TO: Mayor and Commissioners
FROM: David Weatherspoon, Interim Director, Neighborhood and Community Services
THROUGH: Neal de Jesus, Interim City Manager
DATE: July 2, 2019
Title
REQUEST FOR SUBORDINATION OF SECOND MORTGAGE FOR 810 NW 21st WAY
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Recommended Action:
Recommendation
Motion to Approve a request for the City to subordinate its second mortgage position in the amount of $50,000 for the property located at 810 NW 21st Way Delray Beach, FL 33445.
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Background:
Mr. Levins’ participated in the City's Neighborhood Stabilization Program (NSP) in December of 2012 and received a subsidy. 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. This request meets the criteria under the subordination policy. If the owner is taking out a second mortgage for necessary home repairs or reasonable improvements, the City will subordinate if:
1. Request conforms with Subordination Policy - attached - See highlighted section
a. Subordination for home repairs or reasonable improvements is allowed
b. According to policy combines payments cannot exceed 35% of gross monthly income:
i. Gross monthly income of applicant is $3,640
ii. First mortgage is $786.00
iii.New second line of credit will be $219.28
iv. Total new payment will be $1005.28 ($786 + $219.28) which is below 35% of total monthly gross
v. 35% of total monthly gross would be $1274
c. The loan is for a fixed rate of 6.25% and meets policy requirement
2. This item is time sensitive to lock in mortgage rate
Mr. Levins’ has elected to obtain a home equity line of credit (refinance) and lender has agreed to provide $29,691.76 for home improvements which is an allowable use of the policy.
The City’s decision whether or not to subordinate is rendered on a case-by-case ...
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