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The Urban Programs Department provides financing to low-moderate income owners and rental units that are occupied by lower-income households.
The Urban Programs Department believes that its investment in such dwelling units should not preclude economic advancement of the borrower and will subordinate the City’s mortgage when in the best interest of the borrower. The City is interested in preserving its investment in such housing and the continued benefit to the recipient of assistance, therefore the following conditions must be satisfied in order for Subordination to be considered:
Total debt secured by the property shall be no more than 90% of the value of the property as established by a conservative current fair market appraisal.
The terms of all debt must be such that the Owner has sufficient income to make all payments related to housing including mortgage(s), property taxes, insurance, utilities and upkeep.
Urban Program will strongly discourage its borrowers from entering into agreements with so-called "predatory lenders", and reserves the right to decline to subordinate to such arrangements. Among the conditions associated with predatory lending are high loan-to-value mortgages, mortgages based on property value alone, without consideration to borrower’s ability to make payments, interest rates higher than market and excessive closing costs.
If the borrower is refinancing to secure an improved interest rate and no cash equity will be withdrawn, the City will automatically subordinate. Proof must be submitted to the Urban Programs Department.
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