Fiscal Note
The Avenue Limited Partnership and the Madison Development Corporation (MDC) have made no principal or interest payments since this $228,000 loan originated 20 years ago. Under the terms of this requested loan extension, MDC would begin making interest only payments of $950 per month for two years beginning on July 1, 2009. Then, on July 1, 2011, MDC would begin to make monthly principal and interest payments of $8,101 per month for an additional 2.5 years until the loan has been fully repaid. Payments received will be deposited in the HOME-BUY Fund and will be available for redistribution to other eligible loan recipients in the future. No impact on the General Fund or on the City's eligibility under the State Expenditure Restraint program.
Title
Authorizing the modification and extension of loan repayment terms for a $228,000 Section 17 loan to Madison Development Corporation.
Body
Preamble
In 1989 the City, through its Section 17 Loan Program, made a long-term deferred loan of $228,000 (the Loan) to The Avenue Limited Partnership for the purpose of partially financing the rehabilitation of a forty-unit apartment building located at 1948-1954 East Washington Avenue (the Property). In 2001, Madison Development Corporation (MDC) purchased the Property and assumed the obligations to repay the Loan. The Loan, which is secured by a second mortgage on the Property, becomes due and payable to the City on June 15, 2009. By letter dated March 18, 2009, MDC has requested that the City extend the maturity date of the Loan and modify the Loan terms. Staff met with MDC and recommends that the Loan be modified to allow interest only monthly payments for two years, at 5% interest on the unpaid balance, compounded annually, beginning July 1, 2009, and monthly payments of principal and interest commencing July 1, 2011 until payment is made in full December 1, 2013. MDC shall execute a new Note payable to the City incorporating these terms.
Now therefore be ...
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