The Economic Development Authority (EDA) will provide low interest, residential multi -family housing rehabilitation on loans to qualifying downtown buildings owners through the revolving loan fund. Loans will be made to sustain downtown Spring Valley, revitalize downtown, strengthen the downtown for business expansion, job creation, provide affordable housing to low to moderate income families, and compliment small cites block grant funding.
1.To lend low interest funds to the downtown commercial building owners to develop or rehabilitate affordable apartments in which 51% of the apartments are rented by low to moderate income families.
2.To lend low interest funds to improve energy efficiency and overhead costs for downtown commercial building owners.
3.To repair and revitalize facades on the downtown commercial buildings.
4.To compliment the small cities block grant application
5.To improve Main Street for the purpose of job retention, business retention, expand businesses, assist new business start ups, and or to help a local business with capital that improves the building’s energy consumption and façade.
Location of qualifying commercial buildings:
1.North Broadway between Hwy 63, beginning at what is now referred to the Victorian Bed & Breakfast, commencing at South Broadway at is what is now referred to the Bowling Alley.
2.One block to the east or west of the qualifying North and South Broadway area.
Amount of Funds:
•The Economic Development Authority commits $77,000 in revolving loan funds into the revitalization revolving loan fund program for downtown housing.
1.Maximum loan per unit is $5,500
2.2% interest for applicants
3.Amortization period of five (5) years
4.Payments due to the Spring Valley EDA fall on the first of each month and monthly thereafter.
5.Applicants make payments to the city 3 months after closing with interest beginning the day of closing.
6.In 2017 the City begins paying back quarterly Greater Minnesota Housing Finance (GMHF) at a rate of $5,011.56 each quarter.
7.Repayment to GMHFA should be complete by 2020
8.The EDA will not lend funds after 2018
9.51% of the apartments within a building must leased to low to moderate income persons.
10.Loans in the 100 year flood plain are permissible when the building utilities and apartments are not in the lower level of the structure.
11.Applicant must invest have equity in the building and provide good and marketable title.
12.Applicant will assist with the collection of documents to create a funding package for the EDA Director’s review and the EDA board’s approval. The EDA Director will work with the applicant’s commercial banker to verify pay stubs and taxes.
13.Approval of the funding package is determined by the applicant qualifying as a Qualified Owner (see GMHF Origination Document) and loan proceeds are allocated for rehabilitation work.
14.Repayment of the loan is paid to the EDA of Spring Valley by automatic withdrawals.
15.The Economic Development Authority reserves the right to deny loans.
16.Compliance with the requests of the City Attorney concerning title work and closing of the loan.
1.The program begins September 25, 2013 with a sunset date of December 30, 2018 to apply.
2. This program can be extended by the economic development authority board by public meeting accompanied by Greater Minnesota Housing Finance Agency approval.
1.The applicant is to provide a 10 pre- construction photos to accompany the application, and 10 after construction photos.
2.The applicant is to participate in annual or biannual EDA surveys and allow EDA inspections of work in progress.
3.The applicant is encouraged to apply for the pending Small Cities Block Grant program.
4.The applicant will be encouraged to follow the pending adopted Main Street Design Plan.
5.Acknowledgement to conform and report on the State of MN Low to
Moderate Income and Rent annual guidelines
6.Sign a Promissory Note at closing (Exhibit A)
7.Sign the Mortgage (Exhibit B)
8.Sign the Request for Notice of Foreclosure (Exhibit C)
9.Copy of Insurance on the building (fire and extended coverage in an amount equal to the full insurable value of the project with an overlap endorsement or rider to cover the risk of the rehabilitation work in an amount equal to the loan proceeds used in the project.
10.Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) with limits against bodily injury of not less than one million dollars and against property damage of not less than $250,000). Umbrella excess liability policy may be used. Applicant to name, Greater Minnesota Housing as the additional insured, with not less than 10 days written notice to GMHF and the EDA, of policy changes.
11. Agree to an assignment of Rents in case of default (provided by the City Attorney at closing)
12. Indemnification agreement compliance at Closing (provide by the City Attorney at closing)
13.Copies of signed lien waivers and the expense log is to be submit to the EDA prior to closing.
14.Sign a consent to release information to allow the EDA to obtain credit information, and personal finance information.
There is a $220.00 attorney fee paid to the City of Spring Valley at closing, and when applicable, the applicant may have additional fees for the title search, recording a lien position on a mortgage, a tax per thousand on the mortgage, and or when applicable a $20.00 fee for recording UCC documents for liens on inventory and equipment. The collected fee(s) shall be used to offset expenses associated with implementation of the loan.
EDA adopted: 9-11-13
City Council adopted 9-13
Future Modifications4-9-14, per unit