Laserfiche WebLink
South Bend Redevelopment Commission <br />Regular Meeting - August 6, 1993 <br />6. NEW BUSINESS (Cont.) <br />n. continued... <br />Mr. Donoho expressed concern about the <br />after -rehab value. With the $12,000 Rev. <br />Harris has already invested in the home, and <br />the rehab loan amount of $63,650, he will <br />be paying approximately $72,000 for a <br />house that will be valued at $31,000 when it <br />is completed. How can a house like that be <br />resold? <br />Ms. Richmond explained that in order to <br />bring a house with code violations up to <br />code, costs will be over the market value. <br />For this reason we have had trouble <br />marketing any loan programs we have ever <br />had for this area. Most of the owners are <br />elderly. They don't want to tie their <br />properties up with mortgages. <br />Mrs. Kolata noted that the alternative to this <br />type of loan program, if we want to see the <br />rehab accomplished) is to lend only the <br />after -rehab value and grant the remainder. <br />In effect, since the loan is for more than we <br />could get out of the home if we sold it, if <br />the loan goes into default, the City will have <br />to write off part of the debt. However, <br />there is the hope that, over time, the <br />property will increase in value and we could <br />get our money out of it. <br />Mr. Piasecki asked if there was any other <br />way of cutting the rehab costs, such as using <br />the Christmas in April program. Mrs. <br />Kolata responded that there is no way to cut <br />the costs further. <br />Mr. Sharp asked who is making this <br />CW mortgage and what happens if it is <br />foreclosed? Mrs. Kolata responded that the <br />-17- <br />