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ELK,J IVER HOUSING AND REDEVELOPMENT AUTHORITY <br /> <br /> ELK RIVER HRA SEEKS FUNDS FOR HOME MORTGAGES <br /> <br />On January 30, 1996, the Elk River Housing and Redevelopment Authority <br />(HRA) authorized an application to the Minnesota Housing Finance Agency <br />(MHFA) for an allocation of mortgage funds as part of MHFA's first time <br />home buyer program. The program, known as the "Minnesota City <br />Participation Program" (MCPP) provides a way for local units of government <br />to access funds for first time home buyers. In the very near future, MHFA <br />will create a pool of mortgage revenue bonds in the range of $38 to $58 <br />million for this program. The bond proceeds provide below-market interest <br />rate home mortgages for low- and moderate-income home buyers that are <br />entering the market for the first time. <br /> <br />The Elk River application requested a maximum allowable allocation of <br />MCPP mortgage funds. MHFA utihzes a population-based formula to <br />determine the specific allocation of funds to respective cities. In 1995, Elk <br />River obtained an allocation of $256,501. This allocation was increased to <br />$344,981 as of December 31, 1995, which was sufficient to fund 4 (four)home <br />mortgages for first time buyers. <br /> <br />Under the MCPP, qualifying income and maximum purchase price guidehnes <br />will apply. Applicants seeking the Elk River MCPP funds can possess an <br />adjusted gross income of up to $40,800 and qualify for the mortgage funds. <br />The maximum purchase price for each housing unit acquired through the <br />'MCPP program is $95,000 (for both new construction and existing housing <br />stock). Single family detached homes, townhomes, condominiums, and <br />duplexes (existing only) are eligible housing units under the 1996 MCPP. <br /> <br />The Elk River HRA will rely on four lenders to help originate ioan requests <br />from first time home buyers. Lenders include First National Mortgage, Heigl <br />Mortgage, Norwest Mortgage, Inc., and TCF Mortgage Corporation. <br /> <br />Although the 1996 interest rate has not been finalized, the 1995 interest rate <br />for a 30-year mortgage was 6.5 percent (7.423 percent annual percentage <br />rate). <br /> <br />s: ~ eda i [nds~nort.doc <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330-1743 · (612) 441-7420 · Fax: (612) 441-7425 <br /> Equal Opportunity Housing and Equal Opportunity Employment <br /> <br /> <br />