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RESOIUTION NO. 8,500
A RESOLUTION AUTHORIZING THE CITY MANAGER
TO SUBMIT ANSNDMENTS TO THE CITY'S URBAN
HOMESTEADING PROGRAM DESCRIPTION IN ORDER
TO REVISE THE NHOMESTEADER SELECTION" AND
mFINANCINGN SECTIONS, AND FOR OTHER
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WHEREAS, in 1990 the Little Rock Board of Directors
authorized the Urban Homesteading Application to be submitted to
HUD which provided for public drawings of names to select
homesteaders for available properties, providing no assistance for
financing rehabilitation of the properties from the City's CDBG
rehab funds; and
WHEREAS, that application process envisioned that
properties selected for Urban Homesteading would require only
moderate rehabilitation and demand would be high; and
WHEREAS, the City's experience with the first three
properties in this program has been otherwise.
BE IT THEREFORE RESOLVED BY THE BOARD OF DIRECTORS OF THE
CITY OF LITTLE ROCK, ARKANSAS:
SECTION 1. The City Manager is hereby authorized to submit
to the U. S. Department of Housing and Urban Development,
revisions to the City's Urban Homesteading Program Description.
SECTION 2. The language of the revisions shall be
substantially as provided for "Homesteader Selection" in
accordance with Attachment A, and as provided for "Financing" in
accordance with Attachment B, and to edit other sections to be
consistent with those revisions.
ADOPTED: May 21, 1991
ATTEST:
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Robbie Hancock, City Clerk
APPROVED:
Sharon Priest, Mayor
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1 APPROVED AS TO FORM:
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4 Thomas M. Carpenter
5 City Attorney
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ATTACHMENT A
HOMESTEADER SELECTION #
The City will advertise a fourteen -day application period
for Urban Homesteading properties acquired and not
previously advertised as available for homesteading. The
advertisement will provide street addresses of newly
available properties and a summary of Urban Homesteading
requirements. It will be placed in the real estate
classified section of at least one newspaper of general
circulation and at least one minority - oriented newspaper.
It will be made available to community organizations and
appropriate newsletters and other media and will be mailed
to persons who have asked to be notified of Urban
Homesteading opportunities. Interested persons will be
invited to call for an application package which will
include details on the Urban Homesteading program and
Homesteader qualifications, a fuller description of the
properties available, a rough estimate of the cost to
rehabilitate each, and an application form for participation
in the program. Applicants may indicate on their
applications an interest in one or more of the properties
available.
The following will be the eligibility requirements for
participants:
1. Must be a citizen of the United States
2. Must be of legal age
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3. Must not currently own residential property
4. Must have current ►income of at least $12,000 per
year
5. Must have a history of financial responsibility
sufficient to qualify to finance rehabilitation of
the property by contract.
6. Must not be a member of the Board of Directors of
the City of Little Rock or a City employee in a
department or division in any way responsible for
administering the Urban Homesteading Program
Membership in or other ties to any private organization will
not be a factor affecting selection of applicants for
homesteading.
The City will charge an application fee of five dollars
($5.00) to defray partially the direct and indirect costs of
a credit report, indicated verifications, and written
notification of the applicant of the determination as to his
or her eligibility.
City staff will screen applications initially and eliminate
applicants who clearly do not meet basic eligibility
requirements such as income, non - ownership of residential
property, legal age, and citizenship. Those thus
disqualified will be so advised in writing and given the
reason(s) for rejection of the application. If more than
one applicant who appear to staff potentially qualified have
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expressed an interest in the same property, the applications
will be referred to an UrbAn Homesteading Advisory Board.
While review of the applications by the Advisory Board is
pending, those persons will be given opportunity to inspect
the property or properties in which they are interested,
either by individual appointments or at a scheduled open
house, depending on the number of applicants interested in
the same property. After their inspection they will confirm
their wish to be considered for one or more properties, if
they are provisionally qualified as participants by the
Advisory Board.
A majority of the members of the Advisory Board will be
representatives of lending institutions. The Board will
review the information submitted with each application
referred to it, the applicant's credit report, and any
verifications or other relevant information available. On
the basis of standard underwriting criteria for the kinds of
financing available and the information in hand, the Board
will provisionally qualify or will disqualify applicants for
further participation in the program. Those who do not
qualify will be advised by a letter, which will state the
reason(s) for the disqualification. The Board's
determinations will be final for that application period.
Anyone who believes the information on which the Board based
its determination is not accurate will be advised to seek
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correction of the data at its source before the next
Homesteading properties arp announced as available.
If more than one provisionally qualified participant is
interested in the same property, each will be allowed to
enter the drawing for that property. If only one applicant
who potentially is qualified indicates an interest in a
given property, staff will proceed immediately with steps
necessary to enter into a Homesteading agreement with that
applicant and convey the property to him or her
conditionally.
A participant who is a one - person household will not be
allowed to homestead a house with more than two bedrooms. A
participant with a household with fewer than five persons
who wishes to homestead a house of four bedrooms or more may
be allowed to do so, provided no eligible participant with a
larger household desires and qualifies for that house.
When a public drawing is necessary, participants whose
family income exceeds lower income levels (80% of SMSA
median, adjusted for family size) may enter the drawing for
a house but will be selected as a homesteader or an
alternate only if no remaining entries for that house are
low to moderate income.
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Through any public drawing the City will select for the
property a homesteader, a first alternate, and, if more than
two are entered, a second alternate; if for any reason the
principal is not able to accept the house or must withdraw,
the alternates in order will be offered opportunity to
homestead the property.
If no potentially qualified person applies to homestead any
given property during the initial application period that
makes it available, or if all applicants interested in any
given property are disqualified eventually, the City will be
free to convey the property to any person who can meet the
Urban Homesteading program requirements, first -come, first-
served.
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FINANCING
ATTACHMENT B
Homesteaders will be expected to qualify for private sector
financing to rehabilitate Urban Homesteading properties.
The City will not assist homesteaders with closing costs
such as recording fees, insurance premiums, taxes, or
utility deposits which may be required for the initial
closing, even if such assistance is available for
homebuyers. The City will, however, consider an application
from a homesteader after the initial closing for any
Community Development Block Grant deferred payment loan then
available for which the participant qualifies under normal
policies and limitations, provided the CDBG subsidy may not
under any circumstances exceed 50% of the rehabilitation
contract.
In addition, the City will waive local CDBG rehabilitation
program design limitations and policies as necessary to
offer CDBG grants to any homesteader, to the extent
permissible under federal regulations, in order to reduce
rehabilitation costs (not including general property
improvements) to 80% of the after -rehab appraised value of
the property.
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