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HomeMy WebLinkAbout1982-12-13 83-43 ORDER83-43 In4oduced by Councilor Frankel, DoCaM December 13, 1982 CITY OF BANGOR QITIEJ (jDrbere .Author zinS Secoution of a Mine State Housing authority/city, ....., pg$epsox__Neu46SsDsr Part>n.19&fi1.9II A8t2P00111;... _._ _.. .._._ By the afy Couucit of &e all of age: ORDERED. THAT WHEREAS, the Mane State Housing Authority has adopted a Rental Rehsbilltatim/Gmveralm loan ptogram to help preserve the state's rental hauling stock and create new, affordable rental units through conversions or additimz to underutilized space in existing properties; arms WfIEiffA4, said Program envisions the fimncing:of property improve- ments by the amars through a combination of the follmeing sources; grant or lea -interest rate Scan fiom the local Comity Develnpeent Dlox Grant Agency, zero interest rate sown or grant form the M.S.H.A., aad a loan farm a participating Financial Institution; end WiPd 2, said program, would.complementthe City of Seeger'a neighborbood reviializatim,efPorts under its various Comity Development Progrsmsy - MW, 'HETUMtlEE; RE If 0w RBD BY THE BANGOR CITY C0=1119WT the Director of Planning and Community Development is hereby authorized to execute, on behalf of the City of'Habgor, the Interagency Participation Agreement a copy of which is on file in the Office a the City Clerk. 83-43 In City Counci} December 33,1983 - D R D E R° - ,aJ _ essea Title, pNtMil #ng. 8 ti Of Maine State CICIT aLog� '1110. city clerk N 1 g A,tho ity City Of Bangor -'Int r2genCy YertiCipatiOn Agreement IntAro^dnuced and. filed qqby�� Councilvan 14 83-43 Maine State Housing Authority Rental Rehabilitation/Conversion Loan Program Interagency Participation Agreement I. Introduction This Interagency Participation Bettement is entered into by the Maine Stare Hoosine Authority (MESA) and City of Danger (Local Community Development Block Grant Agency, hereafter called "C➢BG Agency") to establish a framework for the multiple funding of rental rehabilitation and c rsion improvement activities as part of the 110Rental Rehabilitation Program Demonstration. The purpose of this unified effort is to direct available financial resources through the respective agencies to qualified projects and property owners in order to use a in a cost effective and complementary ma and to permit higher levels of rehabilitation improvements without tenant displacement than would otherwise be possible by individual agency efforts alone. 11. Responsibilities of Pai Eicipating Agencies It is expressly understood and agreed between the parties to this Agreement that whenever local Community.. Development Black Grant funds administered by the EDGE Agency and MSHA subsidy funds axe used jointly to provide financial assistance to a rental property owner for purposes of rehabilitation a rsion as part of the HUD Rental Rehabilitation Program Demonstration, the parties to this Agreement shall have the following responsibilities: A. The CDBG Agency, in accordance with rules governing the HUD Rental Rehabilitation Program Demonstration, 47 F.R. 26350-26353(June 12, 1982), agrees to assume the fallowing responsibilities: 1. Provide CDBG financial assistance to rental property owners in combination with MSHA subsidy funds and Financial Institution loan. Where CDBG financial assistance is provided in the form of a loan, the security for the luau will assume a position secondary to loans provided by a participating Financial Institution. 2. Identify properties and/or eligible owners within its geographic a of responsibility which are eligible for financial assistance to be provided by the CDBG Agency, MSHA and a participating Financial Institution. Eligible properties are those which will, after rehabilitation and/or conversion, rsion, realize a positive cash r flow before income taxes and are a locality or neighborhood fox which the after-rehabilitationmarket rents, including utilities, are affordable to lower income tenants with Section 8 Existing ental assistance (i.e., rentsdonot exceed Section 3 Existing . Housing Pair Market Rents). Page 1 3. Contact owners to determine their interest In the Rental Rehabilitation/Conversion Loan Program, _ 4. Communicate regularly with participating financial institutions to assure coordinated financial assistance processing; 5. Distribute and a ist interested owners in preparing CDBG Agency, MSDA. subsidy, and financial institution loan application and completion verification materials, including: a)the owner Agreement, the Improvement Certificate, and Building, Market, and Cash Flow Analysis Form; b)tbe Borrower/CDBG Agency Completion Certification to be co-signed by CDBG Agency when improvement activities are completed; c)the Contractor Completion Certification; d)tbe MSH& Energy Analysis Questionnaire or an equivalent energy audit analysis. This work will include helping owners identify necessary improvements,r which a n of a permanent general and nom -luxury character. including cost-effective energy improvements identified from the Energy Analysis Questionnaire, theircosts, and identifying suitablecontractors to performthe impressment work. Me CDBG Agency will ro intain copies of these executed forms for a period of 5 years from the date of this Agreement. 6. Distribute MSHA subsidy funds on behalf of FRIA in accordance with one of two subsidy options set Earth in this Section. Such Funds shall be distributed only as progress payments to contractor(s) - for work performed and listed on the Improvement Certificate. Since the amount of a MSM subsidy is dependent on the principal amount of a Financial Institution loan, the CDBG Agency shall not forward a subsidy commitment (Dodge's Agreement) for MSM execution until it verifies with a Financial Institution the owners loan amount. A. Interest Free Iuan: The MSH4 will provide an interest fretless that is the lesser of $350 f each $1,000 of Financial institution loan funds borrowedor o unt that is equal to $1,000 times the number o ental us to be - rehabilitated o created with either CDBG r Fin val Institution grant or loan proceeds, The loan is repayable, without interest, by the o n the earlier date o which any of the following may occur; o 1)10 years from Lid date the Rental Rehabilitation Vote is executed; 2)cransfer of the property securing the loan; 3)defaul.t of the owner under the terms of the Financial Institution loan or b)breach by the owner of any cants contained in the Owner's Agreement. The CDBG Agency agrees to execute on behalf of HSHA the note and mortgageeing loo and. to record the mortgage. Recording expenses sill be paid by MSBA. Me loan will be junior to a Financial Institution or Community Development Block Grant loan. - Page 2 f@hgT - B.. Grana The MSIIA will provide a grant equal to the less of $160 for each $1,000 of Finar�ial institution loam tr funds `bar wed o amount that is at ual to $640 times the umber of rental unitsto be rehabilitated or created with either CDOC of Financial Institution ;rant or loan proceeds. The MORA grant is repayable to y:i'-'.A under the following circumstances: I)breaeh of say o thec ants in the Owner's Agreement; 2)transfer of the property within a five year period from the dace the Oscar's Agreement is executed; r 3)default of the owner under ebe terms of the Financial Institution loan. ). Coordinate the use and provision of Section 8 Existing rental _ certificates with MRA or its designated sub -contractors to units benefitting from .financial assistance provided. 8. Pay any necessary relocation costs in accordance with outstanding Community Development Block Grant sequireaents, where proposed improvements to properties, ,jointly funded by the CDBG Agency, REM, and participating financial institutions, will temporarily or permanently displace a tenant. B. The Maine State Housing Authority agrees to the following: 1. To make available between $12,500-$20,:00 of subsidy funds to the CDBG Agency community area to rake stairs or interest free loans to property o receiving financial assistance from a CDBG Agency, MSHP_ anas financial institution in accordance with Section I1(A)(6) of this Agreement. 2. To make available up to 3— Section 8 Fvistfeg rental assistance certificates or $ 102.136.00 Contract Authority, whichever is less, in the CDBG Agency s a to tenants in properties provided fimanciarassistance by. the CDBG. Agency, TSCA, and a participating finaarial institutions to - iq?l - - td. _ — , Federal �Section 0 € ing regulations ratifiedbythe HDD.t Rental Behabilitarinn�Program Demonstration; 3. Provide technical assistance to the CD BG. Agency and participating. property owners, 4. Assist in idnottfying participating financial institutions; 5. Provide trIfining to the CDBG Agency In the use of the I .dA Energy Analysis Questionnaire and processingpnas through MSDA conputer equipmanq 6. Providing, a - request o y the COBC Acor¢, a report on behalf of the CngG Ager to the State office - csible for ada!nisterine 5e'%11 Cities CDBG Progr4a identifying how local funds were leveraged with state and pr1wate funds. Page 3 III. This Participation Agreement may be terminated at any time by either party hereto upon 10days written notice to theother party. In the event of such termination, the CDBG Agency agrees to perform the responsibilities and services described herein for all properties covered by a .application submitted to s participating Financial Institution prior to, theeffective date of the notice of cancellation. - IV. The CDBG Agency shall receive no compensation for its services hereunder from the ownerlborrower or from the proceeds of any loan made by a participating financial institution. (DATE) (CDBG ENTITY) (MSHA) BEAR2/RAPotml - Page 4