PRELIMINARY APPRAISAL FOR ACQUISITION OF RIGHT-OF-WAY FOR PROPOSED RICHFIELD PARKWAY BETWEEN 63RD AND 65TH STREETS ALONG 17TH AVENUE S.R. NO. 10 Acting Executive Director Stark presented Staff Report No. 10. Acting Executive Director Stark stated that staff will be back in April or May with two separate agreements -one for the City Council and one for the HRA. M/Sandahl, S/Gepner to direct staff to draft contract for private development between Richfield HRA and LaNel/Susee for ro osed Cedar Point Phase II senior housin develo ment and authorizing payment of $14 500 for preliminary appraisal for acquisition of right of way for proposed Richfield Parkway between 63rd and 65th Streets along 17th Avenue. Motion carried 4-0. Commissioner Quam stated that he has left two messages for Janis Reid of the Sun Current regarding an article that was published in the March 5, 2009 Sun Current. Commissioner Quam stated that Ms. Reid's article was incorrect in her explanation of tax increment financing (TIF). Commissioner Quam explained the correct way TIF operates and is waiting for a return call from Ms. Reid, because he stated that he believes the Sun Current should print a retraction. Item #5 I CONSIDERATION OF GUIDELINES FOR NEWLY-CREATED HRA FUNDED FORECLOSURE PURCHASE INCENTIVE PROGRAM S.R. NO. 11 Assistant Community Development Director Barton presented Staff Report No. 11. Chair Sandahl asked for clarification on the two different loans. Assistant Community Development Director Barton stated the $10,000 loan is to be used for a down payment and the $15.000 loan is for rehabilitation. Both loans require the owner to occupy the home for five years and at that time the loan would be forgiven. Commissioner Quam asked about what provisions are in this agreement to assure the 120% refund amount. Assistant Community Development Director Barton stated that there is no minimum income limit with this program. HRA Meeting -3- March 16, 2009 M/Quam, S/Gepner to approve the guidelines for newly-created HRA funded foreclosure purchase incentive program and to encourage applicants to first apply for available federal programs. Motion carried 4-0. Item #6 I EXECUTIVE DIRECTOR REPORT Acting Executive Director Stark reported on HRA claims and payroll. After much discussion Acting Executive Director Stark stated he would communicate to City Manager Devich and Finance Manager Regis the HRA's request to include the claims and payroll information in their monthly packets. Acting Executive Director Stark announced that on March 26 there will be a Realtors Workshop at the Community Center. City departments will be there to respond to the community with any questions they may have. Item #8 ~ CLAIMS AND PAYROLL M/Helmberger, S/Quam that the following claims and payrolls be approved: U.S. Bank 03-16-2009 Section 8 Checks: 116613 - 116755 HRA Checks: 30509 - 30531 TOTAL Motion carried 4-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 7:42 p.m. Date Approved: Nancy Gibbs City Clerk $ 168, 780.72 $ 56,468.12 $ 225,248.84 Suzanne M.Sandahl Chair John Stark Acting Executive Director AGENDA ITEM # 3 REPORT ~ j 2 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL Z0, 2009 REPORT PREPARED BY: KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME, TITLE REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR REVIEWED BY EXECUTIVE DIREC ITEM FOR HRA CONSIDERATION: Review and consider acceptance of the Urban Land Institute Housing Audit Report and Findings. L RECOMMENDED ACTION: By Motion: Accept the attached Urban Land Institute Housing Audit Report. II. BACKGROUND In June of 2008 the Richfield Housing and Redevelopment Authority (HRA) was awarded a grant through the Urban Land Institute (ULI) MN Regional Council of Mayors to participate in the Opportunity City Pilot Program to conduct a comprehensive review of the City's housing programs. Since that time, staff has been working with Bennett Community Consulting (BCC) conducting a comprehensive audit of our existing housing programs. Over the past several months, BCC has held numerous meetings with various staff, stakeholders, program beneficiaries, residents, and policy makers to gauge the effectiveness, overall success and functionality of the City's programs. BCC also. contracted with Excensus LLC (a demographic services company) to complete a profile of the City's population and housing characteristics. At the Special HRA January 20, 2009 042009 ULI Housing Audit Report Worksession, BCC in conjunction with Excensus LLC, presented preliminary demographic and housing information and has since refined that information. The demographic and housing information is incorporated into the final Housing Audit Report. BCC has completed the audit and will be presenting their findings and recommendations at the April 20, 2009 meeting. III. BASIS OF RECOMMENDATION A. POLICY • The HRA utilizes grants when available and appropriate to maximize fiscal resources. It is necessary to periodically review existing programs to ensure effectiveness, appropriateness, and prudent use of its fiscal resources. B. CRITICAL ISSUES • The information provided via this housing audit will be used to assist in determining future housing-related programming for the City of Richfield. • Best practices will be captured by ULI and will be disseminated to other cities to assist in building their housing programs. C. FINANCIAL • N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Do not accept the ULI Housing Audit Report. V. ATTACHMENTS • Housing Audit Report: ULI Minnesota Regional Council of Mayors Opportunity City Pilot Program VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Cathy Bennett, Bennett Community Consulting _. :.:,,~ Urban Land Institute Minnesota/ 3 Regional Council of Mayors Opportunity City Pilot Program Summary Report J City of Richfield C ULI Minnesota & the Regional Council of Mayors Urban Land Institute (ULI) Mission: ULI provides responsible leadership in the use of land and in the creation of thriving communities worldwide. Urban Land Institute Minnesota (ULI MN): ULI Minnesota actively engages public and private sector leaders in land use planning and real estate development to learn, network and join in meaningful, strategic action. The future holds many challenges and opportunities; we need the diversity of ULI Minnesota's professional community to meet them wisely. Regional Council of Mayors (RCM) Supported by ULI Minnesota, the nationally recognized Regional Council of Mayors represents Minneapolis, Saint Paul and 36 municipalities in the developed and developing suburbs. This collaborative partnership provides a nonpartisan platform that engages mayors in candid dialogue and peer-to peer support, and builds awareness and action for a more connected, more sustainable and more prosperous region. Table of Contents • Opportunity City Pilot Program Summary -Richfield's Story ........................Page 3 • Housing Audit Process .................................................................................Pages 4-6 - City Goals & Policies .......................................................................... Page 4 - Key Community Factors ..................................................................... Page 4 - Program Review .................................................................................. Page 5 - Community Change Report Key Points .............................................. Page 6 - Site Evaluation Summary ....................................................................Page 7 • Recommendations ..................................................................................... Page 8 - 10 • Next Steps ....................................................................................................... Page 11 • Sponsors & Program Participants ................................................................... Page 12 • Appendix -Includes detail background surrounding all aspects of the housing audit process and detail on the review of housing programs, evaluation of their effectiveness and examples of best practices. 2 Opportunity City Pilot Program Report Summary -Richfield's Story Program Goals/Outcomes: The goal of the Opportunity City Pilot Program is to build on the collaborative relationships among Regional Council of Mayors (RCM) and Urban Land Institute (ULI) professionals to identify and implement best practices that support a full range of housing choices for economic stability and regional prosperity. The City of Richfield is one of five metropolitan suburban communities selected to participate in the ULI MN/RCM Opportunity City Pilot Program. Richfield's Mayor, Debbie Goettel, is an active participant in the RCM. The Richfield HRA committed $5,000 to the Opportunity City Pilot Program as well as countless staff hours in the collection of information, evaluation of tools and strategies and coordination related to the housing audit. By working together and learning from each other, the expected outcome of the process is to develop an approach that identifies local housing tools and strategies that can serve as a model for other cities and be brought to scale at the regional level. In addition, implementation of new tools and strategies will enable suburban cities to better prepare themselves for the future through preservation, rehabilitation and production of quality housing units, use of regulatory incentives, incorporating sustainability and connecting housing to jobs and transportation networks. Process: The Housing Audit: 1.) Review of the housing framework. 2.) Analyze the Community Change Report as it relates to demographic and household data. 3.) Review and evaluation of existing city tools and strategies surrounding the preservation and production of housing choices. 4.) Identification of specific recommendations for local implementation. Richfield's Story The City of Richfield is one of the oldest first-ring suburbs in the Twin Cities. Rich with history, the City is a post-WWII outgrowth of Minneapolis for those who wanted a simpler, quieter life away from the big city. Over the years, Richfield developed as a bedroom community with single family neighborhoods. Apartments were developed along the main transportation corridors. Richfield's infrastructure includes an established transportation system (roads, transit, pathways and bike paths a variety of parks and both public and private school options. Its commercial base provides needed services within a few miles of the residential neighborhood. These are all key components of a healthy community. Richfield is currently in a re-growth position. Diversity in age, housing affordability, race and ethnic background provides the basis for stable young family growth. This helps to balance the Richfield school base a growing challenge for many first-ring suburbs. There will be little growth in new single family housing stock Therefore, continuing to reinvest and reinvent the existing homes by offering quality tools and strategies that provide opportunities for new households will remain important. There is some choice in style, location, and affordability, but availability of existing housing is a key issue. There are few choices for young renters, since existing apartments are older and similar in style with limited amenities. Single family homes are attractive as starter homes and are mostly affordable as first-time purchase options. However, as households grow there are limited opportunities for move-up housing. Retention of middle-aged households is lower than other cities evaluated (1 ~ for single family and 22% overall, which could be a factor in the limited choice for new housing options. Opportunities for mixed uses and higher valued housing will be important as the City evaluates redevelopment areas. As the City moves forward, continuing to invest in the existing housing stock while providing resources for more modern move-up housing is an important community housing policy and reinvestment strategy. Helping spur redevelopment so that mixed income, higher density development can occur will continue to help the City be economically and competitively viable. 3 Housing Audit Process: Housing Goals/Policies City Housing Goals and Policies: The Opportunity City Pilot Program has five key themes in support of a full range of housing choices: • Preservation and rehabilitation. • Production of housing units that support varied resident life cycles and incomes. • Use of regulatory incentives • Sustainability • Jobs/housing balance connected to transportation systems. The review of the City of Richfield's and policies indicates a wide range of support for these key themes. The various community goals are incorporated into the City's current comprehensive plan. Diversify housing stock-redevelopment and infill • Encourage "move-up" housing to retain families as they grow. • Do redevelopment that provides connections/integration of land uses and provides opportunities for social interaction. Maintain existing housing stock • Support maintenance. • Encourage quality materials and design. Provide a mix of housing types and values to accommodate a mix of incomes • Target renovation programs to families and seniors in need. • Review land use and zoning ordinances to allow housing diversity • Promote the development, management and maintenance of affordable housing. Maintain and enhance urban "home town" character of the City • Support walkability. • Provide housing that meets the changing resident needs. • Encourage green building. • Target density and scale that creates\preserves neighborhood character. Evaluate Community FaetoYs Evaluate Community Factors: In every city, there are internal and external factors that hinder the city's ability to provide a full range of housing choices. In Richfield, several factors were evident, as determined through interviews with staff, program users, community activists/leaders and service providers. The City is fully developed • No land for development of new housing. • New housing on redeveloped sites is expensive. Middle-income housing is the predominant housing type with an older housing stock • Ongoing reinvestment required. • Smaller sized single-family homes are not attractive to growing families. • Need for more functional space requires a large private investment. • Old, worn apartment complexes-stagnant reinvestment and limited amenities • Limited variety in apartments-mostly l-2 bedroom, same style-not very marketable. • Limited opportunities for new single-family housing as families grow. • Limited supply of housing for lowest-income residents. There is an increasingly diverse population • Communication challenges for City services. • Large extended families in small homes. There is limited funding • HRA levy maximum is not enough to address large-scale housing issues. • Subsidy required to rehab and/or build affordable housing is significant-property-by- property process with limited City capacity to implement existing and new programs. The Richfield Housing Audit included several phone interviews with key stakeholders and housing service providers. The interviews provided excellent background into the city's community history and changes as well as feedback on the success and challenges of existing programs. The interview questions and answers are attached to the summary report. Special thanks to the following who participated in the interviews. • Suzanne Sandahl. Richfield HRA Chair • Susan Rosenberg. Former Richfield Councilmember • Camillo DeSantis, Attainable Housing Committee Chair • .Ieremv Larson, Resident Richfield Rediscovered User • Dave Schaeffer. Richtield Remodeling Advisor • Jim Graham, County CDBG Program Manager • Rick Regneir, City Building Oft3cial • Suzanne Snyder, Greater Metropolitan Housing Corporation 4 Program Review Housing Reinvestment, New Housing, Land Use £~ Official Controls Program Review: Richfield HRA supports a variety of housing programs for home renovation and redevelopment. The programs target a wide range of household incomes and specific housing issues from health and safety items to large renovations and infill development. Redevelopment has been a key priority for many years and has resulted in new multifamily units many targeting the senior population. The following is a summary of the programs reviewed as part of the housing audit. Details regarding the program evaluation are provided in the appendix 5 of this report. Kids @ Home Program. This program provides rent subsidy to residents who are not eligible for section 8 but require subsidy due a specific household situation. The goal is to keep home stability and reduce frequent family moves. • The program supports self sufficiency, and assistance per household is low compared to the renovation programs. • The program specifically serves households with children to reduce school turnover (served 25 families and 55 children in 2008). • The City invests an estimated $200,000 annually to the program. Single-Family Reinvestment Approach. Several programs target single-family renovation. The City invests an estimated $300,000 to single-family renovation annually. ~ CDBG home renovation. Targets health and safety renovation and serves lower incomes. The City's household base is a good market for the use of the program, but funds have not been fully utilized in the last few years. ~ Energy Advantage. Targets energy-related improvements to help increase home sustainability and reduce maintenance costs. The program has limited success. ~ Transformation Loan Program. Increases home value and regenerates older neighborhoods. The program helps retain families who desire modern home amenities. There is a 10 to 1.6 ratio of return on public investment compared to private renovation investment. The average home value increase for taxes (06-08) was approximately $26,000 or 11%. New Single-Family Opportunities. The City offers varied options for infill housing that provide new single-family choices. The City invests an average $400,000 annually to single-family infill development. ~ Richfield Rediscovered. Provides up to $70,000 in grants to demolish and build new homes on scattered sites in the City. Helps regenerate neighborhoods and remove housing blight. For 2008, there will be an estimated 22% increase in value on the parcels redeveloped as a result of the program. Senior Housing Regeneration. The City provides an estimated $ ] 5,000 in gap funds for the purchase of existing homes from seniors. The homes are renovated and resold to first time homebuyers in the City at an affordable price. The program promotes new affordable ownership by young families and reduces deferred home maintenance. Two 2 homes have been purchased. New Home Program. The City provides gap funds to non-profit developers for the purchase; renovation and/or rebuilding of new single families homes on scattered sites. Many of the homes support long-term affordability through the West Hennepin Affordable Housing Land Trust and Habitat for Humanity. Thirty -three homes have been completed under this program. Housing Services. The City financially supports and promotes the use of three separate housing service providers. The service providers administer low-interest home loans and provide varied levels of remodeling advice. They serve as an extension of City staff. • Center for Energy & Environment (CEE). Administers the City's Energy Advantage loans and state renovation loans. CEE provides remodeling advisors but the City does not access this service. Fees for processing these loans are covered by administrative fees charged to the resident. In 2008, a total of four Energy Advantage Loans (supported by a grant from the HRA) and 14 state loans were processed through CEE. • Housing Resource Center (HRC). Administers state renovation loans and provides construction and loan consultation. The service is free to residents with an annual HRA investment of $7,000. In 2008, l 18 services, including 39 home construction consultations were provided to 79 residents. In addition, two state loans were processed through the HRC. • Remodeling Advisor. The remodeling advisor makes home visits and provides advice regarding home renovation. The service is free of charge to residents, with an annual HRA investment of $6,000. In 2008, the contracted advisor made 31 home visits, answered 48 calls regarding home renovation and sent 18 informational packets on City programs. The remodeling advisor does not process or administer loans. City Offieial Controls & Land Use Strategies. In addition to specific housing programs, the City uses several methods through its land use and official controls to support and promote redevelopment and reinvestment of the City's housing stock and reuse of land. • Planned Unit Development (PUD). The City uses the PUD process for mixed use and redevelopment projects to allow more flexibility in the use of the land when redeveloped. • Tax Increment Financing (TIF) The City uses TIF for redevelopment and has a policy that dedicates up to 20% of the project proceeds to a housing fund when there is no affordable housing provided in the project. • Housing & Redevelopment Authority (HRA) Levy. The City makes an annual commitment to housing by adopting the maximum HRA levy. The levy supports housing reinvestment, redevelopment and affordability. • Point-of-Sale and Rental Licensing. The City supports the use of both point-of--sale and rental licensing inspection programs to help ensure minimum housing maintenance standards. Community Change Report -Key Points Community Change-Key Points: The City of Richfield has a diverse and balanced base of households with a sizable number of householders in each age category. The City enjoys a high homeownership rate for households under age 35, which can provide some stability to local schools, commercial businesses, and services. Richfield Householder Ages Distribution of Households by Householder Age (2007) (Data set covers 14,798 Richfield households in 2007") Source: Excensus LLC ~~ k ~ i I~I(l~ s~ I ~ I I ~ I I ~ Median Householder Age I , I ~ ~ in 2007 wes 48 years During period 2004 to 2007, there was a net gain in younger households in both new and existing housing units. However, fewer than 3% of households (ages 45 to 74) in owner occupied housing moved during this 3 year period. This is the large base of mid-to-older homeowners that are "aging in place". With a sizable number of middle-aged households nearing retirement age in the city, there is concern that the lack of move-up housing and more varied senior housing options may accentuate a recent drop in turnover among households age 45 to 74. Low turnover reduces the availability of housing needed by younger replacement households. This aging of existing households more than offsets increases in younger residents entering the city through turnover. Half of all households moving into the city were under the age of 34 and 33% were between the ages of 35-54. A total of 25% of resident movers ended up finding another home in the city. But just 15% ofthose moving from single family detached homes chose another single family detached home in Richfield. This could be the result of a lack of move- up housing and/or attractive options for down-sizing in the City. The positive news is that a significant number (25%) of households leaving rental housing ended up in single family detached housing. The City should market its existing ownership housing stock to those living in rental housing as an ownership alternative within the community. There is strong demand for both owner and rental housing across all age groups in the City. However, with an aging housing stock housing choice is limited. Almost 90% of single family dwellings are more than 40 years old and only 3.8% of these older homes turned over in the 3 years (2004- 07). A large majority of that turnover was those under the age of 35. With older single family homes amactive to young and first time buyers, the city should continue to provide opportunities for young buyers to purchase homes as they become available as well as provide additional choices for older residents for downsizing type housing. The majority of the city housing stock is middle income housing with only 5% of the homes valued under $ l 80,000 in 2007 and 2.4% valued above $300,000. A third of the City's single family detached housing units are valued at or less the 2007 Metropolitan Council's affordability limit $207,800. Access and usage of affordable housing appears to be equally distributed across all age groups. According to the American Community Survey data (2005-07) Richfield's non-white population at 32% is above the majority of developed communities at 15-20%. [n addition, 22% of Richfield's population speaks a different language. The recent economy and increase in foreclosures may result in households remaining in their homes longer and increasing the need for rental housing. ~ _, ~ ~ All Households -. ~ ( I ~ I -- %of All Mouwholds: 22.1 % 46.4% 242 % 13.3 % ~a,~hoi~e. a~<. ~~II 'The Moiropoikan COUriC~%nas?_:(:mal?d RKh4ioM's 2907 hou5ehpM ryase at 11.5"/d. kXCENSUS" The following are key statistics from the demographic change report provided for Richfield. The full change report is provided in appendix 6 of this report. • 62% of the City's households are under age 55-and that includes a strong base (22. l%) of younger householders under the age of 35. • Single-family detached usage by households under the age of 35 is very high at 47.6%. • 68% of all new households that have moved into the City between 2004 and 2007 are renters. • There were 1, l 86 homeowners age 75 or older living in homes built before 1960. • 34.4% of all owner-occupied single-family detached homes are affordable based on the 2007 Metropolitan Council's threshold value of $207,800.44% of homeowners under age 35 succeeded in finding homes in the "affordable" range. • 44% of all households in larger apartment developments are under the age of 35, while householders age 55 and older occupy 25%. • During 2004-2007, 47. I % of all new households were under the age of 35. • During 2004-07, 25% of residents that moved ended up in another home within the City. Retention was higher for households looking for apartments (45%) than for those seeking single-family housing (20%). These findings coupled with the increasing diversity of residents provide opportunities to regenerate Richfield neighborhoods. Due to the age of the homes and households that are aging-in-place it will be important to focus on tools and strategies that help to maintain home value and choice in the city. 6 Site Evaluation Summary Opportunity Site Evaluation. ULI MN/RCM have prepared community site principles that support a full range of housing choices and utilize best practices to maximize efficient land use, connect housing to jobs and provide access to transportation networks. As part of the Opportunity City Program, a team of ULI professionals reviewed four sites in Richfield that have a future land use designation for medium -to high-density housing. The sites for evaluation were selected by Richfield city staff. The following is a summary of the team's recommendations for the sites considering the 11 community site principles. (See appendix 7 for details on the site evaluation and community site principles.) 72ND & Penn Ave. This site would be a good location for higher-density housing such as apartments with modern amenities targeting single and young professionals. By providing higher-density residential, the open space on the site could be maximized and serve as an amenity for the residents. There is good access to parks, transportation (bus line), schools and employment. With this location being close to Best Buy, new apartments would provide a rental housing option not currently available in the city. Lyndale Garden Center The site is an excellent opportunity for the city to create a mix of medium- to high-density housing types incorporating public activity spaces. With a good mix of housing types and uses, the area could be a focal point for the city-a Richfield "Centennial Lakes." A suggestion is to open up the site and provide public gathering spaces at the lake, incorporate housing at various income levels and attracting commercial uses that are a destination. Based upon the site's future potential, it should be a high priority for the city. 66`x' & Portland The site is not the most attractive site of the four reviewed for medium-density housing. The area lacks walkability, is not desirable due to adjacent auto use and has site challenges due to its narrow depth. An option could be for affordable senior apartments or accessible housing for tenants with limited mobility. The site would have more housing and/or mixed use opportunity if the corner parcel were part of the redevelopment. Washburn Avenue (66`x' - 70'x') The area seems to be a stable, well-maintained neighborhood. Evaluating better access to the retail area may be beneficial to the neighborhood to support walkability. Due to the city's li-nited financial and staff resources and the complexity of site redevelopment, it was not recommended as an opportunity site unless redevelopment of Southdale and the other retail areas were to occur. Recommendations Recommendations to Increase the City's Capacity to Provide a Full Range of Housing Choices: Several key themes emerged through the Opportunity City Process in Richfield. Overall, the City has made a long term investment in its housing and should continue to target its efforts toward preservation and reinvestment in the older housing stock. The City offers several programs that address single-family housing with great success. Additional investment in the future should also be focused on the older apartment complexes. [t is essential to ensure that existing programs and any new efforts are properly -~~ ,~- fundedparticularly when there is limited funding and staff capacity. The following is a summary of recommendations resulting from the housing audit, program review, community change information and review of City goals, policies a'~~ and community factors. (See appendix 5 for details on the program evaluation and specific program recommendations). Communication and Education. Create an HRA communication and marketing plan for its programs to help achieve ci goals. Due to the increasing diverse resident base, the City will need to expand its communication and education efforts regarding City housing programs, ownership and rental opportunities and expectation for home maintenance. The following is a summary of ideas to include in the communication and marketing plan. • Partner with the School District and the School Family Multicultural Resource Center. • Support an educational approach to code enforcement, eg. Shoreview's SHINE. • Provide a single staff contact\community liaison (consider bilingual) to reduce the communication barriers as a result of the increased diversity of residents. • Provide educational sessions/fact sheets in multiple languages on alternate home ownership options such as Land Trust, Habitat for Humanity and the Senior Housing Regeneration program. • Include health and cost benefits of incorporating energy efficiency improvements in all marketing materials. • Increase internal department coordination for a more holistic approach in addressing neighborhood issues, eg. Brooklyn Park's Neighborhood Action Committee. • Expand connections of the current and future housing opportunities to local jobs by working with employers to determine housing needs and evaluating links between employment wages and housing values. • Increase partnerships with non-profit and for-profit resources to expand the City's capacity to address housing issues. Program Improvements. Richfield has built a strong base of diverse housing programs and is able to provide entry-level housing to young families and for older adults as they age in place. Specifically, the Richfield Rediscovered, Transformation Homes and New Home Programs have made a positive impact in reinventing existing singe family neighborhoods and attracting and retaining young households many first ring suburbs desire. These programs should continue to be part of the tools and strategies offered to provide a full range of housing choices. To enhance the existing tools in the tool box, implementation of the following recommendations will help to provide options for move-up housing as families grow, redevelop and renovate the existing housing stock and use the City's financial investment as effectively as possible. • Evaluate one-stop shop approach for financial and remodeling adviser services to reduce homeowner confusion and increase efficiency. Currently, there are three services providers the HRA is financially supporting and residents are using. • Evaluate additional methods to increase the use of the City's CDBG funded programs. Hennepin County began administering CDBG funds for the City in 2005. Based upon the evaluation, there was a much higher resident use of the CDBG program when the City internally administered the program funds prior to 2005. If the City takes responsibility for administering the program, there could be opportunities to subcontract with housing service providers to administer the loans. This option may help to increase the use of the funds and provide the City with additional oversight on the marketing to meet the City's needs. Examples of the home service providers that could administer the funds on behalf of the City include the Greater Metropolitan Housing Corporation and the Center for Energy and Environment. These are organizations that the City currently has relationships with. However, as noted above, using one organization would help to provide gone-stop-shop approach to housing services for the City. Recommendations • Continue to fund the Kids(a~Home Prof~r~ and explore options to increase funding through non-profit and foundations sectors. • Continue to fund neighborhood reinvestment in older homes through Transformation Homes and Richfield Rediscovered programs. Increase the maximum Transformation Loan amount to $22,500. This provides an adjustment for inflation since the program was created in 1993 at $15,000. Consider the benefits of incorporating sustainability into existingpro rg ams-expand program requirement to include incentives for energy efficiency and renewable products. The incentive could include up to $5,000 in additional funds based upon the cost of adding energy efficient and renewable products, eg. Woodbury Goes Green Loan. • Market home purchase and renovation programs through local employers. Encourage employers to include the City purchase and renovation programs within new employee and recruiting materials. • Evaluate options for providing homeowner architectural assistance to help increase modern renovations that are more attractive to the younger and move-up housing generations, eg. St. Louis Park's partnership with AIA. • Expand options for single-family capacity and increased marketability by encouraging the addition of egress windows, allowing ease for front yard expansions and expediting the permit process for single-family home renovation. • Expand use and funding for the H.O.M.E. program (Household and Outside Maintenance for Elderly) to help those who are aging in place with maintenance and other household needs. • Establish a small emergency fund ($500 per case) to resolve minor code violations rather than having homeowners go through a time consuming citation and abatement process. • Expand opportunities for seniors interested in selling their single family home. 1. Expand the Senior Housing Regeneration Program by increasing funding from $15,000 to $25,000 in gap funds per home. 2. Establish a deferred loan program for family members purchasing a senior home to rectify code deficiencies noted in the point of sale inspection or to the seniors who wishes to put their home on the market but need to address code deficiencies first to make the home more marketable. Apart~rtent Reinvestment & Redevelopment. Apartments in Richfield are its most affordable housinb as well as some of the oldest and unmarketable housing. This housing type serves a great need for a broad range of residents, particularly younger households. Expanding the City's capacity to improve the apartment stock will be important to the future success of City efforts. Initiating redevelopment in a sensitive, cost-efficient manger-that increases value and sustainability should be a key goal. The recom-nendations to increase apartment renovation and redevelopment include the following. • Dedicate financial assistance (grant, deferred or low-interest loans to an apartment renovation pro 7r~, am. Evaluate ways to increase the city's financial capacity to improve older apartments. Proactively seek out partnerships with non-profit/for-profit organizations that specialize in older apartment preservation/renovation and redevelopment. Seek Minnesota Housing funding specifically to renovate lower income apartments with the goal to retain existing households. • Determine if there are ways to effectively ensure that older apartments become more marketable/sustainable by combining units to increase bedroom counts, adding modem amenities and energy efficiencies, linking residents to social services and ensuring proper connections to transportation, parks, recreation and essential services. • Adopt a rental relocation policy that would address the concern over displacement of apartment residents when they are considered for redevelopment and provides low-income households with similar cost housing alternatives within the City, eg. Brooklyn Park's Relocation Policy. Land Use Controls and Other Housing Maintenance c~ Renovations Strategies. City leaders have a variety of public tools and strategies they use to determine their participation in land use decisions, maintenance standards and the facilitation of redevelopment and renovation. Continuing to be part of the solution and helping to change the way land is used and buildings are maintained takes strong local leadership and vision. Many decisions that policy leaders make are controversial. Understanding the long-term effect of those decisions will help prepare the City for fixture growth and re- Recommendations growth. Richfield has made great progress in redevelopment of their community by understanding the issues and educating their residents. Additional recommendations relating to specific public policy decisions are: • Continue to fund and implement the Point of Sale and Rental Licensing~ro rg ams that help provide consistent maintenance standards for existing housing stock. Even in a time of economic uncertainty, providing methods to ensure that existing homes are property maintained is essential. • Evaluate alternate ways to zone land that would better mana e~; and promote redevelopment. Form-Based or Performance-Based zoning is an option that supports more walkable, mixed-use development. Form- and performance-based zoning provide a framework for how future uses fit into the surrounding area through the placement and design of buildings on the site, rather than tying the land to a specific future use. • Support building and land development requirements that promote sustainability and long-term energy efficiencX. Such efforts include revising local building codes to allow green building standards, allowing smaller street designs and requiring energy-efficient products for all publically funded programs. Local efforts can help reduce the regional carbon footprint, increase long-term affordability (through lower utility and maintenance costs) and support healthy living. • Evaluate options to add new small-lot single-/multi-family move-up housing and higher-density apartments with modern amenities to add a housing type that would retain growing families and attract local workers. • Reduce or waive City fees to allow more affordability for lower-income housing projects. • Proactively acquire and land-bank substandard and/or vacant housing_for later infill housing opportunities - specifically targeting foreclosed properties that are candidates for demolition. • Consider using Housing Improvement Area local government authority to address older common interest communities and promote an affordable renovation option. 10 Next Steps Next Steps: The Opportunity City Program is only the first step in supporting a full range of housing choices in the community. Key policy leaders need to support next steps that make valuable changes to the way that the tools and strategies are delivered throughout the City. Many of the recommendations have budget implications and affect staff resources. Prioritization of the recommendations is essential. Suggestions for next steps associated with implementation of the recommendations include: • Gain acceptance of the ULI MN/RCM Opportunity City report by the HRA and City Council. • Prepare a work program that outlines the steps and time needed to effectively implement the recommendations. Determine how the recommendations affect land use codes, program service providers and staff work load. Include performance targets to track the progress of program changes and additions. Setting performance targets and tracking the progress of local tools and strategies against benchmarks will provide a level of understanding to public officials and residents that become critical during the annual budgeting process. (Detail regarding performance measures as it related to housing tools and strategies are attached.) • Evaluate budget and staff resource implications tied to each recommendation. • Prioritize recommendations that will have the largest impact in supporting housing goals for a full range of housing choices. • Evaluate need to amend the City's comprehensive plan based upon implementation of recommendations. • Discuss the broader meaning of the demographic data as it compares to current market conditions and evaluate how the data relates to the region. Incorporate future data updates and online neighborhood level data tool. 11 Program Sponsors F~ Participants Thank you to the following participants in the ULI MN/RCM Housing Initiative Opportunity City Pilot Program. • Richfield HRA Commissioners -Suzanne Sandahl, David Gepner, Joan Helmberger, Doris Rubenstein, Steven Quam • City of Richfield Staff -Karen Barton, John Stark, Kirsten Partenheimer • Site Evaluation Team: o Colleen Cary, The Cornerstone Group o Mark Koegler, Hoisington Koegler Group o Gretchen Nicholls, LISC o Bob Streetar, City of Oakdale • ULI Minnesota Consulting Team o Caren Dewar, ULI Minnesota Executive Director o Cathy Bennett, Bennett Community Consulting o Dennis Welsch, CPPP o John Carpentar, Excensus A special thanks to the Opportunity City Pilot Program Sponsors. Without their financial contribution, the program would not be possible • Family Housing Fund • Metropolitan Council • Richfield Housing & Redevelopment Authority 12 ~--- 1. City Housing Goals & Policies 2. Housing Framework Worksheet 3. Community Factors 4. Community Interviews 5. Program Review 6. Community Change Report 7. Opportunity Site Evaluation & Community Site Principles 8. Sample of Performance Measures ~rC~ ULI MN/RCM Opportunity City Pilot Program -Housing Audit Summary of Richfield Housing Goals & Policies Growth According to the Metropolitan Council forecast, Richfield will experience an increase of an additional 3,500 households by 2020. Richfield estimates that with an average of 65 new units per year based upon new construction between 2000-2007, there will be less growth than estimated. To accommodate the projected growth the City recognizes the need to focus on diversifying the housing stock in new developments and ensuring that the existing housing stock remains in good condition. As part of the ULI MN Regional County of Mayor Opportunity City Pilot Program there are 5 key themes in support of a full range of housing choices. These include: • Preservation & Rehabilitation • Production of new units of housing (affordable and to meet community life cycle housing balance) • Use of Regulatory Incentives • Sustainability • Jobs/Housing Balance The following is a summary of Richfield's goals and policies as noted the City's Housing Section of the Comprehensive Plan (2008 plan update) which support housing preservation, rehabilitation and the creation of new units as follows. Housing Goal • Maintain and enhance Richfield's image as a community with strong, desirable and livable neighborhoods. Policies: • Encourage the use of quality, durable building and landscaping materials to maintain a high-quality staridard in residential development. • Support the rehabilitation and upgrading of the existing housing stock. • Encourage the creation of "move-up" housing through new construction and home remodeling. • Support ongoing maintenance and upkeep of residential properties. • Ensure redevelopment and infill projects maintain the integrity of existing neighborhoods. • Maintain an appropriate mix of housing types in each neighborhood based on available amenities, transportation resources and adjacent land uses. • Encourage the use of design elements and strategies to create safer streets; facilitate social interaction between neighbors; foster connections with nearby businesses; and ULI MN/RCM Opportunity City Report -Richfield Appendix 1 Page 1 ~'~ enhance neighborhood character, such as sidewalks, traffic calming strategies, front porches, alley enhancements and open/green space. • Limit redevelopment ofsingle-family neighborhoods into other uses except where such neighborhoods are directly adjacent to commercial areas or areas adversely affected by major roadways, the airport, and other major developments. • Implement housing codes and support programs which incorporate state-of-the-art technology for new construction and which promote innovative and sustainable building methods that have application for remodeling homes. • Support initiatives which help connect residents with their neighborhood and foster a sense of community, such as block groups, neighborhood clean-up days, and cultural activities. Housing Goal • Ensure sufficient diversity in the housing stock to provide for a range of household sizes, income levels and needs. Policies: • Promote the development of a balanced housing stock that is available to a range of income levels. • Encourage improvements to the housing stock to better serve families with children and seniors. • Promote additional housing diversity to serve families at all stages of their life-cycle through assistance, incentive programs, and the exploration of possible partnerships. • Regularly review land use and zoning ordinances to ensure maximum opportunities for development of housing. • Promote the development, management, and maintenance of affordable housing in the City through assistance programs; alternative funding sources; and the creation of partnerships whose mission is to promote low to moderate income housing. In addition, the community land use policies that support connectivity, redevelopment at higher densities and housing that is tied to the growth of the city included several goals and policies in support of the community direction as identified through the comprehensive planning process. Community Direction: • Maintain the integrity and desirability of existing single-family neighborhoods. • Encourage ongoing maintenance and upkeep of residential properties. • Accommodate the development of up to 5,400 new housing units by 2030. • Support the renovation and expansion of single family homes which fit the character of their surrounding neighborhoods. • Promote continued affordability in Richfield, including the development of new low and moderate income housing units. • Focus new multi-family housing in Lakes at Lyndale and along major transportation corridors like Cedar Avenue and I-494. ULI MN/RCM Opportunity City Report -Richfield Appendix 1 Page 2 °l r ~-( Land Use Goal: Maintain and enhance the "urban hometown" character of Richfield. Policies: • Establish a land use pattern and supporting infrastructure that creates a "walkable" environment. • Maintain a housing supply that meets changing needs while sustaining the integrity of existing neighborhoods. • Encourage "green" building practices. • Preserve historical, natural and cultural resources. • Develop residential standards (scale, density, etc:) for redevelopment areas that creates neighborhood character. • Support commercial land uses that are diverse and responsive to their context. • Maintain and provide quality amenities and a safe living environment. ULI MN/RCM Opportunity City Report -Richfield Appendix 1 Page 3 ~~~ ULI MN/Regional Council of Mayors -Opportunity City Pilot Program Housing Audit -Framework -City of Richfield Establish aFramework -The first step in the housing audit process was to review and evaluate examples of key tools and strategies that are being used by the City in support of a full range of housing choices. Richfield staff completed an exercise that reviewed and evaluated these examples of key tools and strategies. City staff was asked to indicate the current use by the city, rate how well it was used in the city; and briefly describe its use. If the city did not use the tool or strategy they were asked to indicate the reasons why. The rating system was developed to understand the level of use in the context of local planning and action as 1.) proactive - to prevent and or provide early intervention into a solution to an issue; 2.) organized response -anticipating the issues and reacting to those issues or 3.) crisis response - by reacting to a specific issue and/or crisis. The following is a summary of the key tools and strategies and the city's response. a. Ability to Capitalize on Market Activity i. TIF (proactive -organized response) The city has several TIF districts, including scattered site redevelopment districts that support housing. These scattered site districts are associated with the Richfield Rediscovered program whereby dilapidated homes are demolished and a new home at a higher value is built. In addition, the city requires that 20% of any tax increment district funds generated from a project where no affordable housing is constructed are deposited into the city's housing fund. ii. Tax Abatement The city has not used tax abatement but may consider if the opportunity presented itself. iii. Housing Levy (proactive) The city uses their HRA levy authority annually to support development in the community including housing related activities. iv. Zoning Policies & Regulatory Incentives (proactive) Richfield uses PUD zoning to allow flexibility in density and site design. v. Other b. Generating Capital -leverage outside funding sources i. Tax Credits The city has not used and/or been requested to use tax credits. ii. Pre-development and Acquisition Funding (Proactive/Organized Reaction) The city has provided acquisition and pre-development related to redevelopment projects in the city. The city has also obtained grants from DEED, Met Council, Minnesota Housing and Hennepin County to support its redevelopment efforts. ULI MN/RCM -Richfield Opportunity City Appendix 2 Page 1 3r~ iii. State, County and City Bonding The city has not bonded specifically for housing projects. iv. MN Housing Funds (Proactive) Richfield markets the use of Minnesota Housing renovation and purchase programs. v. Local Employer Funding The city does not required and/or has a program for local employers to support homes purchases. However, the city provided tax increment financing for the redevelopment of a site that is the corporate headquarters for Best Buy. The increment is contributing the city's housing. vi. Housing Trust Funds The city does not provide local housing trust funds vii. Other c. Preserving & Recycling -local programs i. Preservation and Rehabilitation of Older Ownership and Rental Properties (Proactive) Richfield uses Hennepin County CDBG funds for home rehabilitation, markets an energy rehab program through the Center for Energy & Environment and funds a transformation loan program for large single family renovation. ii. Down payment assistance (Proactive) The city has access to state below market/longer term mortgages and down payment and closing cost assistance and funds a down payment assistance through the foreclosure purchase incentive program. iii. Renovation Loans and incentives (Proactive) Richfield provides incentives for investment in new homes in the city through the Richfield Rediscovered program, renovation assistance through the transformation loan program and foreclosure purchase incentive program. iv. 15Y Time Homebuyer assistance (Proactive) The City funds a Senior Housing Regeneration Program that provides gap funds to the Greater Metropolitan Housing Corporation for purchases from seniors that are renovated resold to first time buyers at an affordable price. v. Land Trust, Habitat for Humanity (Proactive) Richfield provides funding to the West Hennepin Community Land Trust and to Habitat for Humanity on scattered sites throughout the City. vi. Preservation Codes -Point of Sale, Rental Licensing (Proactive) The City has had both a Point of Sale and Rental Licensing Programs effective in the city for many years. vii. Aging in Place Programs (Organized Reactive) The city provides a small level of funding to the H.O.M.E. maintenance programs specifically for seniors and those with disabilities living in homes in Richfield. viii. Other ULI MN/RCM -Richfield Opportunity City Appendix 2 Page 2 ~~ d. Expanding Development Opportunities i. Support of Mixed Use Development (Proactive) There are several areas in the city that are specifically zoned for mixed use development such as Penn Corridor, Cedar Point and the 494 Corridor. ii. Development Guidelines (Proactive) The city has specific development and design guidelines for the Penn Corridor area. iii. Use of Publically Owned Land for Housing Opportunities (Organized Reaction) The city is considering the redevelopment of a city owned site for housing but the city has not proactively identify city owned property for housing. iv. Rezoning of Land for Housing Opportunities -Flexible Zoning The City has several areas designated for housing identified in the most recent comprehensive plan. v. Support of Higher Densities -Density Bonus Programs, smaller lot sizes, smaller street widths, cluster development The city considers specific request for higher densities through the use of PUD process. vi. Identification of Sites The City has several areas designated for housing identified in the most recent comprehensive plan. e. Reduce Red Tape in Support of Housing Diversity i. Zoning policies that support diversity in housing types The city has mixed zoning areas. ii. Expedited permitting and review policies The city does not expedite permitting. iii. Fee Waivers for affordable housing The city has not provided fee waivers for affordable housing ULI MN/RCM -Richfield Opportunity City Appendix 2 Page 3 ~~ f. Expand Efforts to Support sustainability at the Local Level i. Energy Efficiency The City developed and promotes the use of the green building/sustainability building guide. ii. Land Use Efficiency The City developed and promotes the use of the green building/sustainability building guide. g. Connect housing choices to jobs. and transportation networks i. Commute Patterns The City has excellent access to metro area transit, mulit-modal park & ride locations and several bike routes for alternate commuting. ii. Employment Connections The city is currently working to enhance this strategy. h. Help Residents Succeed i. Promote Homeownership -Homeownership Classes (Organized Reaction) The city markets available homeownership classes through the Homeownership Center. ii. Foreclosure Prevention (Organized Reaction -Proactive) The City has hosted several foreclosure prevention workshops and provides purchase funds for those interested in purchasing an existing foreclosed home in the city. iii. Crime Free Multi-Family Housing iv. Neighborhood Engagement v. Other ULI MN/RCM -Richfield Opportunity City Appendix 2 Page 4 3~9 Urban Land Institute Minnesota/Regional Council of Mayors Opportunity City Pilot Program City of Richfield Housing Audit Evaluate numerous factors that limit a city's ability to provide a full range of housing choices including: (Examples of factors as suggestions by Housing Policy.org). Information collected through discussions with Richfield City staff. Constraints on new development and redevelopment that prevent the market from responding efficiently to increased demand for housing • The City is fully developed and redevelopment is very time consuming and costly. • The cost of redevelopment and difficultly in securing credit associated with land assembly increases the cost to the end users. Therefore, creating affordable housing through redevelopment is very challenging. In addition, these barriers limit development interest in the City. • Due to the age of the apartment stock and older, smaller homes, there is limited higher value housing in the City. Community opposition to new development generally and affordable housing specifically The City residents in general are not opposed to new development. However, there has been opposition to the development of additional senior housing (currently 16% of the new development is senior housing) and high densities rather than opposition to affordable housing. iii. The deterioration of older homes due to neglect or lack of financing for repairs The City's point of sale program and a long history of offering renovation programs have reduced the deterioration and neglect of older homes. There is a larger issue with older homes being out of date and not functional for current families. It is cost prohibitive for homeowners to renovate rather than purchase a new home in other cities that have the ability to develop new homes. The City does not have any design standards for home renovation rather funds a remodeling advisor to help people make good decisions when considering renovation projects. The City's maintenance code is well established and complaint based. ULI MN/RCM -Richfield Opportunity City Appendix 3 Page 1 ~-/a The older, lower valued apartments are experiencing significant neglect and lack of reinvestment. This is a key concern for the City to address with redevelopment and renovation strategies. iv. Lack of coordination between housing and transportation planning The City has some of the best access to public transportation and a solid bus system. The City is very active in transportation planning and has park & ride locations, bike lanes, express routes and bus rapid transit lines. v. Difficulty accessing financing for various expenses, such as to rehabilitate older homes • The City HRA maximizes their annual levy funds and still does not have enough funds to adequately address the renovation and redevelopment of older apartment complexes in the City. • The City has success in securing Metropolitan Council funds, uses tax increment financing and relies on private and non-profit partners to address redevelopment in the City. vi. Shortages of land on which to develop • The City is 99% developed with some redevelopment areas. • Experiencing some large lot splits. vii. Low-density development patterns that constrain supply and make it difficult to build affordable homes This is not an issue but there is some resistance to high density redevelopment in established single family neighborhoods. viii. Activity by investors to purchase and "flip" properties for a profit There is some level of investor flips but not in this market and it is very scattered. ix. A proliferation of predatory loans and/or sub-prime loans that may not be affordable over the long-run • Foreclosure is becoming an issue in the City and the numbers are still increasing. x. Challenges faced by existing homeowners affording their housing costs ULI MN/RCM -Richfield Opportunity City Appendix 3 Page 2 ~-- i • Homes are relatively affordable and there are many homes where the households are aging in place. This creates longevity of residents but decreases the availability of existing homes for young families. xi. Insufficient funding for affordable housing • The City is 29% affordable and there is debate whether the HRA should use all of their funding only for affordable housing rather than maintenance and/or redevelopment. The HRA supports both and generally supports projects with a mix of incomes rather than 100% affordable. • There is a need to provide funding for redevelopment and renovation of older apartments but it is very costly. xii. Low wages There is not a large industry base in the City for head of household jobs except Best Buy. Households work throughout the metro area and may be attracted to Richfield because of its location next to major transportation systems, access to both Minneapolis and St. Paul and affordability of housing. ULI MN/RCM -Richfield Opportunity City Appendix 3 Page 3 3~~ a ULI MN/RCM Opportunity City Pilot Program -Housing Audit Richfield Program\Resource Questions (conducted via phone conversation) 1. Program Users: (Richfield Rediscovered Program User -Jeremy Larson) 1.1. Where did you learn about the Richfield Rediscovered Program? There was a sign at the property and then also looks on the City's website. 1.2. Why did you apply? Jeremy Larson has been a resident in Richfield for three years and owns an existing home in the City. His family was considering remodeling or looking to build a new home but also wanted to stay in the City. The Richfield Rediscovered Program provided funds the help make that happen. 1.3. Would you have built the new home if the program was not available? No. They were considering remodeling their existing home. 1.4. Were you considering moving out of the City if you were unable to build the new home? Maybe. They were looking into the cost of remodeling the existing home but the option to build a new home for their growing family (5 months, 21/2 year old children) was a better option. 1.5. Do you feel that the program is a good use of city funds and city staff resources? Yes. Great program to improve the city housing stock and keep the neighborhood home values stable. 1.6. Were you satisfied with the process and structure of the program? Are there any modifications you could suggest that would have made the program easier to use? Overall satisfied with the program. There is a fair amount of paper work involved but feel that this is warranted with public dollars and would not want to see a reduced amount of oversight. The subordination clause fora 1st lien on the property is not reasonable. No bank would allow their loan to be in 2nd position. The city ended up taking a 2nd position to the bank. 1.7. Would you recommend the program to friends and neighbors? Yes, Definitely. ULI MN/RCM -Richfield Opportunity City Appendix 4 Page 1 ~~-13 2. Policv\Community leader: (Camillo DeSantis, resident/community affordable housing activist; Susan Rosenberg, resident/HRA member; Susan Sandahl, HRA Chair). The following is a summary of all of their comments collectively. 2.1. Based upon your experience as a policy leader in the City, what do you see as the most pressing housing needs in the city? • Lack of upscale housing (larger bedrooms,' more space) • Need for more affordable housing -mostly middle income housing • Assisted Living and/or loft type of apartments with newer amenities are needed • Challenges of preserving single family homes • Redevelopment with higher density that is affordable • How to pay for redevelopment and reinvestment of older housing stock • Need for more affordable housing which has been challenging politically • More affordable family type housing -apartments for children. 2.2. Do you feel that the current Richfield housing programs and policies are adequately addressing those needs? • Yes mostly • However, there does not seem to be the political interest in addressing the affordable housing issue. 2.2.1. If not, what other types of programs and/or policies should be explored to meet the current and future housing needs in the city? • The Richfield Rediscovered program helps to achieve the housing issues but due to the high market values of homes, it is not an affordability program • New affordable housing is very expensive -multi-unit housing might be the only option. • Need a replacement policy for the future with funding for apartment rehabilitation. • The city mostly addresses ownership housing rather than affordable rental housing. • The Kids~a Home program helps to address affordability but the program needs to be expanded as it helps low income kids stay in school. • There need to be support for more rental housing geared toward families. • There is a need to help manipulate the market to provide low cost housing. Would prefer that 20% affordability be put into the project rather than the housing fund. Would like to see more funding going into foreclosure assistance, apartment renovation and land trusts. ULI MN/RCM -Richfield Opportunity City Appendix 4 Page 2 3~~~ 2.3. What do you consider to be one of the most effective programs that the city currently offers to address the housing needs? • Richfield Rediscovered and Transformation Homes programs that helps to get people to stay in the City. Targets middle income households. Both programs need to be expanded and marketed more effectively. • There is a ripple effect of these programs -other neighbors renovate as well 2.4. What demographic changes in the city are you observing as a policy leader/housing advocate? • Increasing minority population that does not speak English. Greater need for outreach to this population to understand their needs. • Extended families observed on the east side of the city -there are larger space needs than what the homes provide. • Poverty increasing, increase in Hispanic population, lower educational attainment • Elderly population increasing • More singles • Mostly retail jobs in the city - how do you house these workers? • More people of color • Do not see multi-generational families but more non-traditional families • Need to understand that the definition of family is changing. 2.5. Other comments • See that the people living in apartments are immigrant families, people who have foreclosed on their homes and young professional singles • Need a continuum of all types of housing • Need to increase the variety of rental housing -all the same currently • Outreach to the immigrant population on city programs and need/requirements for home maintenance • Struggle to do more with less • It is critical to have a strong relationship with the school district and build a coordinated strategy to address home and school stability and reduce transition and turnover. There is an opportunity to build this relationship with the new school superintendent. • Concern that the 494 Corridor plan and vision will eliminate apartments without considering replacement of these residents. • Penn Avenue -park and ride area redevelopment -could lose affordable rental housing • Would like to see there be a guarantee of 10% affordable units within all new developments • Staff resources should be directed toward the lower, less affordable market rather than developers. ULI MN/RCM -Richfield Opportunity City Appendix 4 Page 3 3-~ ~ ~ • The Richfield Rediscovered & Transformation Homes programs are for the middle and higher incomes rather than low incomes. • Would like to see the effectiveness of these programs and time spent by staff. • Need to evaluate senior housing with affordability - what is the need? • Connection between the schools and city should be strengthened. Does redevelopment reduce family housing? • Seniors in the city are getting poorer -would like to see the data on this. • Would like to see more life cycle senior housing developed. (independent -assisted living) • Would like to see the city have a coordinator who works with the community both internally and externally. The human service coordinator is not getting out into the community. Would like to see them work with the apartment residents to understand their needs better. • Great community development staff -young and energetic. • Keep the social service connection within community development. City manager seems to have a good handle on this issue. ULI MN/RCM -Richfield Opportunity City Appendix 4 Page 4 ~-l~ 3. Program Administrators: (Rick Regnier, Building Official; Dave Schaeffer, Remodeling Advisor; Jim Graham, County CDBG Program Manager; Suzanne Snyder, GMHC) The following is a summary of all of their comments collectively. 3.2. How long have you been working (servicing) the City of Richfield? • There is a long term service commitment in the City from 1993 to 2005. 3.3. What are the most common home renovation/maintenance items that you observe? • Adding square footage to the homes such as garage, kitchen, bathroom, great rooms. Adding more functional spaces • Windows, siding, insulation, basement remodeling for extra bedroom and bath. • Roof, plumbing, heat and electrical upgrades 3.4. Are the financial programs provided by the City of Richfield able to address those most common renovations/code violations? If not, what other types of programs might be helpful? Yes, Hennepin County funds, transformation home loans, energy efficiency loans Do not get involved in the funding programs and generally do not know and/or refer people to those programs. Would like to see more matching funds for lead abatement -rigorous process. 3.5. Is the funding level of the City of Richfield programs sufficient to address the housing needs that you observe? • Answers ranged from do not know to there are more needs than funds available. 3.5.1. If not, what are you not able to address because of lack of funding/resources? • Failing mortgages 3.6. In general, what is the-most common household types you have observed through the use of the programs you administer -families with children, empty nesters, young professionals, older adults, other? Majority are younger families raising elementary school children and making decisions about renovation or moving. Do not observe older adults and professionals. ULI MN/RCM -Richfield Opportunity City Appendix 4 Page 5 ~~17 • More families in rental housing. • Single women. 3.7. What demographic changes are you observing when providing program service to Richfield residents? • More older adults • Mostly younger families • More minorities 3.7.1. How do you feel this change impacts the type and condition of housing in the City? • Some people complain that they are not able to pay for their housing costs resulting in foreclosures and electrical utilities not being paid in apartments. ULI MN/RCM -Richfield Opportunity City Appendix 4 Page 6 ~~t L 'a ~ ~ ~ ~ H tea` o~ aR ~ _ O ~ t V iN+ C Q ; r ~ O 'c Q. 3 ~ w _ ~ d Q 3 .r.. d o ~ d d J N ~ i L _~~ .~ ~ 0 V =c°v~~i~ 3 ~L V W 0 a d _ d ZQ,~t=m ~ H V' Q 7 O O m a ~ c ~ o ~ o c m c N f= ~• O ~ ~ .t.. ~ C O E 6 Ow f a 0 N O C- N dN C f6~ N ~ L O N O > O~ O X Q O N Y ~,'~+0+ a O O o C O U ~.N+ ~ C ~. C c6 N ~ 0 >+ O N 3 l0 _ i fl' R T U O ' N U2 `~ y ~ O N cO X-»' C O ~ O C d N C QJ •~~o •e m C a .o o~o~~; •~ c=~~ ~c ~ y n ' " Q o ~a•LQ S c Q N S~ O ~ p~ ~ ~~ N O V c O Q ~ O + '6 N . ~ N t ~ C . . C L 3 N ~ p O N yaw ..-. 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O ~ i ~ ~ ~ ~ G! t ~ O ~--~ ~--i ci ~ ~ N 111 c-I fYl N N r-I c-I ci O O O ~ M M U z = ~ ~ ~ o 5 ~ Z ~ o~ N m cr ~n ~o ~ oo rn o~ N m~ ~n ~o ~ o~ ~ rn rn m rn rn rn rn rn rn rn o 0 0 0 0 0 0 0 0 ~ v rn rn rn rn rn rn rn rn rn rn o 0 0 0 0 0 0 0 0 } ~ ~--~ ~--~ ~--~ ~ ~--~ c-I rl ci ~ N N N N N N N N N ~ ~ ~ s ~ ~ ~ ~ ~ o s oo *' o o a ~+- N ~ d ~ 0 ~ c 3 ~iD a~ '~ z ~ ~ o c ~ co a ~ ? v ~ a~ ~ 0 o ~ ~ ~ ~a a, a~ ~ ~ '~ -a o u, ~. -a s ~ v ~ ~ ~ vi ~ N O L O i = O C .~ O ttA ~~ i ~ ~ L N ~ ~ _ ~ ~ _N i ~ ~ U ~ N i by 'CF, O 'a fl. d ~ ~ > ~ O U ~ ~ C ~ ~ fC ca U +'~-' t i v ~ t t s *'' +r +~ c co ~ •- ~ -° o °o 'v a, t s _ ~ c o s . wo *' 'v o ~ ~ ~.. ~ tin _ _ -a ~ c=o c ~ ~ ~ 0 ~ s c ao +r i 7 '~'~ ~ O C t ~ ~ ~ 3 ~~ ULI MN/RCM Opportunity City Pilot Program -Housing Audit Richfield Program Evaluation Summary -Appendix 5 The City, through its Housing & Redevelopment Authority (HRA) offers variety of housing programs. These program were evaluated by reviewing, when data was available, the following: • loan grant) activity - number of loans (grants), amount of loans (grants) • number of residents served, median income levels • value of improvements • property value increase • staff resources level -high, very staff intensive (5) to low, limited staff time needed for program (1) The following programs were reviewed and are summarized below. Additional background information on each of the programs is attached. • Home Reinvestment/Renovation Programs • Transformation Homes • Richfield Rediscovered • Energy Advantage • Programs specifically targeting affordability • Stability of Children -Kids @ Home • County Deferred Loan Program • New Home Purchase -New Homes Program • Foreclosure Recovery (new effort - 2008,09) • Down Payment, Closing Cost Assistance • County Neighborhood Stability Funds Programs Target All Income Levels: Annual HH Income Limit (family of 4) szoaooo :~~oo,ooo o~.ioo ra oo a,soo ;ra sco ;ac,soc p v. . _a a~ e .ate O' M t•` z ti¢~ of " p' ,~~ ~ `off a a kz~~ Q'L, ~,~~L c~ e a `~ .T ~~ ~ cl`'~ '+~~~ ` c f p QP T' ¢~~ ~ a . . ~ E~ Income Upper Limit (AMI) zoa~a zoos. .. ii ~.~ so~~ soe.,, so•~~ so~~, T~V c rno~a~¢ tiD~~ oQ03F o,P`Pa. ~o~e ~y e``e~~e vPa, aac F e` e~y` ~ay~ o ~o Lc ,~cc eyed `tie ~o`~ 5 F` Q' ,~.,ac' 3--y~ CDBG Deferred Loan Program • The program serves lower income households with the majority of the loans issued to those who made between 30%-50% of the area median income which is equal to approximately $25,000 - $40,000 annual income for a family of four. Distribution of Total Loans Issued by income <oscanni ^ 30'o- 504% • More average loans issued per year prior to 2000 • Could be a result of less funds available or that the city administered the program in-house until 2005. The program is currently administered by Average Number of Loans Per Year 30 ~~"..' :>~~ ~ ~ a ~~ I~~akN ~ '~- ; o~-yy ~~ ~ ~,. ~~:~ K ""i` ~ zooo-zooa zoos-loon k, 138 the County. • Currently there are funds available for new loans Transformation Homes - (93-08) • Average of 9 Loans Per Year • $1.6 million public investment for almost $10 million in private improvements - 10 to 1.6 ratio of return on public investment • Average public assistance of $11,000 for an average of $65,000 in value of improvements • Targets young households who want to stay and grow in the city. Accommodates a growing family and/or those who desire modern home amenities. • Increases city tax value and regenerates older neighborhoods. The average home value increase for taxes is approximately $5,000 Richfield Rediscovered - ('90-'08) • Average of 5 grants per year • $70,000 grant per home - ($50,000 `90-'04) • Based on 2008 transactions there will be an average of $181,000 increase in home value per property redeveloped • Average of 122% increase in value • Option for young households wanting to stay in the community and own a new home • Increases city tax value and regenerates older neighborhoods ~3--- y I Kids @ Home Program 26 families on the program in 2008 Assisted or are assisting 49 families since 2004 Number of Children Assisted = 55 in 2008 23 families have gone off the program • 10 families (43%) received more/add'I income - no longer needed rent assistance • 5 families (22%) received permanent subsidized housing • 3 families (13%) purchased homes • 2 families (9%) moved out of the state to be near other family • 1 family (4%) removed from program for failing to follow program guidelines • 1 family (4%) had youngest child graduate high school, no longer eligible • 1 family (4%) completed the three-year program Key Findings -Three Home Service Providers Serve Richfield Residents 1. Center for Enerey & Environment - 2008 Summary • Administer the HRA Enerey Advantage Program - 4 loans/$1,000 HRA Grant = $4,000 total assistance - $15,000 in private improvements • Processed 14 other state housing loans = $159,000 • CEE's administrative fees are covered by other agencies or through a processing fee paid for by the loan recipient. 2. Remodelline Advisor - 2008 ($6,000 annual HRA investment) • 31 home visits ($194 per visit) • 48 calls • 18 informational packets sent • Total 97 services ($62 per service) • 14 building permits issued for renovation work on properties that received remodeling advice which is 45% of the total home visits in 2008 • Assistance similar to 1 staff person for construction and remodeling advice 3. GMHC - Housine Resource Center - (2008 - $7,000 annual HRA investment) • 39 construction consultations ($179 per consultation) • 79 residents served ($89 per resident served) • Total of 118 services ($59 per service) • 2 Minnesota Housing Loans closed • Assistance similar to 1-1% staff members for financial and construction advice s V 0 i O OC d! taA ca t V V t f6 i 4A O O 0 • 0 N i a ~ V ~~ ~ ~ =~ ~ ° o N ~ ~ N ~ ~ ~ I o N ~ ~ ~ X i O ~ }' W N o ~ ~- N ~ _ ~ ~ z V a U J J U x 0 0 N 0 ~+- O Q- i 4J ~ ~ C ~ a~ v o ~ o 0 0 ~ ~ O _ L ~ ~ N ~ v O ~ . 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C ~ C ~ N G ~ y ~• o o ~ ~ v a a a m m d m ~ a ~ ~NVOG.-r-o o oe ~ ~ ~oNOO.-~o~ ~ ~ ° of J rn O ~ ~ N ~: L u ~ W y ~ Ali ` N N 4 '- O O L r• N ~ ~ q ~ C ~ di t;. N O O w N w G r ~- N r- ~ v ~@ V fV G ~ t S ''' /G N e ~ O C w ~ w V C x A G 0 ~ O O G~ rG N ~ 4 qF M ~ Y S, .- N O ~ ~ 'n ~ r, ~, M .. o a ~ ~' ~ cv a ~ s ~ ~ ° u ° o s ~ ,s~ ~ ~ N di O .- r) G O O~~ ~ N o ~ y V .- N O O N~~ ~ ~? d .o ~ cu w ,v_ v ~ ` ~ ~ v ~ „ _ m " ~ _ m a °' C v N~ O G G cp ^ ? a m m ~ W 43 O ~- O eQ^~ N O ~ °~ G ~. -. L W ~~ t W U j O ~ M 0 0 0 I`- Cri M ,0 u ~ f~ v O G O N CD ~7 Q „p a V ~ N 61 V ~ a ~ N N r N 3 e d ri z ~ a in ` ~' O co r~ m ~ O v o~ M (O ~ u, Cfi rn o ~ W r' O M I~ W G r• v N cG M B Ot Qt r- ~ ~. t ~ N fir,. c L ~ ~ ~ r• M 4; ~ d _ w 6 m m U U T ~n ~~~cNMnG Nt~ ~ G'' ~ r te, - ;oaN r n ~ 4 ~ c ~ p d 6 c a ~ w ~ L 4 N ~ N ~ G: ~ ~~~ ~~ 'o _ ~ N r ~ 3. N C _ _ c n 6 c r c v_N ox a~ ~; m y~ O .C Gi ~ C r m O O '~ ~ ~ 41 a ~ Q% ~. ~ ~_ `_• m r o c v_h a= °i y m ~ N O L di C C- ~ O _ 4 U c: ~ ~ N t . ~ }~ O ~ 00 ~ N vi N- .~ N ~ U ~-' ~ O ~ ~ v ~ ~ ~ ~ o ~ v N ~ O ~ v N bA N a~--+ - ~ ~ ~_ ~ O •~ ~ ~ .Q ~ ~ Q ~ a--~ ~ ~, ~ a •v U ~-°~ o O ~ ca +' L T ~ N Q ~ ~ O fp 4A ~ ~ W C N N aj N ~ ~ ~ ~ '~ N U ~_ to ~_ v~ O ~ p -a ~ ~ s o a m ~ ~ N ~ ~ ~ ~ O •v O ~ S .~ _ O +J tB s o a N ~ ~ a ~ ~ v ~ ~ W ~ O ~ •ra +~ ~ ~--~ ~ l^ ~ ~ 0 ~ O M ~ O C ~ _ `c_-I ~ ~ ~ ~ ~ O O .O 41 ~ ~ ~ ~_ ~ .- ~_ O N ~ ~ ~ m ~ U O U a-•+ O O ~ ~ t N m ~ -O ~ ~ }, L ~ J ~ N ~ ~ O ~ V O ~ ~ V •Q ~ ~ ~ N H O v v {/1 N ~ ~ ~ •0 C p ~ ~ a Q O ~ U _ ~ ~ ~ LL ~ Q1 ~ ~ c o ~ Y ~ ~ ~ cYn ~ N ' ~ ~ ~ ~ N ~ ~ C U N (6 i N :~ Q U to O O /~ LL O ~ ~ ~ ~ C •L ~ O •~+ ~+ ~• Q ~ ~ ~ N^` W ~ ~ U :... ~ ~. N ~ ~ O ~ O `~ N U ~ ~ ~ ~ ~ O H ~ ~ p 'C ~ O +.. O ~ ~ - ~ ~ Q 0 ~ ~ O f6 ~ N N ~ L ~ ~ ~ C - ~ ~ (B _ C ~ ~ O ^` L ~' ~ ~ O ~ O ~ O U _ `~ ~- o ~ c°n ~ C ~ ~ ~ d p ~ N ~ ~ U O z ++ ~ O U Y O ~ ~ (6 .C ~ C ~ ~ ~ ~ ~ ~ L O ._., O ~ _ J aW ~ ~, a~ ~ ~ ~ ~ as ~ ~ ~ ~ ~ ~ ~ +~ + ~ ~ O O L ~ ~ U ~ ~ L _ W O O ~ = ~ ~~ O O ~ ~ O ~ /`~v` iO.f~ ~ 0 ` ~ V/ ^ , W 0 Q ~ O N ~ ~ ~ ~ N 5 ~ Q V ~ C N ~ p L ~ G V ~ ~ ~ ~ ~ . ~ ~. ~ ~ ~ ~ ~ O ~ ~ U ~ ~ O V to ~ h ~ ~ Q U ~ U ~ ~ U ~ •Q ~ U N O ~ ~ ,c cv ~ C }i G ^ ~ L ~ `~ ~ (a ~ ~F C) a~ •° ~ o ~' ~ c ~ ~- ~ o ca ~ ~ O N ~ V N ~ O N ~ ~ N ~ > ~ O U ~ ~ ~ O O U N ~ ~ '~ ~ ~ V ~ N ~ ~ L ~ ~ ~ ~ ~ ° O ~ f~ ~ fA ~ N ~ ~ ~ ~ ~ ~ ~ U (6 O Q ~ 0 3 .~ ~ ~ ~ U ~ N N ~ U _ ~' m J ~ ~ N ~ ~ O Z can `~ N Q- ~ ca ~ O O ~ N N c~ ~ N ~ ~ ~ ~ ~ H ~ ~ ~ a~ i O Q O O N Q~ ~-yz Q O ~ O ~_ L ~ ~~ ~ O ~ c Q ~ i O C ~ ~ O ~ O o ~ ~ ~ ~ ~ U O C~ ~ Y o ~ ~-~' U ~ U c U U ~ ~ o ~ o ~ ~ .> ~ L ~ ~ O o U U U -~ ~ ~ •N O O Q I > O O ~ ~ I U Q O •"= U ~ ~ co L X O V ... L .r O N ~ W ~ Z ~ ,~ ~ C O U +~ ~ d ~ Y ,V O N N U J C L ~ ~ ~ ~ ~ U ~ ~~ C7 ~ m ~ U ~tS • • • • • rn 0 N M a~ ~-- ~ 3 ~~ C r=~ L O a N ti r N O to N c O O _ ~ ~ N ~ O O Q ~ > p ~~ ~ L O U ~ O :~ ~ ~ ~ ~ to J+ U ~ f6 ~ ~ O L C ~' 4- O O ~, `` ~ ~~ ~ N ~ ~ Q f~ •~ N ~ O U ~ O QJ O O) ~ ~ ~ >, .~ ~ ~ ~ ~ L O ~ ~ ~ c cn = ~ ~ cn N ~ ~ O U -a ~ ~ U ~ C O ~ ' O Q ~ U ~ ~ N ~ O ~ ~ c~i U ~ ~ Q ~ cn ^~ W N O A ~~ O ~_ O N f0 N ~~ VI C c~ J • • • ~^ L N O U m J N ~ N ~ N "~ ~ N ~ O C ~ = O O ~ '~ ~ ~ ~ L ^C` UI ~ ^ ` ~ ~ W ~ ~ ~y •~ W ~ (Q ` ~ ~ O Q O ~ ~ N Q. ~ O :-- O " a N O m A ~ .~ }~ ~ C ~ T S T E V V L c6 O O ~ - T C O ~ O ^` / W ~ O~ /1 ~ / ~ O ~ N H O ^, W 2 J ~ ~ cB ~ C N (6 O .-% V ~ U ~ O L N C v N~ O ~ C ~ N ~j N ~ ~ N ~ . ~ O ~~ ~ ~ (Q _O ~ Q(II o ~ ~ ~ a~ ~ Q- Q c ca ~ ~ N ~ ~ ~ O ~ ~ O 0 ~ 0 N N~ N ~ U C ,.... 0 ~ ~ N C O Q O O ~ p .~~ ~ 0 U L ~ to N ~ ~~ L ~ •~ O . O ~ ~ ~ O ~ ~ O ~ ~ Q ~ ~ C~ ca ~ ~ _ ~ C ~ to ~ cn ~ U a> d N 3 -- ~ 't ++ O i N m ~II d C L O a 4- O C L C'! f~ s O N N O N C O a~ L , ' N 9' I F' - 1 ~ . ~ ., } ~ w ~ .. i 'a 7'.= ~. 141~CU ' 1 L i ~ ~ ~ r¢ ~K ~ fr. .~ .. ' '~ + C It ~ t ~s~ ~ 1 ~• i _ =~ ~~~~~: ~.. ~ ~ 1 1 w~ .. ~ + u l 1 ~ ' rte-. .. ~.. ~ i 1 i ~ i i _ ~~_ , . _ ~ .~.. _~... ~- e. ~_.~ _. ..._. _. _ .. .. . ' ' i ~ j r ' - i N ~ :: ~ - ~ ~ .. ~ q i ._ ~ -'_ -~ ' C i r ~' .~ ~ to C C - ~ ~ ~ O N ~~ ~ ~~ O . _ U ~ C ~ .~ o N L O ~ ~ ~ C m O ' ~ ~ ca ~ "' N O fB .. . ~ O ' O ~ i ~. N ~-' to U U O O ~ ~ O ~ O ~ ~ c0 ~ ~ N O O > O Q ~ N f6 ~ O -p ~ U ~ ~ ~ ~ to C O O O O U p ~ ~ 00 ~ ~ O ~ O S O O N O ~ C ~ O •V -~ i ~ i ~ fn C ~~ ~ N U > C Q (~ Q U O N L (II Q M cn O •- rn ~ 0 C _ 0~ ~~ O O UU i Q L ~ ~~ ~ ° cn °~U N C O U O H J ~ O ~ • O . . O O ~ ~ O X ~ _ (n ~ O L n l ~ e W aV U~ ~ ~ (a A ` A (Q ~ ~ p ~ L Q C ~ ~ L n ` ~ ~ ~ O O N ~ •... ~ N ~ V Q ~ O j ~' O O ~~ C O • ~ O ~ :~ U ~ N ~ ~ tQ O N ~ ~ C ~ ~ Q ~ •N N ~ ~ ~ fQ ~ ~ +. - ~ (a ~ O ~ O O O p Y ~ O ~~ N 0 0 ~ ~ O ~ v ~ ~ ~ > ~ c n ~ N ~ O ~ ~ ~ •~ ~ ~ ~ ~ O C N V ~ ~O p 0~~ ~ ~ 0~ ~ `v ' `v T • O ~ L ~ ~ ~ "_ C O ~' cn O ~ O c6 ~ U Q ~ ~ ~ .N c ~~ ~ N Q~ p N O ~ O o ~ ~ ~ ~ o a m ~ L c~ ca ca Q ~ ~ ~ °' O ~ cOn °~ ~ ~ ~ c4 ~ Q C6 ~ O O I- ~ O N C~; a~ d M 3 -~y s _~ ~ N ~ '~ ~ w N ~ O N p ~ ~ +-+ ~ ~ ~ U ~ +-- ~ ~ ~ O N (Q ~ '~ N ~ ~ O ~ ~ O ~ ~ _ ~ ca ~ N ~ f6 ~ ~ (6 N ` ~~ O ; ~ O cn L ~ cn O N ~ % ~ ~ ~ N ~ ~~ c a C (B ~ - ~ ~ ~ m "_-' ~ ~ ~ ~ O ~ O ~ CV ~ U N ~ Q ~ ti ~ N ~ .~ N ~ ~ ~ ~ O p U O O C~ > p O ~~ O ~ ~ c6 N N ~ ~ ~ ~ ,Y .- ~ ,~ N t ~. ~ •C ~ O ~ O L ~, ~ i O r- C O O~ ~~ (B N .«. i_ ~ (0 ~ O ~ E C N C O ~ ..~ U O ~ • ~ ~ O ~ N (B ~ ~ O N (a ~ ~ co N c ~ O ~ ~ N O >, .~ ~ U N ~ C O~ - ~ ~ Q - }. L fQ O O U ~ ~ ~ .- .• ~ ~ N ~ ~ ^~ N ~ p -~ = N -a ~ -~ (a ~ ~ ~ N ~ (B ~ O ~ C f0 N ~ a~ ~ ~ ~ ~ ~ 0 0 cn ~ ~. O ~ ~ Y U cv ~ ~ ~ ... ... ,Y ' in ~ ~ ~ ~ i ~ O ~ U ~ ~ ~ ~ ~ >+ ~ 3 ~ N O ~ L ~, O ~ Q L ~ ~ c c ~ C ~ ~ N O ~ ~--' ~ +--' ~ O C ice"' ~ . N U ~ ~ ~ ~ (~ L (/~ ~ LL ~ ~ O ~ f6 "O ~ Ca ~ ~ ~ ~ '~ ~- C ~ ~ W fQ ~ ~ to ~ fn ~ ~ ~ Q ~ O U fQ ~ O ~ V VJ M _o N ch d' 3--~~v .. 4 ~ ~__LJ :Its r' _ ', ~ oI " f-~ b J 1 l u!., v l av= s _ ~. --~ J'niitui -s - I-~ ~ I -FIJC SS 'lt FYt •_ --_ ~. .- :• ue:n n~ we : ' ~ - I~I~I' ~ i I I ~~-j ~ ep ~-~- -rl-o - _ F!.-.. II ' ~. ; ; .i, I ---'YL i-_~ t -ice .~ I I 4. r ~ ' I ~ iiilPCRI ~il I I +. f I.l :~ I T"I-~i µl ~ ~ ~~- .. H~pLt174 a ~ ~ ~ ~~ yy~~~N I ~'> ~14 .I li I ill. ~ `~~::~~~ 1 .J -_ t --. ~ . I ;I~; -:7 - _iv~ ~ i I ..' K 7 4 I` .I ,~ I °l 1` II1111- -' I •--__ ""I CliIIz 14^.bn'nve"~., - - ~14 .t •,,~ ~._I ILIJ_._i..~ll _. .i f~ ~ .. )~'S~ .. a:_e~ _ - - O d ~ U o ~4Y }~.4I W •y L rn O O ~ V C .~ A J fn N "~ C _O ~ ~/j U ~ N (6 ~ ~ N ~ ~ O ~ _, (0 O O ~, O N O ~~ VyJ ~I W N ~ V/ W W V O O C U O ;C >, N. O N~~ 0 O ~ (Q ~ ~ f0 O N U p U _ U ~ O ~ ~_ ~C to ~ U ~ ~ ~ ~ ° ~ >, ~ ~ •- (a - U ~ ~ O (a ~ N O Q N ~ ~- ~ ~ ~ ~ "- N (B ~ - tq N ~, U O ~ . ~ ~ ~ ~ .,.. C X ~ ~ ~ Z Q C ~ ~ ~ N L 'N ~ ~ - O V "'' ~ ~ ~ ~ N ~. .O U U % ~ ~ Q N ~ O N ~ ~ ~ ~ ~ ~ O f6 (Q (0 (6 L ~ ~ N C N U ~ V- N ~ N O to .N ~ ~ c ~ o . `-. O N ~ ~ - ~ > c O ~ .o ~ ~~ ~ ~ N c~ > .~ ~ N C ~ > > ~ O ~ ~ ~ O O ~ _ -O ~ N U f6 U cCS J to ~ O >, ~ > C >, ~ ~ Q Q ~ Z ~ Z ~ Cp C~ . ~ ~ ~ O ~ '~ U ~ ca C a~ O v O H J a~ ~ ~ C ~ > ~ U (~ o ~ ~ ~ o ~ ~ ~ Q~ ~ ~ O ~ . ~ fCf ~ (B ~ C ~ . N ~ ~ ~ ~ ~ > ~ Q ~ Q~ Q ~ ~ i ~ .~ ~ ~ o ~ ~ O ~ ~ • ~ "" Q ~ U N O ~ U N Q O 0 0~ • U) L II) ~ L ~ ~ ~~ -C . ~ L -.-. (4 ~ (6 N ~ (B U ~ N ~ ~ p ~ ~ O1 i~,V •O ~ ~ ~ to ~ ~ ~ N O ~ O Q QL O ~ ~ U m N • • O ~ ~ .~ • ~ U _ U ~ .- N ~' N N ~- O ~ I O ~~ N (~ ~' ~ ~ Q N ~ ~ U C ~ ~ ~ ~ ~ > Q ~ ~ p ~ U ~ O . ~ O U ~ O ' ~ ~ ~ ~ ~ Q O ~ ~ Q- L (0 N O ~ ~ + O O _N N X N ~ ~ ~ ~ ~ ~ C O O J ~.x ~ ~~- N ~ L O p (0 ~ . . ~ O W ~ ~ ~ O ~ .N fQ U ~ ~~ ~ ~ ~ ~_~~ ~ ~ U ~ ~. > U > RS • rn _o N m ~~ d Q 'C a N ~_ O U U z J 7 0 M L O ~_ s 3 = ~ •~ ~ c~ _ N ~ ca o ~ ~ O ~ U rr ~ O ~ ~ N ~ ~ N ~ O N = O i ~ N `~ O ~ •- U ~ U .N V (6 C Y_ ~ .« N~ ~~ (n L O ^_`` 0 /\ ~ ~ O \ W N ~ ~ i o ~ ~ N ~ U O ~ ~ ~ ~ tom!) ~ f3 ~ f0 Q" - V N ~ N ~ '~ N ~ ~ ~ tQ ~ ~ ~ Q ._ O Y O ~ (~ +r ~C _O ~ L C D O U O~ ~ tQ Q ~ O f6 LO ~ ~ - "- ~ U_ N ~ C >+ ~ ~ O "'' N~ O O •N ?j f4 t6 ~ O N ~ U Y_ V w- ~ LO = ~ O ~ ~ .~ ~ ~ ~ U >+ ~ ~ N N ~ ~ ca N •c ~ O C _ L +.+ ~ ~ C ~ ~ ~ ~ ~ ~ L O > +O+ O N ~ Q fC ~ N ~. O '-~ O = ~ ~ E E N .V N •N ~~ O O Y O= O~ O O N ~ ~ O ~ U ~ ~~ ~ C~ (l5 N N U i '~ U O ~ ~ ~ L ~ N O N i S O N to ; ~., O ~ N ~ .~ ~ ~ .~ ~ N N ~ N N ~~ O O ~ N ~ ~ O t/~ O ~ f~ •U ~ co N ~ O ~ ~ ~ N ~''' ~ ~ y C1 V ~ >' N O ~, U Q...~ ~ 0~.~ C Q~t-+t-+ N,,,., O ~ O N ~ QOM O~ fq ~ N O L C ~+ L L ~ ~ C Y O= N~ O - U ~ ~ ~ ~ ~ ~ C U ~ U E ~ N ~ ~ ~ ~ O O O vi N c4 N ~ x x x a? ~~ ~ c E.a ~ N ~~ ~ c ~ c ~~c rn ~. ~ ~ U • • • ~ • • • • • • ~ • • U ~ • a ~ ~ N ai d' ~ co E rn 0 N M a~ n. m `~ c c~ O O t U N N C N N V .~ ~U O N L U C U N O Q X U ~ ~ N N A~ L U ~ ~ O L U ~ ~ ~ ~ +6 c4 ~ ~U U U N O ~ U O ~ .~ ~ j O Q C N y ~ •U ~ t U Q N ._ ~_ Q~ N N t O U N N O N t C N ~^ i O .k N N U .Q C N O O Q Q N O ~ ~ ti U L O i ~ L ~ ~ o ~ o ~ ~ I ~ AA`` i ~~ ^` ~1-/ W U U .F C N ~ _ ~ \H ~ ~ ~ ~ O ;_, ~ N N ~ ~O O N N ~ ~ U U ~ ~ Q ~ t U ~' ~ ~ y ~ C ~ 'a N L ~ ~ U C W c m o ~~ ~ ~ L 0 ~ ~ (a L N C ~ ~ ~ ~ t i. O N ~ U ~ ~ `C N _~ N C ~~ ~ ~ ~ ~ Nc L C C O i V O O C O ~ ~ N ~ ~ ~ N U ~ O O ~ N L ~ _ U ~ U ~ +r s. ~j( '~ j N U ~ ~ ~ ~ ~ ~ ~~ ~ N ~ ~. L 0 N ~ Q. ~ Q L Q ~ .O .~ ~, L (~ U N ~ ~ ~ Q U ~ ~ O N ~ O +~-' ~ N ~ C c0 L C ~ N ~ N O = 0 ~ f~6 ~ ~ _ ~ N ~ > .~ N L' ~ ~ Q~ ~ L ~~~_~ C O N O N ~ ~ ~ N U~ O O C N ca ~ ~ N K L Rf U ~ N (6 O i Q ~ ~ ~ ~ O U t6 N O N N Q N ~ y-+ ~ ~ t N ~ N ~ ~ O ~ L _ a~ ,~ .U Q Y N ^~ ACA`` i W C N ~ U `~ U O ~ ~ O U L ~ O N ~ ~O •~ Q = O ca C N C W ~• N Y .C C .~ ftf A~ W N L N ~_ Q O N c f~ N .O C O N O f~ U Q O N 0 c O N .~ ~X C f~ C .O O U C y N .a c ^U^`` ^~^ `^~ i N N cB U .O ^U` W N N N N .; O O C :r .-. ~ (B O ~ N ~ O U N ~ Q. ~ L ~O ~ U ~ O C ~ N ~-. N N = .~ N ^,~ L _~ ~ ~ ~ ~ (Q N .~ N ~ Q ~ o E °' yam-' X N N ~ "r N ~ O f6 ~ ~L C •O-+ ~ ~ C AA`` ~• W W U ~ O ~ O .~ ~ ~ _ O O ~ ~ N .~ c~4 N ~ U ~ ~ O ~ ~ N ~ N N O O U A• L N ~ •~ Q .~ O • • • • C O Q ~U Q ,O Q U L O ~~ U U. N U C W r U O U j ~L O N O O O ~ ~ ~ U U N ,~ ~, O ~ ~ ~ C O C ~ ~ ~ U C C [C _ ~ CC ~ Q ~ • '~rn o IN I~ M ~~ d ~ ~~ Program Evaluation Model Evaluation Model for Program Effectiveness: Providing a method to evaluate how public funds are being used has become significant and instructive in recent years due to limited financial resources and increase public scrutiny. In addition, setting performance targets and tracking the progress of the programs against benchmarks will provide a level of understanding to government officials that become critical during the annual budget process. Cities that incorporate meaningful measures of performance within their housing plans realize significant benefits, which increase as the system evolves and improves. Performance measurement can: Strengthen decision-making at all levels. Timely and relevant reports on performance lay the groundwork for sound decision-making. In addition, performance measurement systems enable decision-makers and staff to diagnose the lack of performance, identify and address causes for lack of performance, and track improvement. Enhance program outcomes. Performance measurement helps provide focus on achieving results. Effective performance measures should be directly relevant to the program goals. • Improve communication of outcomes to key audiences. Quantifying achievements and the impact of the programs helps to demonstrate positive results to both public officials and residents. Each City program should include a specifis goal over a period of years. The goals for performance measurement should be quantitative (numbers) and measurable. Evaluation of the goals should be done consistently both in time and with the same method of evaluation. The following is a sample model that can be used to evaluate the performance of existing and new programs understanding that in some circumstances a qualitative (comments, ideas) nature or public policy issue may skew the quantitative performance results but still achieves the public interest and overall goals of the program. 11Page ULI MN/RCM Opportunity City Pilot Program - Housing Audit ~~o Suggested Evaluation Model .Program Coal ~ Evaluation Performance Improvement Sample Method (results) Methods Low interest Provide xx Review loon Record results ~If performance is Loan Program number of loans activity and compare to below the goals, to households annually goals, evaluate methods below 50% of to make median income improvements. If per year performance exceeds goals, celebrate and report success. Code Reduce the Review and Record results If performance is Enforcement number of code report code and compare to below the goals, Program enforcement enforcement goals annually evaluate methods cases by xx cases and to make percent, case load improvements. If evaluate which annually performance are the most exceeds goals, important issue celebrate and report success. Scattered Increase Track Record results If performance is Site Program property tax property and compare to below the goals, value by xx assessment goals evaluate methods percentage within a to make after property specified improvements. If is sold and new period of performance home is years from exceeds goals, constructed the time celebrate and purchased to report success the time a new home is constructed. Affordable Meet or exceed Complete Evaluate scores If performance is Housing annual Met annual survey provided by Met below the goals, Council to record Council. evaluate methods performance community to make score activities improvements. If associated performance with exceeds goals, affordable celebrate and housing report success. 21Page ULI MN/RCM Opportunity City Pilot Program - Housing Audit AGENDA ITEM # LF REPORT # 1 ~ STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 20, 2009 REPORT PREPARED BY: REPORT PRESENTER: KIRSTEN PARTENHEIMER, HOUSING SPECIALIST NAME, TITLE KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE ~~ ITEM FOR HRA CONSIDERATION: Consideration of a change to the Housing and Redevelopment Authority Subordination and Satisfaction Policy for Foreclosure Purchase Incentive Program loans. I. RECOMMENDED ACTION: By Motion: Approve change to the Housing and Redevelopment Authority Subordination and Satisfaction Policy for Foreclosure Purchase Incentive Program loans to allow the HRA lien to be excluded from loan-to-value calculations for the Foreclosure Purchase Incentive Program Down-Payment Assistance Program. II. BACKGROUND The Housing and Redevelopment Authority's (HRA) Foreclosure Purchase Incentive Program (FPIP) encourages the return of foreclosed and vacant single- family homes to owner-occupancy as quickly as possible by allocating funds for deferred loans in the amount of $10,000 for down-payment assistance or $.15,000 for rehabilitation assistance. If all requirements of the Loan Agreement are met, the loan is forgiven after five years. In order to encourage more applicants to utilize the down-payment assistance loan, HRA staff proposes a change to the HRA's Subordination and Satisfaction Policy to allow down-payment assistance loans to be 042009 FPIP subordination policy change counted as equity instead of debt in the loan-to-value ratio calculation for subordination requests. The Loan Agreement stipulates that the HRA loan be in first position in order to act as security for repayment of the loan in the event that buyer fails to meet the terms of the Agreement. Most FPIP applicant's mortgage lenders request a subordination of the HRA's lien to allow their mortgages to be in first position. Although the HRA will agree to subordinate if the applicant can meet the HRA's Subordination & Satisfaction Policy, applicants seeking down-payment assistance are having trouble doing so. Namely, it is difficult for applicants to meet the 80% loan-to-value ratio required under the policy when the $10,000 HRA loan. is tallied in their combined debt. After securing financing through their lender and approval of their FPIP application from the HRA, these applicants may not be able to utilize the loan if they cannot meet the Subordination Policy and receive a Subordination Agreement. When reviewing a subordination request, the loan-to-value ratio has been calculated by adding up all debt, including the first mortgage and any HRA liens, and dividing it by the appraised value of the home. If an FPIP applicant purchases a foreclosed home valued at $175,000 for $157,500 (a 10% discount) and puts down a $25,750 down-payment, which includes $15,750 of his or her own funds (10% of the purchase price), and the $10,000 HRA loan, the mortgage will be $131,750. If the loan-to-value ratio is calculated by dividing the debt ($131,750) by the value of home ($175,000), the ratio equals 75% and the applicant would be able to receive the necessary Subordination Agreement in order to close on the property. However, because the HRA currently considers the $10,000 down-payment loan debt when calculating the loan-to-value ratio, the ratio would instead equal 81 %, which does not meet the policy. Attached is a spreadsheet providing additional examples. Because the down-payment assistance loan is meant to be an -incentive to assist buyers with the purchase of a foreclosed property, it is suggested that a policy change be made to exclude the HRA lien when calculating the loan-to-value ratio calculation for a foreclosure prevention related down-payment assistance loan. Instead, the $10,000 loan would be considered equity. Applicants will still need to contribute their own funds to meet the 80% loan-to-value ratio threshold. III. BASIS OF RECOMMENDATION A. POLICY • The purpose of the Foreclosure Purchase Incentive Program is to encourage the return of foreclosed and vacant single-family homes to owner-occupancy as quickly as possible. B. CRITICAL ISSUES • An 80% loan-to-value ratio is a requirement under the HRA Subordination & Satisfaction Policy. • The down-payment assistance loan is meant to be an incentive to assist buyers with the purchase of a foreclosed property, but under current policy, it is counted as debt when calculating the loan-to-value ratio. Fewer applicants will be able to utilize Down-Payment Assistance Loan Program if they cannot receive a Subordination Agreement. The policy change will only apply to the FPIP Down-Payment Assistance Loan. C. FINANCIAL • Additional equity will be required from the buyer to meet the loan-to- value requirement. • If all requirements of the Loan Agreement are met, the loan will be forgiven after five years. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION~S~ • Do not approve policy. • Approve alternate policy of allowing a 90% (or other amount) loan-to-value ratio threshold for subordinations of FPIP Down-Payment Assistance Loan (but include the HRA lien as debt). V. ATTACHMENTS • Amended Richfield HRA Subordination & Satisfaction .Policy • Loan to Value Calculations Spreadsheet VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ~, i RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY SUBORDINATION & SATISFACTION POLICY 8/2007 1. SUBORDINATION: A. Requests for subordination of the interest of the Richfield Housing and Redevelopment Authority ('HRA) in real property shall be considered after the lender has submitted a Subordination Request Form. The completed form shall contain the following information: The property address. 2. The mortgagor name. 3. A typed letter dated and signed by the mortgagor, stating the reason for the requested subordination and the use of any equity being removed as part of the loan transaction. 4. The closing date. 5. The full name of the lending institution as it will appear on the subordination. 6. The lending institution's state of incorporation. 7. Information regarding debt on the property: • Amount of the loan to which HRA would be subordinating. • Amount of HRA lien. • Outstanding balance on all other remaining liens. • Maximum indebtedness under all Equity lines of credit. • Amount of any equity -being removed. • Total projected indebtedness. • Ratio of all indebtedness to which the HRA lien would be subordinated, compared to the value of the property. The value of the property. The lender shall attach a copy of the current appraisal or other evidence of market value of the property that is acceptable to the HRA. A copy of current title work (must indicate all debt against the property). 10. Estimated closing costs/settlement statement. 11. A copy of the proposed subordination agreement. B. In general, the Richfield HRA will subordinate its mortgage interest to a refinance if all of the following conditions are met, to the extent that they are applicable: Closing costs are reasonable. Generally this shall mean that the sum of all discount points, origination fees, and lender ancillary fees generally shall not exceed 3% of the new first mortgage amount. ~I-a 2. If the HRA believes that the payment terms of the refinance are within the financial means of the borrower. 3. The total debt secured by the property, including the HRA lien and all superior mortgages, does not exceed 80% of the documented market value of the property. 4. Any equity being removed beyond the cost of the loan transaction will be used to improve the property. A typed letter, dated and signed by the applicant,. must be submitted stating the use of any equity being removed. 5. The overall value of superior debt must not be increased by more than 50%. Exceptions may be granted by the HRA in cases where superior debts are found to be unusually low with sufficient equity protection. 6. The proposed superior mortgage must not be a Reverse Mortgage. 7. If no more than one subordination request has been approved by the HRA in the past. 8. Property taxes, if not escrowed by the superior mortgage holder, must be current. 9. In most cases, interest-only loans or loans with interest-only options will not be allowed unless the HRA determines that an acceptable reason warrants this type of loan. The HRA may approve other subordination requests not meeting the conditions above on a case by case basis that are clearly in the best interests of the HRA, and the security of the HRA loan remains acceptable, and denial of the request will cause or contribute to a documented hardship on the part of the borrower. C. If a borrower dies and leaves the property to his or her heirs, HRA will require repayment of the loan and will not permit heirs to live at the property without having to repay the loan. D. Subordination requests will be processed by Community Development Department staff, who will submit the request with a recommendation for action, to the Housing & Redevelopment Manager. The Manager may request review and final decision by the HRA. Requests for subordination should be submitted 30 days prior to the date the agreement to subordinate is needed. Exceptions may be made on a case by case basis. E. Subordination requests will be subject to a processing fee of $75.00 or as established by the HRA,-which must be paid, when the subordination request is submitted to the HRA. Fees are not refundable. 2. SATISFACTIONS: A. When a loan made by the HRA is paid in full, a document satisfying the lien will be prepared by the HRA and delivered to the borrower for recording. The borrower is responsible for the cost of recording the satisfaction. Analysis of Whether to Exclude FPIP Down Payment Loa~njfrom the LTV Calculation ~r~ Assumptions: 5% discount on Market Value and 5% Down Payment Assessed Value _ $175,000 $200,000 $225,000 $250,000 $275,000 Purchase Price (5% discount) $166,250 $190,000 $213,750 $237,500 $261,250 Market Discount Equit $8,750 $10,000 $11,250 $12,500 $13,750 Personal E uit (5% Purchase Price) $8,313 $9,500 $10,688 $11,875 $13,063 Prima Mort a e $147,938 $170,500 $193,063 $215,625- $238,188 FPIP Grant $10,000 $10,000 $10,000 $10,000 $10,000 E ui (with FPIP Funds) $27,063 $29,500 $31,938 $34,375 $36,813 LVR (with FPIP Funds) 85% 85% 86% 86% 87% Assumptions: 7.5% discount on Market Value and 7.5% Down Payment Assumptions: 7.5% discount on Market Value and 10% Down Payment Assumptions: 10% discount on Market Value and 10% Down Payment AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 20, 2009 5 14 REPORT PREPARED BY: KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME, TITLE REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW REVIEWED $Y EXECUTIVE DIRECTO r_, .. KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME, TITLE ITEM FOR HRA CONSIDERATION: Consideration of annual Consultant Services Agreement with the Greater Metropolitan Housing Corporation for 2009. I. RECOMMENDED ACTION: By Motion: Authorize the attached Consultant Services Agreement with the Greater Metropolitan Housing Corporation for 2009. II. BACKGROUND The Greater Metropolitan Housing Corporation (GMHC) specializes in a variety of housing programs and services. GMHC's partnership with the Richfield Housing and Redevelopment Authority (HRA) began in 2004 and offers a wide variety of housing programs and services to Richfield residents. In 2008 GMHC provided 118 services to 79 Richfield residents through its Southside Housing Resource Center (HRC). In addition, two Minnesota Housing Finance Agency loans were processed through the HRC. Services offered in the scope of services include, but are not limited to: home buyer information, loan services (including Minnesota Housing Finance Agency loans), construction consultations, energy assistance, mortgage foreclosure prevention, 042009 GMHC 2009 Consultant Services Agreement home improvement information, and assistance with rental and emergency housing issues. The HRA has successfully partnered with GMHC for the construction of two affordable New Homes built at 72nd Street and Nicollet Avenue in 2008. Staff anticipates partnering with GMHC for the development and construction of two affordable New Homes in 2009 as well. III. BASIS OF RECOMMENDATION A. POLICY • A partnership between the HRA and GMHC ensures comprehensive rehabilitation resources available to Richfield residents. • New opportunities are available because of the partnership in the area of new and rehabilitated homes for modest income homeowners. B. CRITICAL IssuEs • GMHC offers Richfield homeowners comprehensive support and a variety of program offerings in acost-effective manner. • GMHC offers their packages of programs and services in 16 metro area communities. By partnering with GMHC for these services, Richfield will remain competitive in the metro area. C. FINANCIAL • The cost of services for 2009 is $7,000; unchanged from 2008. • Funds are allocated for these services in the approved 2009 HRA budget. D. LEGAL • The agreement has been reviewed by legal counsel. IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA can choose to direct staff to modify the scope of services or modify the amount with GMHC. • The HRA can choose to not approve the Agreement. V. ATTACHMENTS • Copy of the Consultant Services Agreement VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A -f CONSULTANT SERVICES AGREEMENT THIS IS AN AGREEMENT entered into the day of , 200_, by and between the Richfield Housing and Redevelopment Authority, ("HRA"), and GREATER METROPOLITAN HOUSING CORPORATION, a Minnesota non-profit corporation ("Consultant"). RECITALS A. The Consultant has a division called The Housing Resource Center ("HRC"}. GMHC has agreed to provide certain Services through HRC (as defined below) in connection with the HRA's housing program. B. The HRA desires to hire the Consultant to render this technical, professional, and marketing assistance in connection with housing programs in the HRA for the term as set forth in this Agreement. C. Consultant is willing to provide such services on the terms and conditions set forth herein. In consideration of the foregoing recitals and following terms, conditions and mutual promises contained herein, the parties agree as follows: 1. Scope of Services. The Consultant shall provide services as follows (the "Services"): a. Administer the following home improvement programs for residents of the City of Richfield (the "City"): MHFA Fix Up Fund, Community Fix Up Fund and the MHFA Rental Rehab Program (collectively the MHFA programs): 1. Providing information to residents and property owners about the programs, upon request; 2. Assist the HRA in marketing the programs; 3. Receipt of applications from residents; 4. Processing applications; 5. Closing loans to qualified applicants in accordance with the applicable program; 6. Overseeing the draw process for the funds, including, as necessary, reviewing draws, reviewing the progress of the work and collecting lien waivers and certificates of occupancy. Consultant may, for this purpose, rely on third-party representations and certifications. 7. Provide monthly reports about the number of loans closed and the balance in each loan program. fb.us.3166730.04 1 ~~ b. Assist City residents considering rehabilitation, including property visits, meet with homeowners and potential contractors, suggest alternatives for rehabilitation to homeowners, educate homeowners on the construction bid process, assist homeowners to evaluate bids and work completed and construction progress. c. Provide HRC housing information to City residents, including information on emergency assistance, housing rehabilitation, first time homebuyers and li>nited rental information; d. Assist the HRA in developing programs to purchase and rehabilitate homes; e. Coordinate these services out of Consultant's South office; and f. Have Consultant's staff visit residences as determined necessary by Consultant. 2. Term. This Agreement shall be in full force and effect from January 1, 2009 and shall continue through December 31, 2009, unless otherwise terminated as set forth below. 3. Compensation. For services provided under this Agreement, the HRA shall pay to the Consultant Seven Thousand Dollars ($7,000.00) within thirty (30) days after execution of this Agreement. The Consultant shall receive compensation for administering the MHFA Programs directly from the Minnesota Housing Finance Agency and not from the HRA. 4. Termination. Notwithstanding any other provision hereof to the contrary, this Agreement may be terminated as follows: a. The parties, by mutual written agreement, may terminate this Agreement at any time in which case the parties shall agree to the amount of fees payable to Consultant. b. HRA may terminate this Agreement upon the breach by Consultant of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by Consultant of a written notice from HRA, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that Consultant cannot reasonably cure same in the thirty (30) day period, Consultant shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by Consultant of such written notice. In the event of termination by HRA hereunder, Consultant shall be entitled to fees due to the date the notice of breach is sent by the HRA. c. If Consultant or HRA (as applicable) (i) files a voluntary petition in bankruptcy (ii) files a voluntary petition for reorganization under any bankruptcy law, statute or regulation or other similar statute or regulation, (iii) is adjudicated a bankrupt, (iv) makes an assignment for the benefit of creditors or applies for or consents to fb.us.3166730.04 2 5~~ the appointment of a receiver or trustee as part of or in conjunction with a "creditor plan" with respect to any substantial part of its assets, or (v) a receiver or trustee is appointed, or an attachment or execution levied with respect to any substantial part of its assets, and said appointment is not vacated, or the attachment or execution not released, within sixty (60) days, then this Agreement shall, effective as of such date, without notice or further action by either party, immediately terminate. d. Consultant may terminate this Agreement upon the breach by HRA of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by HRA of a written notice from Consultant, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that HRA cannot reasonably cure same in the thirty (30) day period, HRA shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by HRA of such written notice. In the event of termination by Consultant hereunder. Consultant shall be entitled to retain the entire fee under this Agreement. 5. Insurance. a. During the term of this Agreement, the Consultant .shall obtain and maintain workers compensation, comprehensive general liability, and automobile liability insurance. Comprehensive general liability insurance shall have an aggregate limit of Two Million Dollars ($2,000,000.00). b. Upon request by the HRA, the Consultant shall provide a certificate or certificates of insurance relating to the insurance required. Such insurance secured by the Contractor shall be issued by insurance companies licensed in Minnesota. The insurance specified maybe in a policy or policies of insurance, primary or excess. c. Such insurance shall be in force on the date of execution of an Agreement and shall remain continuously in force for the duration of the Agreement. 6. Indemnification. a. Notwithstanding anything to the contrary in this Agreement, the HRA, its officers, agents, and employees shall not be liable or responsible in any manner to the Consultant, the Consultant's successors or assigns, the Consultant's subcontractors, or to any other person or persons for any third party claim, demand, damage, or cause of action of any kind, nature, or character, including intentional acts; arising out of or by reason of the perfornzance of this Agreement by Consultant. The Consultant, and the Consultant's successors or assigns, agree to protect, defend and save the HRA, and its officers, agents, and employees, harmless from all third party claims, demands, damages, and causes of action, to the extent caused by the negligence or wrongful acts of Consultant, and the costs, disbursements, and fb.us.3166730.04 S~~{ expenses of defending the same, including but not ,limited to, attorneys fees, consulting services, and other technical, administrative or professional assistance. b. Nothing in this Agreement shall constitute a waiver or limitation of any immunity or limitation of any immunity or limitation on liability to which the HRA is entitled under Minnesota Statutes, Chapter 466, or otherwise. 7. Assignment. This Agreement shall not. be assigned, sublet, or transferred, in whole or in part without the prior written approval of the HRA. 8. Conflict of Interest. The Independent Contractor shall use best efforts to meet all professional obligations to avoid conflicts of interest and appearances of impropriety in representation of the HRA. In the event of a conflict, the Independent Contractor, with the prior written consent of the HRA, shall arrange for suitable alternative services. 9. Compliance with Laws. The Consultant shall comply with all applicable Federal, State, and local laws, rules, ordinances, and regulations at all times and in the performance of the services pursuant to this Agreement. 10. Notices. Any notices permitted or required by this Agreement shall be deemed given when personally delivered or upon deposit in the United States mail, postage fully prepaid, certified, return receipt requested, addressed to: Consultant: Greater Metropolitan Housing Corporation 15 South 5`'' Street, Suite 710 Minneapolis, MN 55402 ATTN: Suzanne Snyder HRA: Richfield Housing and Redevelopment Authority 6700 Portland Avenue Richfield, MN 55423 Or such other address as either party may provide to the other by notice given in accordance with this provision. 11. Entire Agreement. This Agreement, any attached exhibits and any addenda or amendments signed by the parties shall constitute the entire agreement between the HRA and the Consultant, and supersedes any other written or oral agreements between the HRA and the Consultant. This Agreement can only be modified in writing signed by the HRA and the Consultant. 12. Third Party Rights. The parties to this Agreement do not intend to confer on any third party any rights under this Agreement. 13. Counterparts. This Agreement may be signed in one or more counterparts but all of which taken together shall constitute orie instrument, fb.us.3166730.04 4 ~~ J 14. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 15. Agreement Not Exclusive. The HRA retains the right to hire other housing program consultants, in the HRA's sole discretion. 16. Data Practices. Act Compliance. Data provided to the Consultant or created by the Consultant under this Agreement shall be administered in accordance with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, as amended. [Signature Page Follows) fb.us.3166730.04 5 ~~ IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by their duly authorized officials, this Agreement on the respective dates indicated below. HRA: RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY By: Its: Chairperson Date: , 200 CONSULTANT: GREATER METROPOLITAN HOUSING CORPORATION By: Its: President Date: , 200_. fb.us.3166730.04 6 AGENDA ITEM # Fj REPORT # 1 S STAFF REPORT HOUSING AND REDEVELOPMENT .AUTHORITY MEETING APRIL 20, 2009 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTO KIRSTEN PARTENHEIMER, HOUSING SPECIALIST NAME, TITLE JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR ITEM FOR HRA CONSIDERATION: Consideration to approve a subordination request of a Housing and Redevelopment Authority Transformation Home loan at 7121 Oak Grove Boulevard. I. RECOMMENDED ACTION: By Motion: Approve subordination request of a Housing and Redevelopment Authority Transformation Home loan at 7121 Oak Grove Boulevard. II. BACKGROUND Sandra Sween of 7121 Oak Grove Boulevard is requesting a subordination of her $15,000 Transformation Home Loan, originated on July 28, 2005, to refinance her current mortgage and consolidate an existing line-of-credit. Including the Housing and Redevelopment Authority's (HRA) lien, Ms. Sween's loan-to-value (LTV) ratio under this proposed refinancing would be 85%, which exceeds the LTV ratio permitted by the HRA Subordination and Satisfaction Policy. The subordination request meets all other requirements under the HRA's policy. Ms. Sween currently has an existing interest-only, variable-rate line of credit and a first mortgage that she is proposing to consolidate with a new 30-year, fixed-rate mortgage at a 5.125% interest rate. Through the proposed debt consolidation, Ms. Sween will have an affordable, fixed monthly payment that will allow her to pay 042009 Subordination Request Appeal down principal in addition to the interest. No equity will be taken out-with this proposed refinancing. As part of the proposed refinancing, Ms. Sween's lender is requiring the HRA's lien be subordinate to their lien. The HRA's lien is currently in second position behind the primary mortgage. If the subordination request is approved, the HRA's lien will remain in second position: HRA staff has reviewed the application and recommends approval of the subordination. III. BASIS OF RECOMMENDATION A. .POLICY • The HRA Subordination and Satisfaction Policy states, "The total debt secured by the property, including the HRA lien and all superior mortgages, shall not exceed 80% of the documented market value of the property." B. CRITICAL ISSUES • The loan-to-value ratio under the ,proposed refinancing exceeds the HRA's policy by 5% (total LTV 85%). • The subordination request meets all other HRA guidelines. • The HRA lien would remain in second position behind a 30-year, fixed-rate mortgage. • The proposed refinancing provides a lower, fixed interest rate of 5.125%. • Ms. Sween's current home equity line of credit is an interest-only, variable rate loan. • No additional equity will be taken out with this new mortgage. • Taxes are current. C. FINANCIAL • Payment has been received for the subordination request. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Deny the subordination request. V. ATTACHMENTS • Request for Subordination Agreement. • Letter from homeowner. • Photograph of 7121 Oak Grove Boulevard. VI. PRINCII'AL PARTIES EXPECTED AT MEETING • Sandra Sween, homeowner. REQUEST FOR SUBORDINATION AGR€EMENT HOUSING AND REDEVELOPMENT AUTHORITY (HRA) IN AND FOR THE CITY OF RICHFIELD - -- - - -- U7 "' I INSTRUCTIONS / Review the HRA's Subordination & Satisfaction Policy prior to submitting a request for subordination. / Complete Request for Subordination Agreement form. / Enclose HRA Processing Fee - $75.00. / Request will not be reviewed until all supporting documents and fee have been received. / Submit your request by fax (612-861-8974), a-mail (kpartenheimer@cityofrichfield.org) or mail (6700 Portland Ave., Attn: Kirsten Partenheimer, Richfield, MN 55423. MORTGAGOR INFORMATION:. Applicant (Mortgagor) Name: Wells Fargo Bank N.A Property Address: 7121 Oak Grove BLVD Richfield, MN 55423 P:ROC=EBBING INFORMATION _ Reason for subordination: _Refinance Closing Date: Week of April 20t" (after meeting with city on April 20t") Full Legal name of Mortgagee (new lender): Wells Fargo Bank N.A. (This name will appear on Subordination Agreement.) Mortgagee's state of incorporation: !N/A to federal credit unions; lender's location is not necessaril the State in which it is incorporated.) DEBT INFORMATION PROPERTY VALUE!1N°FORMATION - -- - --_ Amount of new mortgage loan $220,450.00 Current property-value $277,000 HRA Lien $15,000.00 Appraisal conducted? l$1 Yes ^ No All other remaining lien(s) TO BE PD If no, how value determined? Appraisal OFF/CLOSED _F~BtL.ww,2v 2BC°t Equity Line of Credit $ Total projected indebtedness $235,450 Equity being removed? Client will not get cash back in this transaction. LTV: 85 % (A total LTV including HRA debt should be below 80 percent.) DOCUMENT DISTRIBUTION INFORMATION _ Send document to: ^ Broker or Direct Lender x Title Company ^ Pickup at City Hall Company Name: Rels Title ATTN:Mary Juneau Address: 50 South 6t" St. Ste 1450, MPLS, MN 55402 Phone No: 612-376-7910 Fax No:612-376-9018 ~2y y~~~~ ~ c.r_: ~rz", r~~,.,....~T~ >~ „~;~,,~~ ,~ ~n ~ ~- ~~~ J <<~a.~s~k . _h~r~-~ any ;.,~' ~~ ., ~~~ .~ ~ ~~ Y '_~ AGENDA ITEM # REPORT # j fj STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 20, 2009 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECT KIRSTEN PARTENHEIMER, HOUSING SPECIALIST NAME, TITLE -ITEM FOR HRA CONSIDERATION: Consideration of aoown-Payment Assistance Loan Agreement. between the Housing and Redevelopment Authority and Paul Senkyr for the purchase of 6514 12th Avenue through the Foreclosure Purchase Incentive Program. I. RECOMMENDED ACTION: By Motion: Approve and authorize execution of the attached Foreclosure Purchase Incentive Program Down-Payment Assistance Loan Agreement between the Housing and Redevelopment Authority and Paul Senkyr for the purchase of 6514 12th Avenue. II. BACKGROUND In an effort to return foreclosed and vacant homes to owner-occupancy and reduce the associated blighting effects, the Housing and Redevelopment Authority (HRA) allocated $150,000 for the Foreclosure Purchase Incentive Program (FPIP) for 2009. On March 16, 2009, the HRA approved Guidelines for the program. The purpose of the program is to encourage the return of foreclosed and vacant single- family homes to owner-occupancy as quickly as possible. Prospective buyers who homestead the property are eligible for either a $10,000 down-payment assistance loan or a $15,000 rehabilitation assistance loan. Both loans are deferred and will be forgiven after five years of owner-occupancy. 042009 FPIP 6514 12th Senkyr KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE Paul Senkyr has submitted an FPIP application for down-payment assistance for the purchase of 6514 12th Avenue. The home is vacant and foreclosed. Mr. Senkyr's purchase offer has been accepted and a closing is scheduled for April 27, 2009. Because of lender requirements, Mr. Senkyr anticipates requesting a Subordination Agreement. Staff will review his request once Mr. Senkyr has submitted the supporting documentation. According to the terms of the Down-Payment Assistance Loan Agreement, the HRA mortgage will be a first lien on the property, but the HRA can agree to subordinate. Mr. Senkyr is in agreement with the terms of the Loan Agreement and has signed it. Staff has reviewed Mr. Senkyr's FPIP application and recommends approval of the Down-Payment Assistance Loan Agreement. III. BASIS OF RECOMMENDATION A. POLICY • The proposed purchase and rehabilitation of the property meets the objectives of the FPIP: " o Eliminates the blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods. o Off-sets costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. • The application meets the Procedural Guidelines, as defined in Exhibit A of the Down-Payment Assistance Loan Agreement. B. CRITICAL ISSUES • Foreclosed homes affect the stabilization of neighborhoods and property values: • Foreclosed homes often have deferred maintenance and can be costly to renovate. • FPIP loans provide the incentive for prospective buyers to purchase a foreclosed home and tackle the necessary improvements. C. FINANCIAL • The applicant is eligible fora $10,000 loan according to the terms of the Down-Payment Assistance Loan Agreement. • The loan will be issued to the Buyer at closing. D. LEGAL • Mr. Senkyr is in agreement with the terms of the Loan Agreement and has signed it. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not execute the Down-Payment Assistance Loan Agreement. • Amend the Down-Payment Assistance Loan Agreement and direct staff to work with property owners to revise their proposal. V. ATTACHMENTS • Down-Payment Assistance Loan Agreement • Point-of-Sale report • ' Picture of house VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Paul Senkyr ~- r FORECLOSURE PURCHASE INCENTIVE PROGRAM DOWN-PAYMENT ASSISTANCE LOAN AGREEMENT Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and PAUL B. SENKYR at 6514 12TH AVENUE SOUTH This Instrument Drafted by: The Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue South Richfield, MN 55423 (612) 861-9700 ~~ AGREEMENT THIS AGREEMENT, made and entered into as of this day of Apri12009, by and between the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, having its principal office at 6700 Portland Avenue, Richfield, Minnesota (HRA), and Paul B. Senkyr (Buyer). WITNESSETH: WHEREAS, the City of Richfield (City} and the HRA have previously created and established a Redevelopment Project (Project) and Tax Increment Financing District. (TIF District) pursuant to the authority granted in Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.174 through 469.179 (collectively, the Acts); and WHEREAS, pursuant to the Acts, the City and the HRA have previously adopted a redevelopment plan (Redevelopment Plan) and a tax increment financing plan (TIF Plan) to finance all or a portion of the public development costs of the Project; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan and TIF Plan as hereinafter defined and particularly to make specified land in the Project available for development by private enterprise for and in accordance with the Redevelopment Plan, the HRA has determined to provide substantial aid and assistance to finance public development costs in the Project; and WHEREAS, the HRA has become concerned that within the Project there is an increasing number of homes which have been foreclosed and are standing vacant, and, in many cases are not being adequately secured or maintained; and WHEREAS, under such circumstances, the properties themselves are subject to deterioration; and the entire neighborhood is subject to the impacts caused by such conditions; and WHEREAS, the HRA, in recognition of the need to provide decent, safe and sanitary housing in the community has established a deferred loan program which is designed to provide assistance to individuals who are acquiring foreclosed properties within the Project, and in furtherance of the goals and objectives of the plan for the Project; and. WHEREAS, the Buyer has proposed to purchase and occupy such a property which the HRA has determined will promote and carry out the objectives of the Project, will assist in carrying out the obligations of the Redevelopment Plan and TIF Plan, will be in the vital best interests of the City and the health, safety and welfare of its residents and is in accord with the public purposes and provisions of the applicable state-and local laws and requirements under which development in the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the mutual covenants and obligation of the HRA and the Buyer, each party does hereby represent, covenant and agree with, the other as follows: r ARTICLE I. DEFINITIONS, EXHIBITSzRULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement, the following terms have the meaning given below unless the context clearly requires otherwise: (a) Cam. The City of Richfield, Minnesota. (b) Down Payment. The Buyer's equity contribution which is required by the lender as a precondition to making the loan. (c) Closing The date on which Buyer closes on the Purchase of the Property. (d) Guidelines The guidelines adopted by the HRA as such are applicable to the providing of down payment assistance. (e) Pro a .The real property legally described as: Lot 5, Block 2, Eliason 4`h Addition Located on land having a street address of: 6514 12th Avenue South (f) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles, fire or other casualty to the Improvements, litigation commenced by third parties which results in delays or acts of any federal, state or local government, except those contemplated by this Agreement, which are beyond the control of the Buyer. , Section 1.2 Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: A.. Guidelines B. The Note and Mortgage C. Legal Description Section 1.3 Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota. 2 ~- ~- (b) The words "herein" and "hereof' and words of similar import, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof. (c) References herein to any particular section or subdivision hereof are to the section or subdivision of this Agreement as originally executed. (d) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. ARTICLE II. REPRESENTATIONS AND UNDERTAKINGS Section 2.1 By the Buver. The Buyer makes the following representations and undertakings: (a) The Buyer has the legal authority and power to enter into this Agreement and has duly authorized the execution, delivery and performance of this. Agreement; (b) The Buyer has the necessary equity capital or will obtain commitments for financing necessary for acquisition of the Property; (c) The Buyer is familiar with the Guidelines as they relate to down payment assistance, and agrees to follow and be bound by them; (f) Buyer intends to reside at the Property following Closing and to use the same as Buyer's .principal residence; and is not acquiring the Property for the purpose of resale or speculation. Section 2.2 By the HRA. The HRA makes the following representations as the basis for the undertaking on its part herein contained: (a) The HRA is authorized by law to enter into this Agreement and to carry out its obligations hereunder; and (b) The HRA will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Buyer. ARTICLE III. ACQUISITION OF PROPERTY; CONVEYANCE TO BUYER Section 3.1 Purchase of Property by Buver. The Buyer has, or will utilize its best efforts to enter into a binding agreement to purchase the Property. Upon determination by the HRA that Buyer has entered into a binding purchase agreement for the purchase of the Property, 3 ~-s the HRA will deliver to Buyer the Note described in Section 5.1. If no binding purchase agreement is entered into within 30 days from the date of this Agreement, either the HRA or the Buyer may declare this Agreement null and void, and the parties will thereby be released from any further obligation hereunder. Section 3.3 Closing. Closing must take place on or before May 27, 2009, or such other date as may be agreed to by the Buyer and HRA in writing. At Closing, the Buyer will provide the HRA with a mortgage in recordable form (and pay for the cost of recording). The mortgage will be a first lien on the Property and will act as security for repayment of any Down Payment funds provided to the Buyer at Closing in the event that Buyer defaults on any of its obligations hereunder or under the Note. The Mortgage and Note will be in substantially the form shown on the attached Exhibit B. ARTICLE IV. [Blank] ARTICLE V. DOWN PAYMENT ASSISTANCE Section 5.1 Issuance of the Note. As consideration for Buyer's obligations, and subject to all of the conditions of this Agreement, the. HRA agrees to provide the Buyer with a Down Payment Assistance in the amount of $10,000. Upon the Buyer providing the HRA with evidence that Buyer has entered into a purchase agreement for the purchase of the Property, the HR.A will deliver to Buyer a promissory note in substantially the form of the Note contained in the attached Exhibit B. Payment of the Down Payment Assistance will be exclusively subject to and in accordance with the terms of the Note as such are contained in the Note or described in this Agreement. Section 5.2 Note Terms. In addition to-terms contained in the Note, the Note will be subject to the following: (a) Assuming the Buyer is in compliance with Buyers obligations, the Note will be payable at Closing. (b) The Note will be cancelled if the Closing does not occur by the last date provided in Section 3.3. (c) The Note will not bear interest. (d) The Note maybe canceled by the HRA in the event that the Buyer is in default of any of its obligations under this Agreement. (e) The Note may not be assigned or pledged unless the proposed recipient certifies to the HRA that it is aware of and accepts to the conditions of the Note governing payment. 4 (f) Repayment of the Down Payment Assistance paid to Buyer under the Note is required in the event that the Buyer fails to meet the time requirements of Sections 3.3 and 3.4. The Note will be subject to repayment if: (i} the Buyer does not continue to own and occupy the property as its primary residence for a period of at least five years following Closing; (ii) the Buyer fails to obtain homestead classification for the Property as soon as possible following Closing; or (iii) Buyer fails to continuously maintain the homestead classification for the Property for five years following the Closing. Such repayment obligation will be secured by a mortgage in substantially the form shown in Exhibit B which will be delivered by Buyer to the HRA at Closing. Unless the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the Property. (g) If the Buyer shall continue to observe all of the covenants and requirements and obligations imposed on Buyer under this Agreement and in the Note for a period of five years from the date of Closing, then the Buyer's obligation to repay the Down Payment Assistance will terminate and be of no further force and effect; and that an instrument discharging the Mortgage will be provided to Buyer for recording at the Buyer's request. ARTICLE VI. FINANCING Section 6.1 Financing. Within 15 days of the date of execution of this Agreement, the Buyer shall submit to the HRA evidence of a commitment for financing for the purchase of the Property in compliance with the provisions of Section 2.1(b) of this Agreement. The evidence must include an acknowledgment by the proposed lender that it is aware of the terms of this Agreement as they relate to the Note and Mortgage. Such evidence will also be sufficient to determine the amount of Down Payment that will be required to complete the purchase. If the HRA finds that the financing together with the Down Payment Assistance and other equity available to Buyer is adequate in amount to provide for the purchase of the Property, the HRA shall notify the Buyer of its approval. If the HRA rejects the evidence of financing as inadequate, the Buyer shall have 30 days or such additional period of time as the Buyer may reasonably require from the date of such notification to submit evidence of financing satisfactory to the HRA. If the Buyer fails to submit such evidence or fails to use due diligence in pursuing financing, the HRA may terminate this Agreement and, if issued, cancel the Note, and both parties shall be released from any further obligation or liability hereunder, or under the Note. Section 6.2 Copy of Notice of Default to Lender. Whenever the HRA shall deliver any notice or demand to the Buyer with respect to any Event of Default by the Buyer in its obligations or covenants under this Agreement, the HRA shall at the same time forward a copy of 5 ~~ such notice or demand to each Holder of any Mortgage authorized by the Agreement at the last address of such Holder shown in the records of the HRA. Section 6.3 Subordination. In order to facilitate obtaining financing for the purchase of the Property by the Buyer, the HRA shall agree to modify this Agreement, the. Note or the Mortgage in the manner and to the extent the HR.A deems reasonable, upon request by the financial institution and the Buyer. ARTICLE VII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1 Representation as to Redevelopment. The Buyer represents and agrees that its undertakings pursuant to the Agreement, are not for speculation in land holding. The Buyer further recognizes that, in view of the importance of the Development to the general welfare of Richfield and the substantial financing and other public aids that have been made available by~the HRA for the purpose of making the Development possible, the qualification and identity of the Buyer are of particular concern to the HRA. The Buyer further recognizes that it is because of such qualifications and identity that the HRA is entering into this Agreement, and, in so doing, is further willing to rely on the representations and undertakings of the Buyer for the faithful performance of all undertakings and covenants agreed by the Buyer to be performed. Section 7.2 Prohibition Against Transfer of Property- and Assignment of Agreement. For the reasons set out in Section 7.1 of this Agreement, the Buyer represents and agrees that prior to the issuance of the Certificate of Completion by the HRA: (a) Except only by way of security for, and only for the purpose of obtaining financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to the Development under this Agreement, and any other purpose authorized by this Agreement, the Buyer, except as so authorized, has not made or created, and that it will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust in respect to this Agreement or the Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the HRA. ARTICLE VIII. EVENTS OF DEFAULT Section 8.1 Events of Default Defined. The following shall be deemed Events of Default under this Agreement and the term shall mean, whenever it is used in this Agreement, unless the context otherwise provides, any one or more of the following events: (a) Failure by the Buyer to pay when due the payments required to be paid or secured under any provision of this Agreement; 6 '" D (b) Failure by the Buyer to observe and substantially perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder, including the time for such performance; ' (c) If the Buyer shall admit. in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the Property; (d) If the Buyer, on a petition in bankruptcy filed against it, be adjudicated as bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of the Buyer, a receiver of the Buyer or of the whole or substantially all of its property, or approve a petition filed against the Buyer seeking reorganization or arrangement of the Buyer under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or stayed within 60 days from the date of entry thereof; or (e) If the Development is in default under any Mortgage and has not entered into a work-out agreement with the Mortgagee. Section 8.2 Remedies on Default. Whenever any Event of Default occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, take any one or more of the following actions following written notice by the HRA to the Buyer as provided in Section 9.5 of this Agreement: (a) suspend its performance under this Agreement until it receives assurances from the Buyer, deemed reasonably adequate by the HRA, that the Buyer will cure its default and continue its performance under this Agreement; (b) cancel or rescind this Agreement; (c) cancel or rescind the Note; (d) foreclose on the Mortgage; (e) withhold the Certificate of Completion; or (f) take whatever action at law or in equity may appear necessary or desirable to the HRA to enforce performance and observance of any obligation, agreement, or covenant of the Buyer under this Agreement; provided, however, that ariy exercise by the HR.A of its rights or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any Mortgage authorized by this Agreement and (b) any rights or interest provided in this Agreement for the protection of the Holders of a Mortgage; and provided further that should any Mortgagee succeed by foreclosure of the Mortgage or deed in lieu thereof to the Buyer's interest in the Property, it shall, notwithstanding the foregoing, be obligated to perform the obligations of the Buyer under this Agreement to the extent that the same have not therefore been performed by the Buyer. ~' 1 Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Buyer to exercise any remedy. reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.4 No Additional Waiver Implied by One Waiver. In the event of the occurrence of any Event of Default by either party, which .Event of Default is thereafter waived by the other party, such waiver shall be limited to the ,particular Event of Default so waived and shall not be deemed to waive any other concurrent, previous or subsequent Event of Default. ARTICLE IX. ADDITIONAL PROVISIONS Section 9.1 Conflict of Interests; Representatives Not Individually Liable. No HRA officer who is authorized to take part in any manner in making this Agreement in his or her official capacity shall voluntarily have a personal financial interest in this Agreement or benefit financially there from. No member, official, or employee of the HRA shall be personally liable to the Buyer, or any successor in interest, for any Event of Default by the HRA or for any amount which may become due to the Buyer or successor or on any obligations under the terms of this Agreement. Section 9.2 Non-Discrimination. The provisions of Minnesota Statutes Section 181.59, which relate to civil rights and non-discrimination, and any affirmative action program of the City shall be considered a part of this Agreement and binding on the Buyer as though fully set forth herein. Section 9.3 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is sent by mail, postage prepared, return receipt requested or delivered personally: (a) As to the HRA: Richfield HRA Executive Director 6700 Portland Avenue South Richfield, MN 55423 `1-~0 (b) As to the Buyer: Paul B. Senkyr 4817 Chicago Avenue S. Minneapolis, MN 55417 or at such other address with respect to either such party as that party may, from time to time; designate in writing and forward to the other as provided in this Section 9.3. Section 9.4 Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly executed in its name and behalf and .its seal to be .hereunto duly affixed and the Buyer has caused this Agreement to be duly executed as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chairperson By Its Executive Director Buyer Paul B. Senkyr 9 -1- I I STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this _ day of April, 2009, by Suzanne M. Sandahl, the Chairperson of the. Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of April, 2009, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this 13~`' day of April, 2009, by Paul B. Senkyr, a single person. ~'" Notary Public " ~ '°~` • ' KIR~:y'~~! fi ~ PARTENHEIMER ~? r~oT~~;Y PUBUC-MINNESOTA ' My Commission Expires Jan.31, 2013 ~:. 10 ~1-iz EXHIBIT A Foreclosure Purchase Incentive Program Procedural Guidelines Statement of Purpose The purpose of the Foreclosure Purchase Incentive Program (FPIP) is to return foreclosed, vacant properties to owner-occupied properties as quickly as possible. Program Objectives To eliminate the .blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods: To off-set costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. This will be achieved through the provision of adown-payment assistance or rehab incentive to encourage prospective homebuyers to purchase foreclosed, vacant homes. in the city. Program Outcomes Return ten to fifteen foreclosed, vacant houses in the city to owner-occupied homes. Stabilize neighborhoods impacted by foreclosed, vacant houses. Maintain and increase property values in neighborhoods impacted by foreclosed, vacant houses. Definitions Buyer -The buyer of the subject property. HRA -The Housing and Redevelopment Authority in and for the City of Richfield. Property -The subject house and lot. Foreclosed Property - A house and lot that has been through a mortgage foreclosure process with the most recent owner of record, and is currently owned by a lending agency/bank. A-1 r Eli ibili 1. Funding is limited to the purchase of foreclosed properties, with priority given to foreclosed AND vacant properties. 2. Applicant's household incomes are not restricted. 3. Loan recipient must be the Buyer and reside in and homestead the property during the life of the loan. 4. The house and property to be purchased must be located within the City of Richfield municipal boundaries. 5. Applicants must complete a City of Richfield HRA FPIP Application and submit it at least 30 days prior to closing. 6. Applicants who may be eligible to receive down-payment assistance through available State or Federal Programs must apply for those funds prior to applying for City HRA FPIP funds. 7. Applicants who receive down-payment assistance through State or Federal programs will not be eligible for FPIP funds. 8. Eligible properties must meet minimum health and safety requirements. Loans will not be issued for uninhabitable properties. Determination of habitability will be at the discretion of the HRA based on City of Richfield Point of Sale Inspection report and physical inspection conducted by HRA staff or HRA contracted inspector. Terms and Conditions 1. Maximum loan amount is $10,000 per eligible household for down-payment assistance and $15,000 per eligible household for rehab assistance. 2. Rehab assistance loans will only be issued in conjunction with the purchase of a foreclosed house. 3. Only one loan per eligible household. 4. Funds can be used city-wide within the City of Richfield boundaries. 5. ,Funds can be used for down-payment assistance OR for rehab/improvement projects associated with the property. 6. Buyers will be required to sign an Agreement (Agreement) with the City of Richfield Housing and Redevelopment Authority consenting to all loan requirements prior to loan disbursement. 7. Funds for down-payment assistance will be disbursed at closing. 8. Funds for construction/rehab projects will be disbursed in three installments as detailed in the Agreement. 9. Alien will be placed against the property by the HRA for the full loan amount. 10. Funds will be awarded in the form of a five-year, zero-interest, forgivable loan. 11. Buyer must reside in and homestead the property during the Tife of the loan. If at anytime during the life of the loan the property is vacant for a period of six consecutive months or longer, or the property is no longer homesteaded, the loan will be required to be repaid in full. A-2 `~ - i ~} 12. If the house is sold or the title transferred during the loan period, the loan will be required to be repaid in full. 13. Any mortgage or financing for the property must be in the form of a fixed interest rate. 14. The HRA reserves the right to refuse loan issuance to properties deemed to be un- inhabitable. 15. The HRA may conduct an inspection of the property to verify rehab work has been completed in compliance with documentation submitted for the loan. 16. Loan funds are available on a limited basis. Data Privacy All information secured through the program is subject to the Minnesota Data Privacy Act. General Program Marketing Program marketing is entirely at the discretion of the HItA. It may include the following: Buyer Solicitation. The HRA may market the program to Buyers through promotional articles, direct mail, the Internet, or other methods as deemed appropriate. End Buyers may be any financially eligible family. The HRA is a Fair Housing agency. A-3 .~^ ~ S EXHIBIT B PROMISSORY NOTE $10,000 2009 The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic (the "Maker"), for value received, hereby promises to pay to Paul B. Senkyr (the "Holder") the principal sum of Ten thousand and No/100 Dollars ($10,000), with no interest as hereinafter provided, in any coin or currency which at the time or times of payment is legal tender for the payment of private debts in the United States of America. The principal of this Note is payable as follows: 1. The principal amount of-the Note is as provided for in that certain agreement by and between Maker and Holder entitled: Foreclosure Purchase Incentive Program Downpayment Assistance Agreement dated (the "Agreement") and shall bear no interest. Terms contained in this Note shall have the meanings given them in the Agreement unless a different meaning is clearly indicated. 2. The Note shall be due and payable the Note will be payable at Closing. No amount shall be due or payable prior to that date. 3. This Note will be cancelled if the Closing does not occur by the last date provided in Section 3.3 of the Contract. 4. This Note is given pursuant to the Agreement. All of the agreements, conditions, covenants, provisions, and stipulations and remedies contained in the Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Note. If a default by the Maker or the Holder occurs under the Agreement, then the Holder or Maker may at its right and option, exercise any rights it may have under law or at equity, under the Agreement, and under the Note. 5. The remedies of the Maker or Holder as provided herein, and in the Agreement, or any other instrument, shall be cumulative and concurrent -and may be pursued singly, successively, or together, and, at the sole discretion of the Maker or Holder, may be exercised as often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Maker or Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the B-1 ~-I ~ Maker or Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall. not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 6. This Note shall be governed by and construed in accordance with the laws of the state of Minnesota without regard to its conflict of laws provisions. Any disputes, controversies, or claims arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise 7. Holder may not assign, transfer or pledge this Note without the prior written consent of the Maker. Maker may condition consent on obtaining a certification from the proposed assignee, transferee or pledgee acknowledging and agreeing to Maker's rights to cancel the Note in accordance with the terms of the Note and the Agreement. 8. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. 9. Any payments paid to Buyer under the Note will be repaid to the HRA in the event that the Buyer fails to meet the requirements of the Agreement. Such repayment obligation will be secured by a mortgage in substantially the form shown in Exhibit B. of the Agreement which will be executed and delivered by Buyer to the HRA at Closing. Unless the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the Property. IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the _ day of April, 2009. B-2 ~~ I~ STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chairperson By Its Executive Director Buyer Paul B. Senkyr The foregoing instrument was acknowledged before me this day of 2009, by Suzanne M. Sandahl, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA}, a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENEPIN ) The foregoing instrument was acknowledged before me this day of 2009, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public B-3 yl--i$ STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me by Paul B. Senkyr, a single person. lic -~, t{d~?S, "N S H PARTENHEIMER NOTAAYPUBLK-MINNESOTA - My Commission Expires Jan.31, X13 day of ~_, 2009, B-4 ~ ~ I ~t MORTGAGE This Indenture made this day of April, 2009, between PAUL B. SENKYR, Mortgagor, and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic under the laws of the State of Minnesota, Mortgagee. Witnesseth: That the said Mortgagor, in consideration of the sum of One ($1.00) Dollar and other good, valuable and sufficient consideration, the receipt whereof is hereby acknowledged, does hereby Grant, Bargain, Sell, and Convey unto the said Mortgagee, its successors and assigns, Forever, all the tracts or parcels of land lying acid being in the County of Hennepin and State of Minnesota, described as follows, to-wit: The separate tracts and parcels of land described in the attached Exhibit C. (The "Property") To Have and to Hold the Same, Together with the hereditaments and appurtenances thereto belonging to the said Mortgagee, its successors and assigns, forever. And the said Mortgagor, for itself, and its successors and assigns, does covenant with the said Mortgagee, its successors and assigns, as follows: That it is lawfully seized of said premises and has good'right to sell and convey the same; that the same are free from all incumbrances, save and except reservations, restrictions and easements of record; that the Mortgagee, its successors and assigns, .shall quietly enjoy and possess the same; and that the Mortgagor will Warrant and Defend the title to the same against all lawful claims not hereinbefore specifically excepted. Provided, Nevertheless, That if said Mortgagor, its successors and assigns; shall keep and perform each and every one of its obligations to be performed by Mortgagor under and pursuant to that certain Agreement dated as of (the "Agreement"), made and entered into between Mortgagor and Mortgagee, and shall keep and perform all the covenants and agreements herein contained, then this deed to be null and void, and to be released at the Mortgagor's expense. This Mortgage secures a principal debt in the amount of $10,000 payable by Mortgagor to Mortgagee under the terms of the Agreement, and amendments thereto, between Mortgagor and Mortgagee. And the Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree with the Mortgagee, its successors and assigns, to perform its obligations as above specified, to pay all taxes and assessments now due or that may hereafter become liens against said premises at least ten (10) days before penalty attaches thereto; to pay, when due, both principal and interest of all prior liens or incumbrances, and to keep said premises free and clear of all other liens or incumbrances; to commit or permit no waste on said premises and to keep them in good repair; to complete forthwith any improvements which may hereafter be under course of construction thereon, and to pay any other expenses and attorneys' fees incurred by said Mortgagee, its successors or assigns, by reason of litigation with any third party for the protection of the lien of this Mortgage. B-5 ~~ That Mortgagor, does further covenant and agree that if any lien for labor, skill or material shall be filed for record during the life of this Mortgage, upon or against the premises hereby mortgaged, the said Mortgagor will, within thirty (30) days after the date of its filing for record, either pay off the said lien and secure its satisfaction of record, or will protect the Mortgagee against any loss or damage growing out of its enforcement, by furnishing a bond for the same amount in the form and with the sureties to be approved by the Mortgagee. In case of failure to pay said taxes and assessments, prior liens or incumbrances, expenses and attorneys' fees as above specified, or to insure said buildings and deliver the policies as aforesaid, the Mortgagee, its- successors or assigns, may pay such taxes, assessments, prior liens, expenses and attorneys' fees and interest thereon, or effect such insurance, and the sums so paid shall bear interest at the highest rate permitted by law from the date of such payment, shall be impressed as an additional lien upon said premises, and be immediately due and payable from the Mortgagor, its successors or assigns, to said Mortgagee, it successors or assigns, and this Mortgage shall from date thereof secure the repayment of such advance with interest. In case of default in any of the foregoing covenants, the Mortgagor confers upon the Mortgagee the option of declaring a default and hereby authorizes and empowers said Mortgagee, its successors and assigns, to foreclose this Mortgage by judicial proceedings or to sell said premises at public auction and convey the same to the purchaser in fee simple in accordance with the statute, and out of the money arising from such sail to retain all sums secured hereby, with interest and all legal costs and charges of such foreclosure and the maximum attorneys' fee permitted by law, which costs, charges and fees the Mortgagor herein agrees to pay. In Testimony Whereof, The said Mortgagor has herewlto set its hand the day and year first above written. U~~ Paul B. Senkyr B-6 ~~~~ STATE OF MINNESOTA COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ~3~da of April, 2009, by Paul B. Senkyr, a single person. _ ~ (Notary Stamp or Seal) Notary Public ~~~ KlRSTEN S H PARTENHEIMER NCTAPY PUBLIC-MINNESOTA • • My Canmission Expires Jan. 31, 2Qt3 This Instrument was Drafted by: The Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue South Richfield, MN 55423 612-861-9778 B-7 ~~~~ EXHIBIT C LEGAL DESCRIPTION Lot 5, Block 2, Eliason 4th Addition C-1 '" ~.~ + RICHFIELD PUBLIC SAFETY (612) 861-9882 Ps Detail Listing of All Items Requiring Correction for 6514 12TH AVE S Lic. or App. Number: 12238 This property was inspected by: Jennifer Grinde on: 10/23/2008 at 9:30:00 Date Identifie Unit/Floor Location Description Action Required 10/23!2008 Water to dwelling shut off Water must be on, check system for leaks, including faucets, traps, water pipes, drain lines, ect. NO OCCUPANCY UNTIL RE-INSPECTED 10/23/2008 The following work was performed Obtain permit(s) and final without appropriate permit(s) :new inspections for the work windows all performed. 10/23/2008 fireplace Fireplace lacks non-combustible hearth. Fireplace hearth required-firebox 6sq.ft. or less-8"sides, 16" front. 6+ sq.ft.-12" sides, 20"front. 10/23/2008 1st Floor ,Living room Fireplace doors unsecured. Fireplace doors must be secured to fireplace 10!23/2008 2nd Floor NO CARBON MONOXIDE Install carbon menoxide detector DETECTOR PRESENT WITHIN 10' within ] 0' of all bedrooms OF ALL BEDROOMS 10/23/2008 2nd Floor Bathroom Mold & mildew present at vanity Remove mold & mildew 10/23/2008 2nd Floor bedrooms No smoke detector as requited. Install smoke detector per manufacturers instructions to specified location IMMEDIATELY. 10/23/2008 2nd Floor Hallway Smoke detector not functioning. Replace w/operable smoke detector IMMEDIATELY. 10/23/2008 Basement Fireplace lacks non-combustible hearth. Fireplace hearth required-firebox 6sq.ft. or less-8"sides, 16" front. 6+sq.ft.-12" sides, 20"front. 10/23/2008 Basement Basement No smoke detector as required. 10/23/2008 ~ Basement Bathroom Added and/or altered electrical wiring and /or service. 10/23/2008 Basement Bathroom Added and/or altered plumbing. No permit(s) on file. 10/23/2008 Basement Laundry Clean out plug missing at floor drain. Page I Install smoke detector per manufacturers instructions to specified location IMMEDIATELY. Added electrical wiring and/or service must be certified by licensed electrical contractor on City of Richfield form. Licensed plumbing contractor to certify work on Richfield city form. If changes aze made to system PERMIT and inspection aze also required. Replace missing cleanout plug and verify drain is open. 10/23/2008 14:46 -a~ RICHFIELD PUBLIC SAFETY (612) 861-9882 Detail Listing of A11 Items Requiring Correction for 6514 12TH AVE S rs l Of23i2008 Basement Main .Open bulb site fixutre in clothes uloset Lite fixture must be 12" from shelf and enclosed globe type lixeure, or removed with wires & box covered. 1U;23/2UOR Basement service Storage in front of electrical service. Provide 36 inches clearance in front of electrical service Panel. I Oi23.!2008 Basement Water heater Gasline improper (RIPLACLMINT Ciasline must he approved type; REQUIRES PERMIT & INSP.ECTIONI soft copper- (type L ), black shut nfI' inap iron, approvtd stainless steel Ilex, 8 he properly installed tiv- proper shut-off &dirt leg 1023+'2008 garage Overhead door opener not functioning. Repair or remove overhead door opener. Or23/2UU8 Main floor No smoke detector as required. Install smoke detector per manufacturers instructions to specified location IMMEDIATELY. 10/23.'2008 Outside Back yard Improper tirewoad storage. Firewood must be elevated 10- 12 inches above the ground and be neatly stacked. Firewood may be stored in the rear of property. 10:'2312008 Outside Back yard Bntsh/leaves on property Btvshr']eaves nn property must be rernirved. l0~'23!2008 Outside Back yard Debris or garbage on site Remove debris aniL4u garbage from property. 10;23/2008 Outside Deck Rotted wood, siding or trim Any/all rotted wood must be replaced. 10!23;2008 Outside Deck Paint peelinc Refinish all peeling or blistered pains attd refinish. Paint chips must be properly disposed of. tOr23/2008 Outside Faucets Outside hose iaucetwith threads has Install backflow preventer to potential ofback-siphoning threads on faucet spout. =; ';>~R ~'r i F ~,; ~ Ytrs`€- '~~ °;~ Fes- ~ t'oi L? =t:..t `~ it%.='_ j r,_ _u .~=~GKI~J,NL DGE R4=~~..,: ~F . J5. ~ ID: ~. i_ •~ , . ~i, ::.'r' i",w r'~~. ! ~;' ;; i_ ?~Sf='~.~l~Sl~~.F FAR r`11Ll.. 1R~;~A1R IS4l..!!r~ t;i~!'+lT~~\!!'ale=L`~ ~~t:,i1iF fi~~~1u _, ~? t-ylc,-`.-'•,41`:~~`d =;~C l`I 4=~7.~-;(1~?-'~~ETY C7i= ~R}lCt^i-iJ~F§i~L[L4/j~r{~=}l..?R4;i3~ ~C) ~-E-i F'F;~ ~r~(:s F~S-~? ..,~_.W'`~41,.1t~: ?t~~ ,-,~S' I~k'iw 1t=~1-':~ 'i+~1~4_{ I ~~ F<...r 4'~, 9'`.Cr-P"5.1 t"\~7. /'~IY~t~ t<~~,.`5+..+ ~ `...i~ l~:T ~.~, ~~',-,1! ~F',I-. i... ~~ ~~1v.~1 ! i ._ t ~'r~~~~ ~;ivl J t t•:~ Jl .~ . ~ ~~' <~ ~:;•;' :SFr. J4~ti; ~F:~ ~IJYER~. S~L~. R~FS~~N~4~i_!Ti'. ------1"--~~~%~.~r tiro /__~~,~,~ f l -.._ ~~, ~,v ~ rJ <1 Page 2 10/23/2008 14:4ti ~, ` ~ 5 W A~ W ~~ N r r Cfl n~~~ :~ ''~ ,~; ~•' AGENDA ITEM # g REPORT # j ~ ~- STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 20, 2009 REPORT PREPARED BY: KIRSTEN PARTENHEIMER, HOUSING SPECIALIST NAME, TITLE REPORT PRESENTER: KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR ~IAAAC TITIC DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTNE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a Down~Payment Assistance Loan Agreement between the Housing and Redevelopment Authority and Juan Kosar for the purchase of 6226 Washburn Avenue through the Foreclosure Purchase Incentive Program. I. RECOMMENDED ACTION: By Motion: Approve and authorize execution of the attached Foreclosure Purchase Incentive Program Down-Payment Assistance Loan Agreement between the Housing and Redevelopment Authority and Juan Kosar for the purchase of 6226 Washburn Avenue. II. BACKGROUND In an effort to return foreclosed and vacant homes to owner-occupancy and reduce the associated blighting effects, the Housing and Redevelopment Authority (HRA) allocated $150,000 for the Foreclosure Purchase Incentive Program (FPIP) for 2009. On March 16, 2009, the HRA approved Guidelines for the program. The purpose of the program is to encourage the return of foreclosed and vacant single- family homes to owner-occupancy as quickly as possible. Prospective buyers who homestead the property are eligible for either a $10,000 down-payment assistance loan or a $15,000 rehabilitation assistance loan. Both loans are deferred and will be forgiven after five years of owner-occupancy. 042009 FPIP 6226 Washburn Kosar Juan Kosar has submitted an FPIP application for down-payment assistance for the purchase of 6226 Washburn Avenue. The home is vacant and foreclosed. Mr. Kosar's purchase offer has been accepted and his closing date is scheduled for April 24, 2009. Mr. Kosar is in agreement with the terms of the Down-Payment Assistance Loan Agreement and has signed it. Staff has reviewed Mr. Kosar's FPIP application and recommends approval of the Down-Payment Assistance Loan Agreement. Mr. Kosar's primary lending institution will likely acquire their loan to be superior to the HRA's. A determination has not yet been made (due to insufficient information) on whether this case would meet the subordination requirements. III. BASIS OF RECOMMENDATION A. POLICY . • The proposed purchase of the property meets the objectives of the FPIP: o Eliminates the blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods. o Off-sets costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. The application meets the Procedural Guidelines, as defined in Exhibit A of the Rehabilitation Loan Agreement. B. CRITICAL ISSUES • Foreclosed. homes affect the stabilization of neighborhoods and property values. • Foreclosed homes often have deferred maintenance and can be costly. to renovate. FPIP loans provide the incentive for prospective buyers to purchase a foreclosed home and tackle the necessary improvements. • Mr. Kosar's FPIP application meets program guidelines. C. FINANCIAL • The project is eligible fora $10,000 loan according to the terms of the Down-Payment Assistance Loan Agreement. • The loan will be issued to the Buyer at closing. D. LEGAL • Mr. Kosar is in,agreement with the terms of the Down-Payment Assistance Loan Agreement and has signed it. IV. ALTERNATNE RECOMMENDATION(S~ - • Do not execute the Down-Payment Assistance Loan Agreement. • Amend the Down-Payment Assistance Loan Agreement and direct staff to work with the applicant to revise his proposal. V. ATTACHMENTS • Down-Payment Assistance Loan Agreement • Point-of-Sale Report • Picture of house VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Juan Kosar 8 -I FORECLOSURE PURCHASE INCENTIVE PROGRAM DOWN-PAYMENT ASSISTANCE LOAN AGREEMENT Between THE HOUSING AND REllEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and JUAN C. KOSAR at 6226 WASHBURN AVENUE SOUTH This Instrument Drafted by: The Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue South Richfield, MN 55423 (612)861-9700 ~~ AGREEMENT THIS AGREEMENT, made and entered into as of this day of April 2009, by and between the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State ol~ Minnesota, having its principal office at 6700 Portland Avenue, Richfield, Minnesota (HRA), and Juan C. Kosar (Buyer). WITNESSETH: WHEREAS, the City of Richfield (City] and the HRA have previously created and established a Redevelopment Project (Project) and Tax Increment Financing District (TIF District) pursuant to the authority granted in Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.174 through 469.179 (collectively, the Acts); and WHEREAS, pursuant to the Acts, the City and the HRA have previously adopted a redevelopment plan (Redevelopment Plan) and a tax increment financing plan (TIF Plan) to finance all or a portion of the public development costs of the Project; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan and TIF Plan as hereinafter defined and particularly to make specified land in the Project available for development by private enterprise for and in accordance with the Redevelopment Plan, the HRA has determined to provide substantial aid and assistance to finance public development costs in the Project; and WHEREAS, the HRA has become concerned that within the Project there is an increasing number of homes which have been foreclosed and are standing vacant, and, in many cases are not being adequately secured or maintained; and WHEREAS, under such circumstances, the properties themselves are subject to deterioration; and the entire neighborhood is subject to the impacts caused by such conditions; and WHEREAS, the HRA, in recognition of the need to provide decent, safe and sanitary housing in the community has established a deferred loan program which is designed to provide assistance to individuals who are acquiring foreclosed properties within the Project, and in furtherance of the goals and objectives of the plan for the Project; and. WHEREAS, the Buyer has proposed to purchase and occupy such a property which the HRA has determined will promote and carry out the objectives of the Project, will assist in carrying out the obligations of the Redevelopment Plan and TIF Plan, will be in the vital best interests of the City and the health, safety and welfare of its residents and is in accord with the public purposes and provisions of the applicable state and local laws and requirements under which development in the Project has been undei•talcen and is being assisted. NOW, THEREFORE, in consideration of the mutual covenants and obligation of the HRA and the Buyer, each party does hereby represent, covenant and agree with the other as follows: ~' ARTICLE I. DEFINITIONS, EXHIBITS, RIJI_,IJS OF INTERPRETATION Section 1.1. Definitions. In this Agreement, the following terms have the meaning given below unless the context clearly requires otherwise: (a) Cam. The City of Richfield, Minnesota. (b) Down Payment. The Buyer's equity contribution which is required by the lender as a precondition to making the loan. (c) Closin The date on which Buyer closes on the Purchase of the Property. (d) Guidelines The guidelines adopted by the HRA as such are applicable to the providing of down payment assistance. (e) Pro er .The real property legally described as: Lot 006 Block 002 Leins Richfield 2nd Addn Located on land having a street address of: 6226 Washburn Avenue South (f) Unavoidable Delays. Delays which ai•e the direct result of strikes, labor troubles, fire or other casualty to the Improvements, litigation commenced by third parties which results in delays or acts of any federal, state or local government, except those contemplated by this Agreement, which are beyond the control of the Buyer. Section 1.2 Exhibits. The following exhibits are attached to and by reference made a part of this Agreement: A.. Guidelines B. The Note and Mortgage C. Legal Description Section 1.3 Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota. 2 U~~ (b) The words "herein" and "hereon" and words of similar import, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof. (c) References herein to any particular section or subdivision hereof are to the section or subdivision of this Agreement as originally executed. (d) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. ARTICLE II. REPRESENTATIONS ANll UNllERTAHINGS Section 2.1 By the Buyer. The Buyer makes the following representations and undertakings: (a) The Buyer has the legal authority and power to enter into this Agreement and has duly authorized the execution, delivery and pei°formance of this Agreement; (b) The Buyer has the necessary equity capital or will obtain commitments for financing necessary for acquisition of the Property; (c) The Buyer is familiar with the Guidelines as they relate to down payment assistance, and agrees to follow and be bound by them; (f) Buyer intends to reside at the Property following Closing and to use the same as Buyer's principal residence; and is not acquiring the Property for the purpose of resale or speculation. . Section 2.2 By the IIRA. The HKA makes the following representations as the basis for the undertaking on its part herein contained: (a) The HRA is authorized by law to enter into this Agreement and to carry out its obligations hereunder; and (b) The HRA will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Buyer. ARTICLI; III. ACQUISITION OF PROPERTY; CONVEYANCE TO BUYER Section 3.1 Purchase of Property by Buyer. The Buyer has, or will utilize its best efforts to enter into a binding agreement to purchase the Property. Upon determination by the HRA that Buyer has entered into a binding purchase agreement for the purchase of the Property, 3 ~~s the HRA will deliver to Buyer the Note described in Section 5.1. If no binding purchase agreement is entered into within 30 days from the date of this Agreement, either the HRA or the Buyer may declare this Agreement null and void, and the parties will thereby be released from any further obligation hereunder. Section 3.3 Closin Closing most take place on or before May 27, 2009, or such other date as may be agreed to by the Buyer and HRA in writing. At Closing, the Buyer will provide the HRA with a mortgage in recordable form (and pay for the cost of recording). The mortgage will be a first lien on the Property and will act as security for repayment of any Down Payment funds provided to the Buyer at Closing in the event that Buyer defaults on any of its obligations hereunder or under the Note. The Mortgage and Note will be in substantially the form shown on the attached Exhibit B. ARTICLE IV. [F31~n1<] ARTICLE V. llOWN PAYMENT ASSISTANCE Section 5.1 Issuance of the Note. As consideration for Buyer's obligations, and subject to all of the conditions of this Agreement, the I-IRA agrees to provide the Buyer with a Down Payment Assistance in the amount of $10,000. Upon the Buyer providing the HRA with evidence that Buyer has entered into a purchase agreement for the purchase of the Property, the HRA will deliver to Buyer a promissory note in substantially the form of the Note contained in the attached Exhibit B; Payment of the Down Payment Assistance will be exclusively subject to and in accordance with the terms of the Note as such are contained in the Note or described in this Agreement. Section 5.2 Note Terms. In addition to terms contained in the Note, the Note will be subject to the following: (a) Assuming the Buyer is in compliance with Buyers obligations, the Note will be payable at Closing. (b) The Note will be cancelled if the Closing does not occur by the last date provided in Section 3.3. (c) The Note will not bear interest. (d) .The Note may be canceled by the HRA in the event that the Buyer is in default of any of its obligations under this Agreement. (e) .The Note may not be assigned or pledged unless the proposed recipient certifies to the HRA that it is aware of and accepts to the conditions of the Note governing payment. 4 O -~ (f) Repayment of the Down Payment Assistance paid to Buyer under the Note is required in the event that the Buyer fails to meet the time requirements of Sections 3.3 and 3.4. 'I'lze Note will be subject to repayment if: (i) the Buyer does not continue to own and occupy the property as its primary residence for a period of at least five years following Closing; (ii) the Buyer fails to obtain homestead classification for the Property as soon as possible following Closing; or (iii) Buyer fails to continuously maintain the homestead classification for the Property for five years following the Closing. Such repayment obligation will be secured by a mortgage in substantially the form shown in Exhibit B which will be delivered by Buyer to the HRA at Closing. Unless the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the Property. (g) If the Buyer shall continue to observe all of the covenants and requirements and obligations imposed on Buyer under this Agreement and in the Note for a period of five years from the date of Closing, then the Buyer's obligation to repay the Down Payment Assistance will terminate and be of no further force and effect; and that an instrument discharging the Mortgage will be provided to Buyer for recording at the Buyer's request. A12TICLE VI. FINANCING Section 6.1 Financing. within i s days of the date of execution of this Agreement, the Buyer shall submit to the HRA evidence of a commitment for financing for the purchase of the Property in compliance with the provisions of Section 2.1(b) of this Agreement. The evidence must include ari acknowledgment by the proposed lender that it is aware of the terms of this Agreement as they relate to the .Note and Mortgage. Such evidence will also be sufficient to determine the amount of Down Payment that will be required to complete the purchase. If the HRA finds that the financing together with the Down Payment Assistance and other equity available to Buyer is adequate in amount to provide for the purchase of the Property, the HRA shall notify the Buyer of its approval. If the HRA rejects the evidence of financing as inadequate, the Buyer shall have 30 days or such additional period of time as the I3uyer may reasonably require from the date of such notification to submit evidence of financing satisfactory to the HRA. If the Buyer fails to submit such evidence or~fails to use due diligence in pursuing financing, the HRA may terminate this Agreement and, if issued, cancel the Note, and both parties shall be released from any further obligation or liability hereunder, or under the Note. Section 6.2 Conv of"Notice of Default to Lender. Whenever the HRA shall deliver any notice or demand to the Buyer with respect to any Event of Default by the Buyer in its obligations or covenants under this Agreement, the HRA shall at the same time forward a copy of 5 g-~ such notice or demand to each Holder of any Mortgage authorized by the Agreement at the last address of such Holder shown in the records of the I-IRA. Section 6.3 Subordination. In order to facilitate obtaining financing for the purchase of the Property by the Buyer, the HRA shall agree to modify this Agreement, the Note or the Mortgage in the manner and to the extent the HRA deems reasonable, upon request by the financial institution and the Buyer. ARTICLE VII. PROHIBITIC-NS AGAINST ASSIGNMENT AND TRANSFER Section 7.1 Representation as to Redevelopment. The Buyer represents -and agrees that its undertakings pursuant to the Agreement, are not for speculation in land holding. The Buyer further recognizes that, in view of the importance of the Development to the general welfare of Richfield and the substantial :financing and other public aids that have been made available by the HRA for the purpose of making the Development possible, the qualification and identity of the Buyer are of particular concern to the HRA. The Buyer further recognizes that it is because of such qualifications and identity that the I-IRA is entering into this Agreement, and, in so doing, is further willing to rely on the representations and undertakings of the Buyer for the faithful performance of all undertakings .and covenants agreed by the Buyer to be performed. Section 7.2 Prohibition Against Transfer of Property and Assignment of Agreement. For the reasons set out in Section 7.1 of this Agreement, the Buyer represents and agrees that prior to the issuance of the Certificate of Completion by the HRA: (a) Except only by way of security I=or, and only for the purpose of obtaining financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to the Development under this Agreement, and any other purpose authorized by this Agreement, the Buyer, except as so authorized, has not made or created, and that it will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust in respect to this Agreement or the Property or any part thereof or any interest therein, oi• ally contract or agreement to do any of the same, without the prior written approval of the HRA. ARTIC;I,F, VIII. EVENTS OF DEFAULT Section 8.1 Events of Default Defined. Tlie following shall be deemed Events of Default under this Agreement and the term shall mean, whenever it is used in this Agreement, unless the context otherwise provides, any one or more of the following events: (a) Failure by the Buyer to pay when due the payments required to be paid or secured under any provision of this Agreement; 6 $-~ (b) Failure by the Buyer to observe and substantially perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder, including the time for such performance; (c) If the Buyer shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the Property; (d) If the Buyer, on a petition in bankruptcy filed against it, be adjudicated as bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of the Buyer, a receiver of the I3t~yer or of the whole or substantially all of its property, or approve a petition filed against the Buyer seeking reorganization or arrangement of the Buyer under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or stayed within 60 days ti•om the date of entry thereof; or (e) If the Development is in default under any Mortgage and has not entered into a work-out agreement with the Mortgagee. Section 8.2 Remedies on Default. Whenever any Event of Default occurs, the HRA may, in addition to any other remedies or rights given the HRA under this Agreement, take any one or more of the following actions following written notice by the HRA to the Buyer as provided in Section 9.5 of this Agreement: (a) suspend its performance tinder this Agreement until it receives assurances from the Buyer, deemed reasonably adequate by the 1-IRA, that the Buyer will cure its default and continue its performance under this Agreement; (b) cancel or rescind this Agreement; (c) cancel or rescind 'the Note; (d) foreclose on the Mortgage; (e) withhold the Certificate of Completion; or (f) take whatever action at law or in equity may appear necessary or desirable to the HRA to enforce performance and observance of any obligation, agreement, or covenant of the Buyer under this Agreement; provided, however, that any exercise by the HRA of its rights or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any Mortgage authorized by this Agreement and (b) any rights or interest provided in this Agreement for the protection of the Holders of a Mortgage; and provided further that should any Mortgagee succeed by foreclosure of the Mortgage or deed in lieu thereof to the Buyer's interest in the Property, it shall, notwithstanding the foregoing, be obligated to perform the obligations of the Buyer under this Agreement to the extent that the same have not therefore been performed by the Buyer. 7 ~~ 1 Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof; but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Buyer to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.4 No Additional Waiver Implied by One Waiver. In the event of the occurrence of any Event of Default by either party, which Event of Default is thereafter waived by the other party, such waiver shall be limited to the particular Event of Default so waived and shall not be deemed to waive any other concurrent, previous or subsequent Event of Default. ARTICLC IY. ADDITIONAL PROVISIONS Section 9.1 Conflict of Interests;. Representatives Not Individually Liable. No HRA officer who is authorized to take part in any manner in making this Agreement in his or her official capacity shall voluntarily have a personal i~inancial interest in this Agreement or benefit financially there from. No member, official, or employee of the HRA shall be personally liable to the Buyer, or any successor in interest, for any Fve~It of Default by the HRA or for any amount which may become due to the Buyer or successor or on any obligations under the terms of this Agreement. Section 9.2 Non-Discrimination. `1 he provisions of Minnesota Statutes Section 181.59, which relate to civil rights and non-discrimination, and any affirmative action program of .the City shall be considered a part of this Agreement and binding on the Buyer as though fully set forth herein. Section 9.3 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is sent by mail, postage prepared, return receipt requested or delivered personally: (a) As to the HRA: Richfield HRA Executive Director 6700 Portland Avenue South Richfield, MN 55423 8 ~-fU (b) As to the Buyer: Juan Kosar 2875 Jordan Avenue #310 Minnetonka, MN 55305 or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section 9.3. Section 9.4 Counterparts. This Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the HIZA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Buyer has caused this Agreement to be duly executed as of the day and year First above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICI-IFIELD, MINNESOTA By Its Chairperson By _, Its Executive Director Buyer k .1ua C. Cosar 9 ~j-I( STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this -day of April, 2009, by Suzanne M. Sandahl, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this -day of April, 2009, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) The foregoing instrument was acla~owledged before me this ~~~day of April, 2009, by Juan C. Kosar, a single person. Notary Public -" ~ ~ KIRSTEN S H PARTENHEIMER NOTARY PUBLIC-MINNESOTA ~: _. . ~ My Commission Expires Jan. 31, 2013 g- ~~ EXHIBIT A Foreclosure Purchase Incentive Program Procedural Guidelines Statement of Purpose The purpose of the Foreclosure Purchase Incentive Program (FPIP) is to return foreclosed, vacant properties to owner-occupied properties as quickly as possible. Program Objectives • To eliminate the blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods. • To off-set costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. This will be achieved through the provision of adown-payment assistance or rehab incentive to encourage prospective homebuyers to purchase foreclosed, vacant homes in the city. Program Outcomes Return ten to fifteen foreclosed, vacant houses in the city to owner-occupied homes. Stabilize neighborhoods impacted by foreclosed, vacant houses. Maintain and increase property values in neighborhoods impacted by foreclosed, vacant houses. Definitions Buyer -The buyer of the subject property. HRA -The Housing and Redevelopment Authority in and for the City of Richfield. Properry -The subject house and lot. Foreclosed Property - A house and lot that has been through a mortgage foreclosure process with the most recent owner of record, and is currently owned by a lending agency/bank. A-1 -13 Eligibility 1. Funding is limited to the purchase of foreclosed properties, with priority given to foreclosed AND vacant properties. 2. Applicant's household incomes are not restricted. 3. Loan recipient must be the Buyer and reside in and homestead the property during the life of the loan. 4. The house and property to be purchased must be located within the City of Richfield municipal boundaries. 5. Applicants must complete a City of Richfield HRA FPIP Application and submit it at least 30 days prior to closing. 6. Applicants who may be eligible to receive down-payment assistance through available State or Federal Programs must apply for those funds prior to applying for City HRA FPIP funds. 7. Applicants who receive down-payment assistance through State or Federal programs will not be eligible for FPIP funds. 8. Eligible properties must meet minimtun health and safety requirements. Loans will not be issued for uninhabitable properties. Determination of habitability will be at the discretion of the HRA based on City of Richfield Point of Sale Inspection report and physical inspection conducted by 1 IRA stai'l~ or HRA contracted inspector. Terms and Conditions 1. .Maximum loan amount is $10,000 per eligible household for down-payment assistance and $15,000 per eligible household for rehab assistance. 2. Rehab assistance loans will only be issued in conjunction with the purchase of a foreclosed house. 3. Only one loan per eligible household. 4. Funds can be used city-wide within the City of Richfield boundaries. 5. Funds can be used for down-payment assistance OR for rehab/improvement projects associated with the property. 6. Buyers will be required to sign an Agreement (Agreement) with the City of Richfield Housing and Redevelopment Authority consenting to all loan requirements prior to loan disbursement. 7. Funds for down-payment assistance will be disbursed at closing. 8. Funds for constructio~~/rehab projects will be disbursed in three installments as detailed in the Agreement. 9. Alien will be placed against the property by the HRA for the full loan amount. 10. Funds will be awarded in the form of a live-year, zero-interest, forgivable loan. 11. Buyer must reside in and homestead the property during the life of the loan. If at anytime during the life of the loan the property is vacant for a period of six consecutive months or longer, or the property is no longer homesteaded, the loan will be required to be repaid in full. A-2 ~~~~ 12. If the house is sold or the title transferred during the loan period, the loan will be required to be repaid in full. 13. Any mortgage or financing for the property must be in the form of a fixed interest rate. 14. The HRA reserves the right to refuse loan issuance to properties deemed to be un- inhabitable. 15. The HRA may conduct an inspection o P the property to verify rehab work has been completed in compliance with documentation submitted for the loan. 16. Loan funds are available on a limited basis. Data Privacy All information secured through the program is subject to the Minnesota Data Privacy Act. General Program Marketing Program marketing is entirely at the discretion of the HIZA. It may include the following: Buyer Solicitation. The HRA may market the program to Buyers through promotional articles, direct mail, the Internet, or other methods as deemed appropriate. End Buyers may be any financially eligible family. "The I IRA is a Fair Housing agency. A-3 $-~~ r~Illl3rr B PROMISSORY NOT>C $10,000 2009 The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic (the "Maker"), for value received, hereby promises to pay to Juan C. Kosar (the "Holder") the principal sum of Ten thousand and No/100 Dollars ($10,000), with no interest as hereinafter provided, in any coin or currency which at the time or times of payment is legal tender for the payment of private debts in the United States of America. The principal of this Note is payable as follows: 1. The principal amount of the Note is as provided for in that certain agreement by and between Maker and Holder entitled: Foreclosure Purchase Incentive Program Downpayment Assistance Agreement dated (the "Agreement") and shall bear no interest. Terms contained in this Note shall have the meanings given them in the Agreement unless a different meaning is clearly indicated. 2. The Note shall be due and payable the Note will be payable at Closing. No amount shall be due or payable prior to that date. 3. This Note will be cancelled if the Closing does not occur by the last date provided in Section 3.3 df the Contract. 4. This Note is given pursuant ~to the Agreement. All of the agreements, conditions, covenants, provisions, and stipulations and remedies contained in the Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Note. If a default by the Maker or the Holder occurs under'the Agreement, then the Holder or Maker may at its right and. option, exercise any rights it may have under law or at equity, under the Agreement, and under the Note. 5.. The remedies of the Maker or Llolder as provided herein, and in the Agreement, or any other instrument, shall be cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the Malcer or Holder, may be exercised as often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Malcer or Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the I3-1 8~-~~ Maker or Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note play not be amended, modified, or changed except only by an instrument in v~n-iting signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 6. This Note shall be governed by and construed in accordance with the laws of the state of Minnesota without regard to its conflict of laws provisions. Any disputes, controversies, or claims arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts,. whether based on convenience or otherwise 7. Holder may not assign, transfer or pledge this Note without the .prior written consent of the Maker. Maker may condition consent on obtaining a certification from the proposed assignee, transferee or pledgee ac]<nowledging and agreeing to Maker's rights to cancel the Note in accordance with t:he terms of the Note and the Agreement. 8. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. 9. Any payments paid to Buyer under the Note will be repaid to the HRA in the event that the Buyer fails to meet the requirements of the Agreement. Such repayment obligation will be secured by a mortgage in substantially the form shown in Exhibit B of the Agreement which will be executed and delivered by Buyer to the 1-IRA at Closing. Unless the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the Property. IN WITNESS WHEREOF, the Mal:er has caused this Note to be duly executed as of the _ day of , 2009. B-2 ~^~~ STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) TI3I; HOUSING AND REDEVELOPMENT AUrI'HORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA ~y. Its Chairperson 13y Its Ixecutive Director Buyer (.~.~-- Ju~ C. Kosar The foregoing instrument was acknowledged before me this day of 2009, by Suzanne M. Sandahl, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENEPIN ) The foregoing instrument was acknowledged before me this day of 2009, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public B-3 ~~(~ STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ~~` day of << < , 2009, by Juan C. Kosar. a single per ~"^""~'°^'~^^~~ Notary Public ::~~ ~ ' ~' ~~ h~ i?~-r~rt ~ ~ =s ~ARTENNEIMER k~ ~"~~~r X10?;., ?, "<.~F3LlC•P~fUNESOTA ~~, ~~, ;~ ~Y Ccmmi~scn ~xp~res Jan. 31, 2013 '',; B-4 ~~~~ MORTGAGE This Indenture made this day of April, ?009, between JUAN C. KOSAR, Mortgagor, and THE HOUSING AND REDEVELOl'NII~NT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic under the laws of the State of Minnesota, Mortgagee. Witnesseth: That the said Mortgagor, in consideration of the sum of One ($1.00) Dollar and other good, valuable and sufficient consideration, the receipt whereof is hereby acknowledged, does hereby Grant, Bargain, Sell, and Convey unto the said Mortgagee, its successors and assigns, Forever, all the tracts or parcels of land lying and being in the County of Hennepin and State of Minnesota, described as follows, to-wit: The separate tracts and parcels of land described in the attached Exhibit C. (The "Property") To Have and to Hold the Same, Together with the hereditaments and appLUtenances thereto belonging to the said Mortgagee, its successors acid assigns, forever. And the said Mortgagor, for itself, and its successors and assigns, does covenant with the said Mortgagee, its successors and assigns, as follows: That it is lawfully seized oi• said premises and has good right to sell and convey the same; that the same are free from all encumbrances, save and except. reservations, restrictions and easements of record; that the Mortgagee, its successors and assigns, shall quietly enjoy and possess the same; and that the Mortgagor will Warrant and Defend the title to the same against all lawful claims not hereinbefore specifically excepted. Provided, Nevertheless, That if said Mortgagor, its successors and assigns, shall keep and perform each and every one of its obligations to be performed by Mortgagor under and pursuant to that certain Agreement dated as of (the "Agreement"), made and entered into between Mortgagor and Mortgagee, and shall keep and perform all the covenants and agreements herein contained, then this deed to be null and void, and to be released at the Mortgagor's expense. This Mortgage secures a principal debt in the amount of $10,000 payable by Mortgagor to Mortgagee under the terms of the Agreement, and amendments thereto, between Mortgagor and Mortgagee. And the Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree with the Mortgagee, its successors and assigns, to perform its obligations as above specified, to pay all taxes and assessments now due or that may hereafter become liens against said premises at least ten (10) days before penalty attaches thereto; to pay, when due, both principal and interest of all prior liens or encumbrances, and to keep said premises fi•ee and clear of all other liens or encumbrances; to commit or permit no waste on said premises and to keep them in good. repair; to complete forthwith any improvements which may hereafer be under course of construction thereon, and to pay any other expenses and attorneys' fees incurred by said Mortgagee, its successors or assigns, by reason of litigation with any third party for the protection of the lien of this Mortgage. B-5 ~~~~ That Mortgagor, does further covenant and agree that if any lien for labor, skill or material shall be filed for record during the life of this Mortgage, upon or against the premises hereby mortgaged, the said Mortgagor will, within thirty (30) days after the date of its filing for record, either pay off the said lien and secure its satisfaction of record, or will protect the Mortgagee against any loss or damage growing out of its enforcement, by furnishing a bond for the same amount in the form and with the sureties to be approved by the Mortgagee. In case of failure to pay said taxes and assessments, prior liens or encumbrances, expenses and attorneys' fees as above specified, or to insure said buildings and deliver the policies as aforesaid, the Mortgagee, its successors or assigns, may pay such taxes, assessments, prior liens, expenses and attorneys' fees and interest thereon, or effect such insurance, and the sums so paid shall bear interest at the highest rate permitted by law from the date of such payment, shall be impressed as an additional lien upon said premises, and be immediately due and payable from the Mortgagor, its successors or assigns, to said Mortgagee, it successors or assigns, and this Mortgage shall from date thereof secure the repayment ofsuch advance with interest, In case of default in any of the foregoing covenants, the Mortgagor confers upon the Mortgagee the option of declaring a default and hereby authorizes and empowers said Mortgagee, its successors and assigns, to foreclose this Mortgage by judicial proceedings or to sell said premises at public auction and convey the same to the purchaser in fec simple in accordance with the statute, and out of the money arising from such sail to retain all sums secured hereby, with interest and all legal costs and- charges of such foreclosure and the maximum attorneys' fee permitted by law, which costs, charges and fees the Mortgagor herein agrees to pay. In Testimony Whereof, The said Mortgagor has hereunto set its hand the day and year first above written. Juan Ci . I ~osar I3-6 ~~ ~-/ STATE OF MINNESOTA COUNTY OF HENNEPIN The foregoing instrument was acknowledge Juan C. Kosar, a single person. (Notary Stamp or Seal) d~- d before me this J ~ day of A ril, 2009, by Notary Public ~3"°"' •~•<y ~1~~~'~~ ~ H PARTENHEIMER ::` `'±- Pl~7T:.arYf PUBLIC-MINNESOTA ~~; ` ~• r, ~ ~:' +ay ~;:xnmissien Expires Jan.37, 2073 •.t This Instrument was Drafted by: The Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue South Richfield, MN 55423 612-861-9778 B-7 -Z2. rXI iI13IT C LI+JGAL DLSCIZIPTION Lot 006 Block 002 Leins Richfield 2nd Add ~~ _ Apr 04 09 05:39p Public & Cristina P Ortiz ~ ~~ ~ 319-232-0944 p.3 rage i or ~+ RICHFIELD PUBLfC SAFETY (612) 869-9882 ps C-etai! Listing of AN !tams Requiring Correction far 6226 WASHBURN AYE 5 Lic. or App. Number: 1I239Z TJtis~raperty ti'as inspected J,y: Alan Voracek nn: 3/2l200q at 3:00:00 Date Identifie L'nit/Floar Location Description Action Required 3/3/2009 Garage Common tail! between house & garage InstalUrepair firewai] to lacks proper Ere protection. code.(one option is 1!2" sheetrock installed to garage side from floor to underside of roof sheeting or ceiling. 3/3/2009 Garage Adapters-light and,'ar outlet adapters Adapters, both iig}tt and outlet, present. are meant for temporary use only. REMOVE. 3,'3!2009 Garage Light fixture not functioning above Verify working condition of overhead door light fixture. 3!3/2009 1st Floor NO CARBON'.v10NOXID;/ Install carbon monoxide detector pETECCOR PRESENT WiTH1N 10' within 10' of all bedrooms OF ALL BEDROOMS 3!3/2004 1st Floor Bathroom GFI outlet not functioning properly/not Wire GFl outlet to tripping manufacturers instructions and/or replace. 3!312009 3 st Floor Bedroom Repiacc damaged outlet N.W. bedroom Damagcdlbrokeninon- functioning outlets must be repaircd/replaced. 313/2009 I st Floor Bedroom Na smoke detector as required. install smoke detector pax manufacturers instructions to specified location [MMEDI.ATELY. ALL >3>/:aRaoMs 3/3/2009 1 st Floor Bedroom ~?utletrswitch cover damaged or missing Outletslswitel,es must have N.W_ bedroom approved eoverplatcs 3/312009 1st Floor Bedroom Replace damaged outlet west bcdroorri Damagedlbrokenlnon- functioning outicts must be repairedlrcplaced. 3!312009 [ st Floor Bedroom Outlet(s) improperly wired-reverse Out[et{s) must be property polarity N.G. bedroom wired. 3/3/2009 1st Ploor Entry Door/door hardware damaged RepairJreplace damaged door and/or hardware. 3/3±2009 lsi Floor Tsntry Dead bolt lock(s) missing at exterior Install dead bolt locks at all door(s) exterior doors 3/3/2009 1st: Floor 1•Iallway Smoke detector not functioning. Replace ttdoperable smoke detector [MMEDlA3'CLY. 3!312009 1st Floor Kitchen Abandoned/unused wiring under sink Remove abandanedJunused whin€. 3/3/2009 lsz Floor Kitchen Light fixture not functioning Verify working eandition of hops://rzlaxl.target.~vlnl~GWAi~~TebReadyViewBody.aspx?t=att.&id=Rg~.50Hyup2uC,~... 414120Q9 8- a`l, Apr 04 09 05:39p Publio & Cristina P Ortiz 319-232-0944 p.4 gage t of 4 light fixture. 313(2009 3st Floor Living room Outlet loose Outlet must be secured to properly anchored electbox. Page 13/4/2004 14:58 hops://rrtail.target.com/OVA/VVebReadyViewF3ody.aspx?t=att&id=Rg<4AAABSOHyup2uG... 4/4/20Q9 Apr 04 09 05:40p Publio & Cristina P Ortiz ~ .- 319-232-0944 p.5 t~-S Page 3 of 4 RlCNFlELD PUBLlC SAFE7Y (612} 86'f-9882 Ps fletail Listing of All Items Requiring Correction for 6226 1NASHBt~RN AVfE S 3/3/2009 I st Floor Living room Outlet(s) improperly wired-reverse polarity Outlet(s) must be properly wirctl. 3/3/2009 Alt Areas Water to dwelling shut off Water tnust he on, check system for leaks, including faucets, ' traps. water pipes, drain lines, ect. NO OCCUPANCY UT;TII., RE-INSPECTED 3x312009 Basement Pumace Room Smoke detector not functioning. Replace wlopcrablc smoke detector 1Mh4EDiATI:LY. 313/2009 Basement P'umace Room Light fixture not functioning Verify working condition of light fixture. 3x3/2009 $asemcnt Furnace Room Furnace inoperable at time of inspe:etion Heating system to be certified by or/20+ years old /or no history of heating contractor I icensed wi#h installation the Cin~ of Richfield. 3!3/2009 Basement Laundry Gasline-Open, uncapped gaslinc in Gaslinc-cap openlunused laundry room and furnace roam gaslinc. 3.`3!2009 Basemc-pit Laundry Dryer exhaust duct vented to interior, Veni dryer exhaust to the exterior to code. 3'312009 Basement Main Fireplace lacks non-combustible hearth. Fireplace hearth requin;d-firebox 6sq.It. or less-8"sides, 16" front. CrF sq.ft: l2" sides, 20"front. 3; 3P2009 Basement Main Outlet/sw•itch cover damaged or missing Outlets/switches must have approved coverplares 3; 312009 Outside Exterior Siding damaged and/or missing Repair damaged/missing siding, 313/2009 outside Exterior No caulk Canik all windows and doors to create weather proof seal 3!312009 Outside Exterior Vv'indow screens damaged missing All operable windows must have screens in good condition. 3!3/2009 Outside Roof Gutters damaged Repair/replace gutters and~or downspouts and extentions 3!312009 Outside Roof Fireplace chimney-deteriorated brick ~ Fireplace-repair deteriorated areas morlari cap !or inside firebox of brickJmortar 3/3/2009 Outside Roof Fl~.te cap damagcdJunlisted/missing Flue cap must be U.L. listed ~. in good condition. htt~s://mail.target.corn/OWA/WebReadyViewBody.aspx?t~-att&id-RgA~.AAB 50Hyup2uG... 4/412009 ~~ Q C L t N N N ~O AGENDA ITEM # REPORT # J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING APRIL 20, 2009 REPORT PREPARED BY: KIRSTEN PARTENHEIMER, HOUSING SPECIALIST ~ NAME, TITLE REPORT PRESENTER: KAREN BARYON, ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTNE DIRECT( ITEM FOR HRA CONSIDERATION: Consideration of a Rehabilitation Loan Agreement between the Housing and Redevelopment Authority and Tedd Herman and Jenna Lindeman for the rehabilitation of 7223 10th Avenue Through the Foreclosure Purchase Incentive Program. I. RECOMMENDED ACTION: By Motion: Approve and authorize execution of the attached Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement between the Housing and Redevelopment Authority and Tedd Herman and Jenna Lindeman for the rehabilitation of 7233 10th Avenue. II. BACKGROUND In an effort to return foreclosed and vacant homes to owner-occupancy and reduce the associated blighting effects, the Housing and Redevelopment Authority (HRA) allocated $150,000 for the Foreclosure Purchase Incentive Program (FPIP) for 2009. On .March 16, 2009, the HRA approved Guidelines for the program. The purpose of the program is to encourage the return of foreclosed and vacant single- family homes to owner-occupancy as quickly as possible. Prospective buyers who homestead the property are eligible for either a $10,000 down-payment assistance 042009 FPIP 7233 10th Ave Herman Lindeman loan or a $15,000 rehabilitation assistance loan. Both loans are deferred and will be forgiven after five years of owner-occupancy. Tedd Herman and Jenna Lindeman have. submitted an FPIP application for a Rehabilitation Loan for 7233 10th Avenue. The home is vacant and foreclosed. They are using savings to replace interior carpeting and flooring, repaint and install some new appliances. The rehabilitation loan assistance allows them to replace 15 windows, the exterior doors and the remaining necessary appliances. The renovations being funded with the Rehabilitation Loan are outlined in their Rehabilitation Plan they submitted with their application. The couple will also address all the requirements listed in the Point-of-Sale report. Their purchase offer has been accepted and the closing on the house is scheduled for May 5, 2009. Mr. Herman and Ms. Lindeman will submit a copy of the binding Purchase Agreement to the HRA as soon as the paperwork is ready. Because of requirements imposed by the lender for their first mortgage, Mr. Herman and Ms. Lindeman anticipate requesting a Subordination Agreement. The couple is waiting on the necessary documents needed to submit a request for subordination and will submit them to staff as soon as they are available. According to the terms of the Rehabilitation Loan Agreement, the HRA mortgage will be a first lien on the property, but the HRA can agree to subordinate. It is anticipated (based ~on preliminary information) that the applicants will meet all subordination requirements and staff will be able to administratively approve the subordination. Mr. Herman and Ms. Lindeman are. in agreement with the terms of the Rehabilitation Loan Agreement and have signed it. Staff has reviewed Mr. Herman and Ms. Lindeman's FPIP application and recommends approval of the Rehabilitation Loan Agreement. III. BASIS OF RECOMMENDATION A. POLICY • HRA staff has received a completed application. • The proposed purchase and rehabilitation of the property meets the objectives of the Foreclosure Purchase Incentive Program: o Eliminates the blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods. o Off-sets costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. • The application meets the Procedural Guidelines, as defined in Exhibit B of the Rehabilitation Loan Agreement. B. CRITICAL ISSUES • Foreclosed homes affect the stabilization of neighborhoods and property values. • Foreclosed homes often have deferred maintenance and can be costly to renovate. • FPIP loans provide the incentive for prospective buyers to purchase a foreclosed home and tackle the necessary improvements. C. FINANCIAL • The project is eligible fora $15,000 loan according to the terms of the Rehabilitation Loan Agreement. • Under the terms of the Agreement, three installments would be made: o $3,750 would be due and payable at closing o $3,750 would be due and payable no later than five days following notification and verification of the issuance a building permit for construction of the Improvements o $7,500 would be due and payable on the date of the issuance of a Certificate of Completion showing full completion of all of the Improvements. D. LEGAL • Mr. Herman and Ms. Lindeman are in agreement with the terms of the Rehabilitation Loan Agreement and have signed it. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not execute the Rehabilitation Loan Agreement. • Amend the Rehabilitation Loan Agreement and direct staff to work with property owners to revise their proposal. V. ATTACHMENTS • Rehabilitation Loan Agreement • Rehabilitation Plan • Point-of-Sale report • Picture of property VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Tedd Herman and Jenna Lindeman ~~ i FORECLOSURE PURCHASE, INCENTIVE PROGRAM REHABILITATION LOAN AGREEMENT Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICI-IFIELD, MINNESOTA and Tedd K. Herman and Jenna M. Lindeman at 7233 10TH AVENUE,I2ICHFIELD, MN 55423 This Instrument Drafted by: Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue Richfield, MN 55423 ~- AGREEMENT THIS AGREEMENT, made and entered into as of this day of April, 2009, by and between the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate arid politic under the laws of the State of Minnesota, having its principal office at 6700 Portland Avenue, Richfield, Minnesota (HRA), and Tedd K. Herman and Jenna M. Lindeman (Buyer). WITNESSETH: WHEREAS, the City of Riclltielcl (City) and the HRA have previously created and established a Redevelopment Project (Project) and Tax Increment Financing District (TIF District) pursuant to the authority granted in Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.174 through 469.179 (collectively, the Acts); and WHEREAS, pursuant to the Acts, the City and the HRA have previously adopted a redevelopment plan (Redevelopment flan) and a tax increment financing plan (TIF Plan) to finance all or a portion of the public development costs of the Project; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan and TIF Plan as hereinafter defined and particularly to make specified land in the Project available. for development by private enterprise for and in accordance .with the Redevelopment Plan, the HRA has determined to provide substantial aid and assistance to finance public development costs in the Project; and WHEREAS, the HRA has become concerned that within the Project there is an increasing number of homes which have been foreclosed and are standing vacant, and, in many cases are not being adequately secured or maintained; and WHEREAS, under such circumstances, the properties themselves are subject to deterioration; and the entire neighborhood is subject to the impacts caused by such conditions; and WHEREAS, the HRA, in recognition of the need to provide decent, safe and sanitary housing in the community has established a deferred loan program which is designed to provide assistance to individuals who are acquiring and doing rehabilitation to foreclosed properties within the Project, and in furtherance of the goals and objectives of the plan for the Project; and. WHEREAS, the Buyer has proposed a development as hereinafter defined within the .Project which the HRA has determined will promote and carry out the objectives for which the Project has been undertal<:en, will assist in carrying out the obligations of the Redevelopment Plan and TIF Plan, will be in the vital best interests of the City and the health, safety and welfare of its residents and is in accord with the public purposes and .provisions of the applicable state and local laws and requirements under which development in the Project has been. undertaken and is being assisted. Q- 3 NOW, THEREFORE, in consideration of the mutual .covenants and obligation of the HRA and the Buyer, each party does hereby represent, covenant and agree with the other as follows: ARTICLE I. DEFINITIONS, EXHIBITS. RULES OF INTERPRETATION Section 1.1. Definitions. In this Agreement, the following terms have the meaning given below unless the context clearly requires otherwise: (a) Cam. The City of Richfield, Minnesota. (b) Rehabilitation Plans. Collectively, the .plans, drawings and related documents related to the Improvements, which are listed on Exhibit D. (c) Development. The Property and the Improvements to be constructed thereon according to the Rehabilitation Plans approved by the 1=1RA. (d) Closin The date on which Buyer closes on the Purchase of the Property. (e) Improvements. Each and all of the site improvements to be constructed on the Property by the Buyer, as specified in the Rehabilitation Plans approved by the HRA. (f) Guidelines. The guidelines adopted by the HRA as such are applicable to the providing of rehabilitation assistance. (g) Mort~a~e and Holder. The term "mortgage" shall include the mortgages referenced in Article VI of this Agreement and any deed of trust or other instrument creating an encumbrance or lien upon the Property or any part thereof, as security for a loan. The term "holder" in reference to a mortgage includes any insurer or guarantor (other than the Buyer) of any obligation or condition secured by such mortgage or deed of trust. (h) Pro er .The real property legally described as: Lot 11, Block 5, "Fallden's Third Addition". Subject to restrictive covenants contained in deed Doc. No. 330548; Subject to an easement of 5 feet reserved over the rear of said Lot for utility installation and maintenance as contained in deed Doc. No. 330548. Located on land having a street address of: 7233 10th Avenue (i) Unavoidable Delays. Delays which are the direct result of strikes, labor troubles, fire or other casualty to the Improvements, litigation commenced by third parties which results in 2 `' I delays or acts of any federal, state or local government, except those contemplated by this Agreement, which .are beyond the control of the Buyer. Section 1.2 Exhibits. The following. Exhibits are attached to and by reference made a part of this Agreement: A. Form of Certificate of Completion B. Guidelines C. The Note and Mortgage D. Rehabilitation Plan Section 1.3 Rules of Interpretation. (a) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota. (b) The words "herein" and "hereof" and words of similar import, without reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivision hereof. (c) ..References herein to any particular section or subdivision hereof are to the section or subdivision of this Agreement as originally executed. (d) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and shall be disregarded in construing or interpreting any of its provisions. ARTICLE II. REPRESENTATIONS AND UNDERTAKINGS Section 2.1 the Buyer. The Buyer makes the following representations and undertakings: (a) The Buyer has the legal authority and power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement; (b) The Buyer has the necessary equity capital or will obtain commitments for financing the necessary for acquisition of the Property and construction of the Improvements; (c) The Buyer will construct the Irnproveinents in accordance with the terms of this Agreement and all local, state and federal laws and regulations; (d) The Buyer will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, the requirements of all local, state and federal laws grid regulations which must be obtained or met before the Improvements may be constructed; and t- ~~ (e) The plans for the Improvements have been prepared by a qualified draftsperson or architect, or other person acceptable to the HRA, as appropriate. If the proposed improvements do not require a plan to be prepared, buyer agrees to submit a detailed list of the proposed improvements to the Property, detailing the project and materials. (f) Buyer intends to reside at the Property following the Closing and to use the same as Buyer's principal residence; and is not acquiring the Property for the purpose of resale or speculation. Section 2.2 By the HRA. The IIRA makes the following representations as the basis for the undertaking on its part herein contained: (a) The HRA is authorized by law to enter into this Agreement and to carry out its obligations hereunder; and (b) The HRA will, in a timely manner, subject to all notification requirements, review and act upon all submittals and applications of the Buyer and will cooperate with the efforts of Buyer to secure the granting of any permit, license, or other approval required to allow. the construction of the Improvements. ARTICLE III. ACQUISITION OF PROPERTY; CONVEYANCE TO BUYER Section 3.1 Purchhase of Property by Buyer. The Buyer has, or will utilize its best efforts to enter into a binding agreement to purchase the Property. Upon determination by the HRA that Buyer has entered into a binding purchase agreement for the purchase of the Property, the HRA will deliver to Buyer the Note described in Section 5.1, If no binding purchase agreement is entered into within 15 days from the date of this Agreement, either the HRA or the Buyer may declare this Agreement null and void, and the parties will thereby be released from any further obligation hereunder. Section 3.2 Closing. Closing must take place on or before June 4, 2009, or such other date as may be agreed to by the Buyer and HRA in writing. At Closing, the Buyer will provide the HRA with a mortgage in recordable form (a11d pay for the cost of recording). The mortgage will be a first lien on the Property and will act as security for repayment of any of the Rehabilitation Loan advanced to the Buyer in the event that construction of the Improvements is not completed on or before the date specified in Section 4.3. The Mortgage will be in substantially the form of the mortgage shown on the attached Exhibit C. ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS Section 4.1. Construction of Improvements. The Buyer shall construct the Improvements on the Property in accordance with the Rehabilitation Plans and shall maintain, preserve and keep the Improvements in good repair and condition. 4 1'" (~! Section 4.2. Builctin~ Plans. No building permit will be issued by the City unless the building plans are in conformity with the Rehabilitation Plans and all local, state and federal regulations. The HRA shall, within 2S days of receipt of Rehabilitation Plans submitted in application for a building permit, review such Rehabilitation Plans to determine whether the foregoing requirements have been met. If the HRA determines such Rehabilitation Plans to be deficient, it shall notify the Buyer in writing stating the deficiencies and the steps necessary for correction. Issuance of the building permit b}~ the City shall be a conclusive determination that the Rehabilitation Plans have been approved and shall satisfy the provisions of this Section 4.2. Section 4.3 Schedule of Construction. Subject to Unavoidable Delays, construction of the Improvements shall be completed prior to September 4, 2009. All construction shall be in conformity with the approved Rehabilitation Plans. Periodically during construction the Buyer shall make reports in such detail as may reasonably be requested by the HRA concerning the actual progress of construction. If at any time prior to completion of construction the HRA has cause to believe that the Buyer will be unable to complete construction of the Improvements in the time permitted by this Section 4.3, it may notify the Buyer and demand assurances from the Buyer regarding the Buyer's construction schedule. If such assurances are not forthcoming or are deemed by the HRA at its sole discretion to be inadequate, the HRA may declare an Event of Default and may avail itself of any of the remedies specific in Section 8.2 of this Agreement. Section 4.4 Certificate of Completion. Promptly after notification by the Buyer of completion of construction of the Improvements; the HRA shall inspect the construction to determine whether the Improvements have been completed in accordance with the Rehabilitation Plans and the terms of this Agreement, including the date of the completion thereof. In the event that the HRA is satisfied with the construction, the HRA shall furnish the Buyer with a Certificate of Completion in the form attached IZereto as Exhibit A. Such certification by the HRA shall be a conclusive determination of satisfaction .and termination of the agreements and covenants in this Agreement with respect to the obligation of the Buyer to construct the Improvements. Issunace of the Certificate of Completion shall also serve as a satisfaction of any obligation of Buyer under the Note and Mortgage. If the HRA shall refuse or fail to provide certification in accordance with the provisions of this Section 4.4, the HItA shall within 15 days of such notification provide the Buyer with a written statement, indicating in adequate detail in what respects the Buyer has failed to complete the Improvements in accordance with the provisions of this Agreement necessary, in the opinion of the HRA, for the Buyer to take or perform in order to obtain such certification. Section 4.5 Failure to Construct. In the event that construction of the Improvements is not completed as provided in Section 4.3 of this Agreement, an Event of Default shall be deemed to have occurred, and the HRA may proceed with its Remedies on Default under this Agreement. 5 `" l ARTICLT+J V. RIJHAI3ILITATION LOAN Section 5.1 .Issuance of the Note. As consideration for Buyer's covenant to construct the Improvements, and subject to all of the conditions of this Agreement, the HRA agrees to provide the Buyer with a. Rehabilitation Loan in the amount of $15,000. Upon the Buyer providing the HRA with evidence that Buyer has entered into a purchase agreement for the purchase of the Property, the HRA will deliver to Buyer a promissory note in substantially the form of the attached Exhibit C. Payment of the Rehabilitation Loan will be exclusively subject to and in accordance with the terms of the Note as such are contained in the Note or described in this Agreement. Section 5.2 Note Terms. The terms of the Note will include the following: (a) Assuming the Buyer is in compliance with Buyers obligations, the Note will be payable in three installments. The first installment of $3,750 will be due and payable at Closing, the second installment of $3,750 will be due and payable not later than five days following notification and verification of the issuance a building permit for construction of the Improvements, and the final installment of $7,500 on the date of the issuance of a Certificate of Completion showing full completion of all of the Improvements. In the event the Improvements do not require a building permit, the second installment will be due and payable upon the submission of receipts for the Improvements totaling $5,000 or more. (b) The Note will be cancelled if the Closing does not occur by the last date provided in Section 3.2; or if construction of the Improvements are not fully completed by the last date provided in Section 4.3. (c) The Note, will not bear interest. (d) The Note may be canceled by the IIRA in the event that the Buyer is in default of any of its obligations under this Agreement. (e) The Note may not be assigned or pledged unless the proposed recipient certifies to the HRA that it is aware of and accepts to the conditions of the Note governirig payment. (f) The Note will provide for repayment of the any Rehabilitation Loan payments paid to Buyer under the Note in the event that the Buyer fails to meet the time requirements of Sections 3.2 and 4.3. Such repayment obligation will be secured by a mortgage in substantially the form shown in Exhibit C which will be delivered by Buyer to the HRA at Closing. Unless the HRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the Property. (g) The Note will also provide that if the Buyer continues to observe all of the covenants and requirements and obligations imposed on Buyer under this Agreement, any other agreements between the HRA and Buyer with respect to the Property, and in the Note for a 6 ~- g period of five years from the date of Closing, then the Buyer's obligation to repay the Rehabilitation Loan will be forgiven, terminate and be of no further force and effect; and an instrument discharging the :Mortgage will thereupon be provided to Buyer for recording at the Buyer's request. Section 5.3 Payments Under the Note. On the date payments are due under the Note, the HRA will make such payments by delivering the amount due to either the lending institution providing financing for construction of the Improvements, or the title company servicing the construction loan. Such lending institution or title company may then use the delivered funds to make payment to any contractor or materialman foe work or materials actually furnished in connection with the Improvements In the event that no lending institution or title company is available to serve in that capacity, the HRA shall disburse the payments, when due, in any manner which in its reasonable judgment will assure that the funds will be expended for construction of the Improvements. ARTICLC VI. FINANCING Section 6.1 Financin If additional financing is required for the Improvements, within 30 days of the date of execution of this Agreement by all the parties, the Buyer shall submit to the HRA evidence of financing for the Improverilents in compliance with the provisions of Section 2.1(b) of this Agreement. If the HRA finds that the amount of such financing along with the Rehabilitation Loan is adequate in amount to provide for the construction of the Improvements, the HRA shall notify the Buyer of its approval. If the HRA rejects the evidence of financing as inadequate, the Buyer shall have 30 days or such additional period of time as the Buyer may reasonably require from the date of such notification to submit evidence of financing satisfactory to the HRA. If the Buyer fails to submit such evidence or fails to use due diligence in pursuing financing, the HRA may terminate this Agreement and both parties shall be released from vzy further obligation or liability hereunder, except for the HRA's remedies pursuant to Section 4.5 of this Agreement. Section 6.2 Cony of Notice of Default to Lender. Whenever the HRA shall deliver any notice or demand to the Buyer with respect to any Event of Default by the Buyer in its obligations or covenants under this Agreement, the HIZA shall at the same time forward a copy of such notice or demand to each Holder of any Mortgage authorized by the Agreement at the last address of such Holder shown in the records of the I IRA. Section 6.3 Subordination. In order to facilitate obtaining financing for the purchase of the Property or the construction of the Improvements by the Buyer, the HRA may agree to modify this Agreement, the Note or the Mortgage in the manner and to the extent the HRA deems reasonable, upon request by the financial institution and the Buyer. 7 -1' ARTICLE VII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 7.1 Representation as to Redevelopment. The Buyer represents and agrees that its undertakings pursuant to the Agreement, are for the purpose of development of the Property and not for speculation in land holding. The Buyer further recognizes that, in view of the importance of the Development to the general welfare of Richfield and the substantial financing and other public: aids that have been made available by the HRA for the purpose of making the Development possible, the qualification and identity of the Buyer are of particular concern to the HRA. The Buyer further recognizes that it is because of such qualifications and identity that the HRA is entering into this Agreement, and, in so doing, is further willing to rely on the representations and undertakings of the Buyer for the faithful performance of all undertakings and covenants agreed by the Buyer to be performed. Section 7.2 Prohibition A#;ainst Transfer of Property and Assignment of Agreement. For the reasons set out in Section 7.1 of this Agreement, the Buyer represents and agrees that prior to the issuance of the Certificate of Completion by the HRA: (a) Except only by way of secttt•ity for, and only for the purpose of obtaining financing necessary to enable the Buyer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to the Development under this Agreement, and any other purpose authorized by this Agreement, the Buyer, except as so authorized, has not made or created, and that i.t will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust in respect to this Agreement or the Property or any part thereof or ,any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the 1-1RA. AI2TICLP: VIII. EVENTS OF DCFAULT Section 8.1 Events of Default Defined. The following shall be deemed Events of Default under this Agreement and the term shall mean, whenever it is used in this Agreement, unless the context otherwise provides, any one or more of the following events: (a) Failure by the Buyer to pay when due the. payments required to be paid or secured under any provision of this Agreement; (b) Failure by the Buyer to observe and .substantially perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder, including the time for such performance; ~-! (c) If the Buyer shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the Property; (d) If the Buyer, on a petition in bankruptcy filed against it, be adjudicated as bankrupt, or a court of competent jurisdiction shall enter an order of decree appointing, without the consent of the Buyer, a receiver of the Buyer or of the whole or substantially all of its property, or approve a petition filed against the Buyer seeking reorganization or arrangement of the Buyer under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or stayed within 60 days from the date of entry thereof; or (e) If the Development is in default under any Mortgage and has not entered into a work-out agreement with the Mortgagee. Section 8.2 Remedies on Default. Whenever any Event of Default occurs, the HRA may, in addition to any other remedies or rights given the HR.A under this Agreement, take any one or more of the following actions following written notice by the HRA to the Buyer as provided in Section 9.3 of this Agreement: (a) suspend its performance under this Agreement until it receives assurances from the Buyer, deemed reasonably adequate by the HRA, that the Buyer will cure its. default and continue its performance under this Agreement; (b) cancel or rescind this Agreement; (c) cancel or rescind the Note; (d) foreclose on thf; Mortgage; (e) withhold the Certificate of Completion; or (f) take whatever action at law or in equity may appear necessary or desirable to the HRA to enforce performance and observance of any obligation, agreement, or covenant of the Buyer under this Agreement; provided, however, that any exercise by the HRA of its rights or remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any Mortgage authorized by this Agreement and (b) any rights or interest provided in this Agreement for the protection of the Holders of a Mortgage; and provided further that should any Mortgagee succeed by foreclosure of the Mortgage or deed in lieu thereof to the Buyer's interest in the Property, it shall, notwithstanding the foregoing, be obligated to perform the obligations of the Buyer under this Agreement to the extent that the same have not therefore been performed by the Buyer. Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to ~~r~ exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the HRA or the Buyer to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 8.4 No Additional Waiver Implied by One Waiver. In the event of the occurrence of any Event of Default by either party, which Event of Default is thereafter waived by the other party, such waiver shall be limited to the particular Event of Default so waived and shall not be deemed to waive any other concurrent, previous or subsequent Event of Default. ARTICLE IX. ADDITIONAL PI20VISIONS Section 9:1 Conflict of Interests; Representatives Not Individually Liable. No HRA officer who is authorized to take part in any manner in making this Agreement in his or her official capacity shall voluntarily have a personal financial interest in this Agreement or benefit financially there from. No member, official, or employee of the HRA shall be personally liable to the Buyer, or any successor in interest, for any went of Default by the HRA or for any amount which may become due to the Buyer or successor or on any obligations under the terms of this Agreement. Section 9.2 Non-Discrimination. 'l,l1e provisions of Minnesota Statutes Section 181.59, which relate to civil rights and non-discrimination, and any affirmative action program of the City shall be considered a part of this Agreement and binding on the Buyer as though fully set forth herein. Section 9.3 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered ifs it is sent by mail, postage prepared, return receipt requested or delivered personally: (a) As to the HRA: Richfield H:RA Executive Director 6700 Portland Avenue South Richfield, MN 55423 (b) As to the Buyer: Tedd Herman Jenna Lindeman 1250 Hennepin Avenue, Apt. 321 Minneapolis, MN 55403 10 ~' -1 ~- or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in t11is Section 9.3. Section 9.4 Counterparts. 'hhis Agreement may be simultaneously executed in any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the IIRA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Buyer has caused this Agreement to be duly executed as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AU'T'HORITY IN AND FOR THE CITY OF RICHFICLD, MINNESOTA By Its Chairperson By Its Executive Director Bllyel' ~~ Tedd K. Herman Jens a M. Lindeman Q -- ~ ~ STATE OF MINNESOTA COUNTY OF ) SS The foregoing instrument was acknowledged before me this day of April, 2009, by Suzanne M. Sandahl, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA COUNTY OF SS The foregoing instrument was acknowledged before me this _ day of April, 2009, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF ~~ ) The foregoing instrument was acknowledged before me this L~day of April, 2009, by Tedd K. Herman, a single person, and Jenny M. Lindeman, a sin le er r~~~~ ~~ KIRSTEN S N PARTElVHEIIUIER No ary Public NOTARY PUBLIC•MINNESO'fA ~' My Commission Expires Jan.31, 2013 . 4: 12 q- I `~" EXHIBIT A FOP;M OF CERTIFICATE OF COMPLETION The undersigned hereby certifies that ___ ,has fully and completely complied with its obligations under Article IV of that document entitled "Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement", between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and _ dated filed as Document No. with respect to the construction of the approved construction plans at legally described as <tnd is released and forever discharged from its obligations to construct under such above-referenced Article. DATED: >3y: Its: "I'I iI~ HOUSING AND REDEVELOPMENT All"THORITY IN AND FOR THE CITY RICHFIELD Chairperson By: Its: Executive Director STATE OF MINNES01'A ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 20_, by and the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue Richfield, MN 55423 A-1 Q~~~ I~JXI-IIBIT B Foreclosure Purchase Incentive Program Procedural Guidelines Statement of Purpose The purpose of the Foreclosure Purchase Incentive Program (FPIP) is to return foreclosed, vacant properties to owner-occupied properties as quickly as possible. Program Objectives To eliminate the blighting influence of foreclosed, vacant housing, thus stabilizing and improving residential neighborhoods. To off-set costs associated with deferred maintenance and property damage associated with foreclosure and vacancy. This will be achieved through the provision of adown-payment assistance or rehab incentive to encourage prospective homebuyers to purchase foreclosed, vacant homes in the city. Program Outcomes Return ten to fifteen foreclosed, vacant houses in the city to owner-occupied homes. Stabilize neighborhoods impacted by foreclosed, vacant houses. Maintain and increase property values in neighborhoods impacted by foreclosed, vacant houses. Definitions Buyer -The buyer of the subject property. HRA -The Housing and Redevelopment Authority in and for the City of Richfield. Property -The subject house and lot. Foreclosed Property - A house and lot that has been through a mortgage foreclosure process with the most recent owner of record, and is currently owned by a lending agency/bank. Eligibility 1. Funding is limited to the purchase of foreclosed properties, with priority given to foreclosed AND vacant properties. 2. Applicant's household incomes are not restricted. B-1 q -_ l 3. Loan recipient must be the Buyer and 1•esicle in and homestead the property during the life of the loan. 4. The house and property to be purchased nnist be located within the City of Richfield municipal boundaries. 5. Applicants must complete a City of Richfield HRA FPIP Application and submit it at least 30 days prior to closing. 6. Applicants who may be eligible to receive down-payment assistance through available State or Federal Programs must apply for those funds prior to applying for City HRA FPIP funds. 7. Applicants who receive down-payment assistance through State or Federal programs will not be eligible for FPIP funds. 8. Eligible properties must meet minimum health and safety requirements. Loans will not be issued for uninhabitable properties. Determination of habitability will be at the discretion of the HRA based on City oi• RichCeki Point of Sale Inspection report and physical inspection conducted by HRA staff or HRA contracted inspector. Terms and Conditions 1. Maximum loan amount is $10,000 per eligible household for down-payment assistance and $15,000 per eligible household Ior rehab assistance. 2. Rehab assistance loans will only be issued in conjunction with the purchase of a foreclosed house. 3. Only one Loan per eligible household. 4. Funds can be used city-wide within the City of Richfield boundaries. 5. Funds can be used for down-payment assistance OR for rehab/improvement projects associated with the property. 6. Buyers will be required to sign an Agreement (Agreement) with the City of Richfield Housing and Redevelopment Authority consenting to all loan requirements prior to loan disbursement. 7. Funds for down-payment assistance will be disbursed at closing. 8. Funds for construction/rehab projects «~ill be disbursed in three installments as detailed in the Agreement. 9. Alien will be placed against the property by the HRA for the full loan amount. 10. Funds will be awarded in the form of a five-year, zero-interest, forgivable loan. 11. Buyer must reside in and homestead the property during the life of the loan. If at anytime during the life of the loan the property is vacant Ior a period of six consecutive months or longer, or the property is no longer homesteaded, the loan will be required to be repaid in full. 12. If the house is sold or the title transferred during the loan period, the loan will be required to be repaid in full. 13. Any mortgage or financing for the property must be in the form of a fixed interest rate. 14. The HRA reserves the right to refuse loan issuance to properties deemed to be un- inhabitable. I3-2 Q~.~ ~ 15. The HRA may conduct an inspection o['the property to verify rehab work has been completed in compliance with documentation submitted for the loan. 16. Loan funds are available on a limited basis. Data Privacy All information secured through the program is subject to the Minnesota Data Privacy Act. General Program Marketing Program marketing is entirely at the discretion of the IRA. It may include the following: Buyer Solicitation. The HRA may market the program to Buyers through promotional articles, direct mail., the Internet, or other methods as deemed appropriate. End Buyers may be any financially eligible family. Tlie HRA is a Fair Housing agency. I3-3 ~"I '~ EXHIBIT C PROMISSORY NOTE REDEVELOPMENT CREDIT NOTE $15,000 2009 The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic (the "Maker"), for value received, hereby promises to pay to Tedd K. Herman and Jenna M. Lindeman (tlie "Holder") the principal sum of Fifteen thousand and No/100. Dollars ($15,000), with no interest as hereinafter provided, in any coin or currency which at the time or times of payment is legal tender for the payment of private debts in the United States of America. The principal of this Note is payable as follows: 1. The principal amount of the Note is as provided for in that certain agreement by and between Maker and Holder entitled: Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement dated ~ (the "Agreement") and shall bear no interest. Terms contained in this Note shall have the meanings given them in the Contract unless a different meaning is clearly indicated. 2. The Note shall be due and payable the Note will be payable in three installments. The first installment of $3,750 will be due and payable at Closing, the second installment of $3,750 will be due and payable not later than live days following the date a building permit for construction of the Improvements is issued, and the final installment of $7,500 on the date of the issuance of a Certificate of Completion showing full completion of all of the Improvements. No amount shall be due or payable prior to those dates. 3. This Note will be cancelled if the Closing does not occur by the last date provided in Section 3.3 of the Agreement; or if construction of the Improvements are not fully completed by the last date provided in Section 4.3 of the Agreement. 4. This Note is given pursuant to the Agreement. All of the agreements, conditions, covenants, provisions, anti stipulations and remedies contained in the Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It i;s agreed that tune is of the essence of this Note. If a default by the Maker or the Holder occurs under the Agreement, then the Holder or Maker may at its right and option, exercise any rights it may have under law or at equity, under the Agreement, and under the Note. G1 ~~(`~ 5. The remedies of the Maker or Holder as provided herein, and in the Agreement, or any other instrument, shall be cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the Maker or Holder, may be exercised as often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Maker or Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Maker or Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications; or change is sought. 6. This Note shall be governed by and construed in accordance with the laws of the state of Minnesota without regard to its conflict of laws provisions. Any disputes, controversies, or claims arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise 7. Holder may not assign, transfer or pledge this Note without the prior written consent of the Maker. Maker may condition consent on obtaining a certification from the proposed assignee, transferee or pledgee acknowledging and agreeing to Maker's rights to cancel the Note in accordance with the terms of the Note and the Agreement. 8. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. 9. Any Foreclosure Purchase Incentive Program Rehabilitation Loan payments paid to Buyer under the Note will be repaid to the HRA in the event that the Buyer fails to meet the requirements of the Agreement. Such repayment obligation will be secured by a mortgage in substantially the form shown in Exhibit C of the Agreement which will be executed and delivered by Buyer to the HRA at Closing. Unless the IIRA agrees otherwise in accordance with Section 6.3, the Mortgage will be a first lien on the Property. IN WITNESS WHEREOF, the Mal<er has caused this Note to be duly executed as of the _ day of `, 2009. C-2 g~~o THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA 13y Its Chairperson 13y Its Executive Director I3uyer '~ Tedd K. Herman ~ Buyer Jen M. Lin eman STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this day of 2009, by Suzanne M. Sandahl, the; Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public STATE OF MINNESOTA ) SS COUNTY OF HENEPIN ) The foregoing instniment was aclalowledged before me this day of , 2009, by Steven L. Devich, the Executive Director of the I lousing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public C-3 `7' ~l STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ~ ~ day of ~.~, 2009, by Tedd K. Herman, a single person, and .Ienna M. Lindeman, a single person. Notary Public w~ Ki~~~F?~ S H FARTENHEIt~ER ~~ ~~~~~~ N3TA!'?Y PUBLlC•MINNESOTA t'~~;~ ~: ~.`;°~ ~Ay Commission Expires Jan.31,?.013 ~~~~'' ~~ C-~l v! "~ ~~ MORTGAGE This Indenture made this day of April, 2009, between TEDD K. HERMAN AND JENNA M. LINDEMAN, Mortgagor, and ~l'IIE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic under the laws of the State of Minnesota, Mortgagee. Witnesseth: That the said Mortgagor, in consideration of the sum of One ($1.00) Dollar and other good, valuable and sufficient consideration, the receipt whereof is hereby acknowledged, does hereby Grant, Bargain, Sell, and Convey Tinto the said Mortgagee, its successors and assigns, Forever, all the tracts or parcels of land lying and being in the County of Hennepin and State of Minnesota, described as follows, to-wit: The separate tracts and parcels of land described in the attached Exhibit A. (The "Property") To Have and to Hold the Same, Together with the hereditaments and appurtenances thereto belonging to the said Mortgagee, its successors and assigns, forever. And the said Mortgagor, for itself, and its successors and assigns, does covenant-with the said Mortgagee, its successors and assigns, as follows: That it is lawfully seized of said premises and has good right to sell and convey the same; that the same are free from ail incumbralzces, save and except reservations, restrictions and easements of record; that the Mortgagee, its successors and assigns, shall quietly enjoy and possess the same; and that the Mortgagor will Warrant and Defend the title to the same against all lawfiil claims not hereinbefore specifically excepted. Provided, Nevertheless, That if said Mortgagor, its successors and assigns, shall keep and perform each and every one of its obligations with .respect to completion of construction of the Improvements to be constructed by Mortgagor under and pursuant to that certain Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement dated as of (the "Agreement"), made and entered into between Mortgagor and Mortgagee, and shall keep and perform all the covenants and agreements herein contained, then this deed to be null and void, and to be released at the Mortgagor's expense. This Mortgage secures a principal debt in the amount of $15,000 payable by Mortgagor to Mortgagee under the terms of the Agreement, and amendments thereto, between Mortgagor and Mortgagee. And the Mortgagor, for itself, and its successors and assigns, does hereby covenant and agree with the Mortgagee, its successors and assigns, to perform its obligations as above specified, to pay all taxes and assessments now due or that may hereafter become liens against said premises at least ten (10) days before penalty attaches thereto; to pay, when due, both principal and interest of all prior liens or incumbrances, and to keep said premises free and clear of all other liens or incumbrances; to commit or permit no waste on said premises and to keep them in good repair; to complete forthwith any improvements which may hereafter be under course of construction thereon, and to pay any other expenses and attorneys' fees incurred by said Mortgagee, its successors or assigns, by reason of litigation with any third party for the protection of the lien of this Mortgage. C-5 ~-~3 That Mortgagor, does further covenant and agree that if any lien for labor, skill or material shall be filed for record during the life of this Mortgage, upon or against the premises hereby mortgaged, the said Mortgagor will, within thirty (30) days after the date of its filing for record, either pay off the said lien and secure its satisfaction of record, or will protect the Mortgagee against any loss or damage growing out of its enforcement, by furnishing a bond for the same amount in the form and with the sureties to be approved by the Mortgagee. In case of failure to pay said taxes and assessments, prior liens or incumbrances, expenses and attorneys' fees as above specified, or to insure said buildings and deliver the policies as aforesaid, the Mortgagee, its successors or assigns, may pay such taxes, assessments, prior liens, expenses and attorneys' fees and interest thereon, or effect such insurance, and the sums so paid shall bear interest at the highest rate permitted by law from the date of such payment, shall be impressed as an additional lien upon said premises, and be immediately due and payable from the Mortgagor, its successors or assigns, to said Mortgagee, it successors or assigns, and this Mortgage shall from date thereof secure the repayment of such advance with interest. In case of default in any of the foregoing covenants, the Mortgagor confers upon the Mortgagee the option of declaring a default and hereby authorizes and empowers said Mortgagee, its successors and assigns, to foreclose this Mortgage by judicial proceedings or to sell said premises at public auction and convey the same. to the purchaser in fee simple in accordance with the statute, and out of the money arising from such sail to retain all sums secured hereby, with interest and all legal costs and charges of such foreclosure and the maximum attorneys' .fee permitted by law, which costs, charges and fees the Mortgagor herein agrees to pay. In Testimony Whereof, The said Mortgagor has hereunto set its hand the day and year first above written. ~~ 0 ~`^~~ Tedd K. Herman \ Jen .Lin an C-6 ~'~~ STATE OF MINNESOTA COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this ~ day of April, 2009, by Tedd K. Herman, a single person, and .lenna M. Lindeman; a single perso .. ~~ ~---.. .. 1~1 gli~iNHElMER Notary Public •~~ NOTARY PUBLIC-MINNESOTA ••. ~ My Commission Expires Jan. 31, 2013 p.. •.'' This instrument was drafted by: Housing and Redevelopment Authority In and for the City of Richfield 6700 Portland Avenue Richfield, MN 55423 C-7 I r~~ LEGAL llESCRIPTION Lot 11, Block 5, "Fallden's Third Addition". Subject to restrictive covenants contained in deed Doc. No. 330548; Subject to an easement of 5 feet reserved over the rear of said Lot for utility installation and maintenance as contained in deed Doc. No. 330548. ~,_u ~~~ IJXI-III3IT D LIST OF CONSTRUCTION PLAN DOCUM>/NTS • Foreclosure Purchase Incentive Program Rehabilitation Loan Agreement, frilly executed Rehabiltation Plans, approved by the I-1RA and approved by the Building Official for construction considerations if applicable • Purchase Agreement for sale of Property ii~om Buyer to Homeowner D-1 9-~ ~7 723 ~'e>,rth ~ven>~e truth, .ie~af~~Id, M?`~ ~eiab~l~ta~on FIB "1'edd ~lermat~ and Jetina Linde~rtan wi1P eoclrGinatr, alld complete the rehalai.litaticy~i plan. atad Ytati~c prepared. the fo.Ilo~rin~.cost. estirnat~:s_ The;~uested lc~~tt is to cover'~ie cost of making the following repairs. ~d~litioaiai repairs will be tnruCe tc> t}te horde: taut are not lnclude~l as they wilt .not be paid 1't~r using Eoan funds. Tlie approxitnatc cast of ttte additional repairs to the home is $l3, 0~~ and includes carpet replacement., itttoror repainting, it7stallation of a 4va~t~er and dryer and any ot)?er iterns detailed in the 1'oi.nt cl'Sale frspection, tuff t:i En a tee Cost :Per T)esc_.. rinti~n it;7ntily I.tc.tl~ ~ fin,, . ~tr~e ~ub~cr~i fS~ Twin Cit;r 36" Vd x 55.5" L Sitl~le Hung 9<''inclow 3 52$ Wirldowvs 15$4 Twin City 27.?5" ~ Y j~,j" L Sin:gE~ Hung W¢ttcfow l 4~ti lt~indaw~s ~1GG 1`wir~ Ciry~ ?.+ 75" W' x SS.S" t, Sitt~lc F~lurrg lvindc~w '? 4:3:Z Gvindolvs 8t8 T4vfn CiCy 27.75" ~r x 55.5" [. Sin,~le 1-lun~g Wlndo•;v ? <€6~6 '#~tnct:crvu5 )3~ TYVIn City'' 5" W x 55,5'^ L Picture Style Window I S:i7 Windows 537 T44'idt Ct"v` 27" ~W x 3$.75" L Single Hung WiR~ow' 2 384 WiRdo+:vs 7?R 3'wifl City` 28" ~~' x 4'T" Single F{URg Wnt9ow ? 4'24 WiRdo~,rrs s48 twin City ifi" Vb` x ~3fi.5" T_. Sitlgle lung Windhw "' 482 WVindc+ws 9G4 't'win City 24" Vv' x ~t5"' i. Steele HuR~ Vr'inci€~ti~• ? 39a ~.llicrtivws 78~ Ts~,~in City ,~•' ~~' x SS:S" 1., Casement ~,L'indow 179 Witldows 358 T~~•ilr City 3F," W x 46,.5" ~. SiRr~le t•Iung '4Vinrjaw ~ 482 1~lindaws 9f+~t Twin City, A4.25" ~,V x 19.5" L Picture Stye 'SVindow 1 21 1 GL'illdows 211 ToviR City' 23" ~Iv' x 3~'" L Sirlele Hrsng Ll'in~ow' 1 389 '~7v'inac~tivs 383 `t'win City X10"' ~` x SS" L Single Tune Wintle~w ? 559 ~i?intlows 1118 RfCHFPELI~ PUBLfC SAF~~'Y (6~~) 8Si-982 D+~ta~t fisting of Al[ Itsms Rewiring Cal-rectrc~n far 7233 1t~TH AUK tail:, or App. P~tum.ber: ~-24$2 ~'1:rsWrr~~rc:rty teas Frr.s j,ec°ret! h~~: S~nYYf~r ~rinc3e a-r.: 41?1""t)t?9 at 3.O~.OD 1'ti I?~tr I.dentiE~e ITnit,'F"I~oar Lnctzt~on C3~}scri2ltiorr ri,ct~an l2cquired .~?31?+7(D~7 Vdater to d~.ti•clgiris; shut ;tft" ~~''atc;r mnst EYC trEt, cit~Gk sy'stratY for [Gili:,5, InC[Udlrl~?,' FauGr:.ts, tragxs, «'at~r pP~s. draite kings, rxt.. 230 OC~C;i11':~tNG'4' U3~TTL ft~•JNSPECI'i3L7 4r 3i2[iQ4 i ci .Flpt}r t<47 t'."aR[3~:'4 4it)t*~Q;~1T?E Jnstali c~rkyon tnenoxii2G tletactcxr U: t IC i'c;~1~ J RE.Sf'~;"~ ~'~ I'i°Ci2N Id svitJtin i0' t~f 1il q~cirtaums 3%3t21}Uy ist €~lttor ^:;> ma~kc de u.ur st.~ rntluir~d. Jrrstall s'tnok.e dGtGCtor pct snanut'al;ttan`rs instnxeti~,ns to spGCifiGtl l+acalian r~t~~r~~.rriY. 4;'1?24U9 ist Fio-ar rrniry dams f),;..d Irc~lt lriki;s} rxti:s5ixx~ at axtsrirn Jnstril ~c:~:l bciit 1r5c6~s at alt tJt?4N(S;} exlCf3t5i' d(i(xtr a d'3t'x„pa~ ist l~lunr Kt~;hera i)iSiiti++slterc`.isGlsElr£c ixnpraiacr(y 1:~tshsaasherdischar~;c-mull Vic; plurr.bt:d. prtrpe~ly GoruterfEGd to dra;n sws-tem. ScGUr: dish~c^a~iacr t4raixt to trap of crl7rinGt. ~it3l2ftEJr1 ist i~losr i~itckrGtc ~~dded ancL`or altered pJttmbina. ~~ i,iG~ttscd pJt3rrabinx GxantraGtor tra permit{.;~ s.~,t iilc.«at~r t=cztitrt~nt s~Yskr.m GGrtify ~r'c>rI: nn RichrcJd tarty f().:1'Ir7. [t C[ti3n~8R a•re ina(1r t4 sys[cm k'ER2>-tiT and inspt;Gtaon xirt alsr~ r~tttt'tr~d. a:+~+!?17t)~3 isE ~loar ititchen Rai e ht:rnu.~: rleencnt or~t ksrapcrly Ran~;c-Rclxair b[ri'rtGrs/i:tc:mestts Ititnctronin ss nccd~d. r4ii YYtLt31E~r5 actl~a-li;g~t. and n7ust function properly. Al~2i)~'~ Lsthltxor laivin~roo[n ~'~`inrlotirglassbrc;kcnlGrac~lcdormiss'in ~ f~GpiaccMass 3:~`31`2~195x Tat E'Itttrr ltcgrth hedroorn 1'v''irs ir~tit s,i:is~ t>rc~ker.Jeraekcti or tttissin ~ €ZrrpfttCv Mass 3:i2t)U ~ 2nd Floor ~(7 (':'~Rlir._tti ht{l~t)Yl[3E; Install Gfirlt~Sl menmc.ide dGtu,tor l7i:i l~i:"i`i;~it PR( SIBV~~l 14~'Li~'h1'f,N iO' ~>rlthir~ IfY ~~f xzil ~+rdroataas C)i'al.i l:~ I)ROC7~9~ 313,'2094 2nd Frloor Sct4rGVna ~t,}o;~c dctcc~a~ trot !!"unGtioning. R~pla,r v~ w/operable vrnoAa tifereetar i~+E?v4)vt~li1"CE=~k.1`. df3I24C)'~ 2nd C'it>or h~ziin Li~hi ~xlurc not ltlt~~ctiUnin~- w-all ]i~'ttls V~~ril"4" ~~~!'kit~~ Condii[tsu r~~' ~~~ 1 . 9ig17i, t`txt~re. 4!3/2U~~} 2nei E•ia3ar vi~rrCh hedrr+s>ni C),.at!a1+~~a~~ i~r}a cor~cr eamarcd or missir3~ t~utl~tstsw•itc[~ca must h~we arprn+~ed c~~~erpfates ~71312(ti~y 2nd f'farrr Stair Walk}n~* surfac:c~ ~farn.~~cdilr}~ 37a7~rt4 ~ep~ir as needed ~t3i2Q6'9 gttra~Ze (:7. enc~;aif itat?3• ap.ner ~¢~*t Functic~ni~~g. Re~+aix car rarrlc,ve c~verhe~d i?cn~r opcn~r, i'a°e t ~.+kr2aU4 1(1:EY2 RlGI-lFfEL~ PUBLIC SAFETY (67'2) 861-9882 1' /Q l~s C}~tail Lisfin~g afAll Items l2~quiring Ccsrrectinrt for 7233 'LOTH AVE S 4i3?21709 s~ar.~gt< httic fi;lr"1~C ceiling)c~i~tnotdesioned fnr Gsragr-Rcmovaarticstaragc. stl>nr};r.. including an}~ plywood tar f7oorbernrds. 4i3P20i)9 garaDe east C.iutlet(s) imprGlaerl}• wir~:t~i-reverse gauln ritw flutlef(s~ tnlasi be properly tiviFed, di3 `?0fl9 garc~c averl~aad dear )ocsrr't9tx17 laarclaeare tiacn.a;ged RepairFrcft€ttc:c damHgt=d char aad?aF ta~rrd'tivare. ~t31?009 s*.ar<age st~utYz '1 ree ror. dose t~~ Louser~aragc Remo,~e trees «~itt~ut IK" of ;truciure+fou7adaYiorlroofl inc 4? 3~'Zd09 f~irisiale ;`, ciress Hurt=hers not visablc fiom Address numbers must be un s;r::ct:a;l~~ contrast wlhackground, mica.;., in size and visable frt~rn 411'1:i:E:r3i1Cy. :1i 3?2{19 Uuts[da ~la~~ yard ~?~,hraS 07 ~!f1ri.5~Pe 0171 Stt@ R~raaa~e debris a1~C~Ja' ~arb;~~e from gmperty. ~i3;~2t7{19 €7utside cfrimne~= bric~lc t'irehl~ce c ar rGr7J..-clctc:riore~d brink + Firel?lua;e-repair de'Cat•iara~E~ed a~resis mortar,' cap for in;idc fire-bat of bri~Jmarear ~#+.1?t)t}9 +Ju[sidc r~r facia Sa tit/t~tsci a damak;~.cltmtsrng itep:~ir,+replace datnsagad?riaissta~ so ('iiir-fast; is 4.'3(?(f(1~.~ flutsids ti~intJo~.~s i~'indtat~` scrccris damaged.+r.~issirg ,III operable windtnvs rntist have sc:rCCns in good ccvtadition. ~r -\ l ~'44'lF1 ~.IT:V 28" 6~ x ~~" ~, S'in~l~~ I-Iui~~g Wi~~rlar~r 1 =~6b Vv'ir~dows ,466 Name Elacrria R~~n~e~ ~ ~C~~~~e 1 G98 De~at 695 I~t~rrte E~'xreriar Dc+c~r R~pl~o~rn~nt ? 'l; l ,a l9 iaepat ?.838 f~c~tn e Daar A~4o~~nted ~~t~db~lt aid Lcscit ~ 1 ~5~4.~8 T7~~ot 3~iy.96 Sn~nk~.lG~rb~n Tvfanahtl~ 37etector ~ X6:7$ ~k'aisn~rt 1~7.~2 C~ran~ Tatar: 3 ~3G~:C18 T~~~~te: Esti~~x~~ed cost c~~~'iz~dc~~~rs includes it~~staLtation ~~.~z a~ a~ a s 0 M M N ti