Rules for affordable housing grants and loans

A. A grant or loan agreement for distribution of funds must contain the following conditions and restrictions, unless otherwise approved by the council by resolution: 1. Title to any real property must be held in perpetuity by the grantee or borrower unless conveyed to the County or to a qualified nonprofit or community land trust. 2. The grantee or borrower must submit annual reports to the department of housing documenting the progress toward implementing long-term management of the affordable housing project. 3. The project must not be sold, exchanged, divested, or converted to other uses that are inconsistent with the purposes set forth in this chapter without the prior approval of the council by resolution. 4. If the grantee or borrower dissolves or is adjudicated bankrupt, title to any real property that has been funded or improved by a grant or loan issued from the fund must be conveyed to the County or to a qualified nonprofit or community land trust as approved by the council by resolution. 5. The grantee or borrower must not distribute or redistribute grant or loan funds to other organizations. B. Unless otherwise approved by council by resolution, loans from the fund must: 1. Be secured by a first mortgage lien in favor of the County or, subject to council approval by resolution, be secured by a second mortgage lien in favor of the County. 2. Have a term set by the director of housing. 3. Require the borrower to execute a promissory note in favor of the County. 4. Include an interest rate set at 3 percent per annum. 5. Be recorded with the bureau of conveyances or the land court of the State. C. If a borrower defaults or the project is not serving the affordable housing needs as set forth in this chapter, the following may be required of the borrower: 1. Forfeit the land or property to the County. 2. Full repayment of the principal balance at an annual interest rate equal to two times the prime rate at the time of default. ( Ord. No. 5651 , § 3, 2024; Ord. No. 5131 , § 3, 2020; Ord. 3481 § 3 (part), 2007)