What are the two programs HDC offers to Mitchell-Lama property owners and how do they work?
A. Mortgage Restructuring Program Owners and cooperative corporations can restructure their existing HDC first and second mortgages. By refinancing owners and cooperative corporations save in the form of reduced debt service payments and/or receive funds to repair their property. In addition, no interest will be charged on the project’s second mortgage and such second mortgage will not be due and payable until prepayment or 90 days after the termination of the first mortgage. Key Points: • Mortgages refinanced at lower interest rates and for longer periods of time allowing the developments to maintain level debt service over the next 30 years at or below their current debt service • Owners must remain in the Mitchell-Lama program for an additional 15 years • HDC purchases from the City the second mortgage notes held on properties, refinances these mortgages so that they are no longer surplus cash notes and interest ceases to accrue. Past accrued interest is deferred and becomes payable
