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Request for HRA Action Date: 9-13-11 Item No: 9.a. Director Approval: Agenda Section: Action Description: Authorize the write down of the second mortgage on 279 Elmer Street Requested Action: Authorize the repayment of the second mortgage loan on 279 Elmer Street from $58,000 to $3,000. Background: The HRA approved the program outline and funding for the Senior Housing Regeneration Program (SHRP) for Roseville in August 2005 with the Greater Metropolitan Housing Corporation (GMHC). Under this program, GMHC would purchase homes directly from seniors, renovate the home and then sell it to families who made less than 80% area median income. On June 20, 2006 the HRA approved a second mortgage of $58,000 for 279 Elmer St. in order to assist with the renovation and gap finance of the total cost of property. This allowed the homebuyer to qualify for what a family could afford that made 80% of the area median income. In 2006 the income limit for a family of four was $59,600. These funds were recycled single family housing CDBG funds from Ramsey County that the HRA had in the 720 account. Due to a court ordered sale of 279 Elmer, the property owner has negotiated a short sale and the first mortgage lender is willing to compensate the HRA second mortgage of $3,000. If we do not authorize this forgiveness the bank will be forced to proceed with foreclosure proceedings and the HRA will most likely not be compensated any of the second mortgage amount of $58,000. Staff Recommendation: Staff is recommending that the RHRA authorize the forgiveness of $55,000 of the second mortgage for 279 Elmer Street. Suggested RHRA Action: Motion to approve the write down of the second mortgage for 279 Elmer Street from $58,000 to $3,000. Attachment A: Request letter from Realtor Prepared by: Jeanne Kelsey, RHRA Housing Program Manager (651) 792-7086 HRA authorize the write down of second mortgage on 279 Elmer Street