As of Wednesday, August 15, 2018
FALLS CITY — Polk Community Development Corporation is asking cities and Polk County for permission to pool their revolving loan funds, which are used to issue low-interest loans to low-income homeowners.
The money is used for home repair and to keep properties in compliance with city and county codes.
“We are certified lenders, so we have to go through certain steps, but we try to keep our interest rate and the process reachable to the majority of folks,” said Rita Grady, the executive director of Polk CDC.
Consolidating the money would allow the nonprofit to use the money for more purposes and use it to apply for federal grants, Grady said. If the funds are pooled, the agency could issue first mortgages and business loans for people who might not qualify for a bank loan. Polk CDC doesn’t rely as much on credit scores, rather demonstrated ability to pay the money back, Grady said.
The cities of Dallas, Independence and Monmouth have already agreed to participate, Grady. Falls City and Polk County have yet to decide.
The Falls City City Council debated the idea during a work session on Thursday, and decided to hold on to its share until Polk CDC can provide assurances that Falls City residents will retain resources in proportion to what it contributes.
Mayor Jeremy Gordon, who is on the board of Polk CDC, said the board approved the move, but each city and the county must agree to participate.
“What we would like to do is consolidate those into one fund to maximize matching grants and expand the services that this fund can perform,” Gordon said. “Right now, it can only do second mortgages or rehabilitation loans. If that can be consolidated, it can be expanded into business (loans) for communities like ours, first mortgages and mortgage assistance.”
Grady said if combined, the fund would equal $2.8 million. Falls City portion is $542,000, $450,000 of which has been issued in loans and approximately $92,000 is left in cash. The city has access to the $92,000 for adding to the city’s general fund.
If the city decided to consolidate, it would no longer have access to the cash balance or be guaranteed that Falls City residents would receive benefits equivalent to it contributes.
Councilor Jenn Drill said she prefer not to participate unless Falls City could be assured an equitable share of the benefits. Grady said Polk CDC has managed Falls City’s fund to issue $1.3 million in loans over 30 years. She said the organization has no intention of changing that strategy.
“This has been a great thing for the city of Falls City. Rita, I appreciate your word, but without further guarantee, I don’t feel comfortable to make the decision for the city,” Drill said. “If you were to bring further information of what this would look like and more detail I would feel more comfortable.”
Grady said the organization would like to move forward with the consolidation and apply for grant money within a month, but would wait for Falls City’s decision.
“We would like to have everybody on board and feel good about their decision, that it’s the best thing for their community,” she said. “We’ll wait.”
City Manager Mac Corthell said he should have enough time to address council questions with Grady and work on an agreement before the next council meeting on Sept. 13.
Grady agreed to work with Corthell on an agreement and that she understood the council’s concerns.
“We do have to have it in writing,” she said. You can’t just take my word for it.”