Planning and Development Services Department
TO: David L. Corliss, City Manager
FROM: Margene K. Swarts, Assistant Director, Development Services
CC: Scott McCullough, Director, Planning and Development Services
DATE: May 18, 2011
RE: Mortgage Release
The department has received a request from Tenants to Homeowners, Inc. (TTH) regarding a mortgage the City holds for a property that was purchased through the City’s first time homebuyer program, Homeowners Out of Tenants (HOOT). The existing property owner is selling the property and has made an agreement with TTH to sell the property at a reduced price through the TTH Community Land Trust Program. In order for the negotiation to work the City needs to forgive the second mortgage. Since the property will be sold through the Land Trust program, it will ensure long term affordability for the property.
1812 Atherton Court was purchased by Christine Lanier on February 8, 2002. The total for the mortgage to the City was $8,745.78. At this time, 50% of the mortgage has been forgiven and the balanced owed to the City is $4,372.89. The appraised value of the property is $155,000 but due to the subsidy provided by the City and TTH, the property can be sold to an income eligible buyer for $110,000.
This is another example of the continued partnership the City enjoys with TTH in the development of affordable housing in the community. TTH will retain interest in the property through the ground lease and will provide a lien to the City to ensure continued affordability. This type of situation has occurred previously and the City has forgiven the second mortgage to obtain long term affordability. Staff continues to believe forgiveness of the mortgage is a good use of grant funds because the property will remain affordable and recommends the mortgage be forgiven to allow this to occur. Please let me know if you have further questions.