HomeMy WebLinkAboutAgenda - 09-17-1996 - 8f f
1
ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No. 6-f
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 17, 1996
SUBJECT: Housing Rehabilitation Program- Deferred Loan Policy
DEPARTMENT: Housing and Community Development PUBLIC HEARING: (Y/N) ' 'q
BUDGET AMENDMENT: (Y/N) }` ?s
ATTACHMENT(S): INFORMATION CONTACT:
Resolution Tara L. Fikes
TELEPHONE NUMBERS: -- ext. 2490
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 227-2031
PURPOSE:
To adopt a resolution establishing a policy regarding the County's Housing Rehabilitation Deferred
Loan Program.
BACKGROUND:
All houses repaired under the County's Housing Rehabilitation Programs are completed under a
Deferred Loan Program. Under a deferred loan program,no cash loan payments are required and the
loan is deferred for a period of five, eight, ten, fifteen or twenty year period depending upon the
amount of the rehabilitation costs. The County's investment is secured by a Promissory Note and
Deed of Trust executed by the property owner with the later document recorded in the Register of
Deeds office. Since, the Deed of Trust is a lien on the property, the property owner cannot use the
property as collateral for future loans without first obtaining the County's written consent.
In recent months, the County has received requests from homeowners to execute Release Deeds,
cancel Deeds of Trust and/or subordinate our Deeds of Trust to private mortgage financing. Most of
these requests have been from persons refinancing their first mortgage in order to consolidate other
outstanding debts. In order to establish a fair, impartial process for the review of these requests,
staff is recommending the establishment of a clear policy.
This policy would:
1. Subordinate the County Deed of Trust to security interest in the property to an amount, with the
combination of the new loan and the County's lien, not to exceed 90% of the Fair Market Value of
property as established by an independent appraiser.
2. Authorize the County Manager or his designee to sign a Release Deed or cancel a Deed of Trust
and Promissory Note upon satisfaction.
2
Approval of the attached resolution would establish a policy for administration of the Deferred Loan
Program.
RECOMMENDATION:
Adopt a resolution establishing a policy regarding the County's Housing Rehabilitation Deferred
Loan Program.
r
3
RESOLUTION
HOUSING REHABILITATION PROGRAM DEFERRED LOAN PROGRAM
WHEREAS, the County provides funding in the form of deferred loans to homeowners to
repair substandard housing iri the County; and
WHEREAS, the County secures its monetary investment by the property owner executing
a Promissory Note and Deed of Trust with the later being duly recorded in the Orange
County Register of Deeds Office; and
WHEREAS, from time to time before the expiration of the Deed of Trust and Promissory
Note it may become necessary to re-negotiate the terms of the Promissory Note and Deed
of Trust;
NOW, THEREFORE, be it resolved by the Board of County Commissioners of Orange
County, that the County Manager or his/her Assistant Managers as authorized by the
County Manager has the authority to:
1. Subordinate the County Deed of Trust to security interest in the property for purchase
or refinance to an amount, with the combination of the new loan and the County's lien,
not to exceed 90% of the Fair Market Value of property.
2. Authorize the County Manager to sign a Release Deed or cancel a Deed of Trust and
Promissory Note upon satisfaction.
This the 17th day of September, 1996.