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Resolution Authorizing Subordination of a Lien for the Property Located at 1017 North Harlem Avenue (SRP-049)
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Introduction
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The loan recipient is requesting a subordination of their Small Rental Property Rehabilitation Program (SRP) loan mortgage to a new first mortgage. The Village remains secure in a junior position on the title.
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Recommended Action
Approve the resolution.
Prior Board Action
The Board has taken the following prior action(s):
? RES 24-245: A Resolution Awarding a Small Rental Property Rehabilitation Loan and Authorizing the execution of a Loan Commitment and Agreement for the Property Located at 1017 North Harlem Avenue (SRP-049)
Background
On July 16, 2024, the Village of Oak Park Board of Trustees approved a $10,000 loan to the owner of 1017 North Harlem Avenue. The loan is supported by a mortgage, which was recorded against the property. The mortgage was recorded as a junior mortgage on the property, with the purchase loan mortgage being in first position.
Loans made under the Small Rental Property Rehabilitation Program have a two (2) term agreement, whereby if the homeowner successfully complies with the program, the Village discharges any indebtedness. The program guidelines provide that in cases where former loan recipients wish to refinance mortgages other than the Village's and request that the Village maintain its subordinate position, the Village will agree to maintain its junior position if:
1. The terms of the new first mortgage are more advantageous to the homeowner and are reasonable under current market conditions; and
2. There is adequate equity in the property to support the total proposed encumbrance, with at least 10% equity. (If necessary, the homeowner(s) will submit an appraisal as proof of equity); and
3. Any equity taken out of the property will be reinvested in the property.
The homeowner is seeking to refinance the primary mortgage. The current mortga...
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