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coMAmmy <br />J rC71Y) :1 MW Ii., <br />P O Box 307 <br />Carrboro NC 27510 <br />919.960.0076 tel <br />919.968.4030 fax <br />soniag@mindspring.com <br />BOARD of <br />DiREcroRs <br />Alison Werner <br />Cbair <br />josh Gudira <br />Vic&chdr <br />Pucka Bateman <br />Madeline Jeh'ieison <br />Susan Levy <br />ShideyMarshaU <br />Myles Preslar <br />STAFF SUPPORT <br />Orange Coromunrty <br />Housing Corporadon <br />Robelrraawl ng <br />Executive Director <br />Sonia C;anison <br />Land Trust Projea <br />Manager <br />September 27, 1999 <br />John Link, County Manager <br />P O Box 8181 <br />Hillsborough NC 27278 <br />Dear Mr. Link <br />The Board of Directors of the Community Land Trust in Orange County <br />respectfully request that the subsidy monies for the Scadett Drive <br />Townhomes be provided as a grant to the project <br />Our reasons for this request are as follows: <br />1. Because these townhomes will be part of the land trust (through the <br />ground lease agreement), the units will be permanently affordable and <br />will never require additional subsidy. Subsidy monies are traditionally used <br />in homeownership developments as second mortgages in order to secure the <br />Town's investment. However, once these second mortgages are paid off, the <br />homes tend to escalate in price and become unaffordable. As a part of the <br />land trust, homes not only remain affordable, they tend to become more <br />affordable over time. <br />2. By granting the funds to the development, the townhomes can be <br />marketed at the true cost to the buyer (i.e. $85,000), rather than at the <br />developer's cost ($115,000) which includes the development of the land. <br />This will simplify the marketing of the homes and help make the project a <br />success. The alternative, to sell the homes for $115,000, will require an <br />explanation of the second (and perhaps third) mortgage, in addition to the <br />rather complicated explanation of the land trust modeL The more <br />complicated the sale becomes, the more difficult it will be to sell the homes. <br />3. By granting the subsidies to the development and allowing the sales <br />price to be $85,000, the homebuyers will be able, if necessary, to borrow <br />closing costs from the banks. This may be impossible if the homes are <br />priced at $115,000, and the appraisal does not exceed that amount. <br />We appreciate the support you have provided to this first land trust development <br />and, like you, we are most interested in assuring its success. We believe that <br />granting the various subsidy monies the County has approved for this <br />development will be extremely beneficial to the ultimate success of the Scarlett <br />Drive Townhomes. <br />Thank you for your consideration of this request. If you have any questions, <br />please contact Robert Dowling at Orange Commuaity Housing Corporation at <br />967-1545. <br />cerre_ly,( <br />Alison Weiner <br />Chair, Board of Directors <br />Community Land Trust in Orange County