HomeMy WebLinkAbout2021-04-08 HRA Regular Meeting PacketAgenda
Edina Housing and Redevelopment Authority
City of Edina, Minnesota
V IRTU AL MEETIN G
Thursday, April 8, 2021
7:30 AM
Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeetings or
Facebook.com/EdinaMN.
To participate in Community Comment:
Call 800-374-0221.
Enter Conference ID 7153347.
Give the operator your name, street address and telephone number.
Press *1 on your telephone keypad when you would like to get in the queue to speak.
A City sta8 member will introduce you when it is your turn.
I.Call to Order
II.Roll Call
III.Pledge of Allegiance
IV.Approva l of Meeting Agenda
V.Community Comment
During "Community Comment," the Edina Housing and Redev elopment
Authority (HRA) will invite residents to share new issues or concerns that
haven't been considered in the past 30 days by the HRA or which aren't
slated for future consideration. Individuals must limit their comments to
three minutes. The Chair ma y limit the number of speakers on the same
issue in the interest of time and topic. Generally spea king, items that are
elsewhere on today's agenda may not be addressed during Community
Comment. Individuals should not expect the Chair or Commissioners to
respond to their comments today. Instead the Commissioners might refer
the ma tter to sta. for consideration at a future meeting.
VI.Adoption of Consent Agenda
All a genda items listed on the consent agenda are considered routine and
will be enacted by one motion. There will be no separa te discussion of such
items unless requested to be remov ed from the Consent Agenda by a
Commissioner of the HRA. In such cases the item will be remov ed from the
Consent Agenda and considered immediately following the a doption of the
Consent Agenda. (Favorable rollcall v ote of majority of Commissioners
present to approve.)
A.Dra ft Minutes of Regula r Meeting March 25, 2021
VII.Reports/Recommendations: (Fa v orable vote of majority of Commissioners
present to approve except where noted)
A.Home Rehabilitation Program
B.T ena nt Protection Ordinance
VIII.HRA Commissioners' Comments
IX.Executive Director's Comments
A.Gra ndv iew District Pedestrian Bridge
X.Adjournment
The Edina Housing and Redevelopment Authority wants a ll participants to be
comforta ble being part of the public process. If you need assistance in the way of
hearing ampli9ca tion, an interpreter, large-print documents or something else,
please call 952-927-8861 72 hours in advance of the meeting.
Date: April 8, 2021 Agenda Item #: VI.A.
To:C hair & C ommissioners of the Ed ina HR A Item Type:
Minutes
F rom:Liz O ls on, Adminis trative S uppo rt S p ecialist
Item Activity:
Subject:Draft Minutes o f R egular Meeting Marc h 25, 2021 Ac tio n
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P ME NT
AUT H O R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED :
Approve the regular minutes of M arch 25, 2021.
I N TR O D U C TI O N :
S ee attached meeting minutes of M arch 25, 2021.
AT TAC HME N T S :
Description
Draft Minutes of Regular Meeting March 25, 2021
Page 1
MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
MARCH 25, 2021
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the meeting to order at 7:32 a.m. and noted the meeting was being held virtually
to comply with the Governor’s Stay at Home Order due to the COVID-19 pandemic then explained
the processes created for public comment.
II. ROLLCALL
Answering rollcall were Commissioners Jackson, Pierce, Staunton, and Chair Hovland.
Absent: Commissioner Anderson.
III. PLEDGE OF ALLEGIANCE
IV. MEETING AGENDA APPROVED - AS PRESENTED
Motion by Commissioner Jackson, seconded by Commissioner Pierce, approving the
meeting agenda as presented.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Chair Hovland
Motion carried.
V. COMMUNITY COMMENT
No one appeared.
VI. CONSENT AGENDA ADOPTED AS PRESENTED
Member Jackson made a motion, seconded by Member Pierce, approving the consent
agenda as presented:
VI.A. Approve minutes of the Regular Meeting of March 11, 2021
Rollcall:
Ayes: Commissioners Jackson, Pierce, Staunton, and Chair Hovland
Motion carried.
VII. REPORTS/RECOMMENDATIONS
VII.A. AMENDMENT TO NEW MULTI-FAMILY AFFORDABLE HOUSING POLICY –
APPROVED
Affordable Housing Manager Hawkinson shared a report regarding an amendment to the new multi-
family affordable housing policy. She stated the for-sale requirements for the new Multi-Family
Affordable Housing Policy indicated the maximum sale price was $425,000 and although this was the
cap for the Come Home to Edina program that was directed to allow for single family home
acquisition. She said as this policy covered multi-family ownership, $425,000 did not meet the
threshold for being affordable per the Metropolitan Council or Minnesota Housing. Ms. Hawkinson
stated in order to count towards the goal of creating 992 new affordable units, staff proposed
decreasing the ownership sales cap to serve households with incomes at 80% of AMI, which equaled
a housing value of $293,500, adjusted annually. She stated with construction costs increasing, the
cost to develop an affordable unit within either a market rate development or on its own was also
increasing and staff proposed the buy-in fee increase to $125,000 per affordable unit not being
included in a market rate development. She noted the buy-in fee had not increased since first
introduced in 2018.
Minutes/HRA/March 25, 2021
Page 2
The Commission commented how this was a cost that resulted directly from climate change due to
the nation’s forest fires that eventually resulted in a needed policy change in Edina. They supported
the increase in the buy-in and asked what do we do with those funds to keep progressing towards
our goals. Ms. Hawkinson said we could use the buy-in funds to further different goals where there
was not another source of funds identified and suggested partnering with Homes within Reach for
opportunities for homebuying for lower income households.
The Commission asked more about the drop in acquisition limit from $425,000 to $293,500 and the
difficulty to buy at that level. They spoke about strategy and how they could use buy-in funds to
achieve objectives and stressed the importance of the continuum of affordability and difficulty with
this goal based on where the subsidy comes from. Ms. Hawkinson explained how the policy pertained
to multi-family and not single family and the other mechanisms for single family. She noted it was
unlikely that an area would be used to build 24 new single-family homes but could be used for condos
or townhomes that would serve households at 80% of area medium income and could include cost
saving measures if possible and if not then subsidies would be needed.
The Commission asked more about unintended consequences as increasing the buy-in could affect
the market and drive away developers which could result in both lost housing and funding for future
housing. The Commission noted the policy had been amended over time and could be amended
again if needed and that this proposal was based on good data. They spoke about the affordability
period of 20 years and if needed could amend the policy to include building units that were
permanently affordable too. Ms. Hawkinson agreed the affordability period could be reconsidered
then noted Edina was an appealing community to develop in and the buy-in was more appealing than
including affordable units due to the high cost of construction.
Motion by Commissioner Staunton, seconded by Commission Pierce, to approve the
proposed changes to the new multi-family affordable housing policy.
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Chair Hovland
Motion carried.
VII.B. AFFORDABLE HOUSING FINANCING TOOLS - RECEIVED
Ms. Hawkinson introduced Nick Anhut from Ehlers who presented various financing tools available
to the HRA to support affordable housing development. Mr. Anhut reviewed affordable housing and
the need for public financing, local roles, and examples of public assistance. He said the need for
public financing was important because private financing was limited and explained how an affordable
housing project reduced the project’s overall return potential due to the size of a mortgage and
making it a less attractive return because of the lower rent, therefore creating a gap. Mr. Anhut
explained how public financing options included grants or fill-in funds over time through cashflow
supplements then reviewed development roles of HRAs that ranged from public incentives to policy
to using funds to acquire sites to attract developers to build the affordable housing. He reviewed
tools available to HRAs which included tax increment financing or tax abatement, HRA levy,
revolving loan funds, housing improvement areas, public project bonding, and regulatory incentives.
Commission consensus was to continue this topic to a future meeting.
VIII. HRA COMMISSIONERS’ COMMENTS – Received
IX. EXECUTIVE DIRECTOR’S COMMENTS - Received
X. ADJOURNMENT
Motion made by Commissioner Jackson, seconded by Commissioner Staunton, to
adjourn the meeting at 8:24 a.m.
Minutes/HRA/March 25, 2021
Page 3
Roll call:
Ayes: Commissioners Jackson, Pierce, Staunton, and Chair Hovland
Motion carried.
Respectfully submitted,
Scott Neal, Executive Director
Date: April 8, 2021 Agenda Item #: VI I.A.
To:C hair & C ommissioners of the Ed ina HR A Item Type:
R ep o rt / R ecommend atio n
F rom:S tep hanie Hawkins o n, Affo rd able Ho us ing
Develo p ment Manager Item Activity:
Subject:Home R ehabilitation P rogram Ac tio n
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P ME NT
AUT H O R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED :
Approve loan documents and service agreements with C enter for E nergy and E nvironment to administer and
service the loans for the homeowner rehabilitation program.
I N TR O D U C TI O N :
O n M arch 11 the H R A approved the Homeowner R ehabilitation program and authorized staff to engage an
attorney to prepare and review loan documents and service agreements for the administration of this program.
T his pilot program serves three purposes:
1. Allows higher income borrowers with higher valued homes than the County sponsored C D B G program to
borrow funds to rehabilitate their homes.
2. Allows borrowers to rehabilitate their homes with no adverse effect on their monthly cash flow.
3. P rovides a loan forgiveness provision if the house is sold to the H R A.
AT TAC HME N T S :
Description
Staff Report
CEE Loan Servicing Contract
CEE Adminis trative Contract
Borrower Mortgage
Borrower Note
April 8, 2021
Chair and Commissioners of the HRA
Stephanie Hawkinson, Affordable Housing Development Manager
Home Rehabilitation Program
Information / Background:
On March 11 the Housing and Redevelopment Authority authorized City Staff to engage an attorney to
proceed with reviewing loan documents and administrative agreements with Center for Energy and
Environment (CEE) to carry out the proposed Home Rehabilitation program. Upon final approval and
execution of the documents Staff will proceed with working with the CEE to market the program.
The housing rehabilitation pilot program augments the program offered by Hennepin County. The latter is
supported through a portion of the City’s allocation of Community Development Block Grant Funds
(CDBG). The City based program in partnership with the CEE has broader goals: 1) Preserve modest
homes, 2) promote sustainability, 3) provide a financing option that is fully deferred to save on monthly cash
flow.
The proposed program would be available to households with incomes up to 125% of the Area Median
Income; is deferred with a 2% simple interest and includes an option for principal and interest forgiveness.
This option is available if the house is sold to the HRA and either placed into a Land Trust through West
Hennepin Affordable Housing Land Trust, added to the Metro HRA affordable housing program, or
preserved for long term affordability through another future mechanism.
Deferred Loan
On March 11 HRA Commissioners requested that Staff review a program that was interest only versus
having interest and principal both deferred. After consulting with CEE and reviewing administrative costs,
Staff recommends a fully deferred program for the following reasons:
1. At $30,000 loan with 2% interest for the full 30-year, the interest payment would be $18,000 and
interest plus principal would be $48,000. This is a relatively small amount compared to the
appreciated value of a home over 30-years.
2. One element of this program is to save households monthly cost burden while providing an
opportunity to improve their home.
STAFF REPORT Page 2
3. With current interest rates so low, households with income up to 125% of AMI who are less
concerned with monthly cash flow have other borrowing options in the marketplace.
4. The program is designed for people who want to improve their home and want to make sure that is
preserved once they decide to sell. Some homeowners have expressed that there is no point in
rehabbing their home as the next buyer will just tear it down.
5. A monthly interest payment creates less incentive to provide the City with first right of refusal to
purchase the home when the owner is ready to sell.
6. The cost for administering an interest only loan verses a fully deferred loan is greater by $4.00 per
loan, per month, or $11,520 greater for 8 loans.
Servicing Agreements
After reviewing budget proposals from both the Community Reinvestment Fund and CEE, Staff recommends
that CEE service the loans in addition to administering the program.
CEE will perform the following:
• Assist in marketing the program.
• Accept and review program applications.
• Meet with applicants to inspect house and discuss rehabilitation priorities.
• Inspect final work when a City inspector is not required.
• Pay contractor.
• Service loans.
Program Expenses
Sources Uses*
AHTF $ 250,000 Loan $ 227,620
CEE Administration $ 18,600
CEE Servicing $ 3,780
$ 250,000 $ 250,000
*Assumes 8 loans for 30-years at an average of $28,452.50 each
Alignment with Comprehensive Plan
The Home Rehabilitation Program is a tactic to help fulfill Goals and Strategies approved on the 2040
Comprehensive plan and in the Housing Strategy Task Force report:
Comprehensive Plan
• Encourage the preservation, maintenance, and rehabilitation of existing subsidized and naturally
occurring affordable rental and ownership housing.
• Increase housing stability and security of residents living in affordable housing.
STAFF REPORT Page 3
• Maintain some of Edina’s lower square footage housing stock in order to attract new residents and
retain existing residents, including providing affordable options.
• Protect and maintain lifecycle housing that is important for attracting young families
Housing Strategy Task Force Report
• Develop program to incentivize property owners to keep their properties affordable.
• Offer resources to support senior residents seeking to age-in-place.
• Consider program of assisting income eligible property owners with rehabilitating their homes to
extend their useful life in a manner that also complements the dwelling’s character and is compatible
with the character of the surrounding neighborhood.
Alignment with City Pillars
1. Sustainability
The Home Rehabilitation Program has been designed in partnership with the Sustainability
Coordinator to help improve the energy efficiency and sustainability of Edina’s older housing stock.
To that end, in addition to a home advisor meeting with the borrowers to discuss health, safety and
code issues, the borrowers will also meet with the Home Energy Squad to identify mechanisms to
increase energy efficiency. The Home Energy Squad program is already offered to Edina
Homeowners, so this pairing of the two program brings rehabilitation dollars to help address
identified issues.
2. Equity and Inclusion
The primary purpose of this proposed program to is assist low- and moderate-income homeowners
with their rehabilitation needs, including addressing accessibility issues. A secondary goal is to
potentially secure moderate homes for future affordability. The loan with be secured by a mortgage
with a term of 30-years. If a borrower sells their home within the 30-years they can either sell on
the open market and repay the HRA the principal plus interest, or if they sell to the HRA for the
appraised value, the loan will be forgiven. This is a mechanism to help preserve homes for future
affordability. There is no guarantee that any home with be preserved, but it brings this option
directly to the borrower.
3. Engagement
This type of program was recommended by the Housing Strategy Task Force and reviewed and
supported by the Edina Housing Foundation.
Staff Recommendation
Staff recommends approval and execution of loan document and service agreements with Center for Energy
and Environment.
1 | Page
Edina Loan Servicing Agreement #3569
LOAN SERVICING AGREEMENT
This LOAN SERVICING AGREEMENT (“Agreement”) is made by and between CENTER FOR
ENERGY AND ENVIRONMENT, with offices at 212 Third Avenue North, Suite 560, Minneapolis,
Minnesota 55401 (“CEE”) and EDINA HOUSING AND REDEVELOPMENT AUTHORITY, with
offices at 4801 W 50th Street, Edina, MN 55424 (“Client”).
RECITALS
In consideration of their mutual undertakings and payments provided for herein, the parties recite,
covenant, and agree to the following:
A. CEE is a non-profit corporation engaged in the servicing of development loans; and
represents that it is qualified and authorized to perform the services described herein; and
B. Client originates, purchases, owns, and/or manages loans that benefit economically distressed
or declining areas, disadvantaged persons, neighborhoods or community revitalization, foster
job creation, or other section 501(c)(3) charitable purposes; and
C. CEE is authorized by Client to function as a servicing agent under the terms of this
agreement; and
D. Client now desires to have CEE perform the duties set forth herein for the loans covered by
this Loan Servicing Agreement (the “Agreement”).
NOW, THEREFORE, CEE and Client agree as follows:
1. Duties of CEE
CEE shall, at all times and with respect to all loans identified by Client (the “Client Loans”)
which it has been engaged by the Client to service, employ its normal and regular servicing
activities in the servicing of Client Loans to perform those responsibilities specifically set forth
on Exhibit A (the “Services”). The parties acknowledge that, from time to time, the Services may
be modified at the request of the Client and agreement by CEE. Such changes shall be mutually
agreed upon and are not effective unless agreed to in writing by the execution of a revised Exhibit
A.
2. Effective Date
CEE shall commence servicing activities under this agreement effective on the following date:
_______________, 2021 (“Effective Date”) and shall continue until terminated as provided in
Section 16 of this Agreement.
3. Servicing Compensation and Reimbursement
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Edina Loan Servicing Agreement #3569
Client shall compensate CEE for the Services in accordance with the fee schedule attached as
Exhibit B of this Agreement and reimburse CEE for any of CEE’s out of pocket third-party costs
of recordation, perfecting or releasing liens, legal costs incurred, servicing of notices,
repossession, foreclosure, and other similar costs paid by CEE on behalf of Client with respect to
CEE’s actions on specific Client Loan(s) (the “Fees”). CEE shall retain any late fee payments
collected from borrower. CEE shall retain fees owed from Fund Remittance as provided in
Exhibit A. CEE shall issue a report to Client showing fees netted with funds remitted to Client.
Following the Initial Term, as hereinafter defined, CEE may increase the Fees from time to time
by providing an updated Exhibit B to Client at least sixty (60) days prior to effective date of the
new fee schedule and no more than one time annually.
4. Initial Boarding of Clients
In making this Agreement, CEE represents, warrants, and agrees to provide Client the
Information for each Client Loan and the loan documents related to the Client Loans upon
request.
For purposes of this Agreement, “Information” shall include the following:
• Borrower Full Name
• Property Address, if Secured
• Loan Amount
• Interest Rate
• Term
• Closing Date
• Monthly Payment Amount
• Payoff Date
• Amortization Schedule
• Closing Documents
• Servicing Records
• Complaint Resolution
• Collections Records (for Delinquent Accounts only)
Client will cooperate with CEE, and provide CEE such information and documents as may be
necessary in CEE’s discretion to perform its duties under this Agreement, reconcile any loan
balance information provided to CEE, and CEE may rely in good faith on information provided to
it by Client.
5. Ongoing Boarding of Client Loans
On a regular basis, following the Effective Date of this Agreement, CEE will notify Client of
newly originated Loans for which it will service under the terms of this Agreement.
Client represents, warrants, and agrees to cooperate with CEE, and provide CEE such information
as may be necessary to perform its duties under this Agreement, reconcile any loan balance
3 | Page
Edina Loan Servicing Agreement #3569
information provided to CEE, and CEE may rely in good faith on information provided to it by
Client.
CEE represents, warrants, and agrees to onboard loans accurately according to the provisions
provided by Client and shall, subject to Section 26. Force Majeure of this Agreement, remedy any
onboarding errors within five (5) business days (or such shorter period as may be required by
applicable law) after receipt of notice of such errors.
6. Reports the Property of Client
All reports, documents, and materials delivered by CEE to Client pursuant to this Agreement are
the exclusive property of Client. Client may use any work product prepared by CEE in such
manner, for such purpose, and as often as Client shall deem advisable, in whole, in part, or in
modified form, without further compensation to CEE.
7. Nature of Agreement
CEE shall perform all of its services and duties hereunder at its own expense and without cost or
charge to Client except as expressly provided in Exhibit B of this Agreement.
Governmental Approvals. CEE has obtained and will maintain in full force and effect,
and satisfy at all times, all related eligibility criteria in order to maintain in full force and
effect, without material impairment, suspension or revocation, all municipal, local, or
other applicable governmental approvals, registrations, qualifications, permits, licenses,
and other applicable authorizations that are required or necessary to perform and conduct
the services and CEE’s business in accordance with Applicable Requirements, as
hereinafter defined.
For purposes of this Agreement, “Applicable Requirements” shall mean:
(1) All applicable federal, state, and local legal and regulatory requirements binding
upon CEE related to the performance of the Services;
(2) All other final judicial and administrative judgments, orders, stipulations, awards,
writs, and injunctions applicable to CEE; and
(3) The reasonable and customary practices of prudent loan servicing providers that offer
the same types of services as CEE for the same types of loans serviced by CEE in the
jurisdictions in which CEE operates.
8. Disaster Recovery
CEE shall take all commercially reasonable precautions to mitigate the risks to information
regarding the Client Loans in connection with disruptions to business operations due to fire,
flood, storm, epidemic illness, equipment failure, sabotage, terrorism, natural disaster, disaster
caused by humans, or electronic data system failures;
4 | Page
Edina Loan Servicing Agreement #3569
CEE shall keep duplicate records of all electronic information in its possession or control
pertaining to Client Loans and shall store at least one copy of such duplicate records in a site
remote from its main offices in the following manner:
(1) Full backups of daily files for 7 consecutive days (weekly backup);
(2) Full weekly backups rolled into monthly backups;
(3) Monthly backups rolled into yearly files and kept for 7 years from the date loan
is paid off;
(4) Full daily backups of Cloud Data;
(5) Daily Cloud backups rolled up into Monthly files and moved out of the Cloud
into magnetic storage after 30 days;
(6) In the event of a natural disaster or catastrophic failure of CEE’s electronic data
system, CEE shall have a period not to exceed 45 days from the date of such
catastrophe to recover or reconstruct such lost data necessary for compliance with its
disaster recovery obligations.
*The Cloud Provider's policy is subject to change. CEE will notify Client of any
material changes in the event that they affect the security of the loans.
9. Equal Opportunity Employment
CEE shall comply with all applicable provisions of the Equal Credit Opportunity Act (15 U.S.C.
§ 1691 et seq.). CEE is an equal opportunity employer and will not discriminate against any
person on the basis of race, color, creed, religion, sex, national origin, age, disability, marital
status, sexual orientation, status with regards to public assistance, or any other characteristic
protected by law.
10. Compliance
General. CEE shall comply with all Applicable Requirements.
Vendors. From time to time, CEE may engage vendors to perform certain tasks that may be
included in CEE’s performance of the Services. CEE shall follow commercially reasonable
practices designed to ensure that any Services performed by vendors are in compliance with the
Applicable Requirements and this Agreement.
Policies and Procedures. CEE will maintain and follow written internal policies and procedures
related to the Applicable Requirements in connection with providing services to Client, including
without limitation, policies and procedures for internal quality control, employee hiring and
training, and other methods that ensure compliance.
Audit Rights. Client will have the right to audit CEE, at Client’s own expense and not more than
once per calendar year, for purposes of evaluating compliance with the terms of this Agreement.
CEE will require full cooperation and will be responsible for assuring full cooperation by its
employees and vendors in connection with such audits. CEE will and shall cause any vendor that
performs tasks related to the Services to allow Client and its counsel, accountants, and other
representatives, as well as the applicable regulatory authorities of Client, reasonable access upon
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Edina Loan Servicing Agreement #3569
thirty (30) days advance written notice and only during normal business hours, to all of CEE and
vendors’ files, books and records directly relating to the Services performed for Client under this
Agreement. CEE will provide, and shall require the vendor to provide, to Client, or obtain for
Client, access to such properties, records, and personnel as Client may reasonably require, and
shall provide Client with CEE’s most recent audited financial statements and the names, resumes,
and proof of any required licensures for all relevant personnel employed by CEE , the Client and
its representatives and affiliates shall treat all information obtained in such investigation that is
not otherwise in the public domain as confidential. CEE shall make financial statement audits
available to Client on an annual basis, including any SSAE -16 audits that may be performed on
behalf of CEE. CEE shall remit annual financial statement audit reports to Client upon request.
11. Cooperation.
Client agrees that it shall (a) promptly deliver to CEE (i) any communications that Client receives
from a borrower relating to such borrower’s loan, and (ii) any communication Client receives from
any regulator, state of federal agency or other governmental entity relating to any borrower’s loan that
is being serviced by CEE or otherwise relating to CEE’s loan servicing activities, and (b) cooperate
with CEE regarding any claim, dispute, regulatory examination or investigation related to Client’s
loans and the services provided to Client by CEE under this Agreement.
12. Indemnity
CEE and Client each agree to indemnify, defend, and hold the other and each of their respective officers,
directors, employees, agents, counsel, advisors, and representatives (each, an “Indemnified Party”)
harmless from and against any and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees, and expenses incurred by Indemnified Party arising out of
any actions, demands, investigations, proceedings, claims, counterclaims, or defenses, made by or on
behalf of any third party related to the failure of CEE or Client to perform its duties in compliance with
the terms of this Agreement. Notwithstanding the foregoing, neither CEE nor Client shall indemnify any
such Indemnified Party if such acts, omissions, or alleged acts constitute fraud, gross negligence, willful
misconduct, or breach of fiduciary duty by such Indemnified Party. Neither CEE nor Client shall have an
obligation to appear with respect to, prosecute, or defend any legal action which is not incidental to this
Agreement.
12. Taxes. Neither CEE nor Client shall be responsible to the other party for any taxes owed by such
party, including, without limitation, any federal, state, or local income or franchise taxes or other taxes,
imposed on or measured by income received by such party (or any interest or penalties with respect
thereto or arising from a failure to comply therewith) that are required to be paid by such party in
connection herewith to any taxing authority.
13. Reliance. CEE and Client, and any director, officer, employee, or agent of CEE or Client
respectively, may rely on any document of any kind which it, in good faith, reasonably believes to be
genuine and to have been adopted or signed by the proper authorities or persons respecting any matters
arising hereunder.
6 | Page
Edina Loan Servicing Agreement #3569
14. Insurance
During the term of this Agreement, CEE will obtain and maintain insurance in the amounts listed
below:
General Liability $2,000,000 Aggregate Limit
Automobile Liability $1,000,000 Combined Single Limit
Excess Liability $1,000,000 Aggregate Limit
Professional Liability $1,000,000 Aggregate Limit
Workers Compensation Statutory Limit
15. Limitation of Liability
CEE’s role is strictly limited to the Services. Client will be solely responsible for making all
decisions concerning the management of the Client Loans. At all times, Client will be responsible
for the accuracy of all information provided to CEE, and CEE may rely on any document of any
kind which it, in good faith, reasonably believes to be genuine and to have been adopted or signed
by the proper authorities or persons respecting any matters arising hereunder. The sole duty of
CEE is to exercise ordinary care in its performance of the obligations described in this
Agreement. Client agrees that CEE, its officers, directors, agents, and employees (“CEE
Representatives”) will not be liable for events or circumstances beyond their reasonable control.
Client and CEE agree that clerical errors and mistakes in judgment do not constitute a failure to
exercise ordinary care or to act in good faith.
Neither party shall be liable to the other or any other person for any indirect, incidental,
consequential, punitive or special damages whatsoever (including without limitation, any
damages claimed for loss of income, revenue, or profits or for loss of goodwill) arising from or
related to services provided pursuant to this agreement. The exclusive remedy available to Client
shall be the right to pursue claims for actual damages that are directly caused by acts or omissions
that are breaches by CEE of its duties under this agreement. Notwithstanding anything to the
contrary in this Agreement, CEE’s total aggregate liability arising out of or related to this
Agreement shall not exceed the total amount of fees paid by Client to CEE pursuant to this
agreement during the twelve (12) months immediately preceding the event giving rise to such
action, excluding any third party costs.
16. Term of Agreement: Termination
The initial term shall commence on the Effective Date and continue for a period of three (3) years
(the “Initial Term”). Thereafter, the Agreement shall automatically renew for successive one (1)
year periods, unless CEE or Client provides written notice of non-renewal or amendment to the
other party at least sixty (60) days before the end of the then current term. Notwithstanding the
preceding, on the date corresponding to sixty days prior to the initial three-year anniversary, the
contract will automatically extend to the next one-year anniversary date, unless notice of
termination is given as specified in the following paragraph.
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Edina Loan Servicing Agreement #3569
Either Client or CEE may terminate servicing by CEE with respect to any Client Loan or
all Client Loans upon (a) ninety (90) days prior written notice delivered to the other party via
email (and duly acknowledged by the other party) or (b) upon the occurrence of a CEE
Termination Event (as defined below). Upon such termination, CEE shall promptly supply
appropriate reports, documents, promissory notes, and other information as requested by Client or
any person or entity designated by Client and shall use its commercial best efforts to effect the
orderly and efficient transfer or servicing to the Client or a new servicer designated by Client
subject to the fees described in Exhibit B.
If any of the following events with respect to CEE shall occur and be continuing, it shall be a
“Termination Event”:
A. Any failure by CEE to remit any payment required to be made under the terms of the
Agreement which continues un-remedied for a period of ten (10) business days after
such payment was required to be made (and such cured failure shall not be deemed a
Termination Event); provided, however, that any such failure shall not constitute a
Termination Event if such delay or failure could not have been prevented by the
exercise of reasonable diligence by CEE, or such delay or failure was caused by
events subject to Section 26. Force Majeure; or
B. Any material breach by CEE or Client of their respective representations and
warranties contained herein that materially and adversely affects the interests of the
other, or any failure on the part of CEE or Client to observe or perform in any
material respect any of the covenants or agreements other than as described in
subsection A of this Section 14 and that continues un-remedied for a period of thirty
(30) days after the date on which notice of such breach, requiring the same to be
remedied, shall have been given to by the non-breaching party to the breaching party;
provided, however, that if the breaching party certifies to the non-breaching party
that it has in good faith attempted to remedy such breach, such cure period will be
extended to the extent necessary to permit breaching party to cure such breach; or
C. CEE or Client shall suffer a material adverse change in its financial condition that
affects its ability to perform its obligations under this Agreement; or
D. CEE or Client is subject to a bankruptcy or other proceeding relating to its liquidation
or insolvency, or a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have been
entered against CEE or Client and such decree or order shall have remained in force,
undischarged or un-stayed for a period of sixty (60) days; or
E. CEE or Client shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets or liabilities,
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Edina Loan Servicing Agreement #3569
or similar proceedings of or relating to CEE or Client or of or relating to all or
substantially all of such party’s property; or
F. CEE or Client shall admit in writing its inability to pay its debts as they become due,
file a petition to take advantage of any application insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations.
17. Assignment of Rights
This Agreement may not be assigned by Client except with prior written consent of CEE, which
consent shall not to be unreasonably withheld. CEE may not assign its rights under this
Agreement without the prior written consent of Client.
18. Independent Contractor
Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture
between the parties hereto and the services of CEE shall be rendered as an independent contractor
and not as an agent for Client, its successors and assigns, or any obligors or noteholders under the
Client Loans.
19. Amendments
This Agreement may not be amended or modified except by a written agreement signed by the
parties in interest at the time of such modification. Notwithstanding the foregoing, CEE may
adjust the Fees by providing an updated Exhibit B as set for in Section 3 and all other Schedules
may be changed by mutual agreement.
20. Confidentiality
Neither Client nor CEE shall disclose or use any Confidential Information of the other party or its
affiliates, and each party will keep such Confidential Information confidential and will require
that its affiliates, officers, employees, contractors, vendors, and advisors who have access to such
Confidential Information comply with such non-disclosure and non-use obligations.
Notwithstanding the forgoing, Client or CEE may provide such Confidential Information
as required pursuant to a court or administrative subpoena, court order or other such legal
process or requirement of law; provided, however, that it shall endeavor to promptly
notify the other of such request, order or requirement, unless such notice is prohibited by
statute, rule, or court order. Nothing herein shall require either Client or CEE to fail to
honor a subpoena, court or administrative order, or a requirement of law on a timely
basis.
Notwithstanding this section, CEE is expressly permitted to release information to
borrowers upon written request regarding their specific loans; and, following receipt of
borrower’s written authorization to release information, CEE is expressly authorized to
release such information regarding that borrower's loan to a third party.
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Edina Loan Servicing Agreement #3569
CEE shall cause vendors, if any, not to use or disclose any Confidential Information of
Client except in compliance with this Agreement. Notwithstanding the foregoing, a
vendor may disclose Confidential Information as required pursuant to a court or
administrative subpoena, order or other such legal process or requirement of law;
provided, however, that it shall first notify Client of such request or requirement, unless
such notice is prohibited by statute, rule or court order. CEE shall not, on Client’s behalf,
require a vendor to fail to honor a subpoena, court or administrative order, or a
requirement of law on a timely basis. CEE shall also cause vendors not to remove any
Confidential Information from Client premises without Client’s prior written
authorization.
Each party shall limit access to the other party’s Confidential Information to only those of
its employees and agents who require such access in performing their duties hereunder.
CEE agrees to either return the Confidential Information to Client or destroy the
Confidential Information upon completion of the work or, in any event, upon termination
of the Agreement between the parties. Except as expressly provided in this Agreement,
no ownership or license rights are granted in any Confidential Information.
Notwithstanding anything to the contrary in this Agreement, Confidential Information
may be disclosed to a party’s accountants, attorneys, insurers, regulators and consultants.
Notwithstanding the foregoing, a party may retain one archival copy of Confidential
Information that may be used solely to demonstrate compliance with this Agreement,
Applicable Law, and internal policies and procedures.
“Confidential Information” for purposes of this agreement, shall mean any information of
CEE, Client, or their respective affiliates, whether written or oral, including:
A. Financial Information, marketing plans, and personnel records;
B. Technical and non-technical data, including without limitation, customer
lists, customer information, costumer non-public information, fee schedules,
forms, information, business and management methods, trade secrets,
compilation and analysis of financial information and data to prepare and
submit bids and proposals to third parties;
C. Other proprietary or confidential information;
D. Proprietary computer software, management information and information
systems, whether or not such Confidential Information is disclosed or
otherwise made available to one party or other pursuant to this Agreement;
E. Terms and provisions of this Agreement and any transaction or document
executed by the parties pursuant to this Agreement.
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Edina Loan Servicing Agreement #3569
“Confidential Information” shall not include the following:
A. Information that is or becomes generally available to and known by the
public (other than as a result of an unpermitted disclosure directly or
indirectly by the receiving party or its affiliates, advisors, or representatives);
B. Information that is or becomes available to the receiving party on a non-
confidential basis from a source other than the disclosing party or its
affiliates, advisors, or representatives, provided that such source is not and
was not bound by a confidentiality agreement with or other obligation of
secrecy to the disclosing party of which the receiving party has knowledge at
the time of the disclosure; or
C. Information that has already been or is hereafter independently acquired or
developed by the receiving party without violating any confidentiality
agreement with or obligation secrecy to the disclosing party.
21. Attorney In-Fact. To enable CEE to carry out its obligations under this Agreement, Client hereby
a. authorizes CEE (and its third party contractors) on behalf of Client to communicate as
Client’s agent with (i) borrowers, guarantors, and others obligated in connection with a
Loan by electronic means or otherwise, (ii) credit reporting bureaus and consumer
reporting agencies selected by CEE, and (iii) to do or perform any other acts for purposes
of carrying out its obligations hereunder, and
b. appoints CEE as Client’s lawful attorney in fact to sign in the name of Client such
documents as are necessary or appropriate for CEE to perform its obligations as
contemplated under this Agreement, including without limitation checks and other
documents necessary to process payments, proof of claims, and such other documents as
Client may approve in writing, which approval shall not be unreasonably withheld or
delayed. For the avoidance of doubt, such power-of-attorney shall be revocable, in whole
or in part, at the sole discretion of Client; provided that, upon any such revocation, CEE
shall not be liable for failure to perform any obligations under this Agreement for which
such power-of-attorney is necessary, and such failure may be considered by CEE in its
sole discretion as a basis on which to terminate this Agreement.
22. Transfers. Client shall provide CEE with all authorizations and information, and shall take all such
further steps as may be necessary, in order to authorize and enable CEE to initiate the movement of
funds by automated clearing house (“ACH”) or other electronic funds transfer.
23. Notices
All notices and communications as part of this Agreement must be in writing and, except as
otherwise agreed in writing, must be delivered, mailed, faxed, or emailed, to the following
addresses:
If to CEE:
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Edina Loan Servicing Agreement #3569
Center for Energy and Environment
212 3rd Avenue North, Suite 560
Minneapolis, MN 55401
Attn: Ryan Ellis
Phone: 612.335.5862
Email: rellis@mncee.org
If to Client:
Edina Housing and Redevelopment Authority
4801 W 50th Street
Edina, MN 55424
Attn: City Manager
Phone: 952.826.0401
Email: sneal@edinamn.gov
24. Governing Law
This Agreement and each transaction consummated hereunder shall be deemed to be made under
the internal laws of the State of Minnesota and shall be construed in accordance with and
governed by the laws of the State of Minnesota, without regard to the choice of law rules of that
state, except to the extent that any such laws may now or hereafter be preempted by Federal law.
25. Counterparts
This Agreement may be executed in several counterparts, each which shall be deemed an original,
and all of which shall together constitute one and the same instrument.
26. Force Majeure
CEE and Client shall be excused from performing in accordance with the agreement in the event
of an occurrence of “Force Majeure”. Force Majeure is defined as fire, floods, earthquake,
tornado, explosion, catastrophe, accident, war or war-like operations (whether or not a state of
war is declared), riot, Acts of God, acts of terrorism, insurrection, order of a Governmental Body
and Applicable Laws that prevent performance, to the extent (i) such event of Force Majeure is
beyond the reasonable control of the Party claiming Force Majeure, and (ii) the Party claiming
Force Majeure gives prompt written notice of the same to the other Party. In the event of any
such delay, the sole remedy shall be a time extension for the completion dates required by the
Agreement, which extension shall be the time period lost by reason of the Force Majeure.
27. Entire Agreement
This Agreement (including the Exhibits to this Agreement), the Company Disclosure Letter and
the Confidentiality Agreement constitute the entire agreement among the parties with respect to
the subject matter of this Agreement and supersede all other prior agreements and understandings,
both written and oral, among the parties to this Agreement with respect to the subject matter of
this Agreement. In the event of any inconsistency between the statements in the body of this
Agreement, the Confidentiality Agreement and the Company Disclosure Letter (other than an
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Edina Loan Servicing Agreement #3569
exception expressly set forth as such in the Company Disclosure Letter), the statements in the
body of this Agreement will control.
28. Authorized Persons
CEE will provide a single login user name and password (together with any Client created user
name and/or password, the “Credentials”) to Client for purposes of accessing CEE’s system
(“Portal”) to obtain reporting regarding Client Loans. Client is encouraged to create its own
unique Credentials for use in accessing the Portal promptly after receipt of Credentials from CEE.
Client shall be solely responsible for the use and protection of the Credentials. Client agrees to
maintain the confidentiality of the Credentials.
Client agrees that it shall be liable for all transactions initiated and authorized by means of the
Credentials, whether or not actually authorized by the Client. Client further agrees that any
person using the Credentials to access the Portal shall be deemed to be duly authorized by Client
and such person using the Credentials shall be deemed to have full authority to act on behalf of
Client. Client agrees to maintain a proper and complete log of individuals to whom it has
provided access to Client portal and receipt of reports with respect to Client Loans or Client
reports. Client shall promptly modify the Credentials in the event that any person to whom it has
given the Credentials is no longer employed by or otherwise affiliated with Client.
Client shall appoint one or more officers or employees who are authorized to act on behalf of
Client regarding this Agreement and the services provided by CEE hereunder (“Authorized
Users”). CEE shall not be responsible for any correspondence with or access provided to any
Authorized User. Client may add or remove Authorized Users by written notice to CEE. CEE
may rely on any action taken by an Authorized User until an Authorized User’s authorization has
been revoked by Client by written notice to CEE. CEE shall have a reasonable time to process
any revocation received pursuant to this section.
Client’s agrees that the failure to protect Credentials may allow an unauthorized party to (i) use
the services provided by CEE, (ii) access Client’s electronic communications and financial data,
and (iii) send or receive information and communications on behalf of the Client. Unencrypted
electronic transmissions are not secure, and Client assumes the entire risk for unauthorized use of
Credentials and any unencrypted electronic transmissions. Client undertakes no obligation to
monitor transactions initiated by valid Credentials to determine that they are made on behalf of or
authorized by Client.
29. Records
Except to the extent otherwise required by Applicable Law, CEE shall retain all records relating
to a Client Loan for at least one (1) year following termination of this Agreement or one (1) year
from maturity or payoff of a Client Loan unless such documentation is requested by and delivered
to Client at an earlier date. The records will be maintained in either hard copy or machine-
readable (electronic) format. In the event CEE is no longer in existence, its successor shall
continue to retain such records as provided above or deliver the records to Client.
30. Deconversion
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Edina Loan Servicing Agreement #3569
In the event of termination of this Agreement, CEE will continue to service all existing Client
Loans at the time of termination, at the fees in place at the time of termination. If Client desires to
transfer the duties under this Agreement to a new servicer, CEE agrees to provide Client with
electronic copies of the Client Loan records in CEE’s standard format at the current rate being
charge on a per loan charge by CEE, as well as any additional time charged on a per hour basis.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written below.
CENTER FOR ENERGY AND
ENVIRONMENT
By _____________________________
[Insert Name]
Its: ____________________________
EDINA HOUSING AND REDEVELOPMENT
AUTHORITY
By _____________________________
James B. Hovland
Its: Chair____________________________
By _________________________________
Scott H. Neal
Its: Executive Director_________________
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Edina Loan Servicing Agreement #3569
LOAN SERVICING AGREEMENT
Exhibit A: Duties of Servicer
NEW LOAN SET UP
Loan Boarding
CEE will board the loan upon origination into CEE’s servicing system. For any unsecured loan,
CEE will board the new loan within three (3) Business days of origination. For any secured loan,
CEE will board the new loan within three (3) Business days after the expiration of the right of
rescission. CEE will confirm the funding pool and assure that the new loan draws off the correct
pool.
For purposes of this Agreement, “business days” means calendar days other than weekends,
official federal holidays, and non-banking holidays.
Reporting
CEE will report all amortizing loans to at least one of the three major credit agencies upon
inception as it may designate in its sole discretion.
Quality Control Review
The loan and ACH entry instruction will be reviewed prior to activation to verify the servicing
system matches the terms of the promissory note and any other programmatic requirements per
the documents submitted.
Welcome Letter
A welcome letter will be sent to borrowers within five (5) business days after boarding. This
letter shall include the toll free customer service number as well as an email address that is
available for borrowers to use should they have a question regarding their loan. Customer service
is available from 8:00 AM to 4:30 PM Central Time, on “business days”. An automatic ACH
enrollment form is included in the letter for borrowers to complete and return to CEE if they
would like recurring payments to be initiated automatically by CEE. The letter will also contain
instructions for borrowers to receive access to the online loan portal where they have access to all
their loan information and ability to make payments.
STANDARD SERVICING –AMORTIZING/DEFERRED
Billing
Borrowers with loans that have regularly scheduled payments will receive billing statements on a
monthly basis or other appropriate frequency based on terms of the promissory note.
Collection of Loan payments
CEE shall collect payments of principal, interest and any appropriate fees. CEE shall confirm the
application of payments to be consistent with the loan documents as part of ongoing due
diligence.
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Edina Loan Servicing Agreement #3569
Customer Service
CEE shall provide customer service to borrowers from 8:00AM – 4:30 PM Central Time on
“business days”. The customer service team is available through the toll free phone number or
email at loanservicing@mncee.org. Borrowers will receive a response within five (5) business
days following a question submitted to CEE. Borrowers are able to view loan information on the
loan portal as well as schedule payments.
Past Due Collections
CEE will make reasonable efforts to maintain loans in a current status and will deal promptly
with those which are delinquent in accordance with the Collection Activity section below. CEE
will process loan defaults as directed by Client.
Reporting
CEE will provide standard monthly reporting for the prior month’s activities to Client no later
than the 10th business day of each month. The standard reports are as listed:
o Loan Trial Balance
o Aged Delinquency
o Principal and Interest Collections
o New Loan
o Paid Loan
o Fee Scheduled
o Fee Earned
Special reports may be added at an additional cost for programming. (See Exhibit B for pricing)
IRS Reporting
CEE shall provide borrowers with the required IRS annual tax reporting.
Funds Remittance
CEE shall remit collected funds less servicing and other applicable fees and any late charges
assessed to borrower by the 10th business day of the month. Late charges will be retained by
CEE. Funds will be remitted via ACH. An invoice will be distributed detailing the servicing fees.
CEE shall remit such funds by means of ACH or other electronic funds transfer to an account
designated by Client.
COLLECTION ACTIVITY
Early Delinquency
CEE will make reasonable efforts to maintain loans in a current status and will make reasonable
periodic efforts to contact borrowers who are delinquent, in order to encourage payment. Such
efforts will be limited to those loans that are no more than 90 days past due.
o CEE will follow customary, usual and prudent business practices in servicing
delinquent loans.
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Edina Loan Servicing Agreement #3569
o CEE will send delinquency letters for loans 31- 60 days past due.
o CEE will continue sending letters and begin phone calls for loans 61-90 days past
due.
Late Delinquency
CEE will make reasonable efforts to contact Borrowers, solicit payments, and return loans to a
current status, where the loan has reached 90 or more days past due, in order to encourage
payment.
o CEE will follow customary, usual and prudent business practices in servicing
delinquent loans.
o CEE will send formal default letters for loans reaching 120 or more days past
due.
o CEE shall continue phone calls to borrower at 90 days past due.
o After 120 days past due, Client shall determine next steps and CEE shall have no
obligation to take further action regarding delinquent loans until directed by
Client.
DEFAULT MANAGEMENT
Client shall be solely responsible for declaring a loan to be in default, and determining whether a loan is
to be charged-off.
Loan Modifications
CEE shall respond to Client or Borrower requests for modifications to their loan terms, including
Repayment Plans, Forbearance Agreements, Deferments, Extensions, Short Sales (Pre-
Foreclosure Sales), or Negotiated Releases of collateral, obligors or guarantors (each a “Loan
Modification”).
CEE shall make no decisions independent of the Client. Client shall have final approval of any
Loan Modifications, unless Client has instructed CEE in writing that it may approve Loan
Modifications pursuant to criteria established by Client.
CEE will follow customary, usual and prudent business practices in its review and processing of
Loan Modifications, and keep Client informed of the status of such requests.
Both Client and CEE recognize that time is of the essence in responding to and approving or
declining Loan Modification requests.
CEE shall monitor Borrowers for compliance with the terms of the loan modification and make
such changes to the loan record as required by the modification terms.
Special Servicing
CEE shall perform special servicing actions and steps at the direction of the Client for loans
subject to formal legal proceedings, including Bankruptcy, Foreclosure, Deed-in-lieu of
Foreclosure, Collections suits, Repossession, and Charge-offs involving either an obligor(s) or
guarantor(s).
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Edina Loan Servicing Agreement #3569
CEE shall make no decisions or take actions independent of the Client, who shall have
final say in approval of any Special Servicing actions (other than routine steps taken to
protect or preserve Clients interests), unless Client has instructed CEE in writing that it
may approve and take such actions.
CEE must employ staff with expertise in the above areas and maintain compliance with
all applicable regulations.
CEE will follow customary, usual and prudent business practices in its review, processing, and
management of Special Servicing of Client loans, and keep Client informed of the status of loans
subject to Special Servicing.
Both Client and CEE recognize that time is of the essence in responding to and approving or
declining Special Servicing Actions.
CEE shall monitor Borrowers who are subject to Special Servicing, consistent with the governing
legal proceedings or requirements, and make such changes to the loan record as required to reflect
the Special Servicing requirements. With respect to Bankruptcy, the Special Servicing shall
include Filings, Proof of Claim, Repayment Plan setup and monitoring, and discharge/completion
processing. (See Exhibit B for pricing)
Other Servicing
CEE shall perform the following additional servicing actions and steps for loans as requested
by Client. CEE will follow customary, usual and prudent business practices in providing these
services. The Client shall bear all of CEE’s out of pocket costs for third parties related to these
items. CEE will notify Client of the potential out of pocket costs prior to performing any of the
additional actions.
o REO Marketing
o Insurance Inspections
o Default Inspections
o Property Valuation or Appraisal
o Property Preservation and security
SUBORDINATION PREPARATION
CEE will review subordination requests in accordance with the Client’s subordination program
requirements. Subordinations will be forwarded to the Client for signature if request meets the
program requirements. Fees related to the subordination are paid by borrowers.
MORTGAGE SATISFACTION PREPARATION
Loan Payoffs
CEE will process loan payoffs, issue payoff statements as requested by authorized individuals
within 30 calendar days and remit funds to Client. CEE shall draft mortgage satisfactions
(“Satisfaction”) within 30 calendar days after loan is paid in full to ensure funds received are
cleared. The Satisfaction is then sent to client for signature. CEE shall provide instructions to
borrowers as to how to properly record the Satisfaction. In the event that $5 (five dollars) or less
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Edina Loan Servicing Agreement #3569
of principle balance remains, CEE and Client will not attempt to collect the remaining fee and
will consider the loan as satisfied.
FINAL/SPECIAL PROCESSING TRANSACTIONS
CEE shall charge additional fees in special circumstances such as a charge-off, foreclosure,
servicing release, or any other transaction that is processed on a loan that is not paid in full but is
no longer an active loan on the servicing system. This does NOT include processing a paid in full
transaction.
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Edina Loan Servicing Agreement #3569
LOAN SERVING CONTRACT
Exhibit B: Pricing Schedule
Activity Description Pricing
New Program Setup Creating the new program in CEE
Loan Servicing System and creating
reports
$500 one-time fee
New Loan Setup Loan Boarded to servicing system and
quality control review, welcome letter $20.00 one-time fee per loan
Standard Servicing Activities –
Amortizing and Interest Only Payment
Loans
Payment processing, billing notices,
customer service, investor reporting,
early collections
$10.00 per loan per month
Standard Servicing Activities-
Deferred Loans (no payments)
Payment processing, customer service,
investor reporting $1.00 per loan per month
Collection Activity Collection Work for loans past due
15-90 days
$5.00 per loan per month on all
amortizing loans
Default Management
Example of activities: Repayment
Plan, Forbearance Agreement,
Deferment, Extension
$80.00 per hour plus any charges that
may be incurred from 3rd party vendor.
Subordination Preparation Review request and Prepare
subordination document $150.00 per request (Borrower Paid)
Mortgage/Deed of Trust Satisfaction
Preparation
Create mortgage/deed of trust
satisfaction (excludes recording /
filing fees)
$30.00 one-time fee per loan
Final /Special Processing Transaction
For Charge-off, foreclosure, service
release, loans not paid in full but no
longer active on the servicing system
$25.00 per transaction
Conversion/On-Boarding Boarding Loans previously serviced
by a different company $20.00 one-time fee per loan
Special Report Programming Special report creation not included in
standard report package
$150.00 one time fee per report
Special Reporting Distribution Monthly maintenance for special
reports created for distribution $75.00 one time fee per report
Special Project work Special requests, such as assistance in
audit preparation, special mailings
etc...
$80.00 per hour plus any charges that
may be incurred from 3rd party
vendor.
Non Standard Servicing Activities
Any additional activities required for
servicing a loan not specified in
contract
$80.00 per hour, fee will be set based
on time to complete task on a regular
basis
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 1
LOAN ORIGINATION AGREEMENT
This LOAN ORIGINATION AGREEMENT (“Agreement”) is made by and between the EDINA
HOUSING AND REDEVELOPMENT AUTHORITY, a body politic and corporate under the laws of the
State of Minnesota, with offices at 4801 W 50TH ST, EDINA, MN 55424 (“Authority”), and CENTER
FOR ENERGY AND ENVIRONMENT, with offices at 212 3rd Avenue North, Suite 560, Minneapolis,
Minnesota 55401 (“CEE”).
RECITALS
A. The Authority has a need for certain professional services and desires to retain CEE to
provide said services, all subject to the terms and conditions contained in this
Agreement.
B. CEE is qualified to provide the desired professional services and desires to provide said
services for the Authority, all subject to the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained in this
Agreement, the parties agree as follows:
1. Services/Scope of Work
1.1 CEE shall in conjunction with the Authority develop and deliver the City of Edina
Deferred Home Improvement Loan Program (hereinafter the “Program”) and more
fully described in Exhibit A attached hereto. All activities delivered under the Program
shall be coordinated with the Authority’s designated Economic Development
Director.
1.2 CEE shall assist the Authority staff in marketing the Program. CEE shall insure that
the Authority's sponsorship of the program is a prominent part of any marketing
effort.
1.3 The funding source is exclusively from the Authority and the Program will be
referred to as the Authority Funded Program.
2. Compensation
2.1 The Authority shall compensate CEE for services provided under this agreement
according to the following schedule and more fully described in Exhibit B attached hereto:
Loan Set Up Fee $1,500
The Authority shall pay CEE a one time Program set-up fee. This shall compensate CEE
for time and labor to create the Program.
Loan Origination Fee
10% of the loan amount, not to exceed $1,500 or be less than $500 per loan.
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 2
The Authority shall pay CEE an Origination Fee for each loan closed using the Authority
Funded Program. The Origination Fee shall compensate CEE for assisting borrowers with
loan applications, preparation of loan documents, loan closing, escrow of funds,
verification of projects being complete and other direct costs of processing loans.
Mortgage filing, title work, credit report, flood and other applicable closing costs shall
be paid by the borrower. CEE shall provide a copy of closing documents including the
loan note and mortgage as documentation of the loan closing.
Annual Administrative Fee $2,500.00
This shall be due January 1st of each calendar year the contract is in effect. To begin in
the year 2021. This fee shall be pro-rated the year the Program begins.
The Authority shall compensate CEE only for services completed.
Upon request, CEE will provide marketing services for the following fees:
Hourly rates are inclusive of all overhead expenses and will be charged only for hours
directly related to marketing. CEE will be reimbursed by the Authority for any non-labor,
out-of-pocket expenses, relating to these services on a dollar-for-dollar basis with no
mark-up. There is no cost for creating a program information sheet, creating links to
CEE’s website and assisting in writing articles to promote the Program.
2.2 CEE shall invoice the Authority not more than two times each month for the principal
of loans and administrative fees. The Authority shall pay CEE within 20 days of receipt of
the invoice.
3. CLIENT’s Obligations
3.1 If requested by CEE, the Authority shall make reasonable efforts to respond
promptly to requests from CEE for information and approvals regarding the
services to be provided under this Agreement.
3.2 If requested by CEE, the Authority shall make reasonable efforts to obtain
information and or permission for access from clients which may be necessary
for CEE to provide the services under this Agreement.
3.3 The Authority shall provide sufficient funding to fund eligible Authority funded
loans. The Authority shall determine the amount of funds allocated to the
Program.
3.4 The Authority shall establish eligibility for the Authority Funded Program and shall
provide these criteria in writing to CEE prior to commencement of any
marketing efforts.
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 3
3.5 The Authority shall make reasonable efforts to respond promptly to requests from
CEE for information and approvals regarding the services to be provided under
this Agreement.
4. CEE’s Obligations
4.1 CEE shall use its best efforts to provide services under this Agreement in a
professional manner consistent with the care and skill used by reputable
members of CEE’s profession.
4.2 CEE, and all of its employees or agents, shall comply with all statutes,
ordinances, rules, regulations and other laws applicable to the provision of
services under this Agreement.
4.3 CEE shall secure all permits and licenses required for performance of the
services under this Agreement.
4.4 CEE shall not engage in discriminatory employment practices against any
employee or applicant for employment and shall in all respects comply with all
federal, state and local laws, regulations and orders, including without limitation,
Chapter 363A of the Minnesota Statutes, as amended from time to time. Failure
to comply with the provisions hereof shall be deemed a material default under
this Agreement.
5. Term and Termination
5.1 Unless earlier terminated as provided in the following paragraphs, this
Agreement shall become effective on , and continue through
12/31/2022.
5.2 This Agreement may be terminated by either party, for any reason or no reason,
immediately upon written notice to the other party. In the event this Agreement
is terminated by CEE prior to the expiration of the term set forth in paragraph
5.1, the Authority shall compensate CEE for all services delivered up the date of
termination, and CEE shall provide the Authority with such information as the
Authority may request regarding the status of the Authority Funded Program.
5.3 Any termination of this Agreement shall not release either party from their
respective obligations under sections 7 and 8 of this Agreement.
6. Insurance
6.1 During the term of this Agreement, CEE will obtain and maintain insurance in the
amounts listed below:
General Liability $2,000,000 Aggregate Limit
Automobile Liability $1,000,000 Combined Single Limit
Excess Liability $1,000,000 Aggregate Limit
Workers Compensation Statutory Limit
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 4
7. Liability and Indemnification
7.1 CEE represents that the services to be provided under this Agreement are
reasonable in scope and that CEE has the experience and ability to provide the
services.
7.2 CEE warrants that any services provided hereunder shall be done in a
professional and workmanlike manner.
7.3 CEE shall indemnify, defend and hold harmless Authority and its officers,
directors, employees and agents from and against any and all claims,
damages, losses, injuries and expenses (including attorneys’ fees and damages
for death, personal injury and property damage) which Authority may incur as a
result of any act or omission by CEE in providing services under this Agreement.
8. Confidentiality
Unless otherwise agreed by Authority in writing, CEE shall maintain in confidence and
not disclose to any third party any information obtained regarding the Authority
and/or any of Authority’s clients for which CEE is providing services; provided,
however, that this obligation to maintain confidentiality shall not apply to:
a) Information in the public domain at the time of disclosure;
b) Information which becomes part of the public domain after disclosure
through no fault of CEE; or
c) Information which CEE can demonstrate was known by it prior to the date
of this Agreement.
Notwithstanding the foregoing, CEE shall be entitled to disclose the documents or client
information covered by this paragraph to governmental authorities to the extent CEE
reasonably believes it has a legal obligation to make such disclosures and to the extent
CEE reasonably deems to be necessary; provided, however, that if CEE believes that any
such disclosure is required by law, it shall provide advance notice to the Authority to
provide the Authority with a reasonable opportunity to attempt to obtain an injunction or
other protective order preventing such disclosure.
9. Relationship of Parties
CEE will provide services as an independent contractor under this Agreement.
Neither CEE, nor any of its employees or agents, shall be considered employees of the
Authority for any purpose, and neither shall CEE be eligible for any compensation or
benefits which the Authority may provide to its employees from time to time. CEE shall
be solely responsible for all employment and other taxes applicable to providing
services hereunder, and the Authority will not withhold any taxes or contributions from
the compensation payable to CEE under this Agreement.
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 5
10. Notices
All notices, requests, demands and other communications required to be given in
writing under this Agreement shall be given to the other party in person or by mail as
provided in this section. If delivered personally, notice shall be deemed to have been
duly given on the date of delivery. If delivered by mail, such notice shall be sent via
first class U.S. mail, postage prepaid, to the address set forth at the beginning of this
Agreement or such other address as a party may otherwise request by written notice,
and notice shall be deemed duly given three (3) business days after mailing.
11. Assignment
This Agreement shall be binding upon and inure to the benefit of the parties and their
respective heirs, successors and assigns; provided, however, that neither party shall
assign or transfer in any manner, this Agreement or any portion hereof without the
prior written consent of the other party, and any attempt to assign or transfer without
prior written consent shall be void and of no effect.
12. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota.
13. Miscellaneous
13.1 Headings and captions used in this Agreement are for convenience only and
shall not affect the meaning of this Agreement.
13.2 This Agreement contains the entire agreement of the parties and supersedes all
prior agreements, discussions and representations, written or oral, concerning
the subject matter hereof.
13.3 No waiver by the Authority of any term or condition of this Agreement or any
document referred to herein shall, whether by conduct or otherwise, be
construed as a waiver or release of any other term or condition of this
Agreement.
13.4 This Agreement may only be amended in a written agreement signed by both
parties.
13.5 Except as expressly set forth in section 7, the rights and benefits under this
Agreement shall inure solely to the benefit of the Authority and CEE, and this
Agreement shall not be construed to give any rights, benefits or causes of
action to any third party.
13.6 The invalidity or partial invalidity of any provision of this Agreement shall not
invalidate the remaining provisions, and the remainder shall be construed as of
the invalidated portion shall have never been a part of this Agreement.
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 6
13.7 CEE shall comply with the provisions of Minnesota Statutes Chapter 13
(Government Data Practices) that are applicable to the Authority and shall not
disseminate any information concerning loan requests of the borrowers without
the prior written approval of the Authority.
13.8 This Agreement may be signed in any number of counterparts, each of which
shall be deemed an original and one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
The EDINA HOUSING and REDEVELOPMENT
AUTHORITY
By: Its: Chair
Print Name James B. Hovland
Date:
By: Its: Executive Director
Print Name Scott H. Neal
Date:
CENTER FOR ENERGY & ENVIRONMENT
By: Its:
Date: Tax ID # 41-1647799
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 7
EXHIBIT A
PROGRAM GUIDELINES
This document includes guidelines for the EDINA
DEFERRED HOME IMPROVEMENT LOAN PROGRAM
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 8
EDINA LOAN PROGRAM GUIDELINES
The EDINA HOUSING AND REDEVELOPMENT AUTHORITY (Authority) is making funds available for homeowners to
assist with home maintenance and energy improvements. The Edina Deferred Home Improvement Loan Program
is designed to supplement existing loan programs available from MHFA, CEE, private lenders and other housing
resources. Center for Energy and Environment shall serve as the administrator for the Edina Deferred Home
Improvement Loan Program.
Edina Deferred Home Improvement Loan
Interest Rate: 2% simple, non-compounding
Amortization Type: Deferred (No Monthly Payments Required; interest only option available)
Loan Amount: Minimum of $2,000 and Maximum of $30,000.
Total Project Cost: The borrower must have sufficient funds necessary to cover the cost of the entire project (as
outlined in the bid(s)). Additional funds may come from personal savings, gifts, or other loan funds.
Loan term: Deferred for a period of 30 years or when the borrower sells, transfers title or if the home is no longer
the primary residence of the original borrower, at which time 100% of the principal and interest is due. The loan
may also become due and payable upon refinance. The loan principal and interest is 100% forgiven if the Edina
Housing and Redevelopment Authority is offered first right of refusal, and the Authority acquires the property at
appraised value. The Authority reserves the option to not acquire in its sole discretion. If the Authority choose not
to acquire, the loan principal and interest is 100% forgiven if the Authority provides prior written approval for loan
forgiveness on the condition that the property is sold to the Authority’s partners (i.e. a housing and redevelopment
authority or comparable organization). The Authority reserves the authority to withhold prior written approval for
loan forgiveness in its sole discretion.
Eligible Properties: One to four unit properties located within the geographical boundaries of the City of Edina.
Townhomes and Condominiums are eligible, subject to Association Bylaws. Property must have an Estimated
Market Value at or below $425,000. The property must be homesteaded or in the process of being homesteaded.
Properties may be held in a Contract for Deed or Trust.
Ineligible Properties: Properties with more than four units, cooperatives, manufactured homes and properties
used for commercial purposes.
Eligible Borrowers: All borrowers must be legal residents of the United States.
Ineligible Borrowers: Including but not limited to: Non-Occupant Borrowers, Borrowers with no ownership
interest in the property and business entities.
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 9
Ownership/Occupancy: Owner- occupied only.
Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should not exceed
110% of the property value. Half of the improvement value may be added to the initial property value.
Income Limit: The total gross annual household income cannot exceed 125% of the area median income based on
household size. The income limits shall be determined by the U.S. Department of Housing and Urban
Development (HUD), and is adjusted annually. Income shall be determined by the adjusted gross income from the
most recent Federal Tax Return. If a Tax Return is not required, the income shall be determined by the projected
gross income for the upcoming 12 months.
Debt - to - Income Ratio: N/A
Credit Requirements: All mortgage payments and property taxes must be current
Multiple Loans per Property: More than one loan per property is allowed, however, the outstanding balance(s)
cannot exceed $30,000.
Property Inspection: A Remodeling Advisor Visit and Home Energy Squad Visit must be done to determine the
Eligible Use of Funds.
Eligible Use of Funds: Loans must be used first to address health, safety, and outstanding code violations. If there
are no outstanding health, safety, or code violations, the funds may be used for energy improvements which are
recommended through a Home Energy Squad Visit. If all of the previous items are being addressed adequately or
are not necessary, the funds may be used for any permanent interior or exterior improvement including, but not
limited to: roofing, siding, windows, doors, garage repair or replacement, interior remodeling, sidewalks/steps,
driveways, solar and permanent landscaping.
Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to
emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas,
whirlpools, etc.), furniture, non-permanent appliances (unless part of a kitchen remodel), and funds for working
capital, debt service, homeowner labor or refinancing existing debts are NOT allowed.
Bids: One bid is required from a properly licensed contractor. However, the city reserves the right to request
additional bids at its discretion. Only 1 bid/material list is required for sweat equity projects.
Sweat Equity / Homeowner Labor: Work may be performed by property owners on a “sweat equity” basis. Loan
funds may be used only for the purchase of materials. Loan funds cannot be used to purchase tools/ equipment or
compensate for labor.
Post Installation Inspection: Permits must be obtained and signed off by a City inspector where required; when
not required, a post installation inspection will be performed by a city inspector to ensure the work has been
completed before any funds will be released.
Loan Security: All loans will be secured with a mortgage in favor of The Edina Housing and Redevelopment
Authority. Borrower will pay all applicable title and filing fees, which may be financed in the loan amount.
Borrower Fees: Borrower will be responsible for a, mortgage filing fees, flood certificate and credit report fees, as
well as any other applicable loan fees.
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 10
Underwriting Decision All mortgage payments and property taxes must be current.
Work Completion: All work must be completed within 120 days of the loan closing. However, when warranted,
CEE may authorize exceptions on a case by case basis.
General Program Conditions for the Deferred Home Improvement Loan Program
Application Processing: Loans will be distributed on a first come first serve basis as borrowers qualify. Applicants
must provide a completed application package including the following in order to be considered for funding.
Completed and signed application form
Proof of income
Proof of Identity (driver’s license, passport, etc.)
Bids or estimates for proposed projects (if applicable)
Other miscellaneous documents that may be required.
Disbursement Process: Payment to the contractor (or owner in sweat equity
situations) will be made upon completion of work. An inspection will be
performed by a City Inspector and/or CEE to verify the completion of the
work. The following items must be received prior to final disbursement of
funds for the Revolving Loan Program:
• Final invoice or proposal from contractor (or materials list from
supplier);
• Final inspection verification by a City Inspector;
• Completion certificate(s) signed by borrower and contractor;
• Lien waiver for entire cost of work;
• Evidence of city permit (if required)
CONTRACT between Edina Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #3551 Page 11
EXHIBIT B
TOTAL PROGRAM BUDGET $250,000
EDINA LOAN PROGRAM BUDGET
A. Loan Program Budget Allocation (includes Program Set Up Fee, Remodeling Advisor Fee (RAV), Post
Installation Inspection (PII) Loan Origination Fee and Annual Administration Fee): $250,000
Budget Notes:
1. CEE shall submit monthly invoices for origination fees and the principal loan amounts of closed
loans for that period.
2. Services performed by CEE will initially be funded from the Total Program Budget as stated
above and paid in accordance with the following schedule.
(1) Loan Origination Fee: 10% of the loan amount, not to exceed
$1,500 or be less than $500 per loan closed
(2) Annual Administration Fee $2,500 (pro-rated from contract start
date and then charged January 1st of each year the contract is active)
(3) Program Set-Up Fee $1,500
(4) Remodeling Advisor Fee $225 per inspection
(5) Post Installation Inspection $100 per inspection
3. Loan Servicing
The Authority will contract directly with a servicing company.
4. Marketing
Marketing efforts will be supported by CEE, upon request, and marketing costs are not included
in the administrative budget. Hourly rates are inclusive of all overhead expenses and will be
charged only for hours directly related to the labor of all program marketing. CEE will also be
reimbursed by the Authority for any non-labor, out-of-pocket expenses relating to these
services on a dollar-for-dollar basis.
214478v2
THE MAXIMUM PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTAGE IS
$________________.
MORTGAGE
(THIS MORTGAGE IS EXEMPT FROM THE PAYMENT OF MORTGAGE REGISTRATION TAX UNDER
MINN. STAT. § 287.04 (F) IN THAT THE MORTGAGE RELATES TO A LOAN MADE UNDER A LOW AND
MODERATE INCOME HOUSING PROGRAM BY A LOCAL GOVERNMENT AGENCY.)
THIS MORTGAGE is made this ____ day of ___________, 20__, between the
[indicate marital status] (herein “Mortgagor”) and the Edina Housing and Redevelopment
Authority, Minnesota, a Minnesota body corporate and public, whose address is 4801 W 50th St., Edina,
MN 55424 (herein “Mortgagee” or “City”).
WHEREAS, Mortgagor is indebted to Mortgagee in the principal sum of U.S. $________________
which indebtedness is evidenced by Mortgagor's promissory note dated of even date herewith and
extensions and renewals thereof (herein "Note"), providing for principal and interest, if not sooner paid,
due and payable on [insert date] (the “Maturity Date”) as defined in the Note or such other date as specified
in the Note.
TO SECURE to Mortgagee the repayment of the indebtedness evidenced by the Note, with interest,
thereon and all renewals, extensions and modifications; the payment of all other sums, with interest thereon,
advanced in accordance herewith to protect the security of this Mortgage; and the performance by
Mortgagor of the covenants by Mortgagor and agreements contained herein and contained in the Note.
Mortgagor does hereby mortgage, grant, and convey to Mortgagee, forever, with power of sale, the property
located in the County of Hennepin, State of Minnesota legally described as:
(herein the "Property")
which has the street address of _________________________, Edina, Minnesota _______
(herein the "Property Address").
TOGETHER with all the buildings, improvements, fixtures and equipment now or hereafter
attached to the property including, but not limited to, all heating, air conditioning, ventilation, plumbing,
cooling, electrical and lighting fixtures and equipment, all landscaping, all exterior and interior
improvements, all easements, rights, appurtenances, rents, royalties, mineral, oil and gas rights, profits,
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214478v2
water, water rights, and water stock, all of which, including replacements and additions thereto, shall be
deemed to be and remain a part of the property covered by this Mortgage, and all of the foregoing, together
with said property are herein collectively referred to as the "Property".
MORTGAGOR COVENANTS that Mortgagor is lawfully seized of the Property and has the right
to grant and convey the same; that the Property is free from all encumbrances, except for a first mortgage
in favor of , its successors and assigns; and that the Mortgagor will warrant and defend generally the
title to the Property against all claims and demands, subject to declarations, easements or restrictions of
record, if any. Mortgagor that all statements made in any certificate or other statement given by Mortgagor
to obtain the loan secured by this Mortgage are true and correct.
PROVIDED, NEVERTHELESS, that if Mortgagor shall pay Mortgagee the sums evidenced by the
Note according to the terms of the Note, and shall repay to Mortgagee, at the times and with interest as
specified, all sums advanced in protecting the lien of this Mortgage, in payment of taxes on the Property
and assessments payable therewith, insurance premiums covering buildings thereon, principal or interest
on any prior liens, expenses and attorney's fees herein provided for and sums advanced for any other
purpose authorized herein, and shall keep and perform all the covenants and agreements herein contained,
then this Mortgage shall be null and void, and shall be released at Mortgagor's expense.
UNIFORM COVENANTS. Mortgagor and Mortgagee covenant and agree as follows:
1. Payment of Principal and Interest. Mortgagor shall promptly pay when due, the principal and
interest indebtedness evidenced by the Note and late charges as provided in the Note, and
keep and perform all covenants contained in the Note.
2. Application of Payments. Unless applicable law provides otherwise, all payments received
by Mortgagee under the Note and paragraph 1 hereof shall be applied by Mortgagee first to
interest payable on the Note, and then to the principal of the Note.
3. Prior Mortgages and Deeds of Trust; Charges; Liens. Mortgagor shall perform all of
Mortgagor's obligations under any mortgage, deed of trust or other security agreement with
a lien which has priority over this Mortgage, including Mortgagor's covenants to make
payments when due. Mortgagor shall pay or cause to be paid all taxes, assessments and other
charges, fines and impositions attributable to the Property which may attain a priority over
this Mortgage, leasehold payments or ground rents, if any.
4. Hazard Insurance. Mortgagor shall keep all buildings, improvements and fixtures now or
later located on or a part of the Property insured against loss by fire, hazards within the term
"extended coverage," vandalism, malicious mischief, and other hazards as the City may
require and in at least the amount of the replacement cost at all times while any amount
remains unpaid under this Mortgage and any prior liens.
Each insurance policy shall contain a loss payable clause in favor of the City affording all
rights and privileges customarily provided under the so-called standard mortgage clause. In
the event of damage to the Property by fire or other casualty, Mortgagor shall promptly give
notice of such damage to City and the insurance company. The insurance shall be issued by
an insurance company or companies licensed to do business in the State of Minnesota and
acceptable to City. The insurance policies shall provide for not less than 30 days written
notice to City before cancellation, non-renewal, termination, or change in coverage, and
Mortgagor shall deliver to City a duplicate original or certificate of such insurance policies.
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214478v2
Unless City and Mortgagor otherwise agree in writing, insurance proceeds shall be applied
to restoration of the property damaged, provided such restoration or repair is economically
feasible and the security of this Mortgage is not thereby impaired. If restoration or repair is
not economically feasible or if the security of this Mortgage would be impaired, the insurance
proceeds shall be applied to the sums secured by this Mortgage, with the excess, if any, paid
to Mortgagor. If the Property is abandoned by Mortgagor, or if Mortgagor fails to respond
to City within 30 days from the date notice is mailed by City to Mortgagor that the insurance
carrier offers to settle a claim for insurance benefits, City is authorized to collect and apply
the insurance proceeds at City’s option either to restoration or repair of the Property or to the
sums secured by this Mortgage. However, this mortgage is subordinate to the first mortgage.
5. Preservation and Maintenance of Property; Leaseholds; Condominiums; Planned Unit
Developments. Mortgagor shall keep the Property in good repair and shall not commit waste
or permit impairment or deterioration of the Property and shall comply with the provisions
of any lease if this Mortgage is on a leasehold. If this Mortgage is on a unit in a condominium
or a planned unit development, Mortgagor shall perform all of Mortgagor's obligations under
the declaration or covenants creating or governing the condominium or planned unit
development, the by-laws and regulations of the condominium or planned unit development,
and constituent documents.
6. Protection of Mortgagee's Security. If Mortgagor fails to perform the covenants and
agreements contained in this Mortgage, the Note, the Mortgagor 's Affidavit or in any other
document executed in connection with this Mortgage, or if any action or proceeding is
commenced which materially affects Mortgagee's interest in the Property, then Mortgagee,
at Mortgagee's option, upon notice to Mortgagor, may make such appearances, disburse such
sums, including reasonable attorneys' fees, and take such other action as is necessary to
protect Mortgagee's interest.
Any amounts disbursed by Mortgagee pursuant to this paragraph 6, with interest thereon, at
the Note rate, shall become additional indebtedness of Mortgagor secured by this Mortgage.
Unless Mortgagor and Mortgagee agree to other terms of payment, such amounts shall be
payable upon notice from Mortgagee to Mortgagor requesting payment thereof. Nothing
contained in this paragraph 6 shall require Mortgagee to incur any expense or take any action
hereunder.
7. Inspection. Mortgagee may make or cause to be made reasonable entries upon and
inspections of the Property, provided that Mortgagee shall give Mortgagor notice prior to any
such inspection specifying reasonable cause therefore related to Mortgagee's interest in the
Property.
8. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in
connection with any condemnation or other taking of the Property, or part thereof, or for
conveyance in lieu of condemnation, are hereby assigned and shall be paid to Mortgagee,
subject to the terms of any mortgage, deed of trust or other security agreement with a lien
which has priority over this Mortgage.
9. Mortgagor Not Released; Forbearance by Mortgagee Not a Waiver. Extension of the time
for payment or modification of amortization of the sums secured by this Mortgage, granted
by Mortgagee to any successor in interest of Mortgagor, shall not operate to release, in any
manner, the liability of the original Mortgagor and Mortgagor's successors in interest.
Mortgagee shall not be required to commence proceedings against such successor or refuse
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214478v2
to extend time for payment or otherwise modify amortization of the sums secured by this
Mortgage by reason of any demand made by the original Mortgagor and/or Mortgagor's
successors in interest. Any forbearance by Mortgagee in exercising any right or remedy
hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of any such right or remedy.
10. Successors and Assigns Bound; Joint and Several Liability; Co-signers. The covenants and
agreements herein contained shall bind, and the rights hereunder shall inure to, the respective
successors and assigns of Mortgagee and Mortgagor, subject to the provisions of paragraph
14 hereof. All covenants and agreements of Mortgagor shall be joint and several. Any
Mortgagor who co-signs this Mortgage, but does not execute the Note, (a) is co-signing this
Mortgage only to mortgage, grant, and convey that Mortgagor's interest in the Property to
Mortgagee under the terms of this Mortgage, (b) is not personally liable on the Note or under
this Mortgage and (c) agrees that Mortgagee and any other Mortgagor hereunder may agree
to extend, modify, forbear, or make any other accommodations with regard to the terms of
this Mortgage or the Note without that Mortgagor's consent and without releasing that
Mortgagor or modifying this Mortgage as to that Mortgagor's interest in the Property.
11. Notice. Except for any notice required under applicable law to be given in another manner,
(a) any notice to Mortgagor provided for in this Mortgage shall be given, in writing and by
personally delivering it or by mailing such notice by certified mail, addressed to Mortgagor
at the Property Address or at such other address as Mortgagor may designate by proper
written notice to Mortgagee as provided herein, and (b) any notice to Mortgagee shall be
given in writing and by certified mail to Mortgagee's address stated herein or to such other
address as Mortgagee may designate by notice to Mortgagor as provided herein. Any notice
provided for in the Mortgage shall be deemed to have been given to Mortgagor or Mortgagee
upon receipt when served personally, or upon mailing when sent by certified mail when given
in the manner designated herein.
12. Governing Law; Severalties. The state and local laws applicable to this Mortgage shall be
the laws of the jurisdiction in which the Property is located. The foregoing sentence shall not
limit the applicability of Federal law to this Mortgage. In the event that any provision or
clause of this Mortgage or the Note conflicts with applicable law, such conflict shall not
affect other provisions of this Mortgage or the Note which can be given effect without the
conflicting provision, and to this end, the provisions of this Mortgage and the Note are
declared to be severable. As used herein, "costs," "expenses," and "attorneys' fees" include
all sums to the extent not prohibited by applicable law or limited herein.
13. Mortgagor's Copy. Mortgagor shall be furnished by Mortgagee with a conformed copy of the
Note and of this Mortgage at the time of execution or after recordation hereof.
14. Transfer of the Property or a Beneficial Interest in Mortgagor. If all or any part of the Property
or any interest in it is sold or transferred (or if a beneficial interest in Mortgagor is sold or
transferred and Mortgagor is not a national person) without Mortgagee's prior written
consent, Mortgagee may, at its option, require immediate payment in full of all sums secured
by this Mortgage. However, this option shall not be exercised by Mortgagee if exercise is
prohibited by federal or state law as of the date of this Mortgage.
If Mortgagee exercises this option, Mortgagee shall give Mortgagor notice of acceleration.
The notice shall provide a period of not less than 30 days from the date the notice is delivered
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214478v2
or mailed within which Mortgagor must pay all sums secured by this Mortgage. If Mortgagor
fails to pay these sums prior to the expiration of this period, Mortgagee may invoke any
remedies permitted by this Mortgage without further notice or demand on Mortgagor.
15. Statutory Covenants. Mortgagor makes and includes in this Mortgage the Statutory
Covenants and other provisions set forth in Minnesota Statutes Section 507.15 and the
Mortgagor covenants with the following statutory covenants: (a) to warrant title to the
Property, (b) to pay all other mortgages, liens, charges or encumbrances against the Property
as and when they become due, (c) to pay the indebtedness of the Note as herein provided, (d)
to pay all real estate taxes on the Property (e) that the Property shall be kept in repair and no
waste shall be committed, (f) Mortgagor shall keep any buildings on the Property insured
against loss by fire and other hazards for at least the sum of the full insurable value of the
Property for the protection of the Mortgagee and (g) that the whole of the principal sum shall
become due after default, in the payment of any installment of principal or interest, or of any
tax, or in the performance of any other covenant, at the option of the Mortgagee.
NON-UNIFORM COVENANTS. Mortgagor and Mortgagee further covenant and agree as
follows:
Requirements for Forgivable Loan
The Mortgagor acknowledges and agrees that the amount of the loan granted in the Note
is part of the Mortgagee’s Home Rehabilitation Program (“Loan”). The public purpose of
the Loan is to preserve modest homes and promote sustainability. The Mortgagor shall
not be required to make any payment of principal or interest if any of the following
events occur:
(a) The Mortgagor offers to sell the Property to the Mortgagee at the appraised value of
the Property. The Mortgagee reserves the right to reject the offer to buy the Property
at the appraised value in its sole discretion; or
(b) The Mortgagor offers to sell the Property at the appraised value to a housing
redevelopment authority or comparable entity, provided the Mortgagor obtains the
Mortgagee’s prior written approval. The Mortgagee reserves the authority to withhold
prior written approval in its sole discretion.
Notwithstanding the foregoing, the Mortgagor acknowledges and understands that the entire
principal amount of the Loan plus accrued interest shall be due and payable in full on the
maturity date on the Note.
16. Acceleration; Remedies. Unless the Maturity Date has occurred, upon Mortgagor's breach of
any covenant, representation or agreement of Mortgagor in this Mortgage or the Note,
including the covenants to pay when due any sums secured by this Mortgage, Mortgagor
confers upon the City the option of declaring the unpaid balance of the Note, together with
all sums advanced hereunder, and the interest accrued thereon, if any, immediately due and
payable without notice, and hereby authorizes and empowers City to foreclose this Mortgage
by judicial proceedings or to sell the Property at public auction and convey the same to the
purchaser in fee simple in accordance with the statute, and out of the monies arising from
such sale to retain all sums secured hereby, with interest and all legal costs and charges of
such foreclosure and the maximum attorney's fee permitted by law, which costs, charges and
6
214478v2
fees Mortgagor agrees to pay.
City agrees that, if it intends to foreclose, City will give Mortgagor written notice of any
default under the terms and conditions of the Note or this Mortgage, by sending the notice to
Mortgagor as provided in paragraph 16 hereof. The notice of default shall contain the
following provisions:
A. the nature of the default by Mortgagor;
B. the action required to cure the default;
C. a date, not less than 30 days from the date the notice is mailed to Mortgagor, by which such
default must be cured;
D. that failure to cure the default on or before the date specified in the notice may result in
acceleration of the sums secured by this Mortgage and sale of the Property;
E. that Mortgagor has the right to reinstate this Mortgage after acceleration; and
F. that Mortgagor has the right to bring a court action to assert the nonexistence of a default
or any other defense of Mortgagor to acceleration and sale.
17. Assignment of Rents; Appointment of Receiver. As additional security hereunder,
Mortgagor hereby assigns to City the rents of the Property, provided that Mortgagor shall,
prior to acceleration under paragraph 8 hereof or abandonment of the Property, have the
right to collect and retain such rents as they become due and payable.
Upon acceleration under paragraph 16 hereof or abandonment of the Property, and at any
time prior to the expiration of any period of redemption following sale of the Property, City
shall be entitled to have a receiver appointed by a court to enter upon, take possession of
and manage the Property and to collect the rents of the Property including those past due.
All rents and income from the Property collected by the receiver shall be applied first to
the costs of management of the Property and collection of rents, including, but not limited
to the receiver's fees, premiums on the receiver's bonds and reasonable attorney's fees, and
then to the sums secured by this Mortgage. The receiver shall be liable to account only for
those rents actually received.
18. Mortgagor's Right to Reinstate. Notwithstanding Mortgagee's acceleration of the sums
secured by this Mortgage due as a result of Mortgagor's breach, if Mortgagor meets certain
conditions, Mortgagor shall have the right to have any proceedings begun by Mortgagee to
enforce this Mortgage discontinued at any time prior to the earlier to occur of (i) sale of the
Property pursuant to the power of sale contained in this Mortgage or (ii) entry of a judgment
enforcing this Mortgage if: (a) Mortgagor pays Mortgagee all sums constituting the default
actually existing under this Mortgage and the Note at the commencement of foreclosure
proceedings under this Mortgage; (b) Mortgagor cures all breaches of any other covenants
or agreements of Mortgagor contained in this Mortgagee; (c) Mortgagor pays all reasonable
expenses incurred by Mortgagee in enforcing the covenants and agreements of Mortgagor
contained in this Mortgage, and in enforcing Mortgagee's remedies as provided in this
Mortgage including, but not limited to, reasonable attorneys' fees; and (d) Mortgagor takes
such action as Mortgagee may reasonably require to assure that the lien of this Mortgage,
Mortgagee's interest in the Property and Mortgagor's obligation to pay the sums secured by
this Mortgage shall continue unimpaired. Upon such payment and cure by Mortgagor, this
Mortgage and the obligations secured hereby shall remain in full force and effect as if no
acceleration had occurred. However, this right to reinstate shall not apply in the case of
acceleration under paragraph 14 hereof.
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214478v2
19. Release. Upon payment of all sums secured by this Mortgage, Mortgagee shall discharge this
Mortgage without charge to Mortgagor. Mortgagor shall pay all costs of recordation, if any.
20. Acceleration; Additional Provisions. Mortgagee may declare all amounts secured by this
Mortgage due and payable if: (a) Mortgagor fails to occupy the Property as his/her principal
residence; (b) Mortgagor omits or misrepresents a material fact in any document executed in
connection with this Mortgage; (c) any prior Mortgage is in default or foreclosure; or (d) as
otherwise provided in this Mortgage or the Note.
21. Subject to First Mortgage. This Mortgage is subject and subordinate to a first mortgage of
even date herewith given by to . [If this provision is not filled out, it is not
applicable and has no effect.]
22. Mortgagor Not Released. Extension of the time for payment of the sums secured by this
Mortgage granted by City shall not operate to release, in any manner, the liability of original
Mortgagor and Mortgagor's successors in interest.
23. Forbearance Not a Waiver. Any forbearance by City in exercising any right or remedy
hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of any such right or remedy. The procurement of insurance or the payment of taxes
or other liens or charges by City shall not be a waiver of City's right to accelerate the
indebtedness secured by this Mortgage.
24. Remedies Cumulative. All remedies provided in this Mortgage are distinct and cumulative
to any other right or remedy under this Mortgage or afforded by law or equity, and may be
exercised concurrently, independently or successively.
25. Successors and Assigns Bound; Joint and Several Liability; Captions. The covenants and
agreements herein contained shall bind, and the rights hereunder shall inure to, the respective
successors and assigns of City and Mortgagor. All covenants and agreements of Mortgagor
shall be joint and several. The captions and headings of the paragraphs of this Mortgage are
for convenience only and are not be used to interpret or define the provisions hereof.
26. Notice. Except for any notice required under applicable law to be given in another manner,
notices shall be given by mailing the notice by certified mail, return receipt requested, to: (a)
Mortgagor at the Property Address or such other address as Mortgagor may designate by
notice to City; and (b) City at the address stated herein or such other address as City may
designate by notice to Mortgagor. Notice is deemed to have been given upon mailing.
27. Governing Law; Severability. This Mortgage is governed by Minnesota law. In the event
that any provision or clause of this Mortgage or the Note conflicts with Minnesota law, such
conflict shall not affect other provisions of this Mortgage or the Note which can be given
effect without the conflicting provisions, and to this extent the provisions of the Mortgage
and the Note are declared to be severable.
28. Nonrecourse. The obligation of the Mortgagor is nonrecourse, and the City may look for
payment of the Note solely to the Property.
29. Death of Mortgagor. This lien may pass to Mortgagor’s heirs provided they continue to
8
214478v2
occupy the property as their principal place of residence.
30. Mortgagor’s Compliance with Federal Regulations. Mortgagor agrees to comply with all
U.S. Department of Housing and Urban Development regulations that govern the City’s First
Time Homebuyer Program, including but not limited to Community Development Block
Grant regulations and Lead Based Paint Regulations.
9
214478v2
BY SIGNING BELOW, Mortgagor accepts and agrees to the terms and covenants contained in
this Mortgage and in any Rider executed by Mortgagor and recorded with it.
Mortgagor
Mortgagor
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ________ day of _______________,
202__, by ________________________________________________________ [indicate marital status].
Notary Public
My commission expires
This instrument was prepared by:
Edina Housing and Redevelopment Authority
4801 W 50th St
Edina, MN 55424
City of Edina Promissory Note
(Deferred Loan)
Lender: Edina Housing and Redevelopment
Authority
4801 W 50th St
Edina, MN 55424
Date:
Borrower(s):
The undersigned Borrower(s) (referred to herein as "Borrower"), jointly and severally if more than one, promise(s) to
pay to the order of the Lender named above (referred to herein as "Lender") at the address listed above or whatever
location Lender may specify, the sum of ____________________________________ dollars ($__________) (the
“Loan”), plus interest on the unpaid balance at an annual rate of ______________%. Interest will begin to accrue as of
the date of this note and continues to accrue until the loan has been paid in full.
Security This note IS secured by a Mortgage on my residence at:
IS NOT secured by other collateral or property.
An itemization of amount financed is available upon request.
If secured, the legal description of the property securing this Note is:
[INSERT LEGAL DESCRIPTION]
Repayment In return for the Loan received from Lender (which was given to improve the property located at
________________), Borrower agrees to pay the entire principal of the Loan with yearly interest at
a rate of __________% on the loan maturity date of ___________.
Prepayment Borrower may prepay this loan in part or in whole, at any time prior to the maturity date, without
penalty. If a partial payment (also known as a principal reduction payment) is made at any time, it
does not change the regularly scheduled monthly payments required or any other terms required under
this Promissory Note.
Assumption Anyone buying or acquiring an interest in the property secured by this Promissory Note may NOT
assume the remaining debt.
Initial(s) Page 1 of 3
The terms "I" and "my" refer to all and any Borrowers, individually and together, who execute this Promissory Note
Promises I make the following promises:
* The property to be improved is my principal residence, and said property shall remain my principal
residence throughout the duration of this loan
* I will use my loan only for the eligible items listed on the project bids that I submitted.My residence
does not have more than ___ units.
* My residence is permanently attached to the land by way of a foundation and is taxed as real
property.
* I do not intend to use more than 49% of my residence for business purposes.
* I am the owner of the property referenced herein.
I understand that the Edina Housing and Redevelopment Authority will rely on these promises and
that I could be guilty of fraud if these promises are not true.
Additional Terms
Simple Interest
Interest on my loan will be calculated using the 'simple interest' method. This means that the actual
interest I will pay will depend on my unpaid balance at the end of each day. Interest may also be
referred to as finance charge.
If I pay ahead of the maturity date, the finance charge may be less than estimated. If my payment is
late, my finance charge may be higher.
I understand that the simple interest method of calculating interest may not always give the same
results as the method used in making the Truth in Lending disclosures. Therefore, the actual amount
I pay may not be exactly as disclosed.
Forgivable Loan Requirements
I understand that this loan is part of the Lender’s Home Rehabilitation Program (“Loan”). I understand
that if the following events occur, I shall not be required to make any payment of principal or interest:
(a) I offer to sell the Property to the Lender at the appraised value of the Property. The Lender
reserves the right to reject the offer to buy the Property at the appraised value in its sole
discretion; or
(b) I offer to sell the Property at the appraised value to a housing redevelopment authority or
comparable entity, provided I obtain the Lender’s prior written approval. The Lender reserves the
authority to withhold prior written approval in its sole discretion.
Notwithstanding the foregoing, I acknowledge and understand that the entire principal amount of the Loan plus accrued
interest shall be due and payable in full on the maturity date on the Note.
Your Rights if I Default
I will be in default if:
* I do not make a payment when it is due, or in the full amount due.
* I made misstatements on my loan application or knowingly provided false information or
documentation.
* Someone tries by legal proceedings to get money or property I have on deposit with you.
* I do not keep property insurance in place and in effect that covers the loss of the residence, in
whole or in part.
* I use my residence for unlawful purposes.
* An event of default occurs under any mortgage covering my property.
* I no longer occupy the property as my principal place of residence.
* I sell, transfer, or otherwise assign any or all interest in my property without paying my loan in full.
* I do not live up to any promise I have made under this Promissory Note, or
* I fail to comply with the terms of the Mortgage entered into to secure the Loan.
* I fail to commence and complete the proposed rehabilitation project within one hundred twenty
(120) days of the date hereof, unless I receive the consent of the Lender to have an extension.
If I am in default, you may require immediate payment of the unpaid balance of this Promissory
Note, including the interest I owe. You do not have to give me advance notice.
Borrower Waivers
I hereby expressly waive my rights to require the Lender to do (A) demand payment of amounts due
(“presentment”); (B) to give notice that amounts due have not been paid (“notice of dishonor”); and
(C) to obtain an official certificate of nonpayment (“protect”).
Initial(s) Page 2 of 3
Additional Terms
If there is a mortgage, you may also foreclose and sell my residence and use the money from the
sale of the property to pay my loan. You may also exercise any other legal rights you may have.
However, even if I am in default, you do not have to require immediate payment. You may delay
enforcing any of your rights without losing them.
The provisions contained in this Note may not be amended, except through a written amendment
signed by the Borrower and the Lender.
This Note shall inure to the benefit of and bind the heirs, personal representatives, successors, and assigns
of the parties; provided however, that the Borrower may not assign, transfer or delegate any of the rights
or obligations under this Note.
Whenever used, the singular shall include the plural, the plural the singular, and the use of any gender
shall be applicable to all genders.
The rights and remedies of Lender, as provided herein or by law or equity, in the Mortgage or the
Loan Agreement, shall be cumulative and concurrent, and may be pursued singularly, successively,
or together at the sole discretion of the Lender.
_________________________________________________________________________________________
Bankruptcy If anybody starts a case under the U.S. Bankruptcy code which names anyone who signs this
Promissory Note as a debtor, the unpaid balance of this Note, including any interest I owe, will
immediately become due and payable.
Legal and Collection Costs
I must pay any reasonable attorney's fees, legal expenses, and costs of collection that result from
my default (unless prohibited by law). The Lender or its servicing agent may charge the Borrower
for any check or authorized payment withdrawal request that is returned unpaid due to insufficient
funds or for any other reason.
Governing Law
This Promissory Note shall be governed and construed in accordance with the laws of the State of
Minnesota. In the event of any litigation pertaining to this Note, the exclusive forum, venue and place of
jurisdiction shall be in Hennepin County, Minnesota.
I have received, read and understand all terms and conditions of this Promissory Note and agree to all its terms.
BORROWER(S):
TIL and NMLSR ID
Loan Originator Company Name Loan Originator Individual Name (as
name appears on NMLSR)
Loan Originator Company NMLSR ID Loan Originator Individual NMLSR ID
(if applicable)
Page 3 of 3
Date: April 8, 2021 Agenda Item #: VI I.B.
To:C hair & C ommissioners of the Ed ina HR A Item Type:
R ep o rt / R ecommend atio n
F rom:R is i Karim, C ity Management F ello w
Item Activity:
Subject:Tenant P ro tec tion O rd inance Ac tio n
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P ME NT
AUT H O R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED :
Approval and authorization to engage City Attorney to draft a proposed Tenant P rotection O rdinance.
I N TR O D U C TI O N :
T he city has set a goal to both promote and commit to preserving natural occurring affordable housing (N O AH ),
and in addition to that goal, protecting tenants who reside in N O AH properties. T he creation of a Tenant
P rotection Ordinance for the city will provide additional protection of renters rights.
AT TAC HME N T S :
Description
Staff Report
Staff Pres entation
Edina Neighbors for Affordable Hous ing Pres entation
April 8, 2021
Chair and Commissioners of the HRA
Risi Karim, City Management Fellow
Tenant Protection Ordinance
Information / Background:
Staff is requesting approval to formally begin researching and creating a proposed Tenant Protection
Ordinance for the city. The city has set a goal to both promote and commit to preserving natural occurring
affordable housing (NOAH). Protecting tenants who reside in NOAH properties should always be a priority
for the city. NOAH properties are defined as buildings where some of the units have rents affordable to
households with incomes at or below 60% Area Medium Income (AMI). A Tenant Protection Ordinance
would reflect the city’s priorities and goals to provide a full range of housing choices, particularly for low-
income residents. Residents along with various community partners have expressed concerns about the
displacement of low-income tenants residing in NOAH properties that have been sold to new owners. Staff
is seeking to create a Tenant Protection Ordinance that 1) Preserves existing NOAH properties 2) Protect
tenants’ rights, and 3) provides added security and housing stability for tenants who depend on residing in
units with affordable rents.
Tenant Protection Ordinance
A Tenant Protection Ordinance typically require property owners to give a three month protection
period to current tenants following the ownership transfer of a NOAH property. During that three month
period limits are placed on rent increases, preventing non-renewal of leases without cause, and a
requirement to provide relocation assistance upon failure to comply with the ordinance. Neighboring cities
St. Louis Park, Bloomington, Richfield, and Hopkins have all passed Tenant Protection Ordinances like this.
The April 2020 Maxfield research study reported that Edina has nearly 700 affordable units that are
at or above 60% AMI in NOAH rental properties that were built before 1970. This indicates that it is not
unreasonable to assume that there will be an increase in rents charged, especially with a change of
ownership. Having a Tenant Protection Ordinance in place prior to the sale of NOAH properties will assist
in decreasing the number of tenants that will either become increasingly rent burdened or be forced to
move with little to no assistance.
STAFF REPORT Page 2
Sustainable Housing
The Federal standard for affordability is 30% of income for housing costs. Without a separate break-
out for households that pay 35% or more, a number of households may be choosing to pay slightly more
than 30% of their gross income to obtain their desired housing. Moderately cost-burdened is defined as
households paying between 35% and 49.9% of their income for housing. Higher-income households that are
cost-burdened may have the option of moving to lower priced housing, but lower-income households often
do not. In Edina, 42.3% of renter households are considered cost burdened. Edina has a higher proportion of
cost burdened owner households than the Primary Market Area Remainder (17.4%) and the Twin Cities
Metro Area (19.8%). Edina has a higher proportion of cost burdened renter households (42.3%) than the
PMA (36.7%) but a lower proportion than the Twin Cities Metro Area (43.2%).
In the City’s latest approved Comprehensive Plan the city made a commitment to “to aid and secure
affordable lifecycle housing for a diverse community”. A part of securing some of the city’s most vulnerable
housing communities is to support tenant rights to ensure that renters are treated fairly and equitably by
landlords.
Community Engagement
At the beginning of the year members of the Edina Neighbors for Affordable Housing (ENAH)
convened a roundtable with the following community partners:
Anne Mavity Executive Director - Minnesota Housing Partnership (moderator)
Bernadette Hornig Portfolio Manager/Partner - Hornig Companies, Inc.
Marty McDonough Director of Gov. Affairs - Minnesota Housing Association
Andrew (Andy) Akins Partner - Premier Properties LLC
Joshua (Josh) Clarke Tenant - Yorkdale Townhomes
Jessica Hering Director of Social Services - VEAP
Eric Hauge Executive Director - HOME Line
Santiago De Angulo Executive VP of Operations - Aeon
Cecile Bedor Executive VP of Real Estate - CommonBond Communities
Hannah Houts Public Policy Intern - CommonBond Communities
The purpose of the roundtable was for the group to discuss recommendations for the City to take under
consideration should the city decide to take up the creation of a Tenant Protection Ordinance. Those initial
recommendations by the group have been attached to this report.
Staff Recommendation
Staff recommends the HRA authorize staff to engage the City Attorney to draft a proposed Tenant
Protection Ordinance. Staff will bring the Ordinance to the City Council for final adoption.
Proposed Tenant Protection Ordinance
Roundtable Participants
2
Anne Mavity Executive Director -Minnesota Housing Partnership
(moderator)
Bernadette Hornig Portfolio Manager/Partner -Hornig Companies, Inc.
Marty McDonough Director of Gov. Affairs -Minnesota Housing Association
Andrew (Andy) Akins Partner -Premier Properties LLC
Joshua (Josh) Clarke Tenant -Yorkdale Townhomes
Jessica Hering Director of Social Services -VEAP
Eric Hauge Executive Director -HOME Line
Santiago De Angulo Executive VP of Operations -Aeon
Cecile Bedor Executive VP of Real Estate -CommonBond COMMUNITIES
Hannah Houts Public Policy Intern -CommonBond COMMUNITIES
Tenant Protection Ordinance
•The goal of a Tenant Protection Ordinance (TPO) is to protect lower-income tenants in Edina. Under the TPO, new owners
of affordable housing buildings would be required to pay relocation benefits to tenants if the owner increases the rent, re-
screens existing residents or implements non-renewals of leases without cause within a three-month period following the
ownership transfer of the property and the tenant chooses to move due to these actions.
EdinaMN.gov 3
A rental unit is affordable if the rent plus utilities being charged are less than or
equal to the rates listed in the 60% AMI column below from the Metropolitan
Council
Why?
•A Tenant Protection Ordinance would reaffirm the city's goal promote and facilitate
a balanced and enduring housing stock that offers a continuum of diverse life-cycle
housing choices including the preservation of naturally occurring affordable housing
(NOAH)
•The April 2020 Maxfield Research study reported that Edina has nearly 700
affordable units at <60% AMI in NOAH rental properties that were built before
1970, it is likely that the sale of NOAH rental properties will increase.
EdinaMN.gov 4
Surrounding Cities
•Tenant Protection Ordinances have already been passed by the following cities:
Hopkins,MN (2019)
St.Louis Park,MN (2018)
Bloomington,MN (2019)
Richifield,MN (2019)
Golden Valley,MN (2019)
St.Paul,MN (2019)
EdinaMN.gov 5
Revised proposed Tenant Protection Ordinance
February 8th 2021 1
Recommendations
for a
Tenant Protection Ordinance
for Edina
2
The following proposals for a TPO for Edina were developed by starting with the existing
TPO’s already in place in St. Louis Park and Bloomington and proposing new additions
based on:
-recommendations from these communities based on their experiences with implementation
-recommendations from other advocacy groups based on their experiences
-recommendations from members of ENAH
We held a Zoom roundtable meeting on January 21, 2021 with representatives from all parties involved
to evaluate and provide input regarding the proposed new additions.
We have modified our proposed TPO based on the feedback received and are submitting this revised
TPO to the City for their consideration. This revised TPO is very similar to the St. Louis Park ordinance.
Our roundtable participants noted that similarity across municipalities facilitates
compliance by owners.
Our TPO Development Process
3
4
Roundtable Participants
Anne Mavity Executive Director -Minnesota Housing Partnership
(moderator)
Bernadette Hornig Portfolio Manager/Partner -Hornig Companies, Inc.
Marty McDonough Director of Gov. Affairs -Minnesota Housing Association
Andrew (Andy) Akins Partner -Premier Properties LLC
Joshua (Josh) Clarke Tenant -Yorkdale Townhomes
Jessica Hering Director of Social Services -VEAP
Eric Hauge Executive Director -HOME Line
Santiago De Angulo Executive VP of Operations -Aeon
Cecile Bedor Executive VP of Real Estate -CommonBond COMMUNITIES
Hannah Houts Public Policy Intern -CommonBond COMMUNITIES
Outline of Recommendations
Why a TPO?
When does it apply?
Change of ownership definition
Definition of affordable units
Properties covered
Notice period
Notice required items
Tenant protection period
Notice method
Notice languages
Notice period extension
Relocation assistance
Enforcement mechanisms
Enforcement penalties
Education and training
Other related recommendations
5
Why are we recommending a Tenant Protection Ordinance
This ordinance reflects the city’s goal to promote and facilitate a balanced and enduring
housing stock that offers a continuum of diverse life-cycle housing choices including the
preservation of naturally occurring affordable housing (NOAH)
We believe the City should have a goal of protecting tenants of NOAH housing when the
property is sold to new owners. The April 2020 Maxfield Research study reported that Edina
has nearly 700 affordable units at <60% AMI in NOAH rental properties at were built before
1970 so we believe NOAH rental property sales are increasingly likely to occur.
This type of ordinance has already been passed by St. Louis Park, Bloomington, Richfield and
Golden Valley. These ordinances were passed in part in reaction to specific situations arising
from a change in NOAH apartment ownership in New Brighton (Pike Lake Apts.), St Louis Park
(Meadowbrook Apts.), and Richfield (Concierge Apts.). There has not been a specific issue in
Edina to date.
6
7
When does it apply?
This ordinance applies when there is a change in ownership of a NOAH property.
Change of ownership definition
We recommend a clear and complete definition of change in ownership
or controlling interest in a property. We recommend that the change of
ownership definition include:
-the purchase by a new person
-the purchase of the company that owns the rental property by
another company
8
2020 Rental Housing
# Bedrooms 30% AMI 50% AMI 60% AMI 80% AMI
Efficiency $543 $905 $1,086 $1,448
1 Bedroom $582 $970 $1,164 $1,552
2 Bedrooms $697 $1,163 $1,395 $1,860
3 Bedrooms $806 $1,344 $1,612 $2,150
4 Bedroom $900 $1,500 $1,800 $2,400
NOAH Housing -definition of Affordable for this ordinance
A rental unit is affordable if the rent plus utilities being charged are less than or equal
to the rates listed in the 60% AMI column below from the Metropolitan Council
Note: This definition ensures that it is not necessary to know the income of the tenants
to determine affordability. All that is needed is the current rent being charged.
NOAH Affordability definition rationale:
•60% AMI works as the upper limit for most government sponsored affordable
housing programs as it is the definition of which households are income
eligible for assistance.
•Households above 60% AMI are most likely to be able to compete in the
housing market on their own. Additionally, they are eligible for first time
homebuyer programs for modest income buyers such as Habitat for Humanity.
9
NOAH Properties covered
We recommend an Edina ordinance would apply:
-to a property with three or more housing units
-and having two or more units that are affordable per the earlier definition.
10
Notice period
The new owner shall, within thirty (30) days of the date on which a real estate closing
transfers ownership of a NOAH building, give notice of the items on the next page to
every tenant, regardless of the expiration of their lease, and to the City:
11
Sale completed End of notice period
12
Notice required items: (simplified)
(1)The name, mailing address, and telephone number of the new owner.
(2) The Tenant Protection Ordinance’s provisions of a: tenant protection period and relocation
assistance under certain circumstances
Within the tenant protection period:
(3) Whether there will be any rent increase
(4) Whether the new owner will require existing affordable housing unit tenants to be rescreened
(5) Whether the new owner will terminate or not renew rental agreements without cause
(6) Whether the new owner intends to do 3, 4, 5 above the day immediately following the tenant
protection period.
.
Tenant Protection period
We recommend a protection period during which tenant’s rents remain the same and residents are not
subject to eviction without cause. The protection period starts on the date of the real estate closing and
runs through the end of three calendar months following the month in which the written notice is sent.
(In the example below the new owner could hustle and get a notice out in September and have the
protection period end December 31 or wait until October and have it end a month later.)
13
Sale completed October notice -three months protection periodNotice period ends
September notice –three months protection period
Notice method
We recommend that tenants must be notified by:
-mail
-posting of the notice in public spaces of the rental property including near
the mailboxes, lobby, office, and laundry room if any
-electronically, but only if they have opted in
14
15
Notices to be printed in multiple languages including but not limited to Spanish, Hmong,
Somalian, Cushite (Oromo), Russian, and Hindi. (Languages determined by local need)
English: This is important housing information. If you do not understand it, have someone translate it for you now.
Spanish: Información importante acerca de las viviendas. Si usted no lo comprende, pida a alguien que le traduzca ahora.
Hmong: Qhov no yog lus tseem ceeb heev qhia txog tsev nyob. Yog tias koj tsis tau taub thov hais rau lwm tus pab txhais rau koj.
Russian: Это важная информация о жилпощади.Если Вы её не понимаете, попросите кого-нибудь сейчас перевести её Вам.
Somalian: Kani waa warbixin muhiim ah ee ku saabsan guriyaha.Haddii aadan fahamsaneyn waa in aad heshaa hadeertaan qof
kuu tarjumaa
Example of translations:
Notice Languages
Notice period extension
We recommend tenants be granted an automatic extension on the length
of stay upon their notification to the owner or management agent of the
following condition:
•Households with children enrolled in school to stay until June 30 if
a move would require a change in a child’s school due to lack of
school funded transportation or an out of district move
16
Relocation assistance
We recommend that if during the tenant protection period the new owner:
1.terminates or refuses to renew a tenant’s rental agreement without cause
2.raises any affordable unit tenant‘s rent
3.rescreens an existing affordable housing unit tenant
the new owner shall pay relocation assistance to the tenant equal to three (3) months’
full contract rent, including amounts paid by third parties, for the housing.
Note: Specific ordinance language will provide more detail
17
Enforcement Mechanisms
We recommend mechanisms that should be in place to make it an
enforceable ordinance: (Note: Edina has a rental licensing program that
includes a requirement to purchase the license and has an inspection
program)
•Annual license of rental properties that includes a certified rent schedule
provided by the property owner
•Require new property owner to acquire a license immediately along with
submitting a new certified rent schedule under the new ownership.
•Notice as described earlier
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Enforcement Mechanisms -Penalty
o A Notice violation is an administrative offense and may be subject to
an administrative citation and civil penalties as provided in City Code.
o For a Relocation Assistance violation, the penalty shall be the sum of
the applicable amount of relocation assistance plus $1000 per
offense. Further, the city should have the right to suspend the rental
licenses and prohibit any new tenants from moving into the property.
o Each household denied its rights under the City tenant protection
code is a separate violation or offense and the property owner fined
separately for each violation.
19
Education and training
We recommend providing ongoing education and training tools for
property owners and management agents on the new ordinance.
On-line
20
21
Potential Additions/changes
Here are two additional ideas the City can consider. They were developed after the roundtable, so they have not been
vetted by that group. They do represent good ideas for expanding the scope of the ordinance should the City choose to
do so.
Expansion of the change of ownership definition:
-any recorded change of ownership of a rental property per county records plus any purchase of the parent
or holding company of a rental property.
0r -change in beneficial ownership or control including but not limited to: (those listed on slide 7)
Expansion of circumstances covered beyond simply a sale to a new owner:
-require any owner (current or new) of a NOAH rental unit to always give 30-day notice and provide a
3-month tenant protection period before: raising rents dramatically (10% or more), initiating rescreening, or terminating
or not renewing rental agreements without cause. Failure to this would trigger the relocation assistance provision
of this ordinance and other enforcement actions.
22
Other related recommendations
St. Louis Park TPO packet
St. Louis Park has created a very effective “TPO packet” of materials that provides all the
materials needed to understand and implement the ordinance requirements including:
-An overview
-A copy of the ordinance
-Frequently Asked Questions & Answers
-Example of letter to tenants: no rent increases, rescreening, or non-renewals during
Tenant Protection Period
-Example of letter to tenants: with rent increases, rescreening, or non-renewals during
the Tenant Protection Period
23
Other related recommendations
Tenant Opportunity to Purchase Ordinance
The City should explore a Tenant Opportunity to Purchase ordinance. Under the
ordinance, if an apartment building is up for sale, tenants have the first right of purchase.
If they pursue it, the city helps them organize, prepare legal documents and file loan
applications. In some cases, the City can step in and buy the building if talks between the
tenants and landlord break down.
If the City adopts such an ordinance, tenants would be exempt from the Tenant
Protection Ordinance
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Other related recommendations
City Rental Licensing program –monitoring
The City has enacted a rental licensing and inspections program. We recommend
monitoring this program for:
-How often is it citing landlords?
-How many complaints are being found?
-What is the timeline of response for violations?
-How is the licensing and inspections program going from a tenant perspective?
Note: Eric Hauge noted that repairs (heat, bed bugs, infestations) are the top tenant issue
in Edina, with almost double the complaints of the next issue. Monitoring could
reduce this issue.
We respectfully summit these recommendations
for your evaluation and feedback.
Edinaneighborsforaffordablehousing.org
25
Date: April 8, 2021 Agenda Item #: VI I I.A.
To:C hair & C ommissioners of the Ed ina HR A Item Type:
R ep o rt / R ecommend atio n
F rom:Bill Neuendorf, Ec o nomic Development Manager
Item Activity:
Subject:G randview Dis tric t P ed es trian Bridge Info rmatio n
Edina Housing and Redevelopment
Authority
Established 1974
C ITY O F E D IN A
HO US I NG & R EDEVELO P ME NT
AUT H O R I T Y
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED :
I nformation only. N o action is needed.
I N TR O D U C TI O N :
S taff has been exploring strategies to construct the pedestrian bridge that is envisioned to span between Arcadia
Avenue and J erry’s P arking R amp. W hile complementary to the senior cooperative housing currently under
consideration for the vacant site, the bridge is not an essential element of this type of private project.
S taff recommends that the bridge should be designed and funded in spring 2021 so that infrastructure
construction can be coordinated with the potential construction of the senior housing. I n order to satisfy the 5-
year rule that applies to the G randview 2 T I F D istrict, staff recommends that design engineers be retained and a
C onstruction M anagement firm be retained to establish a guaranteed maximum price. T his strategy is
recommended to achieve cost efficiencies while meeting the deadlines in the T I F S tatutes.
S taff will provide a brief overview of this strategy for informational purposes.
AT TAC HME N T S :
Description
Overview of Grandview Dis trict Pedes trian Bridge
Grandview District
pedestrian bridge
•Staff intends to include with the package of other
public infrastructure items going out for bond
funding in late Spring 2021
•Approx. $2million
•Constructed 2021 –2022
•Independent of 5146 Eden schedule
•Recommend Construction Manager approach with
guaranteed maximum price rather than General
Contractor method; may also use design/build
method to expedite construction
•Anticipate contracts in April and June 2021 to
satisfy the 5-year TIF deadline Concept Sketch December 2020