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,
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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 -
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