Explanation
BACKGROUND: The Housing Division has operated programs that are funded by both local and federal funding sources, in the form of grants and loans that provide critical and emergency home repairs such as roof replacements, water heater replacement, foundation stabilization, and many more repairs/improvements that ensure that residents are not faced with homelessness or additional financial hardship since 1986. In 1988, the City of Columbus made a CDBG funded home repair loan to Cora Towns for her home at 720 South Champion Avenue for $27,000.00. Ms. Towns has passed away and ownership of the home has passed to her heirs in 2023 by order of the Franklin County Probate Court. The family, through their attorney, has requested that the mortgage be forgiven.
Recognizing that there is a limited useful life of the home improvement and value for the City’s investment as well as the importance of ensuring that the City’s programs do not perpetuate inequitable outcomes or limit wealth building opportunities, the Department of Development implemented a loan forgiveness policy which was authorized via Ordinance 0939-2023 for its homeownership services. All federally funded loans that will be considered for forgiveness have met the required affordability periods based on the federal funding source.
This Legislation is to seek the approval of the forgiveness of the loan since it does not fall under the most recent implementation of the loan forgiveness policy due to the fact that the property has transferred to the heirs and therefore does not meet the criteria within the current policy. The same intent of the forgiveness policy applies here as it is still assisting with wealth building by the homeowner and family. There are no CDBG compliance issues with the forgiveness of this loan.
Columbus City Code Sections 335.01 and 335.012 guide the loan forgiveness policy, which allows the Director to authorize the forgiveness of individual loans up to $2,500,...
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