Million dollar program
The City of Blue Earth has accumulated a pile of money for housing rehab or building demolition, and now is working hard to put it to use.
They have contracted with Faribault County Development Corporation (FCDC) to administrate the project.
“We have been very pleased with the response to our flyer,” says FCDC’s Ann Kluenenberg. “There is a lot of interest in this program,”
Plus, there have been at least 40 citizens at each of the two open forums held to explain the project.
Kluenenberg told the citizens at last Tuesday night’s meeting that the program can help them do many kinds of building projects on their home, or be used to purchase their property if it is in need of demolition.
“People need to own the home and have property taxes and utility bills current,” she says. “Plus there is an income requirement.”
There are four income levels, she explains, and the numbers change by number of residents in the home.
For instance, a household of two persons earning less than $23,500 would qualify for level 1 of the program.
In this case, the homeowner would receive 90 percent of the project in a ‘deferred’ loan, with 10 percent coming from other sources.
“If the owner lives in their home for 10 years, the deferred loan would be forgiven with no payment or interest,” Kluenenberg says. “Otherwise just 10 percent per year would be erased if they live there less than 10 years.”
Level 2 covers a 2-person household earning between $23,501 to $30,550. In this case, the deferred loan is 70 percent of the cost of the rehab project, with 20 percent a repayable loan and 10 percent from other sources.
Level 3 covers incomes from $30,551 to $37,600. Here 50 percent of the cost is a deferred loan, 40 percent a repayable loan and 10 percent is from other sources.
Level 4 is income from $37,601 to $47,100 for two people. In this case, all of the cost of the project comes from a bank loan guaranteed by the city program.
Of course, there are a variety of income levels which cover everything from single persons to families of eight or more.
In order to learn all of the income guidelines for every size family, residents need to contact the FCDC office at the Ag Center, 415 S. Grove St., or call (507)526-2151.
Kluenenberg says there is a short, 1-page preliminary application form to learn if a person qualifies for the program.
If they do, the next formal application is several pages long and includes the need for documentation.
“After that, we will send an advisor to the persons home to work with them on what kinds of projects they need to do,” she says. “Two bids from contractors are required. If the person wants the higher bid, we will just pay the amount of the lower bid, and the homeowner makes up the difference.”
The program covers projects such as windows, exterior painting, walls, roofs and heating units.
Not covered are detached garages, landscaping, driveways or decks.
“This is a time-sensitive program,” Kluenenberg says. “We have this pot of money right now, but when it is gone, the program comes to an end. And, right now there is a lot of interest in it.”
That pot of money totals over $1 million, City Administrator Kathy Bailey says.
“The funds came from federal Housing and Urban Development (HUD) grants back in the 1970s and 1980s,” Bailey explains. “The funds were loaned out for housing rehab type projects back then, and were repaid.”
The monies were handled by the both the local HRA and the EDA, but were put aside and just listed on the city’s balance sheet.
Bailey “discovered” the funds and brought it to the attention of the council and the EDA.
“They decided to take $350,000 of the money and fund this housing rehab program,” she says. “That may not go far enough, if there a lot of $25,000 loans that go out. They may add more money.”
Another $100,000 will go towards the purchase of houses that can be slated for demolition, Bailey adds.
Some of the $1 million will be kept in reserve, she says.
“We felt this what was the money was always intended to do, so we want to get it out into the community for housing improvement,” she says. “It is also possible it could be used for developing some area for new housing construction in the future.”