Title
Authorization of Budget Amendment of Federal HOME Funds for Rondo Community Land Trust for the Pilot Foreclosure Prevention Program.
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WHEREAS, the federal HOME Program was created by the National Affordable Housing Act of 1990 and amended by the Housing and Community Development Act of 1992 with the intent to: 1) expand the supply of decent, safe, sanitary, and affordable housing; 2) strengthen the abilities of local governments to provide housing; and 3) assure that federal housing services, financing, and other investments are provided to local government in a coordinated, supported action; and
WHEREAS, HOME funds can be used for a variety of housing activities that benefit low income people or families and the City of Saint Paul, as a participating jurisdiction in the HOME Program, has previously received funds according to a statutory formula; and
WHEREAS, Rondo Community Land Trust ("Subgrantee") was awarded $300,000.00 in Community Housing Development Organization (CHDO) funds in 2008, Resolution No: 08-9/24-05, in order to fund their Homebuyer Initiated Program, however, since that time Subgrantee has observed a greater need for other activities; and
WHEREAS, Subgrantee has submitted a proposal to assist families facing foreclosure using HOME funds in the amount of $150,000 to do the following activities: 1) assist at least three income eligible home-owners with mortgage principal reduction, 2) place a house into a land trust, and 3) rehabilitate the houses, all of which are eligible HOME activities; and
WHEREAS, the proposed activities cannot be paid for with CHDO funds, but can be paid for with HOME funds; and
WHEREAS, the Subgrantee is proposing to reduce their CHDO funds by $150,000.00 and replace them with HOME funds in the same amount; and
WHEREAS, the Subgrantee proposes to repay the $150,000.00 to the HRA without interest unless all of the following conditions are satisfied: (1) the homes are occupied by persons whose income is no more than 80% of the area median income as defined by HUD and who enter into an affidavit of agreement to homestead the property; (2) the homes are homesteaded by the original buyer or subsequent purchasers for a continuous period of 10 years; and (3) the homes are placed in the Subgrantee's land trust upon refinancing. If these three conditions are satisfied, then the portion of the $150,000 allocated and used for the home shall be forgiven and discharged, otherwise the portion of the $150,000 shall be due and payable upon demand by the HRA. The Subgrantee's obligation to repay the $150,000 shall be secured by real estate mortgages on the homes; and
WHEREAS, the staff has reviewed the Rondo Community Land Trust's proposal and supports the proposal to further the goal of the preservation of affordable housing;
NOW, THEREFORE BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul:
1. That $150,000 of previously awarded $300,000 CHDO funds to Subgrantee shall be converted into HOME Program funds for the preservation of affordable housing at 80% or below AMI as outlined in the accompanying staff report which is incorporated by reference;
That the Executive Director of the Housing and Redevelopment Authority of the City of Saint Paul is hereby authorized to execute the necessary documents to provide this funding for the designated activities or revisions that may be necessary which do not substantially change the obligations of the entities to carry out the proposed activities; and 3. Amending to the 2008 Budget pursuant to Attachment A.