Appropriating $200,000.00 Community Development Block Grant Fund

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CITY of SOUTH BEND ROGER O. PARENT, Mayor COUNTY-CITY BUILDING • SOUTH BEND, INDIANA 46601 DIVISION OF COMMUNITY DEVELOPMENT MARZY T. BAUER Director STEVEN F. COMPTON Deputy Director M E M O R A N D U M TO: Members of the Common Council FROM: Marzy T. Bauer Community Development Director 1� SUBJECT: Ordinance to Appropriate $200,0,000 to establish a low- interest Loan Fund for Commercial and Residential Rehabilitation DATE: December 2, 1980 '• /m 2 Y 1440 County -City Building South Bend, Indlana46601 (219) 264.9335 Attached for your consideration is an Ordinance which would appropriate $200,000 from the 1980 Community Development Block Grant to establish a low - interest Loan Fund for Commercial and Residential Rehabilitation. The funds would be transferred from the 1980 Unspecified Local Option account which has a present balance of $318,175. As you are aware, the Community Development Program operates a number of programs designed to assist in the rehabilitation of residential structures. We have, generally, been unable to work with commercial buildings. While our emphasis remains on residential structures, we feel it is necessary at this time to develop an additional program to assist in the rehabilitation of commercial buildings. Since undertakings of this type require large capital outlays, we are proposing to allocate $200,000 initially in the loan fund. This may be used to support one large project or several smaller ones. Our expectation is that the Community Development funds will be only one part of a total financial package put together by a developer to accomplish a major re- habilitation effort. It should be clear that this is a loan fund, not a grant program, and all dollars loaned will be paid back. The loans will be secured against the property or other appropriate security interest. The interest rate will vary between 1 and 5 per cent.