New Hope will continue to offer home loans | New Hope / Golden Valley
Residents of New Hope will continue to have access to housing loans and grants across the city, on better terms than those originally offered by the city.
Members of New Hope City Council, acting as economic development authority, extended an agreement with the Center for Energy and Environment to administer the funds until 2024. Previously, the loan funding agreement was scheduled to expire at the end of this year.
Under the agreement, New Hope will pay the center an annual administration fee of $ 2,500, compared to $ 500 per year, as well as fees that vary based on the number of loans made.
The city has partnered with the organization for home improvement loans since 2012, community development specialist Jeff Alger told EDA on November 22.
Across the center, the city offers low-interest home improvement loans to help homeowners make improvements inside or outside their homes. The loans can be used for maintenance and renovation. In March, the city reduced the interest rate on loans from 4% to 2% to make them more attractive.
The city also offers emergency deferred loans to homeowners who have urgent home improvement needs but are not eligible for other home improvement loans or grants.
“They could have a condition that makes their home uninhabitable, extremely dangerous for the occupants, or it causes serious health problems,” Algiers said of residents requesting such assistance.
Emergency loans are canceled if the owner has lived in the house for 10 years.
Additionally, the Center for Energy and Environment provides New Hope residents with access to other statewide funding options.
Since 2019, the city has tracked a total of 17 loans issued in New Hope with the centre’s participation, the majority through the Minnesota Housing Finance Agency. Only two emergency deferred loans were made to New Hope residents during the period, while residents secured three low-interest home improvement loans during this period.
As the loans are repaid, they help fund future loans. The city had about $ 65,000 to lend to residents in October. City staff recommended that the EDA add $ 15,000 to these available funds, bringing the total available to $ 80,000.
The decision to lower the interest rate to 2% for home improvement loans makes the city loans more competitive compared to loans from the Minnesota housing finance agency.
Algiers noted that the city made no loans this year until the interest rate dropped.
“I don’t see this as a business decision for the city,” he said. “I think that’s a service we provide to residents, and we’re just trying to be competitive at that level of interest.
The city’s new agreement eliminates an interest subsidy program because the Minnesota housing finance agency was offering rates lower than those available under the program, according to Algiers.
He said that the Center for Energy and Environment’s fees increase fees for all cities across the board due to rising costs as the center tries to break even. so that we can continue to offer the programs. Staff at the center coordinate loans directly with residents, Algiers noted.
The EDA also approved the purchase of a house at 4215 Nevada Avenue North for $ 206,000 and a house at 5306 Rhode Island Avenue North for $ 213,000. The city plans to demolish both houses and sell the property for new housing. The city expects a loss of about $ 160,000 after the demolition and sale of the lot for the Nevada Avenue property and a loss of about $ 165,000 after the demolition and sale of the lot on Rhode Island Avenue. .
“The city does not expect to make any money on any of these demolition and reconstruction projects, as the cost of acquiring these homes and redeveloping distressed properties normally exceeds the value of the new one (s). houses, ”Algiers said. “Our primary goals for this program include removing distressed and dilapidated properties, providing phased housing options, improving the city’s housing stock, investing and building confidence in neighborhoods and, to some extent, the increase in house values and the assessed market value of individual plots. . “
New Hope has budgeted around $ 500,000 for such projects next year. Algiers noted that the city could use the Nevada Avenue property for police and firefighter training exercises.
During a New Hope City Council meeting leading up to the EDA meeting, council members took several actions, including the following:
• They approved a modification of a contract with Abdo Financial Solution for the consultation, reporting and administration of grants for federal funding for the benefit of New Hope. The city will receive approximately $ 2.2 million in American Rescue Plan Act funds over the next two years and may receive additional funding through the Federal Emergency Management Agency. The city had already entered into a three-year contract with Abdo Financial Solutions until 2023, but Abdo requested an additional $ 25,000 for work through 2024 related to federal funding.
• Council awarded a contract to Northwest Asphalt for approximately $ 70,000 to replace a culvert and improve an area between a golf course pond and Meadow Lake. The rock that had been placed in the islands of the parking lots of the town hall and the swimming pool will be used for the stabilization of the banks.
• Approved a car shelter ordinance that prohibits the use of materials such as sheet metal, plywood, canvas and nylon in their construction. The change in ordinance also states that two-car garages cannot be converted to one-car garages unless additional garage space is added elsewhere on the property. The city already needed two garages for the new homes.
• Approved an ordinance regulating tutoring centers and specialized schools with individual education of students. Such businesses are permitted in commercial zoning districts, but will not be permitted to exceed 4,000 square feet in a residential business district without a conditional use permit.
• Clarified that “offsite service businesses” such as delivery, catering and plumbing services are not permitted in the downtown area. “On-site service businesses” such as banks, funeral homes, veterinary clinics, appliance repair shops and tailors will be permitted in the district.
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