Fiscal Note
By resolution No. 56097, adopted, March 30 1999, the City approved a long-term deferred loan of $1,500,000 in HOME and HOME match funds to Future Madison Housing Fund, Inc. This loan is secured with a mortgage on the property and a promissory note. The City is currently in third position behind two loans with a current combined value of $4,604,487. Future Madison is seeking to refinance those existing loans and will end up with a loan for $6,053,400. To secure the new HUD insured loan, HUD requires that the lender have a first mortgage on the property which means that the City would have to subordinate its interest to second place.
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Authorizing the subordination of a previously approved loan to Future Madison Housing Fund, Inc and authorizing the Mayor and City Clerk to sign agreements to effect such subordination.
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In 1999 the City provided a loan of $1,500,000 in HOME funds to Future Madison Housing Fund, Inc to acquire and rehabilitate the Wexford Ridge Apartment complex located at 7012 Tree Lane. The complex includes 240 apartments that are subsidized by the U.S. Department of Housing and Urban Development for rental to low income tenants, and several office suites. When they acquired the property, Future Madison secured two bank loans, one for $3,826,041 and one for $3,000,000 ahead of the City loan.
Future Madison has built some equity in this property through repayment of principal and wishes to refinance their first and second mortgage debts in order to secure cash that they will use to rehabilitate other properties, working capital or as a source for a new undertaking.
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WHEREAS, the Common Council approved a loan to Future Madison Housing Fund, Inc. to help it acquire and rehabilitate property at 7012 Tree Lane; and,
WHEREAS, the CDBG Committee has reviewed the request by Future Madison Housing Fund, Inc for the City to subordinate its loan to a new first mortgage loan that consolidates debt and provides working ca...
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