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County Administrator's Report 12. 2.

BCC Regular Meeting

Technical/Public Service Consent

Meeting Date:	05/07/2020
Issue: Loan Subordination Policy
From:	CLARA LONG
Department:	Neighborhood & Human Svcs
CAO Approval:

RECOMMENDATION:

Recommendation Concerning Loan Subordination Policy - Clara Long, Interim Neighborhood & Human Services Department Director

That the Board adopt the Loan Subordination Policy.

BACKGROUND:

The County has extended deferred and low interest loans to citizens through its HUD Community Development Block Grant (CDBG) Program, HOME Investment Partnerships (HOME) Program, and State Housing Initiatives Partnership (SHIP) Program to assist income eligible owner occupants with minor, moderate, and substantial rehabilitation of their properties or down payment/closing cost assistance for income eligible homebuyers. The Community Redevelopment Agency (CRA) has also offered deferred payment loans using Tax Increment Financing (TIF) funds to assist owners with rehabilitation of properties in CRA areas, which are provided to both owner and non-owner occupied properties.

Current policy does not allow for subordination of these County loans, as the applicant must repay the loan balance if wanting to refinance a first mortgage during the loan period. The Loan Subordination Policy will allow for an administrative waiver of this procedure provided applicant meets criteria as outlined in the attached Policy after submission for review through the Neighborhood Enterprise Division (NED) or Community Redevelopment Agency (CRA) Division, as approrpriate, with final approval by the County Administrator.

BUDGETARY IMPACT:

N/A - The County will not be responsible for any recording fees or closing costs generated by a property owner's request for subordination.

LEGAL CONSIDERATIONS/SIGN-OFF:

The Loan Subordination policy has been reviewed and approved by the County Attorney's office.

PERSONNEL:

N/A

POLICY/REQUIREMENT FOR BOARD ACTION:

Current policy does not allow for subordination of County loans. This new policy would allow for a loan subordination in certain circumstances.

IMPLEMENTATION/COORDINATION:

The Policy will be implemented by the Neighborhood & Human Services Department in conjunction with the County Attorney's office as necessary.

Attachments
NHS Loan Subordination Policy