Housing Trust Fund IFA Grant Applicaiton
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MEMORANDUM
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March 16, 2005
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TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
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SUBJECT: Housing Trust Fund Application
Housing and Community Development Department Director David Harris is
recommending approval of an application by the Housing Trust Fund to the Iowa
Finance Authority for a Local Housing Trust Fund grant of $200,000 to support the
City's Washington Street Neighborhood Initiative.
This year's application continues support for that effort, while expanding to include
activities throughout the Washington Neighborhood strategy area. The grant is
designed to support the City's Washington initiative, by promoting a two-year program
of homeownership assistance, housing rehabilitation and capacity building for non-
profits and small contractors working in this area.
Specifically, the IFA grant: 1) promotes homeownership for lowest-income households
by offering forgivable loans for down payments and by offering 0% interest, deferred-
payment loans for homeowner rehab; 2) promotes improvement of rental housing by
offering landlords 0%, deferred-payment loans; and 3) assists local non-profits and
contractors to improve and re-sell housing by offering 0%, deferred-payment
construction loans.
All activities under the grant will benefit homeowners and renters earning less than 50%
of area median income. This is envisioned as part of a "three-tiered" strategy of
assistance to this neighborhood. Housing Trust Funds will be used to assist lowest
(<50% income) families. Housing Department CDBG and HOME Program funds will be
used to benefit households in the 50-80% income bracket, utilizing existing lending
programs. And families earning 80-100% of area income will be assisted through the
City's new (FY06) home purchase loan program. With this approach, we can achieve a
desired mix of incomes and families in the Washington Neighborhood necessary for
stability, diversity and private reinvestment.
The IFA grant requires a 25% local match. For this application, we have proposed this
be achieved by the following:
1. The Trust Fund received a $4,000 grant from the Iowa Fannie Mae Partnership
office. This will be used for neighborhood planning and leadership development
activities.
2. The new City General Fund program to assist moderate-income home buyers will
be counted as a two-year match (FY06-07), in the amount of $200,000.
3. The Engineering Department has committed $28,000 remaining in FY05 and
$55,000 in FY06 for construction of 35 straight ramps and 15 corner intersections
for disabled access throughout the Washington Neighborhood.
In addition, several other partners have committed to participating with the Trust Fund in
this initiative. Most notably, Dubuque Bank and Trust has pledged to lead a mortgage
lending effort. DB&T, through their subsidiary community development corporation, will
also provide seed money to acquire available properties, in order to make them
available to new owners or to contractors/non-profits who will rehabilitate them prior to
resale.
The Dubuque County-ISU Extension Office will donate over 200 hours of home buyer
counseling, workshops and educational services, valued at $14,800.
Other partners include the Four Mounds Foundation/HEART Program, the Gateways to
Home CHDO (which will purchase and rehabilitate the former Washington
Neighborhood Center), the Dubuque Board of Realtors, Dubuque Main Street Ltd. and
St. Mary's Church.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
10 March 05
To: Mike v~ ~lIigen, City Manager
From: David ~arriS, Housing and Community Development Department
Re: Housing Trust Fund application
The purpose of this memorandum is to inform you of an application to be
submitted by the Housing Trust Fund to the Iowa Finance Authority for a Local
Housing Trust Fund grant of $200 000.
Background
As noted in the January 05 memorandum to Council, the Housing Trust Fund
directed staff to prepare an application for this year's IFA Local Housing Trust
Fund competition. Last year the Trust Fund received a $100 000 award which
was used in conjunction with our Five Points revitalization effort. The funds were
granted to the Four Mounds Foundation for purchase and rehabilitation of three
derelict houses on Washington Street, as part of the HEART education, job
training and neighborhood improvement project.
Discussion
This year's application continues support for that effort, while expanding to
include activities throughout the Washington Neighborhood strategy area. The
grant is designed to support the City's Washington initiative, by promoting a 2-
year program of homeownership assistance, housing rehabilitation and capacity
building for non-profits and small contractors working in this area.
Specifically, the IFA grant: 1) promotes homeownership for lowest-income
households, by offering forgivable loans for down payments; and by offering 0%
interest, deferred-payment loans for homeowner rehab; 2) promotes
improvement of rental housing, by offering landlords 0%, deferred-payment
loans; and 3) assists local non-profits and contractors to improve and re-sell
housing, by offering 0%, deferred-payment construction loans.
All activities under the grant will benefit homeowners and renters earning less
than 50% of area median income. This is envisioned as part of a "3-tiered"
strategy of assistance to this neighborhood. Housing Trust Funds will be used to
assist lowest (<50% income) families. Housing Department CDBG and HOME
Program funds will be used to benefit households in the 50-80% income bracket,
utilizing existing lending programs. And families earning 80-100% of area
income will be assisted through the City's new (FY06) home purchase loan
program. With this approach, we can achieve a desired mix of incomes and
families in the Washington neighborhood necessary for stability, diversity and
private reinvestment.
The IFA grant requires a 25% local match. For this application, we have
proposed this be achieved by the following:
1. The Trust Fund received a $4000 grant from the Iowa Fannie Mae Partnership
office; this will be used for neighborhood planning and leadership development
activities.
2. The new City General Fund program to assist moderate-income home buyers
will be counted as a 2-year match (FY06-07), in the amount of $200000.
3. The Engineering Department has committed $28 000 remaining in FY05 and
$55 000 in FY06 for construction of 35 straight ramps and 15 comer
intersections, for disabled access throughout the Washington Neighborhood.
In addition, several other partners have committed to participating with the Trust
Fund in this initiative. Most notably, Dubuque Bank and Trust has pledged to
lead a mortgage lending effort. DB& T, through their subsidiary community
development corporation, will also provide seed money to acquire available
properties, in order to make them available to new owners or to contractors/non-
profits who will rehabilitate them prior to resale.
The Dubuque County-ISU Extension Office will donate over 200 hours of home
buyer counseling, workshops and educational services, valued at $14 800.
Other partners include the Four Mounds Foundation/HEART Program, the
Gateways to Home CHDO (which will purchase and rehabilitate the former
Washington Neighborhood Center), the Dubuque Board of Realtors, Dubuque
Main Street Ltd and St Mary's Church.
Summary
The Housing Trust Fund Committee has enthusiastically approved this
application to IFA for activities in support of the City's Washington Neighborhood
revitalization project. We have formed working partnerships with prominent
neighborhood and downtown leadership organizations and expect to expand
those associations to include additional participants. Particularly, the efforts of
the Neighborhood Development Specialist may prove crucial in identifying and
recruiting resident leaders and forming a representative neighborhood
association. It will take a broad-based effort to achieve the revitalization of this
area, involving a coalition of interested parties and a mix of public and private
reinvestment.
An excerpted application to the Iowa Finance Authority is attached for your
review.
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:J98 CENTRAL AVENUE =,0,30/773 DUBUQUE, iA52004-Q77B
P/-iCiiVE (583) 589-200D .' TCL~ 8=fEE (BOO) JD7-200C FAX (563j 589-2D1 i'
March 9,2005
James Holz, Chairman
Housing Trust Fund Committee
c/o Dubuque Housing Department
1805 Central Avenue
Dubuque,IA 52001
Dear Mr. Holz:
Dubuque Bank and Trust Company is pleased to support the initiative by the Dubuque
Housing Trust to improve housing in the Washington Street district in downtown
Dubuque.
We intend to share a leading role in this initiative by providing affordable mortgage loans
and lending our support to the project in any other feasible manner. DB&T's commlmity
development corporation will provide seed money to acquire properties as they become
available and until new owners are found or contractors purchase the properties for
rehabilitation.
The Washington Street initiative is truly a wOlthy project that will not only help some of
Dubuque's 10w- to moderate-income residents, but also improve our community as a
whole. DB&T looks forward to participating in this project.
Sincerely,
(!P.~~
Douglas 1. Horstmann
President and CEO
dmg
IOWA STATE UNIVERSITY
Cooperative Extension
DT-TBUQUE COUNTY
14858 W. Ridge Ln Ste 2
Dubuque LA 52003
PH: 563-583-6496 FAX: 563-583-4844
E-mail: ejspurlo@iastate.edu
OF SCIENCE AND TECHNOLOGY
March 02, 2005
Jim Holz, Chair
Dubuque Housing Trust Fund Committee
c/o Dubuque Housing Services
1805 Central
Dubuque, V\ 52001
Dear Mr. Holz:
Iowa State University Extension in Dubuque County strongly supports the Iowa Finance
Authority Grant application submitted by Dubuque Housing Services for $200,000. This
comprehensive plan will help low-income families/individuals living in the Washington
Street Neighborhood Revitalization area develop leadership skills, learn sound money
management practices, and become successful homeowners. We support the need to
rehabilitate this depressed area of the city and are willing to be an active partner in
energizing and educating the citizens who live there with educational services.
Iowa State University Extension commits in-kind services valued at $14,800 to support the
home buyer education program in Dubuque:
· Financial counseling: Up to 160 hours of counseling for 40 individuals or
families requesting help each year = $5600.00)
· Six, 4-session workshops and 2 Saturday workshops for qualifying home
buyers (8 hours of instruction per workshop--$3200.00)
· Three hundred hours of client follow-up (including 4-issue newsletter) and
program evaluation--$4500.00
· Educational presentation development and training for all participating lenders
and realtors--$1500.00
In addition, should funds become available to purchase the program, Iowa State University
Extension staff will develop and present a leadership development program for
neighborhood residents that would include the following topics:
· Understanding Ourselves and Others: Myers Briggs Type Indicators of personality
differences
· Effective Communicating and Listening Skills: recognizing and sending effective
messages
· Understanding and Dealing With Controversy: how to deal with conflict and difficult
people
· Leading Effective Meetings: the secrets to productive meetings
The cost of developing and presenting this program would be approximately $1,500.
Extension programs are available to all without regard to race, color, national origin, religion, sex, age, or disability.
Iowa State University Extension has enjoyed a productive working relationship with the
Dubuque Housing Services staff since 1993. Over the years our collaborative efforts have
helped many qualifying families become successful homeowners. We welcome the
opportunity to continue working cooperatively with them to provide educational services to
luw-1llcume lalllll1es.
Sincerely,
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Ellen J. Spurlock
Family Resource Management Specialist
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fC)UR j~OUnDSf()UnDftTlOn
Officers
4900 Peru Road; Dubuque, Imva 52001 ' 563-557.7292
March 9, 2005
John Gronell
President
Pat O'Neill
Vice President
Brian Houtakker
Treasurer
Mary Mulgrew Gronen
Secretary
Trustees
Elizabeth Adams
Jayne B,mfield
Christine Chapin-Tilton.
Jennifer CI.emens-Conlon
Eric Dregne
James Gronen
Doug Horstmann
Charles Huntley
Ann Michalski
City Appointed Trustee
Jim Mulgrew
Randy Mihm
Michael Toskey
Richard Weber
Management Staff
Christine Happ Olson
Executive Director
Marie FitzGerald
Inn Manager/Job Coach
Ron Fritz
HEART Manager/Job Coach
Tina Hamel
Development/Administrative
Jay Potter
Y. E. S. Manager/Job Coach
Neil Winger
Wood Shop Job Coach
l\1r. Jim Holz, Chair
Dubuque Housing Trust Fund
1805 Central Avenue
Dubuque, IA 52001
Dear Jim,
Four Mounds has been pleased to partner with the City of Dubuque and the
. . ,
Dubuque Housing Trust Fund in the HEART Project over the last year. As
recipient of state. and local housing trust fund dollars, we moved ahead with the
purchase of three of the most blighted; troublesome buildings in the targeted
Washington Street neighborhood. We are. nearly firi.ished with the first home
and have begun work on the next. two buildiIlgs. Investment of this. type
wouldn't have been possible without support from the Iowa and Dubuque-
Housing Trust Fundsand revitaliZation wouldn't have been feasible without the
. creative partnership of the~ Dubuque Housing Trust Fundi s "toolbox'" for the
neighborhoodredeveloprnent~ The_HEART partnership is new, and City's
integral involvement by dedicating staff time and resources to the project has
meant that we have been able t() move ahead successfully.
The four homes we are creating will be available for ownership by fust-time
very low incomebuyers~ Vie want to continue investment in this area in order
to make a broad impact .thatWill help change this neighborhood from one that is
depressed to vibrant.' We believe diversity is the key. to change, and so'a multi~
faceted approach to attracting families.to this area is imp,erative. We believe the
City's proposal for this neighborhood, with a variety of grant and loan packages
available to a variety of income levels, is a sound approach for moving ahead.
Four Mounds plays two major roles in the HEART partnership. We manage
vocational training for the youth involved and serve as the developer/general
c'ontractor for the project. We are excited aboutthe Dubuque Housing Trust
Fund's proposal to utilize new Housing Trust Fund dollars to spur economic
development and revitalization.' To date, we. have not been able to obtain no-
interest gap funding, so the Dubuque Housing Trust Fund's proposal to develop
a loan fund at 0% will go a long way to make future projects more feasible. Our
expansion this year of educational programming (by doubling the number of
classes offered to youth) means weare able to revitalize homes at a faster rate
than before. As well, the possibility of expanding partnership, as the city has
proposed, to include Dubuque Bank & Tmst as property holder is appealing to
us as well, allowing us to focus more on construction management and training
for youth. .
A Non Profit Foundation @ Preservation" Education
Tangentially, we have been working with the Dubuque Leisure Services Department and the
Community Policing Program regarding the possibility of developing a badly needed
neighborhood park. The suggested location is within one block ofthe HEART project and
could provide a great outlet for families. As well, HEART has taken an active role in helping
to start a Multicultural Neighborhood Center to serve the diverse population of this
neighborhood and surrounding downtown areas. These two prospects are examples of other
city-wide efforts to help revitalize this neighborhood in a multi-pronged approach.
Again, we thank you for your past support of the HEART Partnership and hope that we can
partner again to continue to positively impact the Washington Street neighborhood.
Sincerely,
III
DUBUQUE
Main Street
Ltd.
March 7, 2005
Dubuque Housing Trust Fund
c/o David Harris
Housing & Community Development Department
City of Dubuque
1805 Central Ave
Dubuque, Iowa 5200 I
Dubuque Housing Trust Fund Managers,
Dubuque Main Street Ltd., a downtown development corporation, looks forward to a partnership with the
Dubuque Housing Trust Fund, the City of Dubuque and other entities in completing the "Washington
Neighborhood Strategy." We also endorse any effort you make in securing fInancial resources for this
endeavor.
As you know, Dubuque Main Street took a lead on and offIcially endorsed the Downtown Dubuque Master
Plan, which calls for a better mix of housing opportunities downtown. The Washington Neighborhood is an
important area, embodying the transition from our traditional downtown to our seasoned residential
districts. Our studies, as have yours, have shown we need more owner-occupied housing and a better
variety of rental opportunities throughout our city center.
We all know the specialized nature of acquisition and rehabilitation of buildings in under-performing
markets and the additional time and risk associated with it typically create significant gaps beyond the
normal scope of traditional financing tools.
Dubuque Main Street will bring our architectural design services and the Main Street Loan Pool to "the
table," while working with you on "mining" other resources to make this mission a reality.
We salute your efforts in pursuing monies from sources such as the IF A's Housing Trust Fund, and will
support your venture to leverage funds such as this into more private investment, leading to a more vibrant
district in the heart of our community.
Should anyone need further details of our partnership and endorsement of the "Washington Neighborhood
Strategy," please call me at 563-588-4400.
Sincerely,
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Daniel L. LoBianco
Executive Director
On behalf of the entire Board of Directors
909 Main Street .
Phone: 563-588-4400
Suite 22LL, Fischer Building · Dubuque. Iowa 52001
· Fax: 563-588-0645 · E-mail: dbornainst@rnwcLnet
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MarchI, 2005
Mr. Jim Holz
Chair-Housing Trust Fund Corom.
Dear Ji~
David Frommelt
Broker Associate
Lie. IA & IL
Prudential Friedmalllleaity, inc.
3435 Asbury Rd., Ste, 201, Dubuque, IA 52002
Bus 563 583.7580 Res 563 588-4203
Fax 563 583-7609 Cell 563 590-7411
E-mail DKFROMfV1ELT@AOLcom
The Dubuque Board of Realtors want to express our support for the funding request
which will allow improvements to an area that is need of improvement. This will not only
allow people to improve their properties but also help others, especially ftrst time home
buyers, acquire and improve properties and have pride in their properties.
This is not only a neighborhood or speciftc area improvement but is also an
improvement for the entire community. As one of the oldest communities west of the
Mississipp~ we are in need of this program and look forward as citizens and Realtors to
this becoming reality.
Thank you and looking forward to this project.
tJ::J' re~~
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David "fO / elt .
President-Dubuque Board of Realtors
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JNDI:F>ENDENTLY OWI\IiD 1'. cP~tEO;}
- ~Iowa's lar~H:is;e;
951 Iowa
Dubuque, Iowa 52001
Phone: (563) 556-2525
Fax: (563) 556-2347
March 4, 2005
Mr. Jim Holz
Chair-Housing Trust Fund Comm.
Dear Jim,
The Fair Housing Committee and the Affordable Housing Committee want to
lend our support for the request of funds to areas of our city that need
improvements to allow residents to have an enhanced living condition and be
able to take pride in their homes and neighborhoods.
Our group works diligently with other agencies and the city to make life a bit
less stressful, knowing this support is available. On behalf of these committee
members, I hope you will consider this application and approve it.
Sincerely,
tj// ',..--/ / ~/,_.. 7h, .~~
"\-./ t!i./L-.,-,~.j p:;.-
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Doris Hingtgen, Chair
Members:
Doris Hingtgen, Chair
Carol Ruden
Terry Mozena
Lindsay Firzlaff
Dorothy Culbertson
Jayne Farrell
March 11 ~ 2005
Dubuque Housing Services
1805 Central Ave.
Dubuque, Iowa 52001
1\1r. David Harris, Director
Re: Washington Neighborhood Renewal Program
Dear David:
We are delighted to learn of the City of Dubuque's interest in
renewing the Washington Neighborhood and Five Points Area.
We would be happy to provide non-financial assistance to the
proposed New Neighborhood Association and we would further
propose the nomination of Al Lundh, a member of St. Mary Parish,
as our fITst representative. Other appointed representatives could
follow, as needed.
We would also be happy to explore, thru discussions with you, the
potential of 81. Mary Church, becoming a non- fmancial partner
with the Housing Department of the City and other interested
parties to enhance the renewal of the W ashington Neighborhood.
We look forward to the venture with enthusiasm.
~~ereth
\JJ{,v- ~
Deacon Tim LoBianco
St. Mary Church
15th and White
Dubuque, Iowa 5200 I
March 9, 2005
lVIr. Jim Holz
Dubuque Housing Trust Fund
1805 Central Avenue
Dubuque, IA 52001
Dear Jim,
Gronen Restoration has been pleased to be a partner in the HEART partnership as
we work with the Dubuque Housing Trust Fund to revitalize the Washington Street
Neighborhood.
Gronen Restoration has been involved in the Five Points/Washington Street
Neighborhood for ten years. We have worked hand-in-hand with the Housing
Department to develop an outline for revitalization of the neighborhood, which we
used as a basis for development of the Housing Trust Fund project last year.
Together, with our partners, we established the necessary momentum to spur
economic investment in this neighborhood. In the next year, we will see the
completion of the sixth roof-to-foundation rehabilitation on the 20th block of
Washington. With the input of the Jeff Morton our architect, we were able to create
design guidelines for the neighborhood that ensure proper development, while
respecting the character of the neighborhood and creating a sense of place.
Gronen Restoration will continue to help the HEART partnership and the Dubuque
Housing Trust Fund with:
o Acquisition strategy and execution,
o Coordinating and overseeing methods and means for property revitalization,
from structural and mechanical systems to design and fmishes, and
o Ensuring compliance with the neighborhood design guidelines, as a means
steering investors and homeowners to sensitive fac;ade rehabilitations that
complement the historic architecture of the neighborhood
Gronen Properties plans include renovating and reusing the abandoned Dubuque
Casket Company, a critical property in this neighborhood, into 35 quality affordable
apartments with 14,000 square feet of first floor space for organizations that provide
neighborhood services. As well, we are moving ahead with transformation of our
20th Street commercial site, which will result in more quality residential and
commercial space for this neighborhood.
Weare in full support of the Dubuque Housing Trust Fund as it moves ahead to
revitalize this important neighborhood in downtown Dubuque.
~SinCereIY' \)
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;1 1111 N. Gr~n~~, President
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DO ~ox 1862 - DU~UQUE - IOWft - 52004-1862 - DNOOE 563-5577010 - fftX 557-690-1610
March 4, 2005
Dear David,
The "Gateways to Home" Board is a non profit CHDO, actively involved in
purchasing and providing rental housing to low income families, with the support
of agencies who offer assistance in other ways.
On behalf of the Board, I want to offer support for the request for funds to
assist families to improve properties, allowing the market to open for new
families, also. Where impact is needed, this request for funding can be especially
important.
We will look forward to working on this project with the staff at the City
Housing Department.
Thank you.
Sincerely,
~// ,- ~ '
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Doris Hingtgen
Chair
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Exhibit #3: Leveraging and Partners in Activity/Project
A list of current and potential partners in the Housing Trust Fund's VVashington
Neighborhood project includes the following:
1. Dubuque Housing Trust Fund
The Trust Fund has received a $4000 grant from the Iowa Fannie Mae
Partnership Office for planning and neighborhood leadership development
efforts to be used in connection with the project.
2. Gateways to Home: Dubuque CHDO
The Dubuque Housing Trust Fund has recently approved financing for
Gateways to purchase the former Washington Neighborhood Center,
located in the 5 Points area. Gateways will rehabilitate this building using
Trust Fund assistance provided through the IFA grant. In addition,
Gateways will seek to acquire and improve additional properties
throughout the neighborhood.
3. Dubuque Bank and Trust
DB& T has pledged to lead a mortgage lending effort in connection with
this project. In addition, the Bank's CDC has committed to provide seed
money to acquire available properties, in order to make them
subsequently available to qualifying new owners or to contractors who will
rehabilitate them prior to resale.
4. Four Mounds Foundation/HEART Project
Four Mounds will continue with the program, modeled on the HEART
project that was funded with an IFA Trust Fund grant last year. This
program rehabilitates dilapidated housing, with students from the
alternative high school/behavioral classroom providing the labor and
learning carpentry skills, for academic credit.
For the proposed Trust Fund grant, Four Mounds intends to expand this
program, doubling the number of students and working on a 12-month
schedule, in order to acquire, improve and re-sell additional homes to
qualifying buyer families.
5. Dubuque Board of Realtors - Affordable Housing Committee
The Board and the Affordable Housing Committee have each endorsed
this project and will assist by offering marketing services, in cooperation
with ISU-County Extension, the Trust Fund and the Dubuque Housing
Department, to educate potential homebuyers and promote the financial
assistance programs offered through this initiative.
6. Dubuque Main Street Ltd
Main Street will work with businesses within the strategy area, assisting
them with architectural design services for exterior restorations and
access to a multi-lender loan pool offering discounted loans for building
improvements.
7. St Mary's Church
St Mary's has a large campus in the center of the Washington
Neighborhood. They have expressed interest in assisting with formation
of a neighborhood. association and exploring other partnerships to achieve
a revitalization of the area.
8. Dubuque County-ISU Extension Office
The Extension Office will donate over 200 hours of home buyer
counseling, workshops and educational services, valued at $14 800.
9. Gronen Restoration
A private firm specializing in historic rehabilitations in the downtown
neighborhoods, Gronen will be a significant partner in the Washington
initiative. Gronen has just received notice of IF A tax credit award for the
Dubuque Casket Company adaptive re-use project. As well, Gronen is an
integral part of the HEART partnership and will assist that project to
continue and expand rehabilitation activities in the neighborhood.
1 0 City of Dubuque Housing Department
CDBG Homeownership activities:
a. Home Purchase. Currently, the Department offers 0%, is-year, $5000
down payment loans to first-time buyers earning <80% area median
income. For lower-income (<50%) households, payments are initially
deferred for 5 years.
For the Washington Neighborhood project, modified terms will be offered:
Households earning less than 50% income will receive the assistance as a
$2500, 5-year forgivable loan and a $2500 deferred-payment loan, due at
sale.
Families at 50-80% will receive the $5000 assistance as due-at-sale loans.
b. Homeowner Rehab. For rehabilitation assistance to homeowners, the
Department offers 30-year, $25000 loans. For lower-income (<50%)
households, loans are made at 0% interest for the initial 5 years, then set
at 3%. For families at 50-80%, the interest rate is 3%, with no deferral
period.
..
For the VVashington Neighborhood project, modified terms will be offered:
Households earning less than 50% income will receive a 5-year forgivable
loan of $5000 with the balance (up to $20000 additional) set at 0% interest
for term.
Families at 50-80% will receive deferred-payment loans for the initial 5
years, then rewritten at 0% for term.
CDBG Rental rehabilitation activities:
Currently, the Department offers 3%, 20-year, $15 OOO/unit loans to owners
renting to tenants earning <80% area income.
For the Washington project, modified terms will be offered:
Loans will be written with the initial 5 years at 0%.
In addition, a new homeownership assistance program will be made
available by the Housing Department beginning in Fiscal Year 2006,
providing $5000 down payment loans to buyers earning 80-100% of
income. $100 OOO/year for 5 years, from City General Funds, will be
committed to the Washington Neighborhood project. The intent of this new
program is to encourage a mix of household incomes in the area, de-
concentrating the current high percentage of very low-income rental units.
11 City of Dubuque Engineering Department
Engineering has committed $28 000, beginning in April of this year, for
construction of disabled-accessible curb ramps throughout the Washington
Neighborhood; and $55 000 for FY06. This work will include
35 straight ramps and 15 corner intersections, the latter necessitating
extensive reconstruction of the high curbing used to convey street
storm water flooding. This work will greatly improve mobility throughout the
neighborhood for persons with disabilities.
Exhibit #6: Financial and Overall Feasibility of Activity
The Housing Trust Fund is proposing a 2-year neighborhood revitalization
initiative with public financial assistance of $1.3 million, matched by private
reinvestment expected to exceed that number many times over. Use of the
requested Trust Funds will provide the additional subsidy necessary to insure the
participation by lowest-income households in achieving homeownership and
financial security.
As mentioned, the Five Points area is within the Washington Neighborhood. The
City has committed significant financial resources. to this project, including a
current balance of $150 000 in HOME Program funds for rental rehab loans.
Additional available 5 Points funding includes $60 000 from CDSG for rental
rehab loans; and $120000 from CDSG for homeowner rehab loans.
Current balance in the Housing Department's HUD Lead Hazard Control grant
exceeds $750 000. We project 25 additional forgivable loans for lead abatement
will be made in the Washington Neighborhood during the next 15 months,
totaling a $150 000 investment.
Beginning in July 05, the Housing Department's annual CDBG allocation includes
$360 000 for homeowner rehab and $75 000 for first-time homebuyer loans. We
project 8 rehab loans and 4 purchase loans in the Washington Neighborhood
during Fy06; with an equal number in FyoT(through June 2007.) Total
investment through those programs for the 2-year project is estimated at
$400 000 for rehab loans and $40 000 for down payment loans and grants.
The City Council has approved a new program in support of this initiative,
beginning in Fiscal Year 2006, with a 5-year, $500000 capitalization of a down
payment assistance program to promote homeownership. General Funds will be
used for this program, to be made available to families residing in or relocating to
the Washington Neighborhood at the 80-100% income bracket.
Planning funds awarded by the Iowa Fannie Mae Partnership Office in the
amount of $4000 will be utilized by the Trust Fund for demographic analysis,
mapping and leadership recruitment and training. Emphasis will be placed on
identifying and recruiting residents to become part of the leadership of this
neighborhood-based initiative, as a precursor to establishing a residents
association.
As an initial public works improvement project, the Engineering Department has
committed current year and FY06 funds in the amount of $83 000 to install 35
curb ramps and to rebuild 15 intersections, to allow access for disabled persons
throughout the neighborhood.
The ISU-Dubuque County Extension office has committed an in-kind match of
$14800 to provide home buyer education counseling, conduct workshops and
provide client follow-up services. All these services will be provided exclusively
to participants in the Washington Neighborhood project. Our experience with
Extension, since 1995, has proven that this type of counseling and education is
an essential element in assuring success for iower-income first-time home
buyers.
As mentioned in Exhibit #4, the majority of the Washington Neighborhood lies
within an Urban Revitalization District. This will allow property owners a 1 a-year
abatement of additional real estate taxes assessed for improvements. While not
included within the local "match" for this project, the tax abatement is a significant
financial incentive and can assist in encouraging owners to invest in their homes.
The total Dubuque Housing Trust Fund and City of Dubuque financial
commitment to this 2-year project is $1 341 800,. of which $301 800 is "local
match" to the requested IFA Housing Trust Fund application.
CURRENT HOUSING PROG.RAMS AVAILABLE FOR PROPERTIES WITHIN
WASHINGTON NEIGHBORHOOD
1. CDBG $5,000 HOME PURCHASE LOANS:
Below 50% Income: 15-year, 0% interest, payments deferred for first five years
50-80% Income: 15-year, 0% interest
2. CDBG $25,000 HOMEOWNER REHAB LOANS:
Below 50% Income: 3D-year, payments deferred for first five years, 3% interest for term
50-80% Income: 3D-year, 3% interest
3. LEAD PAINT $6,000/UNIT LOANS:
Below 80% tncome: 5-year forgivable
4. HOME $12,500/UN/T RENTAL REHAB LOANS (FOR 5 POINTS PROPERTIES)
Below 60% Income: 5-year forgivable
5. CDBG $15,000/UN/T RENTAL REHAB LOANS
Below 80% tncome: 20-year, 3% interest
PROPOSED NEW OR MODIFIED PROGRAMS TO SUPPORT
IFA HOUSING TRUST FUND APPLCIATION
1. CDSG $5000 HOME PURCHASE LOANS - MODIFIED:
Below 50% Income: $2,500, 5-year forgivable
$2,500,0% interest, due upon sale
2. cDSG $25,000 HOMEOWNER REHAB LOANS. MODIFIED:
Below 50% Income: $5,OOO,5-year forgivable
Balance at 20-year term, 0% interest
50-80% Income: $5,000, payments deferred for 5 years
Balance at 20-year term, 0% interest
3. CITY GENERAL FUND $5,000 HOME PURCHASE LOANS:
80-100% Income: 15-year, 3% interest
4. CITY GENERAL FUND ACCESSIBLE CURS / INTERSECTION /NSTALLA TJONS
$28,000 Available in FY05
$55,000 Available in FY06
PROPOSED USES OF IFA HOUSING TRUST FUND AWARD
TARGET: BELOW 50% INCOME HOUSEHOLDS
1. HOME PURCHASE LOANS:
$5,000, 5-year forgivable
2. HOMEOWNER REHAB LOANS:
$10,000, 0% interest, due upon sale
3. RENTAL REHAS LOANS:
$5,000/Untl, 5-year, 0% interest
4. CONSTRUCTION LOANS:
0% interest, deferred payments, 6-12 months
$25,000 - for single fami.ly homes
$35,000 - for duplexes
Exhibit #5: Impact of Activity
$200000 in IFA Local Housing Trust Funds is requested by Dubuque's Housing
Trust Fund for activities to implement the "VVashington Strategy," as follows:
1. to assist very low-income (<50%) families to purchase and rehabilitate
housing
2. to assist extremely low-income (<30%) renter households by providing
landlords low-cost loans to rehabilitate older apartment buildings
3. to achieve rehabilitation of older homes by providing no-cost construction
loans to contractors and non-profits, who in turn will re-sell completed
properties to very low-income households
a. Homeowner activities
The Trust Fund will make loans available for both purchase and
rehabilitation of owner-occupied single-family and duplex dwellings.
Home Purchase. Purchase assistance will be offered as $5000, 5-year
forgivable loans.
Homeowner Rehab. Rehabilitation assistance will be offered as $10 000,
0% interest, due-at-sale loans, with payments deferred.
b. Rental property activities
Rehab loans will be offered as $5 OOO/unit, 0% interest loans, 5-year term,
deferred payments. Rents not to exceed the Voucher Payment Standard
set by the Housing Department's Section 8 Program. (Current VPS is set
at 95% of the Fair Market Rent allowed by HUD.)
No less than 30% of the requested Trust Funds will be used to assist with
rental rehabilitation activities.
c. Construction financing
In addition, the Trust Fund will make loans available to non-profit housing
development agencies and to for-profit contractors and developers to
purchase, rehabilitate and re-sell single-family and duplex dwellings to
low-income (<50%) owner-occupants.
This assistance will be made as construction loans, at 0% interest, with
payments deferred. Non-profits will receive 12-month loans; private
developers will receive 6-month loans.
$25000 loans will be available for single-family homes; $35000 for
duplexes.
All loans when repaid will be deposited to a permanent revolving loan fund, to be
again be made available by the Housing Trust Fund for additional lending
activities in support of the Washington Neighborhood project.
The Dubuque Trust Fund's strategy for revitalization of the 'Nashington
Neighborhood, as stated, is to promote increased homeownership and
rehabilitation of the housing stock. To accomplish this, a U3-tiered" program of
financial incentives is proposed, according to income level.
1. For lowest (<50%) income households, IFA Trust Funds will be made
available as grants and 0%, deferred-payment loans.
In a proposed new program, IFA Trust Funds will be made available to
developers and contractors, as 0% construction loans, to purchase, rehab
and re-sell homes to qualifying households.
2. For households earning up to 80% income, Housing Department CDSG
and Lead Paint program funds will be made available, in a combination of
forgivable loans, deferred-payment and fully amortizing loans (depending
on income.) HOME Program funds are made available for rental rehab
activities, as forgivable loans to owners of 5 Points properties, for
households <60% income.
3. For households earning 80-100% income, City General Funds will be
made available as low-interest amortizing loans for down payments.
Summary of Impact
As mentioned in the Exhibit #4 discussion, properties in the Washington
Neighborhood are severely under-valued relative to much of the rest of
Dubuque's residential housing stock. This makes borrowing, for improvements,
difficult, as private lenders do not make loans exceeding a property's value. This
means existing lower-income homeowners: 1) can't borrow sufficient funds for
needed rehabilitation and up-dating; and 2) have little incentive to do so, as the
improvements will add little to value, given the overall condition of the
neighborhood.
Potential home buyers who would move to the neighborhood - and restore
historically significant properties - are faced with the same dilemma. The costs
of purchase and necessary rehabilitation will typically exceed the appraised value
of the property, even when completed.
Finally, rental property owners have little incentive to improve their units, as
depressed rents in the neighborhood limit the financial return on additional
investment. Up-dating units does not translate into an ability to increase rents.
. .
The solution, as proposed, is to address the neighborhood with a comprehensive
program of public incentives, to encourage private investment. This "3-tiered"
schedule of public assistance reaches persons at all income levels.
The new City program to assist moderate (80-100%) income families to buy
homes in the area will help achieve a mix of household incomes and encourage
new families to relocate to the neighborhood.
The Housing Department's existing CDBG-funded programs for homeowner
rehab and homebuyer loans assist households at 50-80% income; for the
Washington Neighborhood initiative, we have relaxed repayment requirements
and provided additional incentives to encourage participation.
Typically, lowest-income (<50%) families don't have the borrowing capacity to
add debt, even when offered loans by the Housing Department at subsidized
terms. The proposed IFA Housing Trust Funds will address needs for these
households. By offering the assistance as forgivable and due-at-sale loans, with
0% interest, we can encourage these families to join the revitalization effort and
improve their homes.
The Trust Funds will also be used to provide short-term, 0% interest rehab loans
to rental property owners, in an attempt to encourage improvement of rental
housing for extremely low-income tenants.
The Trust Fund Committee feels a significant aspect of this initiative is the
proposal for use of IFA Housing Trust Funds as construction loans, for
contractors and non-profit agencies to rehabilitate and re-sell homes to low-
income families. 0% loans, at 6-12 months duration, will eliminate carrying costs
and enable smaller contractors and non-profits to achieve substantial
rehabilitation of these older homes. Particularly for non-profits, such as Four
Mounds and our CHDO (Gateways to Home), this can build local capacity to
expand rehabilitation activities throughout the downtown neighborhoods.
Coupled with this is the commitment of a local lender, Dubuque Bank & Trust, to
provide seed money to purchase and hold available properties, for subsequent
rehabilitation and resale. The Bank will furnish this service through their
subsidiary community development corporation, in a new partnership with the
City of Dubuque and Dubuque's Housing Trust Fund. Working with the Board of
Realtors, we will then market the homes to very low-income families, coupled
with subsidized purchase financing, and create a higher level of homeownership
within the neighborhood.
Related Impact
The former site of the Dubuque "Pack"/FDL foods lies adjacent to the
Washington Neighborhood. This is a large tract, over 40 acres, and has been a
severely blighted and environmentally contaminated area for several years, since
~
. .
abandonment by Smithfield Foods. It has recently been purchased by a local
development partnership, with plans for a multi-million dollar retail center to
reoccupy the site and provide economic stimulus to Dubuque's "North End."
An expected future impact of this redevelopment will be increased private
investment in the immediate area, including the Washington Neighborhood.
While this reinvestment is needed, it can come with a cost, and that is
gentrification. Lowest-income (<50%) renters and homeowners can find
themselves priced out of a neighborhood that offers the combination of low real
estate values and historic housing, and which becomes an attraction for
investment capital. That is the potential situation that this neighborhood could be
experiencing within a few years.
For that reason, use of the Trust Funds, to insure housing opportunities - for
lower-income renters and current homeowners and potential home buyers-
becomes an essential part of the revitalization strategy for the Washington
Neighborhood. An objective for Dubuque's Trust Fund is to preserve sufficient
affordable housing for those families.
ATTACHMENT #1
PROJECT BUDGET
Total Project/Application: .$1.541.800
~J5;;i:~:~)~;6ifiilig':;I~t~~i,:;:;,,:+;,,;;{ '::;(<~'i';"'>t' :;,; ,;ri~f.(~i!.\!Uiif,~gf4Jijm.t~;;~;t(::"ji ;;J:;";'C"'~ ,"
",,, '", " ",,', ()lJg;
Y"',,~.:>/,.i',,~~:' .~~...:""~".-_..:. - "
IFA Trust Funds $200,000 DownpaymentlRehab
Loans and Grants
Housing Department
Home - Five Points $150,000 Rental Rehab Loans Received
CDSG - Five Points $ 60,000 Rental Rehab Loans Committed
COSG - Five Points $120,000 Homeowner Rehab Committed
Loans
LEAD Program $150,000 Lead Paint Removal Received
Grants
COSG $400,000 Homeowner Rehab Available 7-05
Loans and Grants
COSG $ 40,000 Home Purchase Loans Available 7-05
and Grants
COSG $120.000 Renta! Rehab Loans Available 7-05
Local Match: $200,000 Oownpayment Loans Available 6-05
City General Funds
Local Match: Fannie Mae $ 4,000 Planning Received
Dubuque Trust Fund
Local Match: $ 14,800 Homeownership Committed
ISU Extension (In-Kind) Counseling
Local Match: $ 83,000 Curb Accessibility $28,000 Committed
City Engineering Oept. $55,000 Avail. 6-05
Local Match:
TOTAL: ,$1.541.800
(Total Project/Application & total amount should be the same)
EXAMPLES:
Funding Source: For the total project/application list all funding sources.
Use of Funds: For the total project/application list how all funding sources will be used.
Status: Date committed.
Note:
Local Housing Trust Fund Proaram: Local match of 25% minimum must
come from at least local government and local private sector. Also see the
definition of Local Match in the 2005 Allocation Plan.
Proiect-Based Housing Program: Local match is a minimum of 10% and
may come from sources listed in the 2005 Allocation Plan.
-7-
02/03/05