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f <br /> 1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> Action Agenda <br /> Item No. 6-f <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: September 17, 1996 <br /> SUBJECT: Housing Rehabilitation Program- Deferred Loan Policy <br /> DEPARTMENT: Housing and Community Development PUBLIC HEARING: (Y/N) ' 'q <br /> BUDGET AMENDMENT: (Y/N) }` ?s <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> Resolution Tara L. Fikes <br /> TELEPHONE NUMBERS: -- ext. 2490 <br /> Hillsborough 732-8181 <br /> Chapel Hill 968-4501 <br /> Durham 688-7331 <br /> Mebane 227-2031 <br /> PURPOSE: <br /> To adopt a resolution establishing a policy regarding the County's Housing Rehabilitation Deferred <br /> Loan Program. <br /> BACKGROUND: <br /> All houses repaired under the County's Housing Rehabilitation Programs are completed under a <br /> Deferred Loan Program. Under a deferred loan program,no cash loan payments are required and the <br /> loan is deferred for a period of five, eight, ten, fifteen or twenty year period depending upon the <br /> amount of the rehabilitation costs. The County's investment is secured by a Promissory Note and <br /> Deed of Trust executed by the property owner with the later document recorded in the Register of <br /> Deeds office. Since, the Deed of Trust is a lien on the property, the property owner cannot use the <br /> property as collateral for future loans without first obtaining the County's written consent. <br /> In recent months, the County has received requests from homeowners to execute Release Deeds, <br /> cancel Deeds of Trust and/or subordinate our Deeds of Trust to private mortgage financing. Most of <br /> these requests have been from persons refinancing their first mortgage in order to consolidate other <br /> outstanding debts. In order to establish a fair, impartial process for the review of these requests, <br /> staff is recommending the establishment of a clear policy. <br /> This policy would: <br /> 1. Subordinate the County Deed of Trust to security interest in the property to an amount, with the <br /> combination of the new loan and the County's lien, not to exceed 90% of the Fair Market Value of <br /> property as established by an independent appraiser. <br /> 2. Authorize the County Manager or his designee to sign a Release Deed or cancel a Deed of Trust <br /> and Promissory Note upon satisfaction. <br />