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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: December 5, 2005 <br />Action Agenda <br />Item No. ~~ <br />SUBJECT: Approval of Subordination Agreement Related to Hurricane Floyd Mitigation <br />Program <br />DEPARTMENT: County Attorney/Manager PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): INFORMATION CONTACT: <br />10/30/03 County Attorney Letter Geof Gledhill, 919-732-2196 <br />w/attachments Rod Visser, 919-245-2308 <br />Exhibit from Register of Deeds Book 2407 <br />Subordination Agreements <br />PURPOSE: To approve an agreement related to a bank loan against property acquired by <br />homeowners who participated in the federal Hazard Mitigation Grant Program (HMGP) following <br />damage to their property during Hurricane Floyd in 1999. <br />BACKGROUND: In November 2003, the Board of Commissioners approved a subordination <br />agreement that facilitated a refinancing on property owned by homeowners who had acquired <br />that property after selling their flood-damaged home to Orange County in 2001 using federal <br />Hazard Mitigation Grant Program funds. The homeowners are now seeking a home equity loan <br />on their property at 1907 White Plains Road in the Colony Woods subdivision. Because of the <br />County's involvement in the original grant-supported real estate acquisition loan, the lending <br />institution requires a subordination agreement in order to extend the equity line of credit to the <br />homeowners. <br />Orange County acquired the homeowners' property at 61 1 Yorktown Drive in the Heritage Hills <br />subdivision south of Chapel Hill through the Federal Emergency Management Agency's Hazard <br />Mitigation Grant Program following Hurricane Floyd. The homeowners participated in the <br />"buyout" aspect of that program and received fair market value for their property, title of which <br />passed to Orange County under the provisions of the HMGP, The homeowners also received <br />$17,070 in a deferred loan from the State Acquisition and Relocation Fund (BARE) to assist <br />them in finding a comparably situated replacement home when they vacated 611 Yorktown in <br />2001, (Incidentally, the Yorktown home was thoroughly repaired following the flood damage <br />and has since been moved to Little River Park, where it serves as the caretaker residence for <br />that new County park). <br />The implications of the SARF program loan and the County's financial interest in the property <br />are described in an October 2003 letter (which was included in the agenda item materials when <br />the BOCC approved the previous subordination agreement regarding this property in November <br />2003) from the County Attorney, and in the exhibit from the Register of Deeds' recording, <br />Because Orange County was the designated "grantee" for these funds and passed them along <br />to the homeowners, the County has a security interest in the property for 10 years after the new <br />