12-01-2008 HRA MIN - Laserfiche WebLink

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Housing & Redevelopment rluthoritp December 1, 2008 Page 2 NSP program under the Housing and Economic Recovery Act (HERA) signed by the President in July 2008. Minnesota Housing is a grantee for the state in the amount of $38.7 million, and will administer use of the funds in highly impacted communities in greater Minnesota. He stated that certain Minnesota communities are eligible for up to $4.7 million of the funds; noting that Elk River, Isanti, Big Lake, Buffalo, St. Michael, Otsego, Monticello, Princeton, and Zunmerman have been identified in the draft plan as eligible to apply for portions of the funds in anon-competitive pool Also, communities in Sherburne, Isanti, Benton, Chisago, Stearns and Wright counties may apply for funds in a designated $6 million competitive pool. He noted that Elk River is eligible for $715,446 in NSP funds. Mr. Gongoll reviewed the list of allowed uses for the NSP funds and ineligible activities. He noted that the deadline for submittal of a plan is January 17, 2009. He noted that Mayor Klinzing has requested an extension on behalf of the city, a copy of which is attached to the staff report to the HRA. He stated that staff recommends proceeding with a formal application to the NSP and requested that the HRA discuss, prioritize and help coordinate the city's response. Mayor Klinzing stated that she felt this funding opportunity was too good to pass up. She explained that the areas have been defined by zip code. She stated that the housing area north of the Albertville Mall has a number of abandoned homes, some which have not been completed, and having debris and weed issues. She noted that townhomes have been the hardest hit by foreclosures in Elk River. Mayor Klinzing explained that the city could contract with Minnesota Housing and Tri-Cap for Elk River's application. She noted that the purpose of the program is to benefit neighborhoods and put people to work. Chair Wilson asked why the areas were defined by zip codes. Mayor Klinzing stated the information was tracked by address. She noted that Elk River does not seem to have the same problems as Otsego is having. Chair Wilson asked if it would make sense to partner with Otsego. Mayor Klinzing stated that the funds are non-competitive, but since Otsego seems to have been hit worse than Elk River, there may be some competition within. Commissioner Motin asked if there are any matching funds required. Mayor Klinzing stated no. She noted that MN Housing has funds for mortgage foreclosure projects. Chair Wilson asked if there has been any action on the request for an extension. Mayor Klinzing stated she has not received a response. She noted that if the city does not come up with a proposal for projects, the money will go elsewhere. She explained that if a sufficient number of applications are not received, the funds will go back into a pool and the process will be re-done. Mayor Klinzing stated that she was comfortable with partnering with the Central MN Housing, since the city is very familiar with the agency. She noted that they mainly have done senior housing projects in Elk River. She cautioned that the city will need to lead the project, to make sure it is what they want. Mayor Klinzing stated that Tri-Cap is also a good agency to work with. Commissioner Motin asked if there are lower income limit guidelines. Ms. Mehelich explained that the NSP program requires that 25 percent of Households served must have household incomes below 50 percent of area median income, and the balance of the household at 120 percent or less of area median income. As an example, in Sherburne County a family of 4 would be 120% of the median income ($97,080) and for that same household size $40,450 would be 50 percent of the mediar;,income.