Fiscal Note
The City presently holds second mortgages on the nine Movin' Out rental properties affected by this Resolution. To help facilitate the WHEDA loan arrangement for Movin' Out described herein, this Resolution authorizes the transfer of ownership of these properties from Movin' Out, Inc. to a new entity, Movin' Out Homes, LLC. Since the City will retain its second position on each of these mortgages with the new LLC, there is no net fiscal impact.
Title
Authorizing the sale of various properties owned by Movin' Out, Inc. to a separate entity called Movin' Out Homes in order to reduce the amount of the first mortgage loans on the properties and obtain grant funding from Wisconsin Housing and Economic Development Authority (WHEDA).
Body
WHEREAS, the City of Madison has invested $600,750 on federal HOME funds and plans to invest up to an additional $250,000 in HOME funds to assist Movin' Out, Inc. to acquire and rehabilitate 9 properties where they provide affordable housing for households with people who have disabilities in the City of Madison; and
WHEREAS, the City of Madison loan funds are secured with second mortgages on the properties subordinate to first mortgage loans from Bank Mutual with a combined value of about $1,260,848; and
WHEREAS, Movin' Out has been approved by WHEDA to receive a first mortgage loan of $660,000 and an exchange grant of about $600,000 that can be used to refinance the first mortgage loan from Bank Mutual. A condition of the exchange grant funds is that there be a transfer of ownership.
NOW THEREFORE BE IT RESOLVED that the Common Council approve the transfer of ownership of the nine affected rental properties owned by Movin' Out, Inc., with the City loans subordinate to a new loan from WHEDA and authorize the Mayor and the City Clerk to execute the related documents.