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Step by Step App to Federal Home Loan Bank D~~'&bE ~ck~ MEMORANDUM April 11, 2006 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Step by Step Funding Application Housing and Community Development Department Director David Harris is recommending that the City of Dubuque sponsor an application to the Federal Home Loan Bank for funds to assist in the development of a residential facility to be owned by Step by Step. I concur with the recommendation and respectfully request Mayor and City Council approval. 1 ~ 1 / (k j (hLv (~ t_.L 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 ,...-.... '. .,1 ; i , - CITY OF DUBUQUE, IOWA MEMORANDUM 4 April 06 To: Michael v,~lIigen, City Manager From: David Ha~s, Housing and Community Development Department Re: Step by Step funding application Introduction The purpose of this memorandum is to request the City Council to authorize the City's sponsorship of an application to the Federal Home Loan Bank for funds to assist in the development of a residential facility to be owned by Step by Step. Background Step by Step was incorporated last year as an Iowa non-profit corporation to promote the interests of persons with disabilities. The corporation's first project, now in development, is the purchase and development of a residential facility located at 759 Bluff Street. This building will be converted into a fully-accessible seven-unit apartment home for women with physical disabilities. To assist this project, the City Council has previously approved a $100 000 grant, using CDBG funds; another $100 000 has been committed by the Housing Commission as a non-interest bearing loan. In addition, the Council authorized a $350 000 application to the Iowa Department of Economic Development for HOME Program funds, which was awarded in February. Discussion Another application for funding assistance has been prepared, to be submitted to the Des Moines Federal Home Loan Bank's Affordable Housing Program. This has been principally prepared by Jane Steele and Sarah Davidson, with the assistance of Housing Department staff. The application requests a grant in the amount of $210 000. Applications to the Affordable Housing Program must be submitted by a Federal Home Loan Bank member lending institution; in this case, that will be Dubuque Bank and Trust. In addition, the application must have a'sponsor." For purposes of this application, we are proposing co-sponsorship, between Step by Step and the City of Dubuque. This will allow us the maximum points allocated under the Bank's scoring system. As a sponsor, Housing Department staff will be involved in this project in a number of ways. During construction, our rehabilitation staff will perform on- going inspections and approve pay-outs. As grantee for the HOME Program funds, we will have full responsibility for administration of the $350 000 award. And as the project will be for women qualifying for Section 8 Program rental assistance, we will perform all tenant intake and eligibility verifications, and annual apartment inspections and income re-certifications. Recommendation The projected budget for acquisition and rehabilitation of the Bluff Street building is approximately $1.1 million. With the requested Affordable Housing Program grant funds, a total of $760 000 will have been raised. The balance of the budget will be capitalized through sale of historic rehabilitation and enterprise zone tax credits. Limited partnership corporation agreements are being developed at this time, prior to solicitation of investors. Obtaining the Federal Home Loan Bank grant, of $210 000, is an essential part of the funding structure for the project. It is recommended that the Council approve the City as sponsor for the application for this purpose. Action Step The action requested of the City Council is to authorize the Mayor's signature on the attached excerpt from the Affordable Housing Program application, certifying the City of Dubuque as co-sponsor of the application. VI. Applicant Certification Applicant, sponsor, and owner certifY that the information in this application and all required exhibits is correct and that the subsidy received for this project will not exceed the amount necessary for the financial feasibility of the project and that the rate of interest, points, fees, and any other charges for all loans financing the project will not exceed a market rate of interest, points, fees, and other charges for loans of similar maturity, terms, and risk. The applicant, sponsor, and owner also certifY that the subsidy or other assistance provided shall only be used for purposes authorized under 12 CFR Part 951, Affordable Housing Program Regulation, as amended. Applicant, sponsor, and owner further agree to comply with all applicable Anti- Predatory Lending Laws as defined in the AHP Implementation Plan, the requirements of 12 CFR Part 951, Affordable Housing Program Regulation, as amended, and all applicable federal, state, and local requirements, including, but not limited to, the following: · Architectural Barriers Act of 1969 . Rehabilitation Act of 1973 . Americans with Disabilities Act of 1990 . Fair Housing Act Applicant, sponsor, and owner further certify that any proceeds of a subsidized advance or a direct subsidy which will not be or which ceases to be used for the purpose approved by the Federal Home Loan Bank of Des Moines (the Bank) will be recaptured and that any unused or improperly used subsidy will be returned to the Bank. Applicant, sponsor, and owner also agree to submit reports and certifications as the Bank may require. Applicant, sponsor, and owner hereby provide the Bank the right to exchange information with other funding allocation agencies and with any other parties as deemed appropriate by the Bank. Authorized Signature of Home Loan Bank Member Institution. ('The application mnst be signed by someone who is anthorized to harrow funds from the Bank or the member's official AHP designee, as listed on the member's Anthorized Personnel Form on file with the Bank) Typed Name: Douglas J Horstmann Title: President Member Institution: Date Signed: Authorized Signature of Project Sponsor: Typed Name: Roy D Buol Title: Mayor, City of Dubuque Date Signed: Authorized Signature of Project Owner: Typed Name: Sarah A Davidson Title: President Date Signed: Required signatures may be submitted onfaxed copies and/or on separate pages.