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CHT asserts that its homebuyer mortgage funding from the NC Housing Finance Agency will <br /> be exhausted in 2015, making it necessary to identify alternative funding sources. To address <br /> this issue, CHT is proposing to allow lenders to secure their investment with a fee simple <br /> interest. Currently, CHT can only grant a leasehold interest in the home as collateral. This <br /> leasehold interest secures the home, but not the land upon which the home is situated. Mr. <br /> Dowling asserts that this form of collateral attributes to there being only one bank in the region <br /> that is willing to extend financing to its buyers. While a fee simple interest could potentially <br /> result in a lending institution foreclosing on the home and the property, CHT homebuyers have <br /> never surrendered their home to a lender through foreclosure. Historically, CHT has re- <br /> acquired property at risk of foreclosure and plans to continue this trend. <br /> To address the issue of difficulty in selling homes, CHT has proposed that it be allowed to sell <br /> homes that contain federal subsidy through the HOME program to households with an income <br /> of up to 115% of the Area Median income (AMI), where permissible by US Department of <br /> Housing & Urban Development (HUD) guidelines. The HOME Program imposes an <br /> affordability period on projects assisted with HOME funds in order to ensure that HOME <br /> investments yield affordable housing over the long term. For homebuyer projects such as the <br /> Community Home Trust, the length of the affordability period is based on the amount of HOME <br /> funds invested in the property: <br /> HOME FUNDS PROVIDED AFFORDABILITY PERIOD <br /> <$15,000 5 years <br /> $15,000 - $40,000 10 years <br /> > $40,000 15 years <br /> However, the restrictive covenants CHT executes with the County stipulate 99 years of <br /> affordability. As a result, houses that are originally sold with the assistance of HOME funds <br /> that are later re-acquired by CHT must be re-sold to a family earning less than 80% AMI. <br /> Otherwise, CHT must refund the HOME funds invested to the County from the proceeds of the <br /> sale. <br /> FINANCIAL IMPACT: There is no financial impact regarding the policy allowing CHT to extend <br /> a fee simple interest in properties sold. However, should the Board approve the proposed <br /> policy change regarding selling homes to families above 80% AMI where the federal subsidy <br /> remains in the home, this may reduce the number of low and moderately-low income families <br /> served by the Orange County HOME Consortium. Notwithstanding this reduction in low income <br /> families served, the affordability period as mandated by HUD would be met. <br /> Bonnie Hammersley said there was also request by CHT for the Board to consider a <br /> charter. She said she is meeting with the local managers to bring a unified recommendation to <br /> the Assembly of Governments in November. <br /> Commissioner Gordon asked what would be involved in the charter. <br /> Bonnie Hammersley said staff is looking at the current Community Home Trust model, <br /> and they will be inviting Robert Dowling to meet with them to talk about the current model. <br /> Commissioner porosin asked about the mechanics of the change that is being <br /> requested. He asked whether approved change will only be effective going forward, or <br /> whether it will affect homes currently being sold. <br /> Robert Dowling said the HUD guidelines have a much shorter affordability period than <br /> the 99 year restrictions CHT imposed on itself. He said the home funds and local funds have a <br />