Agenda - 09-01-2009 - 4c - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 1, 2009 Action Agenda Item No. .~- SUBJECT: Community Home Trust -Use of Fannie Mae Uniform Community Land Trust Ground Lease Rider DEPARTMENT: Housing/Community Dev. PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Letter from the Community Home Trust Tara L. Fikes, (919) 245- 2490 Executive Director PURPOSE: To consider endorsement of the use of the Fannie Mae Uniform Community Land Trust Lease Rider by the Community Home Trust. BACKGROUND: Robert Dowling, Executive Director of the Community Home Trust (formerly known as the Orange Community Housing and Land Trust), has determined that the number of lenders willing to provide financing to land trust buyers would increase if the Trust used Fannie Mae's "Uniform Community Land Trust Ground Lease Rider" along with its ground lease. It should be noted that the Community Home Trust (CHT) provides permanent affordable homeownership opportunities by using a ground lease that restricts the resale of properties. The County has historically provided much needed "gap" financing for many CHT projects through various local, state and federal housing programs. Currently, there are three local lenders (Harrington Bank, BB&T, and RBC) that provide first mortgages to buyers of land trust properties. The Community Home Trust (CHT) has determined that the County's Declaration of Restrictive Covenants that assure long-term affordability and its resale provision makes it impossible for CHT to expand the number of lenders because other lenders require the Fannie Mae Rider be attached to the ground lease. If this rider is attached, Fannie Mae would be able to purchase loans from lenders which is important to most mortgage lenders. This is particularly true for such lending institutions as the State Employees Credit Union which requires the Fannie Mae rider. Attorney Geof Gledhill, Staff Attorney Annette Moore, the Chapel Hill Town Attorney, and town and County staff met with the CHT attorney and staff recently to discuss this request and the benefits and risks associated with the requested endorsement. These discussions are summarized in the attached letter from Executive Director Robert Dowling. After careful review, all involved agreed that endorsing this request was necessary to increase financing and re- financing opportunities for land trust homebuyers. It should be noted that the Chapel Hill Town Council endorsed this request at its June 22, 2009 meeting.