Title
Resolution to Amend City Administrator Authority to Sign Lien Discharges, Sign Subordinations, and Forgive Liens for Affordable Housing Single Family Owner Housing Programs
Memorandum
The City of Ann Arbor has provided homeowner down payment assistance and homeowner rehabilitation to low-income households for over 50 years. The City currently has several hundred active liens on properties. The source of funding has been federal CDBG, NSP and HOME funds.
The typical loan term is a 30-year, 0% interest, deferred payment loan that is forgiven after 30 years. If the owner sells or transfers the property prior to the 30-year term, then the loan is repaid to the City out of any proceeds from the sale. However, over time there have been different repayment requirements included in these liens, including some that have no forgiveness at all, after any period of time.
In 2011, on the heels of significant housing market shifts and foreclosures, the City Council granted authority to the City Administrator to waive repayment of liens when the proceeds were not available from the sale of the property (Resolution R-11-439). The following resolution seeks to extend this authority more broadly, to provide the City Administrator the authority to waive repayment of any lien that was enacted to benefit low-income property owners at a point 30 years or more after the lien's signature date. This will provide the opportunity for a previously qualified low-income household to fully benefit from any increased value on the property upon sale.
The Washtenaw County Office of Community and Economic Development (OCED) is requesting that Council give authority to the City Administrator, or designee, to sign lien discharges, lien subordinations and to forgive a lien of any amount for housing units that previously received acquisition, down payment or rehabilitation assistance from the City.
Lien discharges and subordinations are routine administrative activities for OCED. By...
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