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Housing rehabilitation is HRA hallmark

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Housing rehabilitation is HRA hallmark
Park Rapids Minnesota PO Box 111 56470

Hubbard County Housing and Redevelopment Authority will be requesting the continuation of the $198,000 levy, Hubbard County Commissioners to be updated on the program's countywide impact next week.

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Single-family housing rehabilitation may be the HRA's foremost achievement, according to Tim Flathers, community development director for the Headwaters Regional Development Commission, which provides financial management for the HRA.

In the past, housing resources were targeted to cities, Flathers said. "Now the funding is having a countywide impact. We're receiving applications from the entire county.

"The program has grown considerably in the past two years," he said, "and there's more growth projected."

The HRA administers five housing rehabilitation loan programs - the Minnesota Housing Finance Agency's (MHFA) 15-year deferred loans, the Greater Minnesota Housing Fund's (GMHF) 30-year deferred loans, MHFA emergency loans, HRA in-house loans and now, Small Cities Development Program loans, 18 homes expected to be repaired in the county, at least 11 of those in the rural areas.

Approximately 50 Hubbard County families and individuals are now on the waiting list for rehabilitation funding, according the Melody Boettcher, HRA program manager.

The levy allows the HRA to leverage state funds, she explained. By working with various funding entities, houses in need of several upgrades may receive financing.

She cited the example of a homeowner who asks for assistance with plumbing repair, but the roof is in need of a mend. Technically, the house will not meet housing quality standards required by the lending agencies, and the loan would be denied.

"It happens often," she said. "It's frustrating for the homeowner. That's where HRA in-house funding comes into play," she explained, as well as MHFA's emergency funding.

USDA's Rural Development also has funds available for repairs and improvements, Boettcher said, with grant funding specifically for seniors in need of "essential repairs."

And now, the Small Cities Development Program, which is expected to kick off in August with approximately $350,000 in funding, will further buoy housing rehabilitation initiatives in Hubbard County

The Small Cities Loan Program is forgivable if the owner maintains residency, Flathers explained. (After 10 years, it's entirely forgiven.)

A homeowner could conceivably receive $20,000 or $30,000 when packaged with other resources, Flathers said. "This allows us to do a thorough job."

Forty-three have currently applied for the Small Cities loans, Boettcher said. Applicants must have an annual income no greater than 80 percent of the county median. (In a household of one, that's $32,900 or $46,950 for a household of four, as examples.)

The HRDC will be the primary administrative agency but has subcontracted with the HRA to provide staff support.

"People are so humble, so grateful," Boettcher said of the clients who've been assisted. One stops by on a regular basis to tell her how appreciative he is.

n In the past two years, 23 single-family homes of those with low to moderate incomes were improved via MHFA loans in Hubbard County.

The program has historically been funded by the state, last year gaining federal dollars. Households must be very low income to qualify for the $20,000 or less loans. These loans are provided at 0 percent interest with payments deferred for 15 years, when the loans may be forgiven.

n The HRA has made 10 GMHF loans over the past two years. These loans are provided for a 30-year term at no interest. Income limits are up to 80 percent of the state median. These loans are not forgiven.

n The HRA has made nine in-house rehabilitation loans since 2008. Households earning no more than 80 percent of the county median income may qualify for loans up to $15,000 at 3 percent interest.

Loan repayments are used to capitalize a revolving loan fund that will eventually become a more stable source of rehabilitation financing.

Of the nine loans made, three were for repair or replacement of noncompliant septic systems, Boettcher reports.

The rehabilitation housing projects reach an income niche that cannot be served with new construction and allow families that might otherwise find themselves in a home that is unsafe, unhealthy, and inefficient to purchase a home that is like new. 

Rehabilitation housing can stabilize neighborhoods that are blighted by poor housing stock and foreclosed properties while revitalizing a sense of pride in ownership. 

And the projects can incorporate "green" design elements into the homes and increase the energy efficiency of older homes, lowering utility costs for homeowners that need assistance the most.

n Ten families are currently on the waiting list for Cornerstone transitional housing. The Cornerstone project in Park Rapids serves very low-income families while assisting them in becoming self-sufficient.

Households must be homeless or fleeing domestic violence, with a maximum stay of 24 months. Mahube provides case management.

n The HRA also works with Nevis School's industrial technology class to build and sell single-family, affordable homes. Construction on another home is expected to begin on Nevis' Main Street when school starts.

n The HRA also has completed 16 homes via the Minnesota Urban and Renewal Program (MURL). The homes are rehabilitated and sold on a 0 percent interest, contract for deed to low-income families.

n In addition, GMHF and MHFA have jointly funded an initiative to purchase and rehabilitate vacant, substandard housing units in Park Rapids, including foreclosed properties. At least four homes will be renovated and sold to moderate-income families.

For more information on the loans and programs, contact the Hubbard County HRA at 237-9118.

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Jean Ruzicka
(218) 732-3364
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