Agenda 12/14/1999 - Laserfiche WebLink

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Housing Rehabilitation Board and allowed for documented increased cost related to taxes and insurance as long as the rent plus utilities do not exceed more than 35 percent of the LMI tenant's adjusted gross annual income. The investor-owner will be required to sign an agreement with the City specifying he will abide by these rent controls for the term of any lease signed during the five-year project. Investor-owners are required to maintain sufficient insurance coverage to replace or repair the rehabilitated unit should there be a fire or other disaster. Rental properties which become vacant during the five year term must be rented within three months of vacancy or the loan will be due and payable. Extensions may be granted if the Housing Rehabilitation Coordinator is furnished sufficient evidence documenting good faith efforts to rent the property were initiated immediately upon property availability and are on-going. During the term of the loan it is the responsibility of the investor-owner to notify the Housing Rehabilitation Coordinator immediately when the unit becomes vacant and to have the potential tenant submit an application to verify income eligibility. The City of Martinsville's first priority is to rehabilitate owner-occupied single-family houses, followed by single-family rental properties, and lastly multi-family dwellings. Homes that are a threat to life or safety will be addressed first. Homes lacking indoor plumbing will be addressed second. FINANCIAL ASSISTANCE AVAIl,ABLE A. Owner-Occupied: Forgivable Loan Income-eligible owner-occupants of the Southside Neighborhood interested in housing rehabilitation assistance will be provided 50% of the rehabilitation cost as a 10-year forgivable loan and 50% of the assistance as an amortized loan based on a 10-year term at 0% .interest. The monthly loan payment will be based on the household's ability to pay. Should the household's ability to pay exceed the monthly payment needed on the amortized loan, the household will be required to pay up to the ability-to-pay amount, reducing the forgivable portion of the loan by an amount equal to the difference. Should the household's ability to pay be less than the full monthly payment needed on the amortized loan, the unpaid balance of each monthly payment shall be deferred to the end of the loan term. A lien will be placed against the property for the full amount of the rehabilitation assistance at the time of loan dosing. The 50% forgivable loan is proposed based on the limited ability of the owner- occupants to repay 100% of the loan over a reasonable term. The forgivable portion of the lien will be reduced proportionately as long as the residency terms are complied with and the required payments on the amortized loan are made each month. At the end of the loan term, the City has the option to forgive all or any portion of the remaining deferred amounts or to work out a refinancing package to pay them off.