Agenda 04-02-2019 6-b - Approval to Acquire Property at 509 Central Avenue, Hillsborough

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2 The unit at the 509 Central Avenue property is a 1,077 square foot, 3-bedroom and 2-bath Ranch-style home. The total acreage of the property is .29 acres. The home was built in 1994. Adam M. Hooks of Tate-Mosher Appraisal Group, Inc. conducted the private appraisal, and the home was appraised for $175,000. Attachment 1 provides pictures of the unit and the Property Map from the Orange County GIS Records. See below for additional background information: ■ In FY 2000, Orange County designated $30,250 and $69,750 in FY 2001 HOME funds to EmPOWERment, Inc., for the purpose of providing second mortgage assistance for up to eight (8) low and moderate income families who were assisted in their housing search by EmPOWERment. ■ On June 27, 2003, EmPOWERment provided second mortgage assistance utilizing HOME funds identified in the preceding Bullet and implemented a Promissory Note, Deed of Trust and Declaration of Restrictive Covenant with Shannon J. Brown for the property at 509 Central Avenue, Hillsborough, NC. ■ The loan to Ms. Brown did not require any monthly principal or interest payments. However, if the property was sold or transferred by the Borrower, whether voluntarily or involuntarily or by operation of law, other than to a qualified buyer or assumer, and also given any date within 99 years after the date of recording, then all unpaid principal amount of the loan shall be due and payable. ■ Section 4 of the Declaration of Restrictive Covenant sets out the procedure for enforcement of the affordable housing requirements. See below for the procedure: o Orange County and EmPOWERment, Inc. are each granted a right of first refusal to purchase the property. o No sale assignment, sale, transfer, conveyance or other disposition of the property or any part there of whether voluntarily or involuntarily or by operation of law shall be effective unless and until the prescribed procedure has been followed. o Notice of Intent to Sell, not less than 90 days prior to the contemplated closing of transfer, shall be provided to Orange County and EmPOWERment, Inc. Note that the County did not receive notice until February 20, 2019 and the Closing was scheduled for February 22, 2019. The County received notice from EmPOWERment, Inc., and not the seller. o If the County elects to exercise its right of first refusal then it must notify the seller within 30 days and purchase the property within 90 days of receiving the Notice of Intent to Sell. If both EmPOWERment and the County wish to purchase and elects to exercise the right of first refusal, EmPOWERment, Inc., shall have priority. o If neither Orange County nor EmPOWERment advises the seller in a timely fashion of its intent to purchase the property, then the seller shall be free to transfer the property. ■ If the County does not exercise its right of first refusal, and the sale of the property during the affordability period is to a "nonqualified" buyer, the rule regarding the recapture of fifty percent (50%) of the net proceeds will apply. The rule calculation for determining the amount of net proceeds owed the County is as follows: Sales price less (1) selling cost, (2) unpaid principal of original first mortgage (USDA lien), and (3) the unpaid principal of the County and any other government lien secured by deferred Deed of Trust and Note.