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Center for Energy and Environment CEE Financial Resources <br /> 212 3rd Avenue North, Suite 560 • Minneapolis, MN 55401 • (612) 335-5889 • Fax (612)335-2650 <br /> 1961 Geneva Avenue • Oakdale, MN 55128 • (651) 731-2626 <br /> MEMORANDUM <br /> Date: June 2, 2011 <br /> To: Grant Fernelius, City of New Brighton <br /> From: Dave King, CEE <br /> RE: Housing Program Discussion <br /> Loan Volume <br /> The number of loans that could be originated through the allocation will vary depending on <br /> average loan size. In reviewing the program guidelines that have been discussed, CEE believes <br /> the average loan would be around $10,000. Depending on the interest rate that is determined for <br /> the program offering will dictate the coverage of the administrative expenses incurred to operate <br /> the program. <br /> Interest Rate 4% 3% <br /> Avg Loan Amt $10,000 $10,000 <br /> Loan Term 60 months 60 months <br /> Total Interest Pay $1,050.20 $781.40 <br /> Admin Expense <br /> Origination Fee $550.00 $550.00 <br /> Loan Servicing $410.00 $410.00 <br /> Rem Adv Visit $150.00 $150.00 <br /> Post Inspection $70.00 $70.00 <br /> Total Expense $1,180.00 $1,180.00 <br /> Interest Subsidy <br /> The Interest Subsidy option gives communities an opportunity to leverage a significant amount of <br /> money and increase their ability to serve more residents. The Interest Subsidy program utilizes <br /> Minnesota Housing Finance Agency funds as the primary funding source and then uses City <br /> dollars to reduce the rate being offered by MHFA. The result is that the City is able to leverage <br /> additional funds and eliminate the risk to the portfolio. Additionally, since MHFA pays CEE an <br /> origination fee to originate the loan,the admin fees to the City are reduced. . <br />