HomeMy WebLinkAbout88-058 RESOLUTION NO. ~--~"
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
WHEREAS, the City of Port Townsend has received $54,716 in Community
Development Block Grant Funds during 1988 and appropriated $50,216 for
loans to replace sidewalks and improve buildings in the business districts
of the city, and,
WHEREAS, the Port Townsend City Council established a HUD Loan Panel
to screen applications and approve loans under guidelines established by
the Department of Housing and Urban Development, and,
WHEREAS, it is deemed appropriate and necessary that certain terms
and limits for the loans be established and approved by the City Council
prior to acceptance of loan applications, now, therefore,
BE IT RESOLVED, that:
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 for rehabilitation and preservation must be at least
$1,000 but may not exceed $25,000.
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 six percent (6%) per
annum with a rebate offered for early repayment according to the following
schedule:
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 berebated for loans paid off
within 24 months of the date of recorded lien.
c. All interest in excess of 2% will be rebated for 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.
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 promisory 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.
PASSED by the Port Townsend City Council on August 2, 1988
Attest:
City Cl~rk
Mayor