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CITY OF FILLMORE CENTRAL PARK PLAZA 250 Central Avenue . Fillmore, California 93015-1907 (805) 524-3701 FAX (805) 524-5707 TO: Mayor and City Council DATE: August 14,2012 f , \ . .. u": ( , THROUGH: Yvonne Quiring, City Manager iJ FROM: A, Glenda D. Jay, Finance ~ i r e c t o r n SUBJECT: Approval of the Refinance and ~ u b d r d a t i o Agreement for 351 Glen Way; and Authorize the City Manager, or her designee, to take all necessary actions relating to the execution and recordation of the Subordination Agreement. SUMMARY: Staff reviewed the request for the refinance of the current loan and a subordination agreement for 351 Glen Way. After review of the information submitted by the mortgage broker, staff is recommending to the City Council that they approve the request to refinance the current loan and a subordination agreement. RECOMMENDATION: Approve the Refinance and Subordination Agreement for 351 Glen Way and Authorize the City Manager, or her designee, to take all necessary actions relating to the execution and recordation of the Subordination Agreement. BACKGROUND: On January 29,2009, the Redevelopment Agency approved a loan to Kevin and Angelica Richardson of $28,586 to assist with the purchase of the house at 351 Glen Way. The Richardson's have requested to refinance their existing loan to lower their interest payment. Attached is a worksheet that shows the information regarding the original loan and the proposed refinance. Although the Richardson's new loan would increase principal by $1,093.63 it lowers their interest rate from 5.75 percent fixed to 3.75 percent fixed and reduces their monthly payment by approximately $293.21. The loan continues to be a 30 year loan. Approval of the Refinance and Subordination Agreement for 351 Glen Way August 14,2012 Page 2 of 2 The City became the Successor Agency for Redevelopment Agency Housing functions on February 1, 2012. This loan is considered an asset of the Redevelopment Agency which was transferred to the City. FISCAL IMPACT: There is no fiscal impact at this time. If the property is sold or transferred within twenty-seven years, the loan will be repaid. Attachment 1: Richardson Loan Review Worksheet CITY O F FILLMORE SUCCESSOR AGENCY Date of Meeting: August 14; 2012 Borrower: Richardson, Kevin &Angelica Property Address: 3 5 1 Glen Way, Fillmore, CA 93015 NARRATIVE: Proposed savings of $293.21 on Principal, Interest & MIP monthly payment. The new loan is an FHA Streamline refinoncing and it does not require an appraisal. If no sale or transfer of the property within thirty (30) years of the original loan date (01/29/09), the note shall be automatically and completely forgiven (01/29/2039).
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