Minutes 03/10/1987 - Laserfiche WebLink

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86 TUESDAY, MARCH 10, 1987 Recommendation Our current financing options include: 1) a 60% loan/40% grant for LMI owners; 2) a 40% loan/60% grant for VLI owners; and, 3) a limited number of deferred loans for VLI elderly/handicapped/disabled (EHD) owners. If the property does not change hands for twenty years, the deferred loan is forgiven. In order to more closely achieve our goals, it is recommended the first two options be retained and utilized where practical, except that the grant could be forgiven upon the death of the owner (remaining loan amount would still be repaid). In addition, a deferred loan would be made available to any VLI family if payment would present a financial hardship. Revised Goal and Budget Restructuring the financing package would make more use of grant and HRP funds and less of bank loan funds than originally planned. Approximately thirty units would be rehabilitated. While this is 75% of the goal, it would certainly look better than 50%, which is the situation we envision without the recommended changes. $25,000 of funds on hand from loans repaid in the first HRP had been budgeted to assist rental rehabilitation. This aid has not been needed; thus, this amount plus an additional $14,000 from the HRP fund would be directed into deferred loans. VCDBG funds have been and will be spent in proportion to the total program. In fact, money spent by the rental owners on rehabilitation has far exceeded original expectations. As a result, the total cost for thirty units should exceed 90% of the original budget despite a reduction in the number of units rehabilitated. This leveraging will allow us to utilize most of the VCDBG funds granted. Requested Action Council is requested to approve the two program changes listed under "Recommendation." The Virginia Department of Housing and Community Development (DHCD) has been apprised of the proposed changes and supports our efforts to successfully complete the grant. The Associate Director feels that our plan of action is a reasonable and logical one. While the goal of forty will not be met, DHCD feels that Martinsville has a good program. In fact, other rehabilitation programs across the State are also having trouble meeting their goals. It is evident that we were not the only locality to present an optimistic goal and funding package in order to be as competitive as possible for the limited funds available. Conclusion The HRP has achieved a level of success in addressing housing conditions in the Southside neighborhood. However, it is increasingly evident that the initial interest expressed by a number of residents has not resulted in rehabilitation for several reasons. Completion of the original goal of forty units now looks unlikely since units must be under contract by November 30, but more importantly there are families who would participate if the recommended modifications are approved.