FAIRMONT – The Fairmont Housing and Redevelopment Authority (HRA) during its meeting on Monday considered entering a purchase agreement with the Southwest Minnesota Housing Partnership (SWMHP) for houses in the Whitetail Ridge subdivision.

SWMHP CEO Chad Adams said the homes in question have been sitting since around March or April, and despite early interest, have not received a ton of activity.

“We had over two dozen couples,” he said. “It was some pretty strong interest that these were going to be a good fit for the community, and for some reason, they’re not selling. I think part of the reason is just interest rates in general. We reduced the price point once so far, but looking at consideration potentially for the HRA, who’s got a little more invested interest in the community, to acquire those and then rent those out.”

Real Estate Agent Paul Determan said what he has heard with these homes is people want one-level living, and the demand has not been where they would like. On the other hand, he said these homes would fit with the portfolio of what HRA has done in the past, and they feel it could be a potential good fit.

SWMHP Director of Construction Services Jesse Schott said he went out with Determan to inspect the homes last Friday, and there were a few minor items, such as some doors needing readjustment, but that the work was minimal overall.

Commissioner Ron Kopischke asked if SWMHP knew what the bonding rates are for borrowing funds for a project such as this. Adams said they have pretty good connections for finding out what the rates are, but he said they should be much better than a typical local bank’s mortgage rates.

“That’s why I think [this] approach probably makes it the most feasible for like a local rental,” Adams said. “A government agency can get those reduced bonding rates, but also the HRA has got some experience in managing property, so it gets built-in local property managers already in town to get your connections with the local maintenance people already.”

Adams asked about other projects HRA is working on that could be interfering or alongside this deal. HRA Commissioner Clare Mosloski said there is one piece of land they are currently working on.

“We bought some land a few years back, just developing that,” she said. “It’s just trying to figure out our strategy on which way we want to go. We have a lot of conversations about apartments versus townhomes, renting it or selling it to a different property management group. We have a lot of conversations going on from that standpoint about what we want to do with the land we purchased.”

Mosloski said they need to discuss the option further and get a bonding rate before they can move forward with such a big move. Kopischke agreed.

“We’ve got to be able to cash flow it,” he said. “The decision to manage it will be secondary. But if we can’t cash flow, then it comes to a stop pretty quick.”

In other news:

— Commissioner Diana Bradley was added as a board member for the HRA finance committee. This move came as Diede said there is plenty of work to be done on finances due to the changes from the MN Paid Leave Act taking effect January 1. Diede said she attended a workshop put on by the Chamber of Commerce on the act and knows they will have to alter their personnel policies.

— Diede said there are some legislative changes coming, but a lot of it will depend on when the government opens again. The changes revolve around the Housing and Urban Development (HUD) Department and requirements of HRAs. Diede said that many MN CPAs have been invited to HUD in Washington to receive a comprehensive plan outlining what’s happening and what will be enforced.