Explanation
BACKGROUND:
This legislation authorizes the Director of the Department of Development to forgive the principal and accrued interest for the property located at 2393 Canal Bay Way, Columbus, Ohio 43232 that was originally developed by the non-profit housing owner Columbus Housing Partnership dba Homeport for low income and affordable housing. A HOME loan was made on February 16, 1998, in the amount of $1,840,000.00 from the City of Columbus for site acquisition and construction of the project which has been providing affordable housing for eligible residents since that time. The interest rate on the loan is 1.00% and the current total balance exceeds $2,150,000.00. The required federal compliance period for this loan is complete and the restrictive covenant can be released. The property has never operated at a profit. The completion of the 20-year HOME affordability period was completed on September 6, 2020.
The property is being refinanced and syndicated to allow the property to remain affordable housing for decades to come. The owner has completed OHFA’s threshold and underwriting process and is expecting final approval to recapitalize using 4% LIHTC funding. Homeport will remain the managing member of the property. The owner is not requesting any additional funds or competitive resources from the City to do so.
To recapitalize the property, it must take on additional debt. The owners must show the additional debt, and the existing city debt can be paid in full for the new debt not to be considered a grant. If it is considered a grant, the low-income housing tax credit basis and the corresponding tax credit equity will be reduced causing a funding gap which would create a need for additional funds or competitive resources for the City, County, or State.
The debt forgiveness policy of the Development Department allows debt forgiveness in those instances in which the affordability period has been completed, and debt forgiveness will facilit...
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