Submitted By
Tammie Grossman, Director of Development Customer Services
Reviewed By
A.M. Zayyad
Agenda Item Title
Title
A Resolution Authorizing Subordination of a Lien for the Property Located at 834 South Austin Boulevard (MSA 2202-G)
End
Overview
Overview
The loan recipient is requesting a subordination of their Multi-Family Housing Incentives Program (MFHIP) mortgage to a new first mortgage. The Village remains secure in a junior position on the title.
End
Recommendation
Recommendation
Approve the resolution.
Fiscal Impact
The subordination is not a direct cost to the Village's general fund. Staff time in document preparation, which is a regular part of loan portfolio management, is the only cost.
Background
The Multi-Family Housing Incentives Program is a program of grants for owners of multi-family buildings with four or more units. The purpose of the program is to allow owners to upgrade the physical condition of multi-family buildings and to expand the housing choices of renters to encourage diversity. To accomplish these purposes, the Village awards eligible property owners a grant, and in return, the owner enters into a three-year Marketing Services Agreement which requires the owner to market the building's rental units with the Oak Park Regional Housing Center.
The Village records Multi-Family Housing Incentives Program grants as a forgivable mortgage lien against the property, with the purchase mortgage having priority over the Village's lien. When the grant term expires the mortgage is released. The Village records the grant as a mortgage so that it has an enforcement mechanism should the owner not comply with the Marketing Services Agreement. If an owner does not fully cooperate with the Marketing Services Agreement, one option would be to cancel the grant and seek reimbursement.
During the grant term, a building owner may seek to refinance their purchase mortgage. When a property is refinanced, the original purchase loan is...
Click here for full text