Morgan says it’s CHEDA’s best program, so there shouldn’t be a rush to change it
While it’s difficult to find anyone who doesn’t think CHEDA’s housing rehab program, launched a few years ago after the Crookston City Council allocated additional funds to CHEDA, is a big success, once in a great while the short-term, low-interest loans given to property owners and developers aren’t paid back on time.
It’s led to discussions among CHEDA Board members of late that CHEDA should put some teeth in the program language to more strongly encourage loan recipients to pay their full loan balance within the required year. One idea has been to, after the year is up, increase the interest rate to whatever the current prime rate is. Currently, the loans carry a 2 percent interest rate over the 12 months, with the low rate basically in place to cover CHEDA’s administrative costs of running the program.
When the CHEDA Board this week approved the latest loan request, to Dave and Melanie Lessard so they could finish up their major renovation of a house on North Broadway, board member Tom Vedbraaten suggested that the board insert an increased interest rate in the program language for late loans before the board approved any future housing rehab loan requests.
Others, including CHEDA Executive Director Craig Hoiseth, appeared to be in favor of the change, but with no additional housing rehab program loan requests for the board to immediately consider, board member Craig Morgan wondered what the hurry is. While he said he “fully agrees” that the loan language should have some more teeth in the event that program participants are slow to pay off their loans in full, Morgan said the board shouldn’t rush into anything.
“We are acting way too fast here, so let’s find out if there is a better way,” Morgan said. “Why can’t we sit on this another month? Is there something else we could do to grow this program more? …It’s the best program we’ve got going and we’re going to just sit here and make a five-minute decision on it? I don’t think that’s right.”
The board tabled the matter.