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This Agreement is made this day of , 1988 <br />by and between the City of La~ewood, by the Mayor in its behalf, <br />hereinafter referred to as the City, the Community Development <br />Corporation of Lakewood, by its Chairman on its behalf, hereinafter <br />referred to as the CDC, and the First National Bank of Ohio, <br />hereinafter referred to as the bank for loan services more fully <br />described below in this agreement. <br /> <br />I. LUMP SUM DEPOSIT <br /> <br />The city will receive, $1,500,000 in community Development Block <br />Grant (CDBG) funds from the United States Department of Housing & <br />Urban Development (HUD) and agrees to transfer these funds to the <br />CDC (who will) deposit at the bank. All funds will remain the <br />property of the CDC and will be used for eligible housing and <br />commercial renovation activities in accordance with the federal <br />law and regulations governing the CDBG Program. The interest rate <br />paid by the bank on these CDC funds will be equal to the 7 day <br />access account. Interest paid by the bank will be the property of <br />the CDC and will be used for housing rehabilitation loans in <br />conformance with the federal laws and regulations governing the <br />CDBG Program. All funds in this account will be insured through <br />the Federal Deposit Insurance Corporation (FDIC) to the maximum <br />extent possible and the uninsured balance will be collaterally <br />insured by the bank in the name and possession of the CDC. <br /> <br />II. LOAN PROVISIONS <br /> <br />Ae <br /> <br />The Bank agrees to make loans for the CDC Low Interest Loan <br />Program in all cases where the loan applications are approved <br />by the bank and the CDC, according to all applicable laws, <br />regulations, and bank policies and procedures. All bank loans <br />made under this agreement will be made using bank funds. For <br />the purposes of this program, the standard on equity will not <br />exceed 804 of the appraised value and the debt to income ratio <br />will not exceed 404 unless waived by the bank. <br /> <br />The Interest Rate payable by the borrowers will be 54 and <br />loan terms for a period not to exceed 15 years, term to be <br />determined by the applicant's ability to pay. In order to <br />achieve the desired interest rate to be charged to the <br />borrower, the CDC will deposit at the time of individual loan <br />fundings, into a non-interest bearing account an amount equal <br />to the bank loan amount for a period specified in the schedule <br />attached and made a part of this agreement based upon the <br />interest rate charged by the bank for unsubsidized home <br />improvement loans at the time of the loan closing. <br /> <br />These deposits will be hereinafter called "Compensating <br />Balances" and will be the mechanism used to enable the bank to <br />reduce the interest rate to the borrower. <br /> <br /> <br />