Coon Rapids award federal grant for housing rehabilitation

The city of Coon Rapids has $238,399.80 in federal Community Development Block Grant (CDBG) dollars to spend on its housing rehabilitation program over the next year.

That includes $197,122 from the annual CDBG allocation plus $41,277.80 in program income from paid-back loans.

To administer the housing rehabilitation program, the Coon Rapids City Council has renewed its contract with the Greater Metropolitan Housing Corporation (GMHC).

According to Cheryl Bennett, city housing and zoning coordinator, the housing and rehabilitation program has provided homeowners with loans since 2001.

Beginning last year, loans for energy efficiency improvements were awarded through the program, Bennett wrote in a report to the council.

“Housing rehabilitation loans provide zero-interest, deferred loan funds of up to $24,999 for housing rehab work plus additional funds not to exceed $5,000 in grant assistance to address lead-based paint hazards,” she wrote.

“Up to 50 percent of the rehab loan is forgiven after five years.

“Loans for energy efficiency improvements provide up to $10,000 in a zero-interest, deferred loan that is completely forgiven after 10 years.”

Under the terms of the loan, if a property is sold or is no longer the principal residence of the borrower, the outstanding loan balance becomes due, according to Bennett.

Repayments are program income and are placed back into the loan program unless allocated for another use, Bennett wrote.

Property owners cannot not access both the housing rehabilitation and energy efficiency programs, but the housing rehabilitation loan can address both energy and property maintenance needs, she wrote.

The number of housing units assisted by 2012 CDBG program funds will depend on the size of the individual projects, but Bennett estimates that between eight and 12 households will receive benefit.

Following a competitive proposal process, the council first awarded the housing rehabilitation program service contract to GMHC in 2003 and has renewed the contract each year since then.

The services provided by this contract include program marketing, intake and application, income and asset verification, site inspection, scope of work preparation, bidding, bid award, contract execution, construction oversight and document filing, according to Bennett.

“GMHC consistently provides quality service,” Bennett wrote.

“Through July 31, GMHC has closed 128 loans totaling over $2.56 million.”

Under the contract, GMHC receives a service fee of 15 percent of the loan amount.

Peter Bodley is at peter.bodley@ecm-inc.com

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