RENTAL REHABILITION LAON PROGRAM
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Metropolitan Council
Housing and Redevelopment Authority
RENTAL REHABILITATION LOAN PROGRAM
SUMMARY
Purpose
During the past two years, Metro HRA has offered its Section 8
Moderate Rehabilitation program to rental property owners through
participation in the Minnesota Housing Finance Agency's (MHFA)
Rental Rehabilitation Loan Program. Metro HRA has now expanded
participation by offering the Rental Rehabilitation Program to
rental property owners as a separate program, as well as a source
of financing for Moderate Rehabilitation Program participatlon.
The Rental Rehabilitatlon Program provides below-market interest
rate rehabilitation loans to owners of rental property occupied
primarily by low- and moderate-income households. t1etro HP~
is administering this program in conjunction with the Section 8
Moderate Rehabllltation Program. Both programs are designed to
Rehabllltate private rental unlts which are substandard
or have major bUlldlng components in need of repair or
replacement, and
Provide property with energy improvements for compliance
with state energy conservation standards for rental
houslng.
The Rental Rehabilitation Loan Program does not provide rent
assistance to tenants in the improved units. However, because
rental property qualifications vary between the two programs,
the Rental Rehabilitatlon Program will offer alternative rehabill-
tation opportunities to owners whose property is not feasible for
the Section 8 program.
Technical Assistance and Financlng
Metro HRA publicizes the availabllity of the Rental Rehabllitation
Loan Program through newspaper circulation and dlrect oalling.
Property owners indlcating an interest in the program are sent
lnformation packets containing program requirements and the format
for submlttlng proposals
As the admlnlsterlng agency of the program, Hetro HRA provides
rehabilltatlon technlcal asslstance to property o\mers by \vOrklng
wlth them In deterQ1nlng the a~ount and type of rehabllltatlon,
preparlng the feaslblllty analysls, cost estlQates and de tal led
work wrLte-ups, and locatlng contractors
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Metro HRA also assists in the packaging of the rehabilitation
loans. The loans to property mmers are insured under the FHA
Title I Property Improvement program and processed through the
First Bank of St. Paul. The interest rate on MHFA's financing
of the loans is 11 percent and the maxiDum loan term is 15 years.
Program Requirements
The following are requirements for owner participation in the
Rental Rehabilitation Loan Program:
a) The property to be rehabilitated must be owned by the applicant
and used for residential purposes
b) Units must be leased to low- and moderate-inco~e households
c) Owners must certify that tenants will not be displaced during
or after rehabilitation
d) FHA Title I loan maximum amounts are $7,500 per multi-family
unit not to exceed $37,500 per structure, and $15,000 per
single-family structure
e) All buildings rehabilitated ~ust be brought into compllance
with State Energy Conservation Standards
f) Structures less than 15 years old are eligible only for
energy compliance improvements
g) Structures more than 15 years old are also eligible for
permanent general improvements
Eligible Improvements
a) Energy Conservation Standards
- Caulking, weatherstripping
- Storm door and window installation
- Fireplace and stove positive shutoffs
- Insulation in accessible attics, walls and rim joists
b)
General rehabilitatlon
e
- Structural additions, alterations
- Exterior, interior flnishing
- Roofing repair or replacement
- Plumbing installatLon or replacement
- Heatlng and ventLlatLng
- Electrlcal wlrLng
c)
Accessibility improvements
- Ramp construction
- Handrail, grab bar lnstallatlon
- Other
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Community Involvement
Before the Metro HRA Rental Rehabilitation Loan Program can
operate within a Metropolitan Area community, the city must pass
a resolution to participate in the program. Other community
involvement could include additional promotional efforts through
local newletters, newspapers, and utility bill enclosures.
The operation of the Rental Rehabilitation Loan Program within
a community requires the involvement of the city's building
inspector. As local code enforcement is of vital importance in
the program, Metro HRA staff works closely with community building
inspectors during the rehabilitation process to ensure quality
rehabilitation in compliance with local codes.
The Rental Rehabilitation Loan Program can also be used as a
leveraging tool with Community Development Block Grant funds in
local rehabilitation projects. CDBG funds can be used to further
reduce the interest rate on the Rental Rehabilitation Program
loan funds, provide interest or principle subsidies, provide
additional funding when the total cost of rehabilitation exceeds
the program's maximum loan amount, or provide financing for
projects not eligible under the program's standards
For further information on the Metro HRA Rental Rehabilitation
Loan Program, contact Rosemary Fagrelius at 291-6504.
STATE OF MINNESOTA
DEPT OF ENERGY, PLANNING AND DEVELOPMENT
OFFICE OF LOCAL GOVERNMENT
APPLICATION FOR
SMALL CITIES GRANT PROGRAM
PAGE 12
23 RESOLUTION OF SPONSORSHIP
I( SponsorIng lInlb of government IllllSt ddopt and submit the followlIlg or an equlvJlent resolution TillS
resolution mu~t be ddopted prIor to submission of the applicatIOn
Be It resolved thJt Clty of Hopklns
sponsonng Untt of government
.let dS sponSOrIng Ul1lt of government for the project titled CBD Comprehenslve Improvement
Program
to be conductcd dUrIng the perIod 1-1-83
through 1-1-85
(duratIOn dates)
Wllllam P. Cralg, Clty Manager
(Title of ^uthonled OfficIal)
IS hereby authorIzed to
apply to thc Ml11nesotJ DepJrtment of Energy, Plannl11g and Developmen t for fundlllg of tillS
project on behJlf of
C~ty of Hopklns
sponsonng umt of government
I certify thJt the Jbove resolutIOn was adopted by the
>(
Clty Counc~l
(City Council, County Board, etc )
of
Clty of Hopkins
(sponsonng umt of government)
on
January 18, 1983
(dJ te)
Signed
Witnessed
(slgnJture)
(sIgnatures)
(title)
!'Eyor
(da te )
(title)
( da te )
If funds Me Jwardcd for tIllS projcct, J resolutIOn authorlzlIlg executIon of such agreements as are necessary
to Implemcnt thc proJcct must be completed by the sponsoring unit of government pnor to contract
I<;SU,lI1Ce
Adopted by the City Council of the Clty of Hopkins on the 18th day of January, 1983.
J
J. SCOTT RENNE
C~ty Clerk
ROBERT F. MILLER
Mayor
JOSEPH VESELY
Clty Attorney
Hennepin County, Minnesota
RESOLUTION NO.
83-3047
e
RESOLUTION AUTHORIZING THE METROPOLITAN COUNCIL
TO IMPLEMENT THE RENTAL REHABILITATION LOAN PROGRAM
WITHIN THE CITY OF Hopkins
WHEREAS, the City of Hopkins desires to assist lower
income families and individuals to obtain adequate housing
in the City of Hopkins at an affordable
price and to accomplish the purpose of undertaking a program
of providing technical assistance and loans to property
owners for the purpose of rehabilitating rental units for
occupancy by low- and moderate-income families and indiv-
iduals, and
WHEREAS, the Metropolitan Council has been duly organized pursuant
to Minnesota Statutes 473.123, and has been designated a
housing and redevelopment authority pursuant to Minnesota
Statutes 473.193, with the powers and duties of a housing
and redevelopment authority under the provisions of the
Minnesota Housing and Redevelopment Authority Act, Minnesota
Statutes 462.4ll to 462.711, and the acts amendatory thereto,
and
WHEREAS, the Ci ty of Hopkins and the Me tropo li tan Counci 1
desire to encourage the stabilization, revitalization, and
rehabilitation of the rental property in the City of
Hopkins , and
WHEREAS, the City of Hopklns has determined that a program
to encourage the rehabilitation of rental units is consistent
with the housing goals of the City and consistent with the
City's public interest.
.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF Hopkins
that the Metropolitan Council is hereby authorized to
implement the Rental Rehabilltation Loan Program to
encourage the rehabilitation of affordable private rental
units within the City of Hopkins and that
the city administrator is hereby authorized to enter into
an agreement with the Metropolitan Council for the operation
of such program within the City.
Adopted by the Clty Councll of the Clty of Hopkins on the 18th day of
January, 1983.
J. SCOTT RENNE
City Clerk
ROBERT F. MILLER
Hayor
JOSEPH VESELY
Clty Attorney