5/20/1997 - Laserfiche WebLink

Home Browse Search

TO: James E. Chandler County Administrator DIVISION HEAD CONCURRENCE: Robert M. Keating, AICP / Community Development Diredr FROM: Sasan Rohani, AICP C—::; - /C Chief, Long -Range Planning DATE: May 13, 1997 SUBJECT: REVIEW OF PROPOSED SPECIAL CREDIT REQUIREMENTS FOR HABITAT FOR HUMANITY ASSISTED SHIP APPLICANTS AND COMMUNITY DEVELOPMENT BLOCK GRANT ASSISTED SHIP APPLICANTS It is requested that the data herein presented be given formal consideration by the Board of County Commissioners at its regular meeting of May 20, 1997. As adopted, the county's Local Housing Assistance plan requires that eligible persons applying for assistance through the Local Housing Assistance Program must have bad a valid, satisfactory credit rating for a minimum of one (1) year prior to receiving approval for any application. For applicants applying for both SHIP funds and a loan from a financial institution, the applicable financial institution determines whether each applicant's credit is satisfactory based upon the applicable financial institution's credit standards. For all other applicants, county staff assesses the applicant's credit based upon the information provided in a credit report from one of the three national credit reporting agencies. For all SHIP loans except rehabilitation loans, an applicant will be deemed to have satisfactory credit if the applicable credit report shows that, in the previous 12 months, the applicant had: - No more than (4) 30 day late payments - No more than (1) 60 day late payment No 90 day late payments - No more than 2 collections - No collection or combination of collections more than $500.00 Judgment liens for medical expenses may be acceptable if a repayment plan is established and payments have been made for at least the previous 12 months. Regardless of an applicant's credit history for the previous 12 months, an applicant's credit will NOT be considered satisfactory if the applicant's credit history shows: - Any charge offs that were not subsequently paid or discharged in a bankruptcy - Active judgments against the applicant - Repossessions with a remaining balance payable by the applicant - Bankruptcies that have not been fully discharged for two years with no new negative credit history Recently, the issue of whether to treat Habitat for Humanity assisted SHIP loan applicants and Community Development Block Grant assisted SHIP loan applicants differently has arisen. This report addresses that issue. Although the state imposes a number of requirements on SHIP program administration, those requirements do not involve credit standards. Instead, establishment of credit standards is a county requirement, and the county can revise its credit standards as appropriate. Two situations, in particular, warrant consideration for establishing special credit requirements. One involves SHIP loans to Habitat for Humanity applicants, while the other involves SHIP loans to applicants participating in the CDBG program. MAY 20, 1997 75 6C'K 2lJ rA�t