HomeMy WebLinkAboutHEDRA 09-10-09 IV.a Residental LoanSeptember 4, 2009
TO: Hastings EDR~
FROl\f: John Crrossman
RE: Residential loan to 1\,larcia Biermann, 1413 Maple St.
A,fs. Biennann has made progress on meeting the conditions EDRa specified in January
and February 2009 to be met prior to approving a residential loan to pay off the City's
assessment on the property for replacing a sewer line. Ms. Biermann asked that the loan
be deferred in order to reduce her mortgage payment, thereby making it possible to keep
the house. The EDRA conditions were:
1) The mortgage company would restructure the terms to make the payment affordable to
her. She has recently been offered a lower payment under The 1\,laking Home Affordable
federal program. The September flu'ough November payments are a trial period, at the
end of which she will be offered a rewritten mortgage. Ms. Biermann affirms she can
make the restructured payments, without the assessment.
2) Documented household income qualifies as low/moderate income for 3 persons. Proof
of income and household expenses have been provided which do qualify ly1s. Bieimann
as moderate income. This is the income criteria in EDRA's loan programs and also flee
City s to qualify for assessment abatement for street construction.
3) The Board asked for confirmation that the assessment for sewer replacement was an
exceptional cost for a homeowner. Public Works Dep<utment did confirm that the normal
range of costs is $3.000 to $5,000 for fliis type of work. Soil conditions were responsible
for the higher cost, $9,174. The assessment added $112 to the monthly payment.
The Board indicated they would consider a combination of $5,000 as a deferred loan and
the remainder as a forgivable loan. The assessment balance at the beginning of 2009 was
$8,526.83. The balance will be reduced by payments made during 2009, so the current
amount of the forgivable loau will haee to be determined.
The 2009 budget includes adequate fiords for residential loans and for emergency grants
for this request. The deferred part would be paid back on sale of the house. The
forgivable p:ut would be reduced by 20% each year she owns the house. The loan will be
secured by a note, agreement and mortgage (second) on the property.
Staff will time the execution of the loan and payoff to the trial period, but the first
consideration will be paying off flee assessment in time so that flee mortgage company
will not Kaye to escrow for 2009.
ACTION: Consider approval for the package as described. If approved the documents
will be drawn and executed and the assessment paid off.