09-30-08 Special Agenda• CITY OF RICHFIELD, MINNESOTA
TUESDAY, SEPTEMBER 30, 2008
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL COUNCIL CHAMBERS
6700 PORTLAND AVENUE
7:30 A.M.
AGENDA
Call to order
Roll call
1. Consideration of subordination request of HRA's Transformation Home Loan at 6520
Girard Avenue
Staff Report No. 44
Notes:
• Adjournment.
Auxiliary aids for individuals with disabilities are available upon request. Requests must
be made at least 96 hours in advance to the City Clerk at 612-861-9738.
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AGENDA ITEM # )L
REPORT #
J STAFF REPORT
HOUSING AND REDEVELOPMENT
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AUTHORITY MEETING
SEPTEMBER 3~, 208
REPORT PREPARED BY:
REPORT PRESENTER:
KIRSTEN PARTENHEIMER, HOUSING
SPECIALIST
NAMti, T/7%F.
JOHN STARK, COMMUNITY DEVELOPMENT
DIRECTOR
NAMG, TIT /Ji
DEPARTMENT DIRECTOR REVIEW:
ACTING REVIEWED BY EXECUTIVE
DIRECTOR:
Tutzt:
ITEM FOR HRA CONSIDERATION:
Consideration to approve a subordination request of a Housing and Redevelopment Authority
Transformation Homes Loan at 6520 Girard Avenue.
I. RECOMMENDED ACTION:
By Motion: Approve subordination request of a Housing and
Redevelopment Authority Transformation Homes Loan at 6520 Girard
Avenue.
II. BACKGROUND
Keith and Cynthia Shellberg of 6520 Girard Avenue requested a subordination of
their Transformation Homes Loan of $8,885, received in March of 2006. The
subordination request exceeds the Housing and Redevelopment Authority's (HRA)
policy for loan-to-value ratio (LTV) by 1.55%, and therefore is being brought to the
HRA for consideration.
The subordination request meets all other requirements under the HRA's policy.
• The Schellbergs are refinancing their primary mortgage to a lower interest rate of
5.375%. The Transformation Homes Loan will remain in third position (its current
position) if the request is approved. No equity will be taken out.
093008 6520 Girard subordination request
HRA staff has reviewed the application and recommends approval of the
subordination.
III. BASIS OF RECOMMENDATION
A. POLICY
• According to the HRA Subordination and Satisfaction Policy, "The total
debt secured by the property, including the HRA (ien and all superior
mortgages, does not exceed 80% of the documented market value of
the property."
B. CRITICAL ISSUES
• The loan-to-value ratio is 81.55%.
• Subordination request meets all other HRA guidelines.
• The HRA lien is currently in third position and will remain in third
position if the subordination request is approved.
• No additional equity~will be taken out with this new mortgage.
• Taxes are current.
• Schellbergs are refinancing to a lower fixed-rate mortgage (5.375%).
C. FINANCIAL
• Payment has been received for the subordination request.
• The subordination would not put the HRA into a less desirable
financial position.
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATION~S~
• Deny the subordination request.
V. ATTACHMENTS
• ~ Picture
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Keith Shellberg may attend.
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