A RESOLUTION AUTHORIZING CONVERSION OF AN ACQUISITION LOAN INTO DEFERRED SECOND MORTGAGES TO THE FUTURE BUYERS (2006-02-27/R-8)

WHEREAS, the Town provided $115,000 from the Housing Loan Trust Fund to the Pines Community Center, Inc. to purchase property located on Park Road in the Pine Knolls neighborhood; and

WHEREAS, the Pines Community Center has repaid $60,750 of this loan; and

WHEREAS, the Pines Community Center has requested that the Council forgive the balance of this loan;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes conversion of the balance of the loan ($54,250) into zero interest second mortgages to the future buyers of the homes that would be due upon sale or transfer of ownership.

BE IT FURTHER RESOLVED by the Council that the value of each second mortgage will be determined by dividing the balance of the loan ($54,250) by the number of houses that will be built on this property. 

BE IT FURTHER RESOLVED that the Council authorizes the Manager to amend the existing Performance Agreement with the Pines Community Center that would allow the funds from the loan to be converted into deferred second mortgages.

BE IT FURTHER RESOLVED that the Pines Community Center must submit a plan for maintaining the long-term affordability of the homes for approval by the Town Manager prior to executing an amended Performance Agreement.

BE IT FURTHER RESOLVED that the Pines Community Center must submit documentation for each initial and subsequent buyer for the homes to the Town for approval at the time the deferred loans are made prior to each closing.

This the 27^th day of February, 2006.