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File #: 31991    Version: 1 Name: Approve Common Wealth Development’s request to waive the 2013-2014 CDD Program Goals and Objectives loan-to-value ratio limit for 2013-2014 SW Rental Acquisition & Rehab projects.
Type: Resolution Status: Passed
File created: 10/23/2013 In control: BOARD OF ESTIMATES (ended 4/2017)
On agenda: 12/3/2013 Final action: 12/3/2013
Enactment date: 12/5/2013 Enactment #: RES-13-00872
Title: Approve Common Wealth Development’s request to waive the 2013-2014 CDD Program Goals and Objectives loan-to-value ratio limit for 2013-2014 SW Rental Acquisition & Rehab projects.
Sponsors: Maurice S. Cheeks, Lauren Cnare, Matthew J. Phair
Attachments: 1. CWD 2013-14 SW Rental Acq-Rehab Waiver .pdf, 2. Letter to waive 115 LVR for Additional Purchases 10 21 13.pdf
Fiscal Note
No appropriation is required.
Title
Approve Common Wealth Development's request to waive the 2013-2014 CDD Program Goals and Objectives loan-to-value ratio limit for 2013-2014 SW Rental Acquisition & Rehab projects.
Body
Common Wealth Development (CWD) has targeted revitalization efforts to neighborhoods on the South West side of Madison such as Balsam-Russet-Leland-Hammersley.  Based on recent purchases and research of the properties for sale in this area there is a need to waive the CDD 115% loan-to-value limit outlined in the 2013-2014 Program Goals and Objectives.
 
Whereas, the housing market and number of distressed sales in these challenged areas, results in low post-rehab appraisals, resulting in a higher loan to value ratio; and
 
Whereas, in order for Common Wealth to be a successful bidder of properties in these areas in a timely way, a waiver agreement needs to be in place before submitting an offer to purchase properties; and
 
WHEREAS, the CDBG staff and Committee have reviewed this request and find that it furthers the goals expressed in the 2010-2014 Five-Year Community and Neighborhood Development Plan and the 2013 Action Plan; and
 
WHEREAS, the acquisition and rehab of units in these neighborhoods will ensure permanent, affordable rental housing for low-income people; and
 
WHEREAS, the loans necessary to complete acquisition/rehabilitation of housing in these areas results in a higher than average loan-to-value ratio while not necessarily increasing the risk to the City; and
 
WHEREAS, the risk to the City is greatly minimized by the following factors: Common Wealth Development has a strong record of performance and responsibly using public funds to increase the stock of affordable housing for low-income people while revitalizing and stabilizing distressed neighborhoods; CWD has worked extensively on the Southwest side over the past year, including hiring a Housing Community Organizer in 2012, which increases the likely success of the project; Property values are likely to increase if the planned Southwest side projects and revitalization efforts are successful; CWD is in a unique position to provide much needed quality property management practices and community development expertise to this challenged set of properties and neighborhood; and the project would not likely be undertaken but for the City's commitment of funds, resulting in a lost opportunity to advance neighborhood stabilization efforts while adding affordable rental housing; and
 
WHEREAS, the CDBG staff and the CDBG Committee have reviewed this request for a waiver and find that it merits an exception while still adequately ensuring a reasonable risk to the City;
 
NOW, THEREFORE, BE IT RESOLVED that the Common Council approve Common Wealth Development's request to waive the 115% loan-to-value limit for 2013-2014 SW Rental Acquisition & Rehab projects and allow a loan-to-value ratio of up to 130%.