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Kenosha council approves parameters for Affordable Living Neighborhood Revival Program, names bank to run loan approvals
Summary
The City of Kenosha approved a mayoral resolution setting program limits for the Kenosha Affordable Living Neighborhood Revival Program and a separate lending services agreement that assigns underwriting and applicant selection to State Bank of the Lakes.
The Kenosha City Council on a voice vote approved a resolution that sets parameters for the Kenosha Affordable Living Neighborhood Revival Program and separately approved a lending-services agreement with State Bank of the Lakes to administer the loan pool.
The resolution, presented as Item 2, establishes program limits including a maximum loan of $325,000 and an interest rate the presenter described as 5.75%. The resolution also includes a provision for a second mortgage of up to $50,000 for eligible buyers and a developer agreement clause that would transfer lots to builders for $1, with a requirement that the builder construct and sell the home within 15 months.
Staff emphasized the two items (the resolution and the lending agreement) are related but distinct. “The maximum loan is going to be $325,000. The interest that the builder can get is 5.75,” the presenter said while outlining the resolution’s parameters. The resolution also includes one-time exception authority for the mayor to alter parameters such as the maximum loan or the interest rate if program take-up is slower than expected.
Under the lending-services agreement approved as Item 4, State Bank of the Lakes will administer underwriting, select qualifying applicants and monitor loans; the city’s role will be to vet and refer qualified builders. The presenter said the bank will do underwriting “like they do for any other mortgages” and will monitor the loans to builders. The bank declined to permit its own employees to participate in the program, the presenter said, although city employees would be eligible under the program rules the resolution establishes.
The bank’s compensation under the agreement was described as a fee equal to 1% of the second-mortgage loan balance. The agreement also spells out a recapture/forgiveness schedule for the second mortgage: according to the presentation, if a homeowner remains in the home past 10 years, 40% of that second-mortgage amount is forgiven; after 20 years the forgiven share rises to 60%; and by 30 years the borrower would be required to repay 20% of the original second-mortgage amount. The presenter said repaid funds will return to the program pool for future loans.
Council members asked few substantive questions during the hearings. The council voted to approve both the resolution setting program parameters (Item 2) and the lending-services agreement (Item 4). The vote on Item 2 was recorded as aye by Alderperson DeBare; Alderperson Harper; Alderperson Dyson; Alderperson Dominguez; Vice Chairperson Rosenberg; and Chairperson Wilson. The vote on Item 4 was recorded as aye by Alderperson Deban; Alderperson Harper; Alderperson Dyson; Alderperson Haggis; Vice Chairperson Rosenberg; and Chairperson Wilson.
The presenters said the Affordable Living Neighborhood Revival Program was originally authorized in late 2023 with a Uline donation and use of TIF funds; the resolution approved by the council now puts specific loan and program parameters into effect.
