Item Description:
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Terminate and forgive HOME Agmts A07333, A07604, A13444, A18517 with the Housing and Redevelopment Authority of the City of Bloomington for the Rental Homes for Future Homebuyers Program
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Resolution:
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BE IT RESOLVED, that the HOME Investment Partnerships (HOME) Program Agreements A07333, A07604, A13444, and A18517 with Housing and Redevelopment Authority of the City of Bloomington for the Rental Homes for Future Homebuyers Program be terminated and forgiven; that the County Administrator be authorized to negotiate and sign any related documents agreements on behalf of the county.
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Background:
In 1992, the Housing and Redevelopment Authority of the City of Bloomington (Bloomington HRA) was awarded a $419,450 loan from Hennepin County’s HOME Investment Partnerships (HOME) program for their Rental Homes for Future Homebuyers program (Agreement A07333). The Bloomington HRA leveraged local, private, and federal funding, including funding from Hennepin County’s HOME Program, to purchase nine single-family homes for its Rental Homes for Future Homebuyers Program, which provides the opportunity for income-eligible participants to rent an HRA-owned home for up to five years while escrowing funds towards the purchase of a home of their choice. This program continues to meet priorities of increasing housing and homeownership opportunities for low- and moderate-income households, and of preserving the existing housing inventory.
Since the first HOME award in 1992, the county provided three additional HOME loans to the Bloomington HRA: $510,270 in 1993 for five additional single-family homes (Agreement A07604), $220,000 in 1994 for three additional single-family homes (Agreement A13444), and $250,000 in 1998 for the final three single-family homes (Agreement A18517). Separately, the Bloomington HRA purchased a 21st home for the Rental Homes for Future Homebuyers program. All four awards were structured as 30-year payable loans, and included a Declaration of Covenants and Restrictions, a note, and a mortgage to ensure affordability. The four agreements, totaling $1,399,720, are payable February 2023, January 2024, October 2024, and July 2030 respectively.
The Bloomington HRA has requested termination and forgiveness of all four loans to allow them to maintain ongoing affordability of the homes.
• The 15-year HOME affordability period for all twenty homes has been satisfied.
• 50 percent area median income (AMI) restrictions will remain on all properties through their original loan expiration date.
• Since inception, the Rental Homes for Future Homebuyers program has created 62 new homebuyers.
• The Bloomington HRA will use forgiven loan funding to sustain ongoing affordability of the 21-property portfolio.
• Forgiveness supports the City of Bloomington’s voluntarily membership in Hennepin County’s HOME Consortium; since 1992, Bloomington’s membership has totaled approximately 11 percent ($4.5 million) of the Consortium’s total federal receipts of $42 million.
Based on the information presented herein, staff recommends terminating and forgiving the four loans to the Bloomington HRA.
Current Request: This request is for authorization to terminate and forgive the HOME Investment Partnerships (HOME) Program Agreements A07333, A07604, A13444, and A18517 with the Bloomington HRA for the Rental Homes for Future Homebuyers Program.
Impact/Outcomes: Bloomington HRA’s Rental Homes for Future Homebuyers program has supported long-term affordability (at or below 50 percent of area median income) for 21 units and created 62 new homebuyers.
recommendation
Recommendation from County Administrator: Recommend Approval