HomeMy WebLinkAboutA200 Hernandez Loan SubordinationMEETING DATE:
CITY OF NATIONAL CITY, CALIFORNIA
COMMUNITY DEVELOPMENT COMMISSION
COUNCIL AGENDA STATEMENT
September 6, 2011
AGENDA ITEM NO.
ITEM TITLE:
Resolution of the Community Development Commission of the City of National City authorizing its
Chairman to execute a Subordination Agreement with Miguel S. Hernandez and Alicia B. Hernandez
allowing a new mortgage not -to -exceed $196,000 to be and remain a lien prior and superior to a First -
Time Home Buyer assistance loan of $25,000 issued by the CDC on a single -unit property located at
1334 Tecolote Court in National City
PREPARED BY: Carlos Aguirre, Comm. Dev. Specialist II DEPARTMENT: Adminstrative Services
PHONE: 619 336-4391 APPROVED
EXPLANATION:
The CDC made a loan for $25,000 from the Low -Moderate Housing Fund to Miguel S. and Alicia B.
Hernandez ("Borrowers") on October 10, 1996 to assist and eligible household in the purchase of a new
single-family house located at 1334 Tecolote Court in National City. The CDC loan is fully deferred until
October 10, 2029 as long as the residence is occupied by the Borrowers and the Borrowers perform under
all other Covenants and Agreements contained in the Deed of Trust of the CDC loan. The Borrowers are
interested in refinancing the current debt on the property and have been approved for a new loan with San
Diego County Credit Union. The new lender is requiring that the CDC execute a subordination agreement
allowing the new loan to hold superior position to the CDC -issued loan. The CDC loan will maintain second
lien position on the property. The purpose of the refinance is to allow the Borrowers to reduce the interest
rate paid a fixed rate of 4.0% and there will be no cash proceeds to the Borrowers through the refinance
transaction. The new combined loan -to -value (CLTV) ratio will be 72% as substantiated by a current
appraisal of the property at $305,000. Staff has also satisfactorily reviewed the Borrowers' credit report,
preliminary title report, new loan note terms, and closing statement.
FINANCIAL STATEMENT:
ACCOUNT NO.
APPROVED: /.. Fiance
APPROVED: `I=/MIS
There is no fiscal impact associated with this request. The existing CDC loan is an "enforceable obligation"
entered into before January 1, 2011.
ENVIRONMENTAL REVIEW:
The subordination agreement is exempt from environmental review.
ORDINANCE: INTRODUCTION:
FINAL ADOPTION:
STAFF RECOMMENDATION:
Staff recommends the approval of the resolution to execute the Subordination Agreement.
BOARD ! COMMISSION RECOMMENDATION:
There is no board or commission recommendation required for the Subordination Agreement.
ATTACHMENTS:
1. Subordination Agreement between CDC and Borrowers
2. New First Trust Deed with San Diego County Credit Union as the Beneficiary