Mountain Lake council approves resubordination of SCDP loan for single property, pending DEED approval

The Mountain Lake City Council voted unanimously on March 2 to approve resubordination of a Small Cities Development Program (SCDP) deferred loan on a privately owned property, while noting the action is contingent on a final exception from DEED.

The council's action, moved by Councilmember Andrew Ysker and seconded by Councilmember Jeff Jack, formally allows the property owner to refinance the first mortgage and eliminate an existing home equity line of credit (HELOC) while keeping the city's SCDP loan secured against the property. The motion carried 4'0.

In explaining its decision the council recorded four findings: that the refinance would consolidate debt and remove the HELOC; that the City's SCDP loan would remain secured to preserve the municipality's long-term interest in the rehabilitation investment; that completed SCDP improvements have enhanced the property's condition and value (which the minutes say may not be fully reflected in the existing appraisal); and that approval is contingent upon DEED's determination and final approval of an exception.

The meeting minutes list the SCDP deferred loan balance as $24,846 and the property appraisal at $100,000. The council's approval is limited to resubordination; the transcript explicitly states the change remains subject to "final review and written approval by DEED and compliance with all applicable SCDP requirements." The council did not specify an effective date or additional conditions beyond the DEED contingency.

The council took the vote as a local approval; the resubordination will not take final effect unless and until DEED grants the required exception and completes its review. The next procedural steps will be the city's submission of required documentation to DEED and any follow-up compliance steps the agency requests.