R08-126
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1 RESOLUTION NO. 08-/)).;
2
3 A RESOLUTION OF THE CITY OF BOYNTON
4 BEACH, FLORIDA, ADOPTING A
5 SUBORDINATION POLICY FOR USE IN CITY
6 OF BOYNTON BEACH HOME IMPROVEMENT
7 PROGRAMS; AND PROVIDING AN EFFECTIVE
8 DATE.
9
10 WHEREAS, the Community Improvement Division has used a subordination
11 policy and procedure in their programs since March, 2003; and
12 WHEREAS, upon recommendation of staff, the City Commission of the City of
13 Boynton Beach deems it to be in the best interests of its residents and citizens to approve
14 and adopt the Subordination Policy for use in the City's Community Improvement
15 Housing Programs.
16 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
17 OF THE CITY OF BOYNTON BEACH, FLORIDA THAT:
18 Section 1. Each Whereas clause set forth above is hereby ratified as being true
19 and correct and incorporated herein by this reference;
20 Section 2. The City Commission of the City of Boynton Beach, Florida,
21 hereby approves and adopts the Subordination Policy for use in the City's Community
22 Improvement Housing Programs, a copy of which is attached hereto as Exhibit "A".
23 Section 3. This Resolution shall take effect immediately upon passage.
:\CA\RESO\Subordination Policy.doc
Subordination Policy & Procedure .~ 03- /.:l...(P
SUBORDINATION POLICY
A homeowner assisted by the SHIP or CDBG program may not refinance his or
her first mortgage or take out a second mortgage unless the city agrees to
subordinate its second mortgage.
The policy used by the City of Boynton Beach regarding a subordination request
shall be as follows:
. The City does not support the owner using equity for any items other than
the house itself. If the purpose of the new loan is home repair or
reasonable improvements. the need must be substantiated by an
inspection of the property by a City of Boynton Beach Housing
Rehabilitation Inspector or Construction Manager. and a contract for the
proposed repairs furnished by the homeowner.
. The City will not subordinate its mortgage for owners attempting to obtain
a line of credit or consolidate debt. as this would enable them to increase
their debt for purposes other than home improvement. The City maintains
that:
~ Second mortgages are provided under the SHIP program to
assist with homeownership.
~ Grants are provided under the CDBG or SHIP program for the
exclusive purpose of rehabilitating, enhancing and/or preserving
real estate.
. If the owner wants to refinance the first mortgage at a lower rate and/or
for a shorter loan term. the City may subordinate if:
~ Additional money isn't being borrowed (unless its purpose is for
home repair or reasonable improvements).
~ The resulting housing cost (PITI) does not exceed the housing
cost (PITI) calculation of the original loan.
~ The new loan is for a fixed rate.
. If the owner is taking out a second mortgage for necessary home repairs
or reasonable improvements, the City may subordinate if:
~ The combined payments of the first and second mortgages do
not exceed 35% of the gross income.
~ The loan is for a fixed interest rate.
Homeowner Date Homeowner Date
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1 PASSED AND ADOPTED this ~ day of November, 2008.
2
3 CITY OF BOYNTON BEACH, FLORIDA
4 I j ~
5 . ~><1 t?l-' ~.
6 ~~Je A~r
7
8
9 Vice ~or~o ." odr'
10
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11 /.", ....r ~ _.._ .........
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12 Com~i~sioner - Ronald Weiland //
13 .'" p~
14 (... "C/~~~~<,?? -~ . . ~J
15 Commissioner - W ooz:
16 '-;2.~~ /'
-
17
18 Commissioner - Marlene Ross
19 ATTEST:
20
21
22 ..- .Yr), :J .
23 I-.ILfu/ft...1."
24 J et M. Prainito, CMC
25 ity Clerk
26
27
28
29
30
31
:\CA\RESO\Subordination Policy.doc