HomeMy WebLinkAbout1987-12-08; City Council; 9228; Community Development Block Grant Residential Rehabilitation Program ExceptionI
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AB # 2 ITLE: COMMUNITY DEVELOPMENT BLOCK GRANT
MTG. 12�7 RESIDENTIAL DEFT. HD. '
REHABILITATION PROGRAM CITY ATTY
DEPT. RED EXCEPTION
RECOMMENDED ACTION: CITY MGR.�
If Council concurs, your action is to adopt Resolution
No. 9 09 authorizing an exception to the Community
Development Block Grant Residential Rehabilitation Loan
Program.
ITEM EXPLANATION
The Rehabilitation Loan Committee is re grant an exception to the City's Resident1 ialR habilitation)
Loan Program.
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The Loan Program is funded from the Community Development
Block Grant Program. The
Residential Rehabilitation pProg ar mgislto of
rupgrade the
housing stock and maintain affordable housg. The the existing
is designed to assist property owners to obtain financing who
previously were not interested in or could not afford a home #
improvement loan. -
Under the Residential Rehabilitation Program there are three M1
types of loans:
1. Low -interest property improvement loans.
2• Deferred loans.
3• Direct grants.
The Loan Program permits use of funds to make direct long
term, zero interest loans. A lien would be taken on the
property and the loan would be due in full at the"time the
property changes hands. The minimum deferred loan is $500,
the maximum is $7,50o.
Currently, the Loan Committee has reviewed a request for
$23,450. The applicant meets all criteria for a deferred
Loan. A failing septic system. The septic systsystem must be hooked to City sewer
em failure cannot be corrected and
'as caused a health hazard. Because of the steep terrain,
extensive work is required in order to complete the sewer
:onnection.
'he Loan Committee is requesting that Council grant an
exception to the $7,500 deferred loan maximum by authorizing
;he $23,450 loan.
ISCAL IMPACT
ands are available in the Community Development Block Grant
esidential Rehabilitation Program.
I. Resolution No.
2. Staff Report.
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NOVEMBER 30, 1987
TO: CITY MANAGER
FROM: Management Analyst/Redevelopment
VIA: Redevelopment and Housing Director
COMMUNITY DEVELOPMENT BLACK GRANT RESIDENTIAL REHABILITATION
PROGRAM EXCEPTION
f REHABILITATION LOAN COMMITTEE
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Mike McDermed
John McCoy
Jim Elliott
x. Marty Orenyak
f;.
kA Chris Salomone, Ex-officio
The Rehabilitation Loan Committee is requesting that the City
Council
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grant an exception to the Community Development Block
Grant Residential Rehabilitation
Loan Program. The applicant
is requesting a deferred loan. A failing sewer septic system
must be hooked up to the City sewer system. The septic system
failure
cannot be corrected and it is causing a health
hazard. Because of the steep terrain, extensive
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work is
required in order to complete the sewer connection.
The full loan request is $ 23,450 to assist in the connection
of a residence to the city sewer
system. The program limit
for deferred loans is $7,500. The Loan Committee has
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recommended that the limit be increased for this application
only.
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The current balance in the residential loan program is
$60,076; by January
1988 this amount will be $90,076.
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This loan would be a direct, long term, zero interest loan.
No payments would be due until the
property changes hands -
this includes a voluntary sale or a transfer in case
of
death, or any other type of transfer. The full loan amount
would be due
and payable at that time.
The estimated Fair Market Value of the property is $250,000.
Currently, there are three liens
on this property:
First - Great American $49,000
Second - First Interstate $10,000
Third - Private Party $30 000
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TOTAL $89,000
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The City of Carlsbad would be in or position. While this
is not the
most desirable positio;�
n, certain safeguards exist
which will protect the City,s interest:
A. A request for any notice of default by a prior
lienholder
will be issued in connection with this loan.
This means that the City would be notified
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of all
activity which takes place in the other lien positions.
B. If the first position lien holder forecloses, the City
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would then "cure" the defaulting first to save their
position
and proceed to foreclose themselves. All
remaining mortgages would be paid until such time
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as the
city would choose to sell the property and pay off the
other liens. (NOTE: By
state law, the owner would be
entitled to a specified amount of equity in the house.)
C. If the current owner claims bankruptcy, the foreclosure
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process is automatically "stayed". The trustees involved
must them apply for relief from the automatic stay. The
property would then be available for sale to clear off
the liens.
The primary goal of the Residential Rehabilitation Program is
to upgrade the existing housing stock and to maintain
affordable housing. The program is designed to assist
property owners to obtain financing who previously were not
interested in or could not afford a home improvement loan.
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LYNN FITZGER
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L RESOLUTION NO. 9309
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA AUTHORIZING AN EXCEPTION TO THE
COMMQNITY DEVELOPMENT BLOCK GRANT RESIDENTIAL
�) REHABILITATION PROGRAM.
WHEREAS, the City Council has considered a request to
grant an exception to the Residential Rehabilitation Program
guidelines; and
AREAS, the City Council has considered the necessity
to increase the deferred loan amount from $7,500 to $23,450
to grant a deferred loan on a sewer hook-up.
NOW, THEREFORE, BE IT HEREBY resolved as follows:
1. That the above recitations are true and correct.
2• That the City Council of the City of Carlsbad hereby
authorizes an exception to the Community Development
Block Grant Residential Rehabilitation Loan Program.
PASSED, APPROVED AND ADOPTED at a regular meeting of the
City Council, of the City of Carlsbad, California on the 8th
day of December , 1987, by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larson
NOES: None
ABSENT: None
ABSTAIN: None ��
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CLAUDE A. S, aY r
ATTEST:
ty Clerk
(SEAL)