Fiscal Note
This resolution authorizes the CDA to create and administer a new loan program, utilizing $1,600,000 of a $4,100,000 Fannie Mae line of credit as the financing source. In 2004, the CDA incurred closing costs of $18,250 and currently pays a standby fee of $2,400 per year to maintain the availability of this $1,600,000 variable rate line of credit extension.
Under the proposed program terms, the CDA would provide short-term loans of between $50,000 and $1,600,000 to selected projects at an interest rate at least equal to the rate charged by Fannie Mae, and the CDA would administer the program utilizing existing staff resources. All individual loans would be subject to approval by the Common Council and would be fully due and payable by June 15, 2007.
The Fannie Mae line of credit is backed by a general obligation pledge of the City to the extent that the CDA acts to draw upon it. The interest rate and availability of the credit is conditioned on the City maintaining it's current bond rating. If the CDA were unable to meet its payment obligations under the line of credit at any time, the City would be responsible for repayment.
Title
Authorizing the creation of a $1,600,000 American Communities Capital Revolving Fund program, objectives and criteria to be administered by the Madison Community Development Authority (CDA) and capitalized by the Fannie Mae American Communities Fund line of credit.
Body
WHEREAS, on September 24, 2002, the City of Madison adopted Resolution No. 59,816, authorizing the Community Development Authority (CDA) to guaranty payment of a $2,500,000 American Communities Fund revolving line of credit ("line of credit") loan from Fannie Mae; and
WHEREAS, on November 9, 2004, the City of Madison adopted Resolution No. 62,022 authorizing an increase in the line of credit to $4,100,000; and
WHEREAS, on the CDA has committed to take down approximately $2,500,000 of the line of credit to finance development in the ...
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