DATE: August 27, 2019
TO: Members of the Housing & Redevelopment Authority
FROM: Janine Atchison, Housing Coordinator
Title
2nd Quarter Community Development Block Grant Report
Body
SUMMARY AND ACTION REQUESTED:
The Housing & Redevelopment Authority (HRA) to review the 2nd quarter Community Development Block Grant (CDBG) Report.
BACKGROUND:
The HRA receives approximately $63,000 in CDBG funds each year through the Dakota County Community Development Agency (CDA). In their annual application for CDBG funds, the City requests funds for the next fiscal year (FY). The funds requested are designated for individual programs such as down payment assistance (DPA), Home Matters Homeowner Rehabilitation, Northern Oaks rehabilitation programs, manufactured home rehabilitation, etc. The annual application includes the amount or portion of the total allocation to be devoted to each existing or new program. The application is approved by the CDA. Funds are generally made available between July and October of the fiscal year.
Funds that are not utilized within 4 FY are subject to recapture by the Department of Housing & Urban Development (HUD). Funds that are not utilized within 3 FY are subject to recapture and redistribution by the CDA.
ANALYSIS:
Staff completed one DPA loan in the amount of $15,000 during the 2nd quarter of 2019. The loan amount was reimbursed to the HRA by the CDA.
Staff is currently working with 2 applicants for the Home Matters Homeowner Rehab program. Applicants have been deemed income eligible, initial inspection completed and scope of work defined. Applicants will get bids from qualified contractors. Once the lowest qualified bid is determined, the work will then be scheduled.
Work has commenced at the Northern Oaks Townhome Project. The City Council approved the sub-recipient agreement with property owners Three Rivers Community Action Agency (Three Rivers) on August 5, 2019. Three Rivers will be able to draw down CDBG funds as materials are purchased in work completed at the project. It is expected that all FY 2016 funds will be utilized by the end of 2019.
FY 2019 CDBG funds have not been released by HUD yet. The manufactured home rehab program at Viking Terrace will be advertised once the funds are released.
OPTIONS:
In conversations with the CDA, staff has learned some additional strategies for utilizing CDBG funds in a more effective and timely manner. Examples would include:
Residential Rehab
Raising the amount of the maximum CDBG contribution from $10,000 to $20-25,000 for rehab projects.
Lowering the required homeowner contribution to zero.
Utilizing a zero % interest deferred loan which is payable when the home is sold, refinanced, 1st mortgage is paid off, or the home is no longer used as sole residence.
Down Payment Assistance Program
Raise the amount of the maximum CDBG contribution from $15,000 to $20-25,000.
The above changes could make the CDBG programs more accessible to lower income families and allow the HRA to utilize CDBG funds in a more-timely manner. Staff will conduct additional research and bring information to the HRA at a future meeting.
Recommendation
No recommendations at this time.