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Historic Pres Revolv Loan FundPlanning Services Department cit~ H~ 50 West 13th Street Dubuque, Iowa 520014864 (563) 5894210 office (563) 589-4221 fax planning~cityofdubuque.org July 6, 2001 The Honorable Mayor and City Council Members City Hall - 50 W. 13th St. Dubuque, IA 52001-4864 SUBJECT: Historic Preservation Revolving Loan Fund Dear Mayor and City Council Members: Introduction On March 6, 2001 the City Council adopted the creation of Historic Preservation Revolving Loan Fund to provide Iow interest loans to property owners at any income level in the four residential histodc districts. The City Council approved the FY02 Budget with $200,000 in Urban Development Action Grant (UDAG) funds for this new program. The Historic Preservation Commission has committed to raising an additional $200,00 to match the City's commitment. After reviewing the program with City staff, the Histodc Preservation Commission is recommending the following program guidelines. Recommendations The program guidelines presented to the City Council in January 2001 are found in Attachment #1. Recommended changes are shown on Attachment #2, with new language in italics and deleted language crossed out. Terms: The Historic Preservation Commission recommends that the payments begin after project completion, but not longer than 6 months after loan dosing. The Commission also recommends that property owners be limited to one loan outstanding on a property, rather than just one loan per property. Security: With UDAG funding, this program is open to property owners at any income level. For some households, however, a second mortgage position will be difficult to obtain. Consequently, the Historic Preservation Commission recommends that the security for these grants be expanded to include an amount up to 100% loan-to-value. The value will be based on assessed value, or appraised value after improvements, if the assessed value is not a good indicator of the property's value. (This is similar to requirements for housing programs administered by the Housing and Community Development Department.) The Honorable Mayor and City Council Members Histodc Preservation Revolving Loan Program Page 2 Application period: The Histodc Preservation Commission recommends a 60-day open enrollment period, to allow loans to be ranked. Once this first round is completed, then loan applications would continue to be processed until all funds are committed. Eli,qible Improvements: The Histodc Preservation Commission recommends additional language regarding design standards that will be developed for the histodc districts. Project Rating: The Historic Preservation Commission recommends that projects be ranked based on their level of architectural or historical significance to the district, and the priority level of the proposed work. The level of significance would be taken from the 1979 Histodc Properties Survey that was the basis for establishing the histodc districts. This rating, from highest to lowest, is as follows: 1 - State or National, 2 - City, 3 - Neighborhood, 4 - Supportive and 5 - Non-Supportive. The Historic Preservation Commission recommends that highest priority be given to the restoration and use of odginal materials, such as wood siding; and that second pdority be given to preservation alternatives. The Commission also recommends that applications from previous borrowers receive a lower rating, so that more properties are included in the program. Review and Approval: The Historic Preservation Commission recommends that the loan applications be taken at the Housing and Community Development Department, which handles similar programs. Additional language about the processing of applications is shown. This process parallels other housing programs, and the Housing and Community Development Department has agreed to handle these loans. The Histodc Preservation Commission also recommends formation of a loan review committee consisting of three City staff from the Economic Development, Building Services and Planning Services Departments and two HPC members selected by the HPC Chairperson. The committee would rank applications, recommend a loan amount, and review the applications for compliance with City codes and the Section 106 federal review process, and then provide recommendations to the HPC for approval. The Housing and Community Development Depai iment would verify income and repayment capacity, and handle the loan underwriting. Marketin,q: The Historic Preservation Commission discussed marketing the program to property owners in the historic districts. With information about the loan program in the July, 2001 edition of City Focus, we reached many property owners and staff has had many inquiries. If all loan funds are not committed, then the Historic Preservation Commission will undertake additional marketing. Requested Action The Honorable Mayor and City Council Members Historic Preservation Revolving Loan Program Page 3 The Histodc Preservation Commission respectfully requests that the City Council approve the recommended guidelines for the loan program. Sincerely, Terry Mozena, Chairperson Historic Preservation Commission Enclosures cc Michael Van Milligen, City Manager Laura Carstens, Planning Services Manager David Harris, Housing and Community Development Director Pam Myhre, Acting Economic Development Director Rich Russell, Building Services Manager Joleen Patterson, Rehabilitation Supervisor Jerelyn O'Connor, Neighborhood Development Specialist Walty Wernimont, Assistant Planner HISTORIC PRESERVATION REVOLVING LOAN FUND Purpose: Preservation loans are available on a competitive basis to property owners in the four primarily residential histodc districts for exterior rehabilitation projects that meet the Secretary of the Interior's Standards for Rehabilitation. This loan fund provides positive incentives to property owners in these districts to maintain and improve the community's architectural heritage. Applicant Eligibility Any property owner. Eligible Property Must be at least 50 years old and located in Jackson Park, Cathedral, W. 11th Street or Langworthy Historic Preservation Districts (see map of histodc preservation districts). Loan Amount Up to $25,000. Terms 3% 10 years Monthly principal and interests payments begin after project completion. Limit one loan per building. Security At least a 2nd mortgage position and promissory note. Eligible Improvements Extedor work that results in property improvements that meet the Secretary of the Interior's Standards for Rehabilitation. Priority will be given to projects that result in saving, restoring or reconstructing original building elements, using original materials that reflect the architectural character or significance of the property. Review and Approval A loan review committee will rank eligible applications. The Historic Preservation Commission must all work to be completed. All applicable City permits and reviews must be completed; e.g., building permits, rental license, housing inspection. HISTORIC PRESERVATION REVOLVING LOAN FUND Purpose: Preservation loans are available on a competitive basis to property owners in the four pdmadly residential histodc districts for exterior rehabilitation projects that meet the Secretary of the Interior's Standards for Rehabilitation. This loan fund provides positive incentives to property owners in these districts to maintain and improve the community's architectural heritage. Applicant Eligibility Any property owner. Eligible Property Must be at least 50 years old and located in Jackson Park, Cathedral, W.11t~ Street or Langworthy Historic Preservation Districts (see map of historic preservation districts). Loan Amount Up to $25,000.00. Terms 3% 10 years Monthly principal and interests payments begin after project completion, but not longer than 6 months after loan closing. Limit one loan outstanding per building. Security Application Period Eligible Improvements Preferably at least a 2nd mortgage position and promissory note, or an amount not to exceed 100% of loan - to- value. The property value will be based on the assessed value, or on the appraised value after improvements if the assessed value is not a good indicator. Open enrollment for first 60 days of the fiscal year (July and August); applications accepted until all funds are committed. Exterior work that results in property improvements that meet the Secretary of the Interior's Standards and Guidelines for Rehabilitation. Work must meet the Secretary of the Interior's Standards and Guidelines for Rehabilitation and any specific design standards established for the pertinent Historic Preservation District. Project Ranking Projects will be ranked by the architectural or historical significance of the building, and the priority of the work. HISTORIC PRESERVATION REVOLVING LOAN FUND (continued) The architectural or histo#cal significance will be based on the Historic Properties Inventoq/ of 1977. Highest priority will be given to projects that result in saving, restoring or reconstructing original building elements, using original materials that reflect the architectural character or significance of the property. Second p#ority will be given to projects that use preservation alternatives, such as different materials, techniques or methods for rehabilitation of historic buildings. Projects will receive a lower rating if the property owner is a previous borrower under this program. Review and Approval Applications will be accepted at the Housing and Communi~/ Development Department, 1805 Central Avenue, Dubuque. All applications must include required information on income, specific work proposed, and at least two estimates, received, from full-time contractors licensed and insured by the State of Iowa. Homeowners may do the work themselves; written quotes on the costs of materials must be provided. Labor by homeowners is not covered. Incomplete applications will not be processed. A loan review committee of City staffand members of the Historic Preservation Commission will rank ~ applications prior to income verification, and make recommendations relative to loan amount, and compliance with City Housing, Building and Historic Preservation Codes, and with Section 106 of the Code of Federal Regulations. The Histodc Preservation Commission will review the loan application, the proposed work, and the committee's recommendations. The Commission must approve a Certificate of Apprepriateness for all proposed work ~ eempleted prior to issuance of permits or processing of loans. All applicable City reviews and permits must be completed; e.g., building permits, rental license, housing inspection, before any work begins. Work begun prior to obtaining a required permit, review or approval will not be eligible for loan assistance.