Title
Discussion of Low-interest Loan Program for Moving Historically Significant Houses (B)
Explanation
The City Commission approved a house-moving program during its meeting of September 27, 1999. The approval limited the funding to $10,000 per fiscal year, with any one grant limited to 50 percent of the program's budget for moving historically significant houses at least 50 years of age within the City. The grant can be for up to 50 percent of an applicant's cost to move such a house. The Commission also requested that staff explore the idea of a low-interest loan or other program in addition to or instead of the approved grant program.
Planning staff has discussed the concept of a low-interest loan program with staff from the Housing Division, which has considerable experience with loan administration. Low-interest loans administered through the Housing Division typically have an annual interest rate of 3 to 5 percent, which is below market value. Such loans have market appeal, but administrative costs are relatively high. Establishing a program would require identifying a source of funds, setting maximum loan amounts and terms, developing an application process and applicant eligibility criteria, establishing insurance requirements, and developing repayment and other performance criteria.
One advantage of a loan program over a grant program is that accrued interest payments to the City could be used as a source of funds for the house-moving program. A loan program also has the advantage of creating a recorded mortgage that runs with the property, thus allowing for placement of a lien if necessary, and monitoring changes in ownership. Non-performance of contractual terms by one owner would not obviate the contractual obligations of a subsequent owner of the property. However, given the probable relatively small amount of a house-moving loan, the City would likely have an inferior lien position and would predictably encounter difficulty in...
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