Agenda

Back to Calendar Return

County Administrator's Report 12. 5.

BCC Regular Meeting

Technical/Public Service Consent

Meeting Date:	10/03/2013
Issue: Mortgage Subordination for Wesley Haven Villa Refinancing
From:	Keith Wilkins
Department:	Community & Environment
CAO Approval:

RECOMMENDATION:

Recommendation Concerning a Mortgage Subordination for the Wesley Haven Villa Refinancing - Keith Wilkins, Community & Environment Department Director

That the Board take the following action concerning the Mortgage Subordination for the Wesley Haven Villa Refinancing:

A. Approve and authorize the Chairman to execute the U.S. Department of Housing and Urban Development Office of Residential Care Facilities Subordination Agreement - Financing Section 232, Wesley Haven Villa, FHA Project Number: 063-43069 (the existing Escambia County State Housing Partnerships Program second mortgage), in conjunction with, refinancing the Wesley Haven Villa first mortgage, as requested by the Methodist Homes Corporation and the Wesley Haven Villa, Inc.; and

B. Authorize the Chairman to execute any additional documents or certifications as may be required to culminate the subordination.

BACKGROUND:

Methodist Homes Corporation (MHC), formerly Methodist Homes for the Aging, Inc., was the developer and, through its non-profit subsidiary, Wesley Haven Villa, Inc., remains the owner of the Wesley Haven Villa affordable assisted living facility (located downtown at Wright & Tarragona). Wesley Haven Villa has been a high quality, positive addition to the community in that it provides a set-aside of its total assisted living units that meet affordability requirements of Florida Housing Finance Corporation (FHFC) and the State Housing Initiatives Partnership (SHIP) Program (22 of the total 55 units are affordable set-aside for elderly with incomes below 60% of the area median). In 2003, the County committed $330,000 in SHIP funds to aid with development of the facility and to meet FHFC fund leveraging requirements in the form of a 20 year zero interest, deferred payment loan with forgiveness at the end of the 20 year affordability period. The funds are secured by a subordinate mortgage/note on the property/facility see BCC action resume in Exhibit I).

MHC is currently working with HUD and the first mortgage lender to refinance the outstanding first mortgage on the property/facility with a Section 232 loan in order to effectively reduce the interest rate by approximately 2 percentage points, while maintaining their commitment to all FHFC and SHIP stipulations. This will allow MHC to reduce annual costs, thereby delaying the necessity to increase rents, make needed physical enhancements to the existing facility, and better position the facility to maintain its current level of excellence. It is our desire to ensure that the rates for the units remain as affordable as possible over the duration of the SHIP affordability period.

To accomplish the refinance, MHC is requesting that the County execute necessary documents to continue to subordinate the SHIP Mortgage/Note to the new (refinance) loan. The SHIP Mortgage/note would continue in its subordinate position for the balance of the original 20 year term until it expires and is forgiven (assuming there is no default by MHC prior to said expiration).

BUDGETARY IMPACT:

There is no impact on current budgets as a result of this action.

LEGAL CONSIDERATIONS/SIGN-OFF:

The Subordination of Mortgage (copy included in Exhibit II) has been reviewed and approved by Steve West, Assistant County Attorney.

PERSONNEL:

N/A

POLICY/REQUIREMENT FOR BOARD ACTION:

The Board must approve the Subordination of Mortgage to authorize the Chairman to execute the required document.

IMPLEMENTATION/COORDINATION:

The County Attorney's Office and NEFI will coordinate with Methodist Homes Corporation as necessary to culminate the mortgage transaction.

Attachments
Exhibit I
Exhibit II