| County is selling two properties for Habitat |
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| Wednesday, 16 September 2009 | |
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Managing editor Two of the nine properties now under ownership by the Anoka County Housing and Redevelopment Authority (HRA) through the Neighborhood Stabilization Program (NSP) have been sold. The federally-funded program is designed to mitigate the impact of vacant homes and/or foreclosures by the purchase of those homes, which are then either rehabilitated or demolished for resale. The HRA has approved the sale of two acquired properties in Columbia Heights to Habitat for Humanity for $1 each. “The low purchase price will allow the nonprofit to rehabilitate the property and sell or rent the home to a very low income family,” said Karen Skepper, county community development manager. According to Skepper, the program requires that 25 percent of the total funding received benefit households that have an income at or below 50 percent of the area median income. To achieve that, the county NSP program includes the option to work with local nonprofit agencies that have a proven track record and sufficient staff capacity, Skepper said. The HRA has approved a contract with Frattalone Companies Inc. in an amount not to exceed $23,355 to demolish two NSP-purchased properties, both in Columbia Heights. Another contract approved by the HRA is with Nova Consulting for environmental services in an amount not to exceed $1,150 per unit. According to Skepper, in some of the older homes that have been purchased, asbestos has been found wrapping old furnaces. In addition, the HRA has authorized the negotiation and execution of purchase agreements for five more properties for the NSP program - two each in Coon Rapids and Blaine and one in Fridley. According to Skepper, homes either under the ownership of the HRA or where purchase agreements are being negotiated are being acquired either from Fannie Mae, a government-sponsored agency, or on the open market through a realtor retained by the HRA for the NSP program. The HRA tweaked its NSP program partly because of changes made by the U.S. Department of Housing and Urban Development (HUD), through which the county received grant dollars for the program. As a result of industry pressure that the discounts required by HUD in the purchase of properties were having a negative effect on property values, the federal agency has reduced the minimum discount from 5 percent to 1 percent for each property purchased and eliminated the aggregate 15 percent discount for the entire portfolio, Skepper said. The HRA has taken action to do that, as well as to eliminate the 50 percent of purchase price cap for rehabilitation. That’s not a HUD requirement, but Skepper said that staff has found that many older homes in the county are structurally sound and can be purchased for less than the original budgeted totals. “The lower purchase price combined with the rehabilitation cap is preventing the purchase of quality homes in NSP target areas,” she said. As well, on the recommendation of Skepper, the HRA has eliminated language in the action plan that restricts acquisition and demolition to just low and moderate income census blocks. “This will allow for demolition in all eligible target areas,” Skepper said. To finance the program, the county has received two pots of federal money, one a direct grant of $2,377,310 from HUD and the other, $2,506,643, from the Minnesota Housing Finance Agency, as part of the state’s NSP allocation. To determine “greatest need” for the direct federal grant, the county identified federal census tract/block groups with data showing the number of properties foreclosed in 2007 and 2008, the U.S. Postal Service residential vacancy rate and HUD’s high-cost loan rate. Seventy-six census tracts/blocks were picked by the county to target the funds. The county has put in place a three-point plan for spending the direct federal grant. • $300,000 for second mortgage financing for households to purchase homes. Grants totaling $10,000 are given to income-eligible households to buy single-family homes that are foreclosed and vacant. • $400,000 for the acquisition of properties deemed blighted and in need of demolition. • $1,439,579 to purchase properties in need of rehabilitation and resale, including $594,330 specifically to meet the permanent housing needs of households at or below 50 percent of the area median income. For a family of four, that’s $40,450, Skepper said. For the dollars the county is receiving from MHFA, eligibility is based on zip codes, Skepper said. With these federal dollars, the HRA is focusing on just two of the programs - acquisition and demolition of blighted properties, $500,000, with the balance going for the purchase, rehabilitation and resale of properties, according to Skepper. There is an 18-month window to spend the money under the federal legislation, which was passed in response to rising foreclosures and falling home values. The program will run for five years before any money left has to be sent back to the U.S. Treasury, she said. Peter Bodley is at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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