TO: Mayor and Commissioners
FROM: Michael Coleman, Director, Community Improvement
THROUGH: Chief Neal de Jesus, Interim City Manager
DATE: February 7, 2017
Title
REQUEST FOR SUBORDINATION OF SECOND MORTGAGE FOR 243 SW 4TH AVENUE
Body
Recommended Action:
Recommendation
Motion to Approve a request for the City to subordinate its second mortgage position in the amount of $10,908.10 for the property located at 243 SW 4th Avenue.
Body
Background:
Ms. Thomas participated in the City's State Housing Initiatives Partnership Program (SHIP) under its Subrecipient Housing strategy in April 2009. Subsidies provided for purchase assistance through the Neighborhood Services Division are secured by a mortgage and promissory note. All deferred payment loans require the applicant to maintain ownership/residence for a specified period according to the amount of the grant. Loan amounts less than $35,000 per unit have a recapture period of fifteen (15) years.
Ms. Thomas' mortgage company has agreed to modify the current loan by reducing the interest rate from 5.375% to 3.750%, increasing the monthly payment (including insurance and tax escrows) from $1,145.35 to $1,305.02 and reducing the term of the loan from 30 years to 15 years. However, it reduces and captures a cost savings of $202,368.80 over the term of the loan. There is also a 3rd mortgage from the Florida Hardest Hit Program through the Florida Housing Finance Corporation in the amount of $42,000 that was recorded in 2013 that has approved the subordination request.
Ms. Thomas' originally submitted a subordination request in September 2016 from BBT Bank and it was approved at the October 4, 2016 commission meeting. However, she was able to find a better interest rate for a shorter term and therefore did not go forward with that subordination. If approved by the Commission, the City will continue to be in the second secured position behind the new first mortgage loan.
The City’s decision whether or not...
Click here for full text