Explanation
BACKGROUND: This legislation authorizes the Director of the Department of Development to execute modified loan documents between the City of Columbus, Department of Development, formerly known as the Department of Trade and Development (City) and Framingham Village, LLC as successor to Framingham Homes Limited Partnership (Borrower) to allow for an extended maturity date to December 31, 2044, a reduction of the interest rate to 0% and to modify the name of the borrower. The City made a HOME loan to the borrower of $602,000.00 on September 25, 1996 for the construction of 64 multifamily units and 22 single family units. The loan documents were amended in 2012 to clarify the number of HOME assisted units in the project. The loan documents were amended again in 2014 pursuant to Ord. 0823-2013 to permit a partial release of the mortgage and restrictive covenant that allowed the single-family homes to be sold to existing tenants. Since then, the property’s Low-Income Housing Tax Credit initial 15-year compliance period and the HOME 20-year compliance period have been met and the project has been transferred from the initial borrower to Framingham Village, LLC.
Emergency action is requested to allow Framingham Village, LLC to refinance their first mortgage loan which is scheduled to mature in December 2024.
Fiscal Impact: None
Title
To authorize the Director of the Department of Development to execute modified loan documents for Framingham Homes Limited Partnership to extend the maturity date of the loan to December 31, 2044, to reduce the interest rate on the loan to 0% and to change the name of the borrower to the current owner of the property, Framingham Village, LLC.; and declare an emergency. ($0.00)
Body
WHEREAS, the Department of Trade and Development, now known as the Department of Development made a loan to Framingham Homes Limited Partnership, an Ohio limited partnership, on September 25, 1996 for the purpose of funding a long-term commitment of affordability for nine rental units; and
WHEREAS, this loan was made through the Rental Housing Production and Preservation Program with HOME Investment Partnership Program Funds received from the U. S. Department of Housing and Urban Development; and
WHEREAS, this loan has previously been modified in 2012 to clarify the number of HOME assisted units in the project; and
WHEREAS, the loan was further amended in 2014 pursuant to Ord. 0823-2013 to permit a partial release of the mortgage and restrictive covenant.
WHEREAS, subsequent to this, the compliance periods for the Low-Income Housing Tax Credit initial 15-year period and the 20-year HOME compliance period have been satisfied.
WHEREAS, the project ownership has been transferred from Framingham Homes Limited Partnership to Framingham Village, LLC and making the new ownership entity subject to the loan; and
WHEREAS, the project owners wish to refinance their first mortgage loan which is maturing in December 2024 and the lender requires that the City loan maturity date be extended beyond the term of the new first mortgage loan; and
WHEREAS, now that the Low-Income Housing Tax Credit initial 15-year compliance period has been satisfied, the project owners wish to have the City loan interest rate reduced to 0%;
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to execute modified loan documents between the City of Columbus, Department of Development, formerly known as the Department of Trade and Development (City) and Framingham Village, LLC as successor to Framingham Homes Limited Partnership (Borrower) to allow for an extended maturity date, a reduction of the interest rate to 0%, and to modify the name of the borrower so that they may refinance their mortgage loan which is scheduled to mature in December 2024 and for the City not to create any undue hardship so that they may refinance, thereby preserving the public health, peace, property, safety, and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of the Department of Development be and hereby is authorized to modify loan documents for the new owner, Framingham Village, LLC to extend the maturity date of the loan to December 31, 2044, to reduce the interest rate on the loan to 0% and to change the name of the borrower.
SECTION 2. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this Ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.