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<br />a. Multiple Factor During First Five Years of Loan. During the first five (5) years of the loan, the Multiple
<br />shall be 1.5. Thus, for example, if the Cost of the Dwelling is $400,000 and the Lender/Agency's loan is $100,000, this
<br />proportion would be 25% ($100,000/$400,000). Therefore, to calculate the Shared Appreciation payment during the first five
<br />(5) years, one would multiply 1.5 times 25% yielding 37.5%. In this example, if the Dwelling sold for $600,000 (that is an
<br />appreciation of $200,000) the Borrower would repay the Lender/Agency 37.5% times the Appreciation, or 37.5% times $200,000
<br />which is $75,000. The Borrower's Cost of the Dwelling is $398,756 and the Lender/Agency's loan is in the amount of
<br />$100,000, thus the proportion represented by the Agency's loan to the Cost of the Dwelling is 25.078% ($100,000/$39$,756).
<br />The Borrowers Shared Appreciation payment during the first five (5) years is calculated by multiply 1.5 times 25.078% yielding
<br />37.617%. The Borrower must repay the Lender/Agency 37.617% times the Shared Appreciation over the first five years of
<br />the Note. Repayment will be required irrespective if the loan has been paid off to a zero dollar ($0) balance over the first five
<br />years.
<br />b. Multiple Factor(s) Be ig nning in Sixth Year of Loan. Commencing the sixth year of the loan, the
<br />Multiple factor will be reduced based upon the reduction of the principal. The principal balance can be reduced through
<br />regular scheduled payments, accomplished. in proportion to the amount the principal balance is reduced on the loan At the
<br />time the loan reaches a zero dollar ($0) balance, the Multiple will be reduced to .6666.or (2/3) The Shared Appreciation
<br />Multiple will never be reduced below.6666 and will remain in place even after the loan balance has been paid off to zero dollars
<br />($0) Shared Appreciation will be required until such time that the Lender/Agency has received full payment of the Shared
<br />Appreciation. For example, if the Cost of the Dwelling is $400,000 and the Lender/Agency's loan is $100,000, this proportion
<br />would be 25% ($100,000/$400,000). To calculate the Shared Appreciation payment after year five (5) and when the loan balance
<br />is at zero dollars, one would multiply .666 times 25% yielding 16.65%. In this example, if the Dwelling sold for $700,000 (that
<br />is an appreciation of $300,000) the Borrower would repay the Lender/Agency 16.65% times the Appreciation, or 16.65% times
<br />$300,000 which is $49,950. The formula depicting the exact calculation to establish the Borrowers Shared Appreciation
<br />Multiple is provided in the Shared Appreciation Disclosure Addendum. In addition a schedule depicting the various Multiple
<br />factors at various levels of loan balance has been provided in the Shared Appreciation Disclosure Addendum attached hereto.
<br />The Borrower's Cost of the Dwelling is $398,756 and the Lender/Agency's loan is in the amount of
<br />$100,000, thus the proportion represented by the Agency's loan to the Cost of the Dwelling is 25.078% ($100,000/$398,756).
<br />The minimum Shared Appreciation the Borrower will be required to repay with a zero loan balance after the first five (5) years
<br />is calculated by multiply .6666 or (2/3) times 25.078% yielding 16.719%. Forgiveness of debt by the Lender/Agency for
<br />targeted borrowers is a reduction of the principal balance upon which the shared appreciation is calculated.
<br />Attached and incorporated with the Shared Appreciation Loan Agreement is a City of Redwood City First Time
<br />Homebuyer Program Shared Appreciation Disclosure Statement, hereafter referred to as the shared appreciation schedule and
<br />disclosure statement. The purpose of this shared appreciation and disclosure statement is to provide the formula used to calculate
<br />the Shared Appreciation Factor and to illustrate the net effect principal reduction has on the reduction of shared appreciation.
<br />IN WITNESS WHEREOF, the parties have executed this Shared Appreciation Agreement upon the date above written.
<br />THE RIDEVEL_�AMNII CY OF THE CITY OF REDWOOD CITY
<br />BY:
<br />MICHAEL CHURCH, PLANNING & REDEVELOPMENT MANAGER, CITY OF
<br />By:
<br />Borrower SUSAN STORY Dated
<br />Co -Borrower Dated
<br />Redwood City First Time Homebuyer Silent Loan Program - Shared appreciation agreement October 13, 2000
<br />Page 4
<br />REDWOOD CITY
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