HUD notified us that we would need to make adjustments to our plan to account for that increase and. So that is what you're seeing tonight. This is a correction to that plan that you saw back in March.

It was as if we were double allocating those funds. So we're instructed by our contact HUD to not not re identify those prior year funds but to follow the plan that those funds were originally allocated.

There's been an increase the allocation for Homeowner Rehabilitation Assistance and that's the amount that was the difference between the estimated allocation and the actual received allocation.

This is a five or a three year contract that's held by the City, the Poor and the HRA who all use Kennedy and Graven for bond council services. So this is the first of two optional one year extensions.

The goal was to provide affordable homeownership opportunities. It was split into two for two single family homes with an attached ADU. It's an exciting project because while it was our allowed Brooklyn Park right sorry Bloomington the we don't have too many of them in the City so this will be an innovative and unique project.

And the goal behind this subsidy to keep these projects affordable they are being sold to a land trust. So presumably these would go to the land trusts would be renewed with every sale and so you would be keeping these affordable in perpetuity essentially and the affordability ranges the 60% Area Median Income which is quite deep affordability.

I guess I'm just curious because I know that the HRC finances are very complex. Do we just kind of have this money reserved for these kinds of opportunities to leverage or are there trade offs here? So if we spend this 200,000 here, does that mean that we might have to make other decisions in other areas of the budget?

We're very excited to do this project. Um it's been years in the making. We were approached by the City to really try to do something there. Um our original proposal was just a single family home perhaps that all and seeing that we could take this project and turn it into basically four units of affordable homeownership is quite a undertaking but it's one that we're glad we have the opportunity to and to bring a new form of homeownership to the City is really quite an that we've been asked to do this so we're very excited with the project.

Every year in October HUD sets the Fair Market Rents or the FMR is what we call it on our office and then also that gives us the the kind of threshold for what our payment standards are and that's based on really budgetary stuff.

This year they only increased at 4% so we didn't want to touch our ones and twos we raised them $200 which I don't I've word here for 25 years. I don't think we've ever done that so that was really exciting to give some relief to those bedroom sizes.

Because we are at the end of a five year cycle, I did want to just highlight some of the key milestones that occurred over the last five years, one of which is approval of eight new Project Based Vouchers in the 700 American Development. And that project is or should be construction any day now.

The broad theme here is building on the work of the last five years and also recognizing that HUD has made some pretty substantial changes to the program we are going to be implementing over the next few years.

I'm asking these questions in part because we're making these major investment in infrastructure improvements and I'm really curious as to what's going to be our plan of action going forward in relationship to really interconnect with those families to ensure that they understand truly grasp you know, the investments that are being made on their behalf and more importantly than that how we're actively going to be hopefully helping them evolve to a point of home ownership.

I will say one of the major efforts that we did put in this year building out our staff capacity around the properties that we own and manage to allow for greater kind of one on one interaction with our tenants specifically the Rental Homes for Future Homebuyers program. So separating out the property management components from the programmatic allows us to really kind of dig in a little deeper with our households and provide more one on one coaching as appropriate.

Within the ordinance language is a requirement that a report be given to the City Council before October 1st of each year and interested bodies can receive that report as well. So this report was given to the City Council on September 9th but as the HRA is deep into the work of affordable housing we thought we'd bring it here.

We will have fully utilized that initial $15 Million and we were able to achieve some great accomplishments with that money in terms of getting deeper affordability, I think 700 American is great to highlight. They had initially proposed a 60% AMI low income housing tax credit project and through our subsidy through the project based vouchers and partnering with them to get local funding sources they brought that down to 50% AMI.

The study that was conducted to establish basis of the ordinance back in 2019 is reaching the end of its relevant lifespan so it's not as relevant to economic conditions that we're currently in. So our plan is to go out for RFP in October in this month to partner with a consultant to conduct this study.

We have a long long way to go for 30% more. So that's something we will need to work hard on and it does kind of highlight a challenge which is that we have expended that loan that $15 Million loan which was our main tool to subsidize the construction of those affordable units.

And then my second question is about the the loan the loans we have. Right? The idea was that we'd have 50 Million we'd be able to loan these out and then get the repayment back. What is the repayment period where we start seeing money come back to be able to use towards other projects?

What we've found is the cash flow for some of those projects hasn't met the expectations that were set in the original development process and as a result we're getting lower payments and that means we can't fully make the payment on that loan that we took out with the National Bank for the 15 Million.