AGENDA #4e

 

MEMORANDUM

 

TO:

Roger L. Stancil, Town Manager

FROM:

J.B. Culpepper, Planning Director

Loris Colclough, Interim Finance Director

Loryn Clark, Housing and Neighborhood Services Coordinator

SUBJECT:

Budget Ordinance Amendment for the Housing Loan Trust Fund

DATE:

November 7, 2007

 

PURPOSE

 

The purpose of this memorandum is to appropriate funds received as repayment of loans issued by the Town in the Housing Loan Trust Fund in accordance with North Carolina General Statutes.  Enactment of the attached budget ordinance would budget $119,250 of program income to the grants/deferred loan activity of the Housing Loan Trust Fund. 

 

BACKGROUND

 

The Town Council established the Housing Loan Trust Fund in 1973 to assist lower income households with the purchase of a new home or to renovate an existing home. The Housing Loan Trust Fund has since been used for a variety of Community Development projects including deferred second mortgage loans for Tandler and Culbreth Park programs, construction loans to Habitat for Humanity, grants to First Baptist Church and Manley Estates and Orange Community Housing and Land Trust, and second mortgage assistance to homebuyers through EmPOWERment, Inc. 

 

DISCUSSION

 

The Town has recently received program income from the sale of two Culbreth Park homes and repayment of a loan made to the Pines Community Center.  These funds were returned to the Housing Loan Trust Fund.  Before using the repaid loan funds for eligible activities, the funds must be appropriated in the annual budget by the Council.  We recommend allocating the funds to the grants/deferred loans line item in the Housing Loan Trust Fund.  We are currently working with Orange Community Housing and Land Trust on the acquisition and resale of three properties in the Culbreth Park neighborhood.  We propose to provide these funds as grants to eligible buyers to reduce the sales price of these homes.   The Town’s funds would be applied toward the purchase price and would reduce the amount of funds needed by a buyer to purchase a home. 

 

RECOMMENDATION

 

We recommend that Council enact the attached budget ordinance budgeting $119,250 of revenue received to the grants/deferred loans activity in the Housing Loan Trust Fund.