Bloomington HRA Forgives $438,947 in Interest on 35-Year-Old Affordable Housing Loan
Board votes 4-0, with one abstention, to extend a 1991 loan to CommonBond's Bloomington Family Town Homes to 2038 at zero interest in exchange for deeper affordability requirements.
The Bloomington Housing and Redevelopment Authority board voted 4-0 on Nov. 10 to renegotiate a 1991 deferred loan to the owners of Bloomington Family Town Homes, forgiving roughly $438,947 in accrued interest and pushing the maturity date out another 12 years, to Dec. 1, 2038.
The original loan was $46,000. With no payments made in 35 years, the balance had grown to about $832,767, according to Housing Development Specialist Ryan Soulberg, who presented the request from CommonBond Communities on behalf of Bloomington Nord Limited Partnership. The loan was set to mature Dec. 1, 2026.
CommonBond had asked the HRA for either outright forgiveness or an extension. Staff instead recommended a package that trades debt relief for tighter affordability conditions: the loan carries 0% interest, accrued interest is forgiven, CommonBond must match the HRA's forgiveness with forgiveness of its own debt on the property, four units must be restricted to households at 30% of area median income and 16 units at 50% AMI, and 50% of any positive cash flow must be paid to the HRA.
Bloomington Family Town Homes consists of 14 units on Nord Drive and six units on West 90th Street.
Commissioners press on terms
Several commissioners questioned the arrangement before voting. Commissioner Wooten focused on the long record of nonpayment.
So in essence, what you're asking for is an additional eight years of no payment.
Commissioner Dolinger questioned why the HRA would extend a loan it does not expect to collect on.
Why why extend? Why not just forgive at this point? If we're not expecting payments, why extend it? What's the point?
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