Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Housing Rehabilitation topic
No spam. Unsubscribe anytime.
Maplewood council approves housing-rehabilitation loan program with NeighborWorks partnership
Summary
The City Council approved a Maplewood Housing Rehabilitation Program using $300,000 from the local housing trust fund plus a $225,000 Minnesota Housing match; NeighborWorks Home Partners will administer loans of $5,000–$40,000 at a fixed 3% rate for owner-occupied homes up to 115% AMI.
The Maplewood City Council voted unanimously on Sept. 8 to approve the Maplewood Housing Rehabilitation Program, a loan program to help owner-occupants repair health-and-safety issues in 1–4 unit homes. The council passed a resolution directing staff to move forward with a program that pairs the city’s $300,000 housing-trust allocation with a $225,000 match from Minnesota Housing and a loan-administration partnership with NeighborWorks Home Partners.
The program targets owner-occupied properties within Maplewood and sets borrower-income eligibility at up to 115% of area median income (AMI) — for example, a family of four would be capped at $152,250 under the proposed guidelines. Loan sizes will range from $5,000 to $40,000 for qualifying health-and-safety and accessibility repairs. Loans will carry a fixed 3% interest rate and a maximum 20-year term and will be secured by a recorded mortgage. Program rules include a debt-to-income limit of 50% and a maximum combined loan-to-value of 100% of the property value (the city and administrator will account for a portion of repair costs when calculating value increases).
NeighborWorks Home Partners, a St. Paul–based nonprofit and certified community development financial institution, will act as loan originator, administrator and servicer under a fee-for-service arrangement. Jason Peterson, NeighborWorks’ chief executive officer, said the organization will handle underwriting, closings, escrowed contractor payments, lien waivers and loan servicing; he noted reporting will be provided to both the city and Minnesota Housing because of grant dollars.
On program costs, Peterson told the council that NeighborWorks’ average origination cost is roughly $4,400 per home-repair loan and that the organization proposes a 10% origination fee with a $2,000 floor to recover costs; he said annual servicing averages about $200 per loan and that the proposed 3% interest should help cover servicing over time. The presentation stated the city would pay loan-administration costs up front to eliminate borrower fees at application.
Councilmember Lee questioned program risk and asked for troubled-debt and delinquency metrics. Peterson said NeighborWorks’ serviced portfolio totals about $13 million; last year the organization wrote off about $150,000 in uncollectible loans (he characterized that as roughly 1%), with an overall delinquency rate of about 6% and a 90+-day delinquency rate around 3.5%. He said NeighborWorks has performed loan workouts and modifications and that more severe collections would be a city decision.
Ms. Parr (city staff) and other staff noted the program’s emphasis on health-and-safety repairs rather than luxury improvements, clarified that attached-unit common-area work generally is ineligible, and confirmed program outreach would rely on the city’s existing communications channels. Staff also said NeighborWorks will provide legally compliant loan documents and regular reporting.
The council took the motion to approve the resolution (moved by Councilmember Juneman, seconded by Councilmember Lee). After no further discussion the mayor called for the ayes, and the motion carried by voice vote.
Next steps: staff will finalize the agreement with NeighborWorks Home Partners, complete required Minnesota Housing reporting, and begin outreach to eligible homeowners in Maplewood. The city plans to bring program documents back to council as required by the grant and to report launch timing publicly.
