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<br />6.11 <br />Page 15 <br /> <br />. Fees for refinandng costs increases the loan amount to the extent that <br />the "cosf for refinancing do not meet the standard test to "break even- <br />or payoff refinancing costs with savings from the reduced mortgage <br />within 24 months after the new mortgage is recorded. <br /> <br />C. Exceptions <br /> <br />The Home Improvement Loan Committee may choose to consider <br />exceptions to allow: <br /> <br />1. continuation of a deferred Home Improvement Loan for clients who no <br />longer meet the then current income eligibility, or <br /> <br />2. where some risk is determined to exist to City/Agency based on past <br />and current credit history, or the terms of the new financing. <br /> <br />GENERAl OPERATING GUIDELINES: <br /> <br />Purpose of Refinance - The following guidelines shall apply: <br /> <br />A. The indebtedness after the refinance must reduce the homeowner's <br />housing costs and loan fees for refinancing should "break even" <br />from monthly savings in approximately 24 months after the new <br />mortgage is recorded. <br /> <br />B. In the case of rental properties, the refinance must reduce the <br />operating expenses of the investor owner and facilitate the <br />continuance of affordable rents for households residing in the <br />subject property for the remaining term of the City's loan. The <br />standard for establishing the maximum affordable rent shall be <br />defined as the lower of the following: <br /> <br />. 250/0 below "street" or market rent for the property as <br />determined by a survey by three reputable independent real <br />estate agents using the average of the three market rent <br />amounts (adjusted for utilities), or <br /> <br />. 200/0 below the most recent Section 8 Fair Housing Market Rent <br />issued for San Mateo County Housing Authority (adjusted for <br />utilities). <br /> <br />C. The applicant must meet the Community Development Block Grant <br />program's current income ellgibllity and occupancy requirements, or <br />the Program standards for the program in which the applicant was <br />originally assisted. <br /> <br />2 <br />