The Community Development Division manages home repair loan programs to assist low-income households in making needed improvements to homeowner-occupied residences. The majority of the funding for these programs is annually authorized by the U. S. Department of Housing and Urban Development.

Loan recipients routinely request loan subordination in order to refinance primary mortgages on properties where the City of Billings holds secondary or tertiary loan position. The current process for approval of routine subordinations requires Council approval, often extending the amount of time a homeowner must wait to close on a new loan.

The Community Development Board is required to annually review the Subordination Policy for loan programs (see attached) and recommend changes to preserve the City’s financial interest in residential properties that have been rehabilitated, in part, using the City’s home repair loan program. Changes to this policy are submitted through the Division’s annual allocation process when funds are committed to programs each April for Council review and approval.

1) Approve authority for the City Administrator to sign and execute subordination agreements under the City’s approved Subordination Policy for home repair programs.

2) Not approve authority.

This streamlining measure is expected to save staff time in processing standard subordinations and increase customer service and responsiveness in managing long-term secured loans. Staff is unaware of other financial impact following approval of the resolution.

Staff recommends approval of a resolution granting the City Administrator authority to execute and sign loan subordination documents to facilitate financing or refinancing residences that have received loans through the City of Billings home repair programs.