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County Administrator's Report 11. 1.
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| BCC Regular Meeting |
Discussion |
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| RECOMMENDATION: |
Recommendation Concerning the Request for Subordination of the HOME Investment Partnerships Program Mortgage at 3839 Belle Meade Court, Unit A - Clara Long, Neighborhood & Human Services Department Director
That the Board take the following action concerning the Request for Subordination of the HOME Investment Partnerships Program (HOME) Mortgage at 3839 Belle Meade Court, Unit A, as requested by Troy Stepherson:
A. Approve the Request for Subordination of the HOME Mortgage at 3839 Belle Meade Court, Unit A, in the amount of $12,500, as requested by Troy Stepherson, in order to allow the homeowner to refinance his first mortgage to obtain a lower interest rate and monthly mortgage payment; and
B. Authorize the Chairman or Vice Chairman to execute the Subordination Agreement and related documents required to complete this request, including actions that may be required of the County Attorney's Office.
[Funding: Not applicable] |
| BACKGROUND: |
Troy Stepherson received $12,500 in HOME Program down payment/closing cost assistance to purchase a home in July 2018. The HOME program placed a 0% interest second mortgage and note on the property (Exhibit I). The loan will depreciate to zero after five years provided that the borrower has not defaulted due to sale, transfer, rental, or other encumbrance of the property.
On April 29, 2020, Mr. Stepherson submitted correspondence and requested backup (Exhibit II) to the Neighborhood Enterprise Division (NED), requesting that the HOME second mortgage be subordinated so he can refinance and obtain a new first mortgage with Synovus Bank. The HOME program policy is not to subordinate as is noted in the program loan documents. Mr. Stepherson has provided the NED office with the proposed loan estimate and appraisal in order to review his request. The current appraised value of the property is $95,000, with the proposed new first mortgage loan amount being $62,000. The equity in the home is sufficient to provide a 78% cumulative loan to value ratio. The new monthly principal, interest, and escrow payment will be lower for Mr. Stepherson at $269.83, and the new interest rate will be a 3.25% fixed rate instead of the 5.25% on his current first mortgage. No funds will be received by Mr. Stepherson at closing and any closing costs will be covered by the applicant. If approved, the County HOME loan will remain in the second mortgage position. The homeowner has complied with all HOME program requirements to date, and the proposed loan is within affordability guidelines.
Staff reviewed the subordination request according to the recently approved Loan Subordination Policy approved on May 7, 2020, and the request falls within policy perimeters. A staff summary review of the subordination request is included in Exhibit III. |
| BUDGETARY IMPACT: |
| No impact to the HOME program if the Board approves this request. |
| LEGAL CONSIDERATIONS/SIGN-OFF: |
| Legal will review and approve the Subordination Agreement as necessary. |
| PERSONNEL: |
| N/A |
| POLICY/REQUIREMENT FOR BOARD ACTION: |
| Current HOME policy is not to subordinate liens or mortgages as outlined in the HOME mortgage and note. Any deviation from policy requires Board approval. This request is within recently the approved perimeters under the Loan Subordination Policy approved May 7, 2020. |
| IMPLEMENTATION/COORDINATION: |
| If approved by the Board, Neighborhood Enterprise Division (NED) will coordinate paperwork with the County Attorney's office and the homeowner as needed. |
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