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People Serving <br />People <br /> <br /> CITY OF RIVERSIDE <br />AGENCY MEMORANDUM <br /> <br />l~.iverside <br /> <br />HONORABLE MAYOR AND AGENCY MEMBERS DATE: July 13, 2004 <br /> <br /> ITEM NO: 17 <br /> <br />SUBJECT: REQUEST TO CHANGE COMMUNITY DEVELOPMENT BLOCK GRANT REGULAR <br /> <br />LOAN #06 073 TO DEFERRED LOAN FOR PROPERTY LOCATED AT 7666 EMERALD <br /> <br />STREET (92504) <br /> <br />BACKGROUND: <br /> <br />On April 26, 1993 Joseph and Julia Acosta, homeowner of 7666 Emerald Street ("Property") in the Casa <br />Blanca area, sought rehabilitation assistance to make needed home repairs. The Acosta's received approval <br />on August 17, 1993 from the Agency for an $18,500 Community Development Block Grant (CDBG) <br />Rehabilitation Regular Loan. The Property rehabilitation included installing rain gutters; replacing broken <br />windows, doors, and screens; replacing garage door; painting exterior walls; improving drainage by <br />constructing a retaining wall; and installing a concrete walkway and driveway. A perimeter fence and <br />driveway gates were also installed for security. <br /> <br />CURRENTISSUE: <br /> <br />The Acosta's have been unable to make their Regular Loan payments, which as of July 1, 2004 has a <br />balance of $17,586.10. They have contacted the Agency to give notice of their current financial hardship. <br />They have requested that the City change their Regular Loan to a Deferred Loan, which would be paid in full <br />upon the sale of the Property. The five percent (5%) annual interest will accrue for 4-1/2 years, since they <br />have been making payments on their Regular Loan for 10-1/2 years. The Property currently has no other <br />liens. The Agency Board in the past has approved similar financial hardship cases to ensure that the home <br />remains owner-occupied. <br /> <br />FISCALIMPACT: <br /> <br />If the loan is deferred, the Agency would no longer receive monthly payments of $250.58. The loan, along <br />with 5% interest, would be repaid in full upon sale or transfer of the property, which is $22,013.18. There <br />is no impact to the General Fund. <br /> <br />ALTERNATIVES: <br /> <br />The Agency may choose not to change the Acosta's Regular Loan to a Deferred Loan Agreement, which <br />would result in the Agency foreclosing on the Property. <br /> <br />17-1 <br /> <br /> <br />