If the owner sells the property at a bonafide sale for fair market value (FMV), the total amount due the city shall be determined based upon the following formula:
(A) The original value of the deferred/shared appreciation loan be divided by the FMV after rehabilitation of the property as determined by a qualified appraiser at the time of rehabilitation. This ratio shall be known as the Shared Appreciation Value Ratio (SAVR).
(B) The amount due the city shall be lesser of:
(1) The SAVR multiplied by the sales price of the property; and
(2) The amount calculated by taking the sales price of the property and subtracting from it the amounts paid out upon sale of the property to satisfy debts owed on the property which were in a secured position superior to that of the deferred/shared appreciation loan and the costs of any capital improvements paid for by the property owner and the amount of all closing costs paid by the owner. By way of example only, the following two alternatives demonstrate the methodology for calculating the amount to be paid back to the city upon sale of the property.
Example #1 | |
$10,000 | Loan |
$50,000 | Appraised Value |
$60,000 | Sales Price |
$25,000 | Outstanding 1st Mortgage |
$ 5,000 | Closing Costs |
$ 2,000 | Capital Improvements made by Owner |
$10,000 | |
$50,000 | = 20% SAVR |
$60,000 x 20% = $12,000 | |
$60,000 - 25,000 - 5,000 - 2,000 = $28,000 | |
City is paid $12,000 | |
Example #2 | |
$10,000 | Loan |
$50,000 | Appraised Value |
$60,000 | Sales Price |
$35,000 | Outstanding 1st mortgage |
$ 5,000 | Closing Costs |
$10,000 | Capital Improvements made by Owner |
$10,000 | |
$50,000 | = 20% SAVE |
$60,000 x 20% | = $12,000 |
$60,000 - 35,000 - 5,000 - 10,000= $10,000 | |
City is paid $10,000 | |
(1995 Code, § 11.28.060) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)