The Franklin County Economic Development & Planning Department administers housing programs for the Franklin County Commissioners. Through the housing programs, investors are offered 0 percent interest and/or low interest loans to finance essential home repairs and lead hazard controls on their properties. Loans are secured by a mortgage on the property and are provided to owners of rental property if tenants are of low or moderate-income. Federal funds are provided from the U.S. Department of Housing and Urban Development for these programs. Loan terms and amounts are based on established underwriting criteria to assure adequate financial resources for repayment and property value in the case of default.

The investor/owner may request a subordination of his or her loan under the following conditions:

1. The request is to strictly refinance the current mortgage(s) for better terms, such as a lower interest rate, monthly payment and term (see page 3: Loan types & terms).

2. The request is for additional rehabilitation or condition upgrade of the property.

3. The request is to obtain permanent financing once rehabilitation is complete (for rental rehabilitation projects only).

4. The request is to access the equity for the expansion or maintenance of the owner's Properties to increase the availability of low-income housing units, which will also be maintained as low-income housing for the balance of the affordability period.

Each request for subordination must be submitted in writing in letter format from the lender and/or the property owner with the following information included/attached:

1.  The reason for the subordination request.

2.  The Loan Application

3.  The Good Faith Estimate or the proposed HUD 1 Settlement Form

4.  The Uniform Underwriting and Transmittal Summary (Fannie Mae Form 1008 or Freddie Mac Form 1007)

5.  The Uniform Residential Appraisal Report

6. The mortgage rate on the property owner's current mortgage.

7. If the property owner is requesting a mortgage for debt consolidation, include the payoff amount, monthly payment and interest rate for each debt that will be paid off and evidence of debt counseling.

8. If the property owner is requesting a mortgage for additional rehabilitation or condition upgrades; include a work specification and/or contract.

Once the subordination review is complete, we will submit a letter to the lender either accepting or rejecting the subordination request. If the subordination request is accepted, the lender must close the loan and provide this department with a subordination agreement, a signed copy of the executed HUD-1 Settlement Statement and The Truth in Lending Disclosure Statement. The closing documents will be reviewed by staff to verify that the loan has closed according to the terms stated in the original request for subordination. Our staff will then prepare a resolution authorizing the Franklin County Commissioners to sign the subordination of mortgage agreement. The resolution and subordination agreement will be forwarded to the Commissioners office to be added to the next agenda for General Session.

The Franklin County Commissioners hold General Session every Tuesday morning to vote on all resolutions requiring their approval. All proposed resolutions for general session must be forwarded to the Commissioners' office by noon the previous Wednesday. General session is strictly for review and voting purposes. The resolution and attached documents are then circulated for signature. The Commissioners' office will then forward the resolutions and attached documents to this department through inter-office mail. We usually receive the signed documents on Thursday. We will notify the lender that we have received the documents. The lender must advise us at that time of which method they prefer to use to retrieve the documents (i.e., mail, pickup or courier).

Minimum conditions for a subordination request:

1.  Franklin County will not exceed a 90 percent combined loan-to-value on the property.

2.  Franklin County will not, for any reason, subordinate their loan if the property owner will receive cash back, except for the purposes listed above.

3.  We are protecting the Franklin County Commissioners' interest in this property as well as reviewing what is best for the property owner; therefore, we may request additional information or require a loan adjustment while reviewing a subordination request.

4.  Total settlement fees cannot exceed 10 percent of loan amount (points and fees cannot exceed 4%)

Loan Types and Terms (standards for refinancing)

• New mortgage must be amortizing at a fixed rate and term, no balloon notes or lines of credit and no prepayment penalties,
• Maximum income ratios not to exceed 35/45; housing and total debt,
• New interest rate cannot exceed prime plus 5%,
• Total points and fees charged cannot exceed 4% of mortgage amount,
• The following third-party charges may be financed:
  a. appraisal fee and inspection fee
  b.  document preparation fee
  c.  property survey
  d.  title examination and title insurance policy
  e.  attorney, settlement and courier fees
  f.  tax service fee
  g.  recording fees and taxes
• Credit life insurance, credit disability, or credit unemployment insurance, or any other life or health insurance financed for the life of the loan is not acceptable.

Please submit all requests to:

Franklin County
Economic Development and Planning Department
280 East Braod Street, 2nd Floor
Columbus, OH 43215

Subordination requests can also be faxed to our office at the following number: (614) 462-7155.