Explanation
BACKGROUND: This legislation authorizes the City of Columbus, Department of Development to release its recorded mortgage interests in a residential property located at 1407-1409 North Fifth Street that secures one City loan with outstanding balances totaling $25,700 made to borrower Northside Development Corporation. The purpose of the release is to enable Northside to sell the property to an individual who will maintain this twin single as affordable housing. The purchaser of the property meets the requirement of 80% and below Area Median Income. This ensures the property will not be resold through an unavoidable foreclosure action. The action would, however, require the city to forgive $25,700 (or the original loan amount).
Northside Development Corporation purchased this property using city HOME dollars in 1993 to create a rental income portfolio. Due to the large number of rental units in the area Northside has shifted focus to homeownership development. In addition, the properties are in need of significant repair and maintenance. Northside is unable to effectively manage the properties and lacks the operating dollars to complete the rehabilitation work needed. An existing tenant in the twin single has agreed to purchase the property for $38,000. Code Enforcement has inspected the property, and outstanding repairs have been made and were to be paid for from proceeds of the sale of the property. The mortgage will be transferred to the new owner with a five year Restrictive Covenant and forgivable Mortgage requiring the owner to live in one-half of the property for five years and the City will forgive the loan. Should the property sell or transfer ownership, the entire $25,700 will be due in full. In order to complete the sale for the negotiated price, the City must agree to allow the new owner to assume the mortgage with the forgivable clause for the $25,700. This transaction would enable Northside to satisfy the first mortgage and closin...
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