More money for Coon Rapids home loan programs
by Peter Bodley
The city of Coon Rapids plans to pump more money into its housing improvement home loan programs.
Acting on a recommendation from the Coon Rapids Mortgage Assistance Foundation, the Coon Rapids City Council has approved allocating $250,000 from foundation funds to the home loan programs.
The city housing program was developed by the foundation board of directors with assistance of city staff in 2005.
There are four loan funds.
• Home improvement incentive program loan fund.
• Home rehabilitation assistance program loan fund.
• Two-family home rehabilitation program loan fund.
• Emergency home repair program loan fund.
According to Cheryl Bennett, city housing and zoning coordinator, $150,000 will be allocated to the home improvement incentive program and $100,000 to the home rehabilitation assistance program.
Since the first loans were issued in July 2005, the foundation has allocated $2,425,000 to the program, Bennett said.
As of Oct. 31, 2011, 170 loans have been funded and 95 percent of the funds committed, she said.
According to Donna Naeve, foundation president, the additional funding has been recommended because there has been an increase in the applications for loans in recent months.
As well, the foundation is looking at finding new ways to get the word out to the public about the loan programs, Naeve said.
The housing program has been administered by the Center for Energy and Environment since 2005 and an extension of the existing contract, which was set to expire Dec. 31, 2011, was approved by the council on the recommendation of the foundation board until Dec. 31, 2014.
In addition, the foundation board recommended and the county approved expanding the regenerations downpayment assistance loan program, which began in April 2010.
According to Bennett, the program promoted and facilitates the repair or modernization of existing single-family housing units through the use of a federally-insured FHA Section 203(k) mortgage.
The program provides down payment assistance of up to 3.5 percent of the purchase price of the property, plus rehabilitation costs, through a forgivable loan up to a maximum of $6,000, Bennett said.
“The loan is fully forgiven after 10 years of principal residence occupancy of the borrower,” Bennett said.
There is no maximum purchase price on the property under the program, but the maximum mortgage under FHA regulations is presenting $318,550 for property in Anoka County, she said.
The action by the council will expand the program to current residents refinancing an existing mortgage to use the FHA mortgage to make needed repairs or renovations of their properties.
According to Bennett, the terms would be the same as for a new homebuyer – up to $6,000 in assistance forgiven after 10 years.
Participation would require at least $10,000 in improvements and while equity could be used to partially fund the renovations included in the FHA mortgage, the program will prohibit cashing out any equity during the mortgage refinancing, Bennett said.
Under the existing regenerations program, 13 downpayment assistance loans had been made as of the end of November 2011.
Downpayment assistance loans totaling $62,664 have resulted in more than $218,127 worth of rehabilitation work on these properties and returned 12 vacant, foreclosed homes to owner occupancy, Bennett said.
“Eight of the 13 households (62 percent) have minor children of school and pre-school age; 85 percent are first-time homebuyers,” she said.
This has been a very successful program, Naeve said.
According to Councilmember Scott Schulte, who is one of two councilmembers who serve on the foundation board – Mayor Tim Howe is the other – participants in the loan programs are well represented across the city geographically.
“The regenerations program is bringing young families to the city,” Howe said.
The Coon Rapids Mortgage Assistance Foundation was established in 1979 to allow the city to issue low interest housing bonds to boost new housing construction at a time of high interest rates.
The $45 million housing revenue bond issue, of which $12.2 million was refunded in 1994 to take advantage of lower interest rates, was paid off in March 2003.
Mortgage payments from homeowners who benefited from the bond issue paid off the bonds.
And the money that has built up in the foundation coffers over the years has been allocated to housing and rehabilitation projects in Coon Rapids.
Peter Bodley is at firstname.lastname@example.org