Agenda - 12-09-2014 - 6a - Laserfiche WebLink

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9 1 Robert Dowling said these two requests are related but not linked. He saidthe fee 2 simple request is an enticement for banks to make loans to the buyers. He said the CHT has 3 never had a foreclosure, as they would pay off the bank and take the property in order to keep 4 the equity that is in the home. 5 He said the second part of this is leaving in the subsidy in order to widen the window of 6 people who are eligible to purchase the homes. He said there is a struggle to sell homes 7 becausethe banks will not lend moneyand because HUD income limits have declined. 8 Commissioner Gordon said she understands that the issue tonight is different from the 9 charter issue. She said what she wanted to articulate was that the managers could expand 10 their discussions to include the related topic. 11 Commissioner Rich noted thatHillsborough and Chapel Hill have already voted in favor 12 of this proposal.She said the charter has been out for about a year, and the Board saw it at a 13 meeting last November. 14 15 A motion was made by Commissioner Dorosin,seconded by Commissioner Price to 16 approve the policy changes as requested by Community Home Trust to permit CHT to extend a 17 fee simple interest to mortgage lenders and permit homes to be sold to persons up to 115 18 percentAMI where permitted by HUD. 19 20 Robert Dowling said the word “unrestricted’ was not used by him, nor was it used by 21 Commissioner Dorosin in his motion. He clarified that every time HOMEfunds are put in, the 22 County draws up restrictive covenants against that property, specifying that the home will stay 23 affordable for 99 years. He said “unrestricted” fee simple interest means that the bank wants 24 this covenant to disappear or else it is no good to them. He said this is what is holding some of 25 the banks back. 26 Chair Jacobs asked if this is part of the motion. 27 Robert Dowling said it is not used in Commissioner Dorosin’s wording. 28 Commissioner Dorosin askedif would be better to amend the wording. 29 Robert Dowling said when this is implemented he wants it to be crystal clear what is 30 needed to enticethe banks to lend money. 31 Chair Jacobs said if this change is made, he will oppose the motion. He said the CHT 32 and the Board agreedto the 99 year restriction to make sure the affordability is assured. He 33 said he is fine with making it easier for residents to buy the homes, but doing away with 34 affordability is a much more complicated discussion. 35 Commissioner Dorosin questioned what would be in place between CHT and abuyer to 36 insure long term affordability if covenants are not in place. 37 Robert Dowlingsaid the CHT holds all of the deedsand would receive notice if there 38 was a foreclosure. He said CHT would step into pay off the bank and take the property back. 39 Commissioner Dorosin said if there isno deed restrictions on the property there is 40 nothing to prevent the home owner from selling it again. 41 Robert Dowling clarified thatthere will always be a restrictive covenant on the property. 42 He said if the CHT did not step in to buy the property, then the bank takes it without restriction. 43 He said therestrictions are in place, and are only terminated if CHT does not step in to prevent 44 a foreclosure. He said the banks will only lend with no restrictions. He said he was not 45 suggesting that they forego the 99 year affordability. 46 Chair Jacobs asked about the possibility of an affordable housing bond that includes 47 setting aside $1 million for loans to CHT buyers so that banks do not have to be involved. 48 Robert Dowling said this s a good idea. 49 Commissioner McKee said this will take the 99 year restrictionofffor the banks, but 50 CHT and the County can still impose the affordability time frame.