Title
Resolution to Approve the Subordination of the City’s Mortgage Lien to the Bank of Ann Arbor’s Federal Home Loan Bank Mortgage on Avalon Housing’s Properties at 518, 520 and 522 S. Division and to Approve an Intercreditor Agreement with Washtenaw County
Memorandum
On March 1, 1993 (R-87-3-93) Council approved $405,000 in funding for Avalon to acquire and rehabilitate 518, 520 and 522 S. Division. Following are the funding sources:
$345,000 City federal HOME funds 30 year, 1% interest
$60,000 City federal CDBG funds 30 year, 0% interest
$75,000 County local Housing Contingency funds 30 year, 1% interest
$90,000 Federal Home Loan Bank Funds 15 year, 0% interest
$570,000 TOTAL
On July 2, 2007 (R-309-7-07) Council approved an amendment to the City’s liens to convert them to 99-year, 0% interest, deferred payment loans. Instead of placing the City’s liens on all three properties together, the balance owed on the liens were divided among the three properties in the following manner based on the taxable value of the properties:
518 S. Division $60,000.00 CDBG and $108,548 HOME 99 year, 0% interest
520 S. Division $93,638.00 HOME 99 year, 0% interest
522 S. Division $112,364.98 HOME 99 year, 0% interest
The FHLB-TCF lien term has expired and the Federal Home Loan Bank has awarded Avalon $160,000 in new funds to rehabilitate these properties. Bank of Ann Arbor is the local bank processing these loans. BOAA does not charge a fee or receive any payments from Avalon over the life of the loan. BOAA does get CRA credit and they are liable to FHLB if Avalon does not maintain the units as affordable housing for 15 years. Therefore, Bank of Ann Arbor is requesting a first lien position, which is typical for affordable housing projects with private financing. The FHLB-BOAA funds are 0% interest, deferred payment loans, forgiven after 15 years. The County wi...
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