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Council hears update on three UKAP homes, pricing and gap financing
Summary
City staff reported three UKAP homes are under construction and will be sold by UKAP at about $262,000; staff said gap financing from Minnesota Housing covers the difference between construction cost (cited at $350,000) and sale price, and the city is helping market the homes but is not receiving proceeds.
The council received an update that three homes being built by UKAP are under construction and are intended to be sold at a price point (reported at $262,000) that uses gap financing to bridge the difference between actual construction cost and the appraised/sale value.
City and EDA staff said UKAP will market and sell the homes directly; the city is assisting with outreach and promotional materials but will not receive sale proceeds. Staff said the construction cost cited in the meeting was about $350,000 per unit; Minnesota Housing and other gap financing mechanisms were described as covering the difference so qualifying buyers can purchase at the lower price point. The homes are being built to a model plan that will provide comparable sales data for future appraisals.
Councilors asked about qualification rules; staff said there are income-maximum guidelines (moderate-income level) and no asset test for buyers under the program’s terms. Councilors expressed support for having more new homes to establish comps and help close the local housing gap.
Staff said they will continue coordination with UKAP and provide information to prospective buyers about qualification and availability once sales are active.
