RM 01-16-81 - Laserfiche WebLink

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South Bend edevelopment Commission Regular Mee ing - January 16, 1981 6. NEW BUS NESS c. Mr. McMahon continues... quite strongly that we shouldn't exceed the after rehab cost and feel that a guideline along this line will be very appropriate. Kathy, do you have anything to add to my comments? Mrs Baumgartner: Just that we did try to get the mos conservative reading from HUD as to how they int rpret the 312 package when it comes down to them. As you are aware, some of the approvals that we have mad have been countermanded by HUD because they have thr e representatives and they do not all have the sam standards. So that something like this would not happen to the city again, we wish to find the mos conservative stand by each of the three repre- sen atives and then adopt that as our policy so we will not be countermanded. Mr. Cira: We worked on the guidelines before. Mrs. Baumgartner: It is subject to interpretation. It' what the particular HUD representative wishes to inderwrite. Mr. Cira: Why did we wait all this time before we got into something like this? Mr. McMahon I think it was necessary first to estab- lisi a pattern, because they hadn't come forward and vol nteered information saying that we have a problem wit anything over 105% or with anything over 70% as far as the client indebtedness itself is concerned. Als , we were receiving a number of them back that precipitated an inquiry down there as to why. While HUD doesn't have any formal guidelines, we have de- ter fined their informal guidelines and this is what we're recommending be adopted. Mr. Butler: Kathy, under item (a) a percent indebt- edness shall not exceed 70 %, 70% of the after appraised value? Mrs. Baumgartner: No, of their gross income. Mr. McMahon: This is the client's personal indebted- ness. There is a HUD form right on the back of the le ter from Kathy that outlines how one determines what that indebtedness is and how the percentage is w