HomeMy WebLinkAbout09-012 Amending res#88-58. Terms and limits for loans from community development block grantRESOLUTION NO. 09-012
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON, AMENDING RESOLUTION 88-58 ESTABLISHING
THE TERMS AND LIMITS FOR LOANS FROM
THE COMMUNITY DEVELOPMENT BLOCK GRANT FUND
WHEREAS, Resolution 88-58 was adopted August 2, 1988 setting terms and loan limits
for the Community Development Block Grant Fund; and
WHEREAS, the Community Development Block Grant Fund is a revolving loan fund
intended to encourage downtown reinvestment and rehabilitation, preservation, and restoration of
historic properties in the Historic District; and
WHEREAS, the HUD Loan Committee (comprised of HPC Liaison, City Council
liaison, one member of the Lending Community, and Ywo members of Main Street's Economics
Committee), by Main Street letter dated February 19, 2009, has requested the City Council
consider an increase in the loan limit from $25,000 to $40,000, and a change in interest rate from
6% to 5%, to encourage more applications and provide more funds in circulation, and the City
Council supports this request.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port
Townsend as follows:
Resolution No. 88-58, a Resolution of the City Council of the City of Port
Townsend Establishing the Terms and Limits for Loans from the Community
Development Block Grant Fund, is amended as follows (strike is deleted,
underline is added):
1. All eligible property owners will be granted an equal opportunity to
apply for loans during the application periods established by the HUD Loan Panel.
2. Loans for sidewalk replacement must be at least $1,000 but may not
exceed $5,000. Loans fox rehabilitation and preservation must be at least $1,000
but may not exceed ~AAO$40,000.
3. The maximum term of the loans may not exceed ten years and all
contracts will include a "Due on Sale" clause with annual or semi-annual
payments.
4. The interest rate on all contracts will be fivesi~ percent (§5%) per
annum with a rebate offered for early repayment according to the following
schedule:
Page 1 oft Resolution 09-072
a. All interest charges will be rebated for loans paid off within 12 months of the
date of recorded lien.
b. All interest in excess of 1 % will be rebated fox loans paid off within 24 months
of the date of recorded lien.
c. All interest in excess of 2% will be rebated fox loans paid off within 36 months
of the date of recorded lien.
d. All interest in excess of 3% will be rebated for loans paid off within the 48
months of the date of recorded lien.
e. All interest in excess of 4% will be rebated for loans paid off within the 60
months of the date of recorded lien.
5. Final allocation of funds by the HUD Loan Panel will be made as soon
as possible after the close of the application period.
6. Interest charges and loan periods begin when the lien is recorded and
funds are disbursed.
7. Funds not disbursed within six (6) months of the "Notice of Award"
may be reallocated at the discretion of the HUD Loan Panel.
8. Each loan will be evidenced by a promissory note secured by a
mortgage or deed of trust recorded against the property. As a rule a title search
will be made to establish ownership, the cost of which will be paid by the property
owner. However, in consideration of the cost for a title search, the HUD Loan
Panel may waive a title search for projects under $10,000.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this sixteenth day of March, 2009.
Attest:
Pamela Kolacy, M C
City Clerk
~ ,~~~` ~~
Michelle Sandoval, Mayor
Approved as to form:
\~'~
John P. Watts
City Attorney
Page 2 oft Resolution 09-012