DISCLAIMER

 

06-0695R

 

RESOLUTION AUTHORIZING A THIRD AMENDMENT TO THE FISCAL YEAR 2004 HOME PROGRAM HOUSING DEVELOPMENT PROJECTS PURCHASE / REHABILITATION / RESALE AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES.

BY COUNCILOR GILBERT:

     RESOLVED, that the proper city officials are hereby authorized to enter into a third amendment substantially in the form of the copy on file in the office of the city clerk as Public Document No. ___________ to the HOME program housing development projects purchase/rehabilitation/resale agreement with Neighborhood Housing Services (NHS) in order to release the $30,000 mortgage lien by NHS in favor of the city, to require that two new mortgage liens in the amount of $15,000 be executed on two separate condominium units in favor of the city; and upon sale to a homebuyer, to allow the condominium mortgage liens to be executed by the homebuyer in favor of the city.


STATEMENT OF PURPOSE:  NHS is developing the east side of Lake Avenue at East Fourth Street into eight newly constructed, for sale condominium units and eight rehabilitated, for sale condominium units. The project, called the Lake Superior View condominium project will, therefore, consist of a total of 16 units.


On April 1, 2005, the city entered into a HOME program agreement with NHS in the amount of $30,000 for rehabilitation related to the condominium project. The agreement required a ten-year affordability period and that the city hold a ten year mortgage lien on the property. A lien agreement in the amount of $30,000 was filed on the entire property, which is the subject of the $30,000 HOME program agreement. Subsequently, the property was condominiumized into two units, Unit 3 and Unit 4. It was intended that each unit should be required to carry a $15,000 mortgage in favor of the city for the ten year period.


An income qualified buyer was scheduled to close on the purchase of Unit 4 on Friday, September 22, 2006. As stated above, it was intended that Unit 4 would have a $15,000 mortgage in favor of the city for the ten-year period. However, upon review of the original HOME agreement it was determined that there is no provision allowing for the division of the $30,000 lien over the two units.


This resolution provides for the release of the original $30,000 mortgage and requires the execution and recordation of two mortgage liens, one on Unit 3 and one on Unit 4, each in the amount of $15,000. Additionally, upon the sale of a unit to a homebuyer, the homebuyer will execute a mortgage lien in favor of the city, and any NHS lien in favor of the city on that unit will be released.