3. HRSR 05-16-2005 - Laserfiche WebLink

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Consider Small Cities Development Program Loan Agreement May 16, 2005 Special H12A Meeting Pagc2of2 Income Limits Upon initial occupancy of the Subject Property by each tenant, the Borrower shall obtain a certification that the tenant's household income does not exceed sixty percent (60%) of the County Median Income as adjusted for household size. At all times during the term of the Loan, Borrower shall require that the Assisted Dwelling Units are rented to households with incomes of sixty percent (60%) or less of the Sherburne County Median Income as adjusted for household size. What does this really mean? The attached HUD chart indicates the following: Rent Limits The rents are set according to state guidelines so that the rents are affordable to households earning 50% of the Sherburne County median income. Sherburne County's median income is $77,000 for the year 2005, so 50% of the median income is $38,500. Something to keep in mind is that Sherburne County's median income is calculated based on the median income for the Twin Cities Metropolitan Statistical Area (the 13-county metro area), which is the highest median income in the state. The maximum allowable rent for the Jackson Place apartments, based on 2005 HUD numbers is $721 fora 1-bedroom and $866 fora 2-bedroom. MetroPlains has set Jackson Place rents at $600 fora 1-bedroom and $700 fora 2-bedroom. Income Limits The income limits are 60% of the Sherburne County median income. Below are the income limits for each household size: 1-person household $32,340 2-person household $36,960 3-person household $41,580 4-person household $46,200 Why are these provisions in the SCDP loan agreement? This is because the SCDP loan coincides with the MN Housing Finance Agency (MHFA) tax credit financing that MetroPlains' received for the Jackson Place housing project. The July 2003 City Council Resolution No. 03-42 supported MetroPlains' application to MHFA for Low Income Housing Tax Credits. In addition, the City Council held a public hearing on October 27, 2003 to consider the SCDP grant application for the benefit of low and moderate-income residents and to alleviate blight conditions in the downtown area. Action Requested Since minor revisions may be made to the loan agreement upon final review by the Dept. of Employment & Economic Development (DEED) and MHFA, staff requests that the HRA consider approval of the loan agreement terms with MDI Limited Partnership #70 in the amount of $400,000 to be repaid in full at 1% interest at the end of 30 years.