Fiscal Note
This resolution proposes a $1,025,000 loan from the Affordable Housing Trust Fund (AHTF) to the Community Development Authority as a source of funding for the CDA's renovation of existing low rent public housing units. Under the proposed terms, the loan repayment would be $68,333.33 per year plus interest over a 15 year period, with interest pegged at .25% above the rate that the Affordable Housing Trust Fund earns on the investment of available funds. Based on current investment yields, the initial interest rate would be approximately 1.75% per year. Sufficient funds are available to provide the loan proposed in this resolution.
A recently enacted amendment to the AHTF ordinance broadens the definition of eligible expenditures to include, among other things, the repair, preservation and upgrade of existing affordable units. Additionally, it removed the strict annual expenditure limitation that existed under the original ordinance, replacing it with the provision that no more than 25% of the fund balance as of January 1st of the year prior to disbursement could be spent on any single project. The balance in the AHTF was $113,096 on January 1, 2009. Thus, under the newly adopted ordinance, a loan of up to $1,028,000 could be made to any single project in 2010. The CDA's revised application requested $1,025,000 in loan funds, an amount which qualifies under the new AHTF ordinance limitation.
Title
SUBSTITUTE - Authorizing a loan from the Affordable Housing Trust Fund to the Community Development Authority for the Truax Park Apartments Project and authorizing the Mayor and City Clerk to execute a Loan Agreement with the CDA.
Body
Preamble
The Community Development Authority of the City of Madison (“CDA”) intends to renovate and rehabilitate seventy-one existing low rent public housing family units located in six buildings at the CDA’s Truax property using Section 42 tax credits. In order to close a financing gap for the project, the CDA has r...
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