RecDoc2003-237251 - Laserfiche WebLink

Browse Search

the Note. Repayment will be required irrespective if the loan has been paid off to a zero dollar ($0) balance over the first five years. b. Multiple Factor(s) Beginning in Sixth Year of Loan. Commencing the sixth year of the loan, the Multiple factor will be reduced in proportion to the amount the principal balance is reduces on the loan At the time the loan reaches a zero dollar ($0) balance, the Multiple will be reduced to .6666.or (2/3) The Shared Appreciation Multiple will never be reduced below.6666 and will remain in place even after the loan balance has been paid off to zero dollars ($0) Shared Appreciation will be required until such time that the Lender/Agency has received full payment of the Shared Appreciation. For example, if the Cost of the Dwelling is $400,000 and the Lender/Agency's loan is $100,000, this proportion would be 25% ($100,000/$400,000). To calculate the Shared Appreciation payment after year five (5) and when the loan balance is at zero dollars, one would multiply .666 times 25% yielding 16.65%. In this example, if the Dwelling sold for $700,000 (that is an appreciation of $300,000) the Borrower would repay the Lender/Agency 16.65% times the Appreciation, or 16.65% times $300,000 which is $49,950. The formula depicting the exact calculation to establish the Borrowers Shared Appreciation Multiple is provided in the Shared Appreciation Disclosure Addendum. In addition a schedule depicting the various Multiple factors at various levels of loan balance has been provided in the Shared Appreciation Disclosure Addendum attached hereto. The Borrower's Cost of the Dwelling is $409,200 and the Lender/Agency's loan is in the amount of $100,000, thus the proportion represented by the Agency's loan to the Cost of the Dwelling is 24.44% ($100,000/$409,200). The minimum Shared Appreciation the Borrower will be required to repay with a zero loan balance after the first five (5) years is calculated by multiply .6666 or (2/3) times 24.44% yielding 16.296%. Forgiveness of debt by the Lender/Agency for targeted borrowers is a reduction of the principal balance upon which the shared appreciation is calculated. Attached and incorporated with the Shared Appreciation Loan Agreement is a City of Redwood City First Time Homebuyer Program Shared Appreciation Disclosure Statement, hereafter referred to as the shared appreciation schedule and disclosure statement. The purpose ofthis shared appreciation and disclosure statement is to provide the formula used to calculate the Shared Appreciation Factor and to illustrate the net effect principal reduction has on the reduction of shared appreciation. IN WITNESS WHEREOF, the parties have executed this Shared Appreciation Agreement upon the date above written THE REDE ELOPMENT AGENCY OF THE CITY OF REDWOOD CITY Susan F. Moeller, Redevelopment, Housing �5� h t and Economic Development Manager Arm i� )e j �e-r 03 arrower J e v, l� �! ��r� Dated Co -B6'6 Dated to v �r e--sy Redwood City First Time Homebuyer Silent Loan Program - S1- -I' ---- !�� r—,ement April 23, 2001 li�lllllll�lll�llllll�llllllllllll�lllllllJllllllllll�l 8'� 4 Qg 3725 X 9 of 5