Department, Organization                                                  Board of Supervisors

or Person Making Request:                                                      Meeting Date:

Harry F. Atherton, Chairman, Marshall District                                 May 19, 2003

Staff Person & Department:

Anthony I. Hooper, Assistant County Administrator

Topic:           A Resolution to Authorize a Conditional Donation to Fauquier Housing                         Corporation

Topic Description:

The development of the Botha subdivision has taken a longer time than originally planned.  A number of special grants associated with helping families purchase a home are nearing the grant deadlines and there is a concern that if the houses are not ready for occupancy by November that funding from the Federal Home Loan Bank in the amount of $5,000 per unit may be lost.

In order to retain this funding, the housing needs to be constructed by November. In order to meet this schedule, it is necessary to accelerate plans to build the nine units in question.  The contractor to be used by Fauquier Housing Corporation has the capability; however, Fauquier Housing does not have sufficient funds to support construction progress payments for the number of units that will be constructed under an accelerated schedule.

To support the new construction schedule it is proposed that the County advance funds to Fauquier Housing to be used as construction funding.  These funds will be repaid to the County as construction is completed and mortgages closed.  The donated funds will be secured by an agreement that will assign funds to the County upon completion of construction and receipt of the proceeds from the permanent financing.  Other safeguards include the requirement for an approved mortgage loan and construction advances only upon completion of a portion of the construction contract.  Further, performance bonds will be required, as a means of assuring that the homes will be completed.

Requested Action of the Board of Supervisors:

Consider adoption of attached resolution.

Financial Impacts Analysis:

The donation of funds will be repaid in full to the County once the nine homes are built and the mortgage loans closed.  The financial impact to the County is only the loss of interest earnings that will be provided for a short period estimated to be less than six months. It is proposed that funds be transferred within the Utility Fund from the Catlett-Calverton sewer allocation to the Botha project.

Identify Any Other Departments, Organizations or Individuals That Would be Affected by This Request:

Fauquier Housing Corporation

Finance Department