Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Raymond Hodges, Director of Housing
Subject: Loan Forgiveness - CDBG and HOME Loan
RECOMMENDATION:
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Adopt a resolution authorizing and directing the director of the Department of Housing, or designee(s), to forgive a Community Development Block Grant and HOME Investment Partnerships Program loan to the Mental Health Association of San Mateo County relating to property located at 37 Clinton St. in Redwood City in an original principal amount of $225,000, as amended to $332,250, including all accrued interest, and to take all actions and execute all documents and amendments as necessary and advisable, in consultation with the County Attorney, to effectuate the loan forgiveness and the release and reconveyance of security instruments issued in connection therewith.
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BACKGROUND:
On November 11, 1994, the County issued a Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) loan to the Mental Health Association of San Mateo County (MHA) to finance the purchase and rehabilitation of a four-plex property at 37 Clinton Street in Redwood City. The CDBG and HOME loan was made pursuant to a Promissory Note secured by a Deed of Trust recorded against the property.
The CDBG and HOME loan was issued in the original principal amount of $225,000, and accrued interest at 3%. Under the Promissory Note, the term of the original loan was 30 years, and MHA's monthly payment obligation was deferred to November 1, 2009. By 2010, $107,500 in interest had accrued on the original loan. At that time, the Promissory Note was amended to roll the accrued interest into the principal for a new amended loan balance of $332,250. Under the Amended Promissory Note, effective July 1, 2010, the term of the loan was 40 years, the loan continued to accrue interest at 3% interest, and MHA was required to make monthly payments of $...
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