HomeMy WebLinkAbout4.A. Approval of Request for Subordination Decision under Residential Rehabilitation Loan Program �� General Business
4. A.
�Fi.�1�C?I'F�;
TO: Economic Development Authority
FROM: Mark Noble, Planner iI
DATE: 08/20/2013
SUBJECT: Approval of Request for Subordination Decision under Residential Rehabilitation Loan Program
Action Sought
Approval of Request for Subordination Decision under Residential Rehabilitation Loan Program
Introduction
James &Cheri Drawert, recipients of a residential rehabilitation loan for their property at 906 Lewis Street,have
submitted a request for subordination to the Economic Development Authority.
Discussion
James& Cheri Drawert received approval from the City on March 16, 2010, for a$15,000.00 loan under the Small
Cities Development Program for a roof and rafter replacement. This program is a joint venture between the City of
Shakopee and Carver County Community Development Agency(CDA). The loan stipulated that they are to pay a
sum equal to a percentage of the full amount of the loan, �vith 10%of the full amount of the loan forgiven each year
the borrowers remains in the home, for a period of 10 years, should they sell,transfer or convey the property to
someone other than themselves. The City/Carver County CDA does have a lien on the real estate to satisfy the
repayment obligation and the cost to collect the repayment(see attached Repayment Agreement).
At this time, the Drawerts are in the process of refinancing their current mortgage with First American Title
insurance Company, and are asking that the City of Shakopee agree to take second lien position on the refinance
with First American. They are not intending to sell their home nor transfer ownership; they are attempting to take
advantage of a drop in the mortgage interest rates.
Alternatives
1. Offer and pass a motion approving the request for subordination of a rehabilitation loan for 906 Lewis Street,
and direct staff to work with the Carver CDA to implement the request.
2. Provide staff with any further direction it deems appropriate regarding the request.
Staff Recommendation
Staff recommends alternative no. 1, offer and pass a motion approving the request for subordination of a
rehabilitation loan for 906 Lewis Street, and direct staff to work with the Carver CDA to implement the request.
Relationship to City Goals
By providing for the upgrading of existing housing in the target area, this item relates to City Goal D,vibrant,
resilient and stable.
Action Requested
Offer and pass a motion approving the request for subordination of a rehabilitation loan for 906 Lewis Street, and
direct staff to work with the Carver CDA to implement the request, and move its adoption.
Attachments: Repayment A�reement
04/22f2013 10:2b FA� 9523034223 FIRST AMERICAN TITLE ; TENS �U30I030 �
� � Doc. NQ. A 85�a�5 i
oFFlCEOF7HE Cl7UNTY RECORDER '
�� S�pTT CdUNT(,MINNESDTA
�' Certified Filed and/or Recorded on
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�� Q�6-1$-20�0 at 11:0� Recpt:904409
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.Janlce Frnm,Acting Cor�nty Recorder o,
� Fee; ffi�46.40
CQMMUhlITY DEVEl.ORMENT Pa4GRAM
RERAYMENT AQR�EMEh1T
City of Shakapea �
THIS AGREEMENT,made and enterEd inta this 8`"day of M�a r, 201 D, by and between
J�rr�AS K, f�raw�rt and Cheri A. [�raw?rt, hugh�nd anri wif�:(her�ing{ter ref�rred td�s ,
"Barrower'},and The City oi Shakapee, having its prinoipal vffice at f 29 Holmes Street
South,Shakopee, Minnesota(hereinsfier�efeRed to ae`Lender),
WHEREAS,the aarrowar nas applled for a loan under sald pragram Ia Improve and
rehalailitate ih�t r,ertairl real estate situated in the City af$hakapee described beaow and;
WNEREAS, Lender has paid FiHeen Thousand Dollars ($15L000_00)on 8orrower's behelf
as a no-Interes�loan (heralnafter r�ferred to as"Loan")for improv�ng[ha tielow descrlbed
real estate under the Small Gltles Development Pro�ram,the recelpt and sufflcfency of
whir.h i.s h�rpby�cknowledged by L�orrow�r; �nri;
WHEREAS, Borrawer a�nd Lender desire tp set f4rttt herein the pr�vlsion for�orrowers
rapaymsnt of the L4�n, �nd to provld�for securing�aid repayment with ihe mortt�aye on
the property describzd bglow(hereln referred to as the°h+lort�ac�e"),
NOW,THE�{E�OfiE,In consideration af said Laan and in�ocordanr,Q with Minnesofa
Statutes,the partlos h�areto do nerypy agree as�ollows:
1. Borrower covengnts�nd�grees wikh L�nder ta p�y to the order af the Lender a sum
equel io a percBntsge of the full amount of the Loan with 10°,�of t(�e full amount c�f
the Loan forgivqrl g2Ch ygar th�borrower remains in th9 norti9,witt7CUt interest,�t I
such place l-endsr may daslgnate In writing ta Borrow�r, upan the occurrence of �
any af the following events within Ihe period of ten(10) years�fter the dat�of the
Loan a�set forth at�ove:
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Vw�«�c� �,� iv.�� rr�n a�[aU;i41'Lb FTR3T AMEA,ICAN TITLE � 7EN5 l�031/060
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a, The sala,transf�r,or conve�y�n�e(whether f�y deed,Corrtract`ar deed,or
ntheryvi��);�nd vyhethef vafuf�tary or involuntary;ehher while the 8armwer i�
living t►r by r�ason of the tl6ath of tt�e 8orrawer,ar i
b, Thg 4�21ow-d2scriheN rPai esxate ceelse5 for any reasort to be th�principal i
place af residenr,�of the Borrower,
Repayment of thG t,oan as required undar th�tarms af this para�r��h t shall be
made to Lender nvi later than the�Oth day folivwing the��a��, Fr�n9F�r, or other
. convey�nce rgf�rred to tn paragraph t (a)abave. F�r�he purpases of this �
Agr'eerrZertt ih►s wU!bQ Maturity I�ate�. i
2. R q c ri to rr weC' li ation t rk a ment and s b'ect to th an
A e u ty r Bo, o s ob g a p y , u � e tem,s d
GQndili�rlQ of this agr9ement, �orrower herphy gr�nt�, and LBrlder sha�ll a�d h�reby '�,
dQes nave, a lisn on the real estate h�reinafter described in the fu►I amount ,
neCe&s�ry to satisfy said rep�ymenx obli��tion and the cosC,InCluding reasvnable �
Attomey fPes,�r cofte�ting 1he same.The real estatA subjact to said fi�n is Rituated �,
in Shakopcc, Minnesot�,in the Gounty af Scoit and is legally describc.�i�s:
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SubdiviStonNam� � 8c O aDON Lat 014 P11r,ck 006 SubdivisipnCd I
�70UZ &, LqT2(� � E �t5'OFLOTI6 & W25' QFE3D� 4PN1/2 �F
LQT 17
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p►�#�7,aa�a�oo
3. Promptly after the daie if any sala,transisr or other�onveyance hf the above '
desonb�d real estate(or,m me eve�t ot a ta�e hy cantraGt ar cieed at ieast cen(1v? �
tlays prlor�su�h daie nf sale),Clwnesr or his/her heirs,exe�cutors,or i
Repres�riiativBS, 9hali Qive the City�1lotip�titerAOf_ '
4. frr th�9vant Dwner or hislher heirs,Pxetutnrs or�eprese�ntatives snell fail pr r�fuse I
to make�a rcquired repaymPnt within aeid limited period,tha Cit�may,tivlth or �
withau!natice+nf pvyner,foreplose seid IiQn in the sama mann2�as an ar.tion for the j
foreclosur�of mbrtgages upon sattl raal Estate, as by statute pravided. ;
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5, S4id li�n sha11 terminate and shall be of no further farce or effarl in the�v�nt Ihe
City has n�t, on ar befora Mayr B`"`�Q2Q commenced an a�tion in tP�a aforesald i
m�nner to loreclose the s�me.
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' �-'��'_"•` `��?- aJG�V34LL� - FTRST AMERICAH TITLE � TEN3
C�j 432/05U
6. Tftii'a�reem6nt shall run with Rh0 afqresaid roal est�te and�hall inure io 1he qenefit
pf and bs b[ndin9��rnn the parti68 herato and their�3pective heirs,executors,
reprerentatives,sucaes3ars, and�sslgns.
7. If this pgreerrlent!s ex�CUted 6y the cpntract for dsed vendor ar�mortgage of the
property, as onB oi th�C7wners,such executl0n shalf be deemed forthe purpase ot
establishing �nd con�inuing Iht eXist2nCe ot ttta IndeE�tednes�de9vribAd harqin and
tri9 Ilen granted h�rein.Howev9l, Ift fhe event af ddfe�Ult of the t9rms hsreof,r�ith�:r
the City of Shakqpe�nar I(S as5lgns shal�take�ny�ctPon agalnst such contr��t far
dAed v�ndor�xc�pt such�s m�y be necessary in order to subject to the satisfactlon
of said indebtsdn�ss thp property d�scribed hereln_
IIU 7ESTlM4NY WH�R�QF,the pani�s hav�executed ihis Agreement as of tt-�e day and
year firstwritte bove.
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Qrrawer. James K. Qrawalt orrower: ' ari A.Drawert
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BoCrvwer a4rrowef I
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Contract Vendor(it 2ppllcahle) Cantratt Vendor(iE�,ppl�c�hle)
Gontrao�Vendor(�f��rr�gbie) Contra.ct VQndor(If appliC7b�e)
The Carver County�Q,4 for the f _ r�
C+tv of hnkap�x _ _ ^�
Grant Adm�nisYracor By: Da '2 f3�rrger, it
C mmunity Development Spec��list
04J22/2p13 10:25 FAY, 9�29034225 FIRST AMERICkN TITLE ; TENS f�033l450
State of M�nnesc�ta y a �, � .
) "°°°`a"'�n�
Gounty of Carver ) `�'�^� '
+� � aa�s '
On the 6�n day of M�a�,201 C,b�fqre me,a Notary Public with and for the said C�unly,
personally appeared James FC. DrriwPrt!�Chari A.f�rawRrt. hushand and tvifa tn m� i
knawn tn he thp p�:r.gon(s)describ�d in and who ex��uk�d th�f¢repQing instrurnent end
acknowledging th hey execu#ed the same�s fhair free act and deed. �
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Notary Ruhl' i
State of Minnesota }
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County af Carv�r }
On th� �day of Mav,2Q10,befo�e me,a Notary Publlc wlth and tpr the s�id Count�,
persanally appeared�arin J.Berqsr,a sir�dl�qersan to me knawn to be tha person(s)
deSCt'lbed Irl�nd who exeouted th�f4ragoing inskrument and acknawlPdginc�th�
he _v,me A3 his fres 8Ct and deed.
fVatary Publit
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���s This document w�s preoared bv: !
�p - �.��'�o,s x Carver Gounty Communi#y Development
Agency
705 North Walnut Str�9et
Chaska MN 55318
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Tnis Instrument Is exem�at fr�m registraiion tax under 8ectian 267A8 of Minnesa�Slatutea. '
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