Borough of Middletown, PA
Dauphin County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Borough Council of the Borough of Middletown 9-9-2008 by Ord. No. 1239, approved 9-9-2008.
Editor's Note: Section 2 of this ordinance provided that Res. No. 240 of 1993 is codified as part of this ordinance and all existing loans under the Homestead Loan Program or any preexisting loan programs shall continue under the terms and conditions of the documents signed by the parties at the time. To the extent that no documents exist, this ordinance shall control.
Amendments noted where applicable.]
GENERAL REFERENCES

Taxation — See Ch. 243.

§ 168-1
Legislative intent. 

§ 168-2
Definitions. 

§ 168-3
Source of funds. 

§ 168-4
Executive Committee. 

§ 168-5
Home improvement loans. 

§ 168-6
Multi-family building conversion loans. 

§ 168-7
Subordination. 

§ 168-8
Delinquent loans. 

§ 168-9
Records. 

§ 168-1 Legislative intent.

A program of the Borough of Middletown has been created known as the "Homestead Loan Program." The purpose of the program is the improvement of housing stock in Middletown; to promote an increased vitality of neighborhoods; and to provide decent, safe, sanitary, single-family housing that is in conformance with the Code of Ordinances of the Borough of Middletown and the Borough's Comprehensive Plan, as may be amended from time to time.

§ 168-2 Definitions.

As used in this chapter, the following terms shall have the meanings indicated:

ABSENTEE LANDLORD
A person who holds the legal or equitable title to any parcel of real estate located in the Borough of Middletown or who holds the equitable or legal title to any improvements on real estate or any building located in the Borough of Middletown but does not maintain primary residence at that real estate.
BOROUGH
The Borough of Middletown, Dauphin County, Pennsylvania.
BOROUGH SECRETARY
That employee of the Borough appointed to the position of Secretary pursuant to the Borough Code.
CODE ENFORCEMENT OFFICER
The Code Enforcement Officer of the Borough of Middletown, Dauphin County, Pennsylvania.
CONVERSION
The creation of a single-family dwelling in a property that was previously a multi-family dwelling.
FINANCE DIRECTOR
The Finance Director of the Borough of Middletown, Dauphin County, Pennsylvania.
LOAN
The lending of funds in exchange for a mortgage agreement and promissory note.
MULTI-FAMILY DWELLING
A dwelling having more than one household or more than one independent outside access to separate living areas not otherwise easily accessible, or more than one party wall in common with adjoining dwellings.
SINGLE-FAMILY DWELLING
A dwelling having only one household from ground to roof, independent outside access, one side yard and not more than one party wall in common with an adjoining dwelling.
TENANT
A person who has the use, either by himself or with others, of a dwelling unit owned by a person other than himself.

§ 168-3 Source of funds.

The funding for the Homestead Loan Program is derived from residential, rehabilitation loan repayments for loans previously granted through federally funded projects. All monies accrued through loan repayments and/or interest earnings shall be set aside in a special account, referred to as the Homestead Program Account for the specific purpose of supporting community redevelopment through the Homestead Loan Program in accordance with the policies herein. The Finance Director shall be the custodian of these funds.

§ 168-4 Executive Committee.

Authority to approve loans shall be vested in the Homestead Loan Program Executive Committee. Said Committee will consist of one member of Council who will serve as the Chairperson and four members of the general public, each of whom shall serve a four-year term. Those members having been appointed pursuant to Resolution Number 240 of 1993, the predecessor to this article, shall continue in said capacity for the balance of their terms.

§ 168-5 Home improvement loans.

A. 

It shall be the goal of this type of loan to provide low-and moderate-income property owners with low-interest-rate loans so that single-family dwellings in the Borough may be brought into compliance with building, electric, sewer, or other codes as defined by the Middletown Code of Ordinances.

B. 

All loans shall be to low-and moderate-income persons (as determined by the Section 8 income guidelines of the U.S. Department of Housing and Urban Development for the Harrisburg-Lebanon-Carlisle Pennsylvania MSA; or any successor housing program as administered by the Dauphin County Housing Authority).

C. 

Loans to absentee landlords shall be governed by the requirement that all tenants within the structure for which the loan is being applied must fall within the low- and moderate-income limits; and tenants must continue to maintain income eligibility for the balance of the loan term.

D. 

Loans shall be in accordance with the following guidelines:

Loan Applicant Maximum Loan Annual Interest Rate Maximum Term
Low income $10,000 1% per annum 15 years
Moderate income $10,000 2% per annum 10 years
Absentee landlord $10,000 6% per annum 5 years
E. 

Loans shall be awarded according to the following priorities:

Priority Loan Category
1 Low-moderate income/code violation correction
2 Low-moderate income/housing renovation
F. 

Loans shall be secured by a construction covenant agreement, promissory note and open-ended mortgage. The costs of preparing these documents shall be paid by the Borough. The Borrower shall be responsible for the costs of recording the construction covenant agreement and mortgage, which cost shall be added to the amount of the loan. The construction covenant agreement shall place a restrictive covenant on the property prohibiting the property from being used as anything other than a single-family dwelling.

G. 

All payments to contractors will be made directly by the Borough on behalf of the loan recipients as submitted to the Borough Secretary.

H. 

The Borough Secretary shall promulgate policies for the validation of the applicant's credit worthiness and the appropriate cost of proposed code or home improvements. The Borough Secretary is authorized to request information necessary for the Executive Committee to make a reasonable determination whether the loan should be approved.

I. 

The Executive Committee may reasonably deny any request where incomplete information has been supplied, or where, in its opinion, the total income of the single-family residential household exceeds income eligibility, or where the proposed code or home improvements do not meet with the goals of this chapter.

J. 

Loans shall not be made for construction activities that will convert a single-family dwelling into a multi-family dwelling.

§ 168-6 Multi-family building conversion loans.

A. 

Said loans shall be known as "conversion loans." It shall be the goal of these loans to provide all property owners with an incentive to convert multi-family buildings into single-family dwellings.

B. 

The resulting single-family dwelling may be owner-occupied or a rental unit but the proposed conversion project must result in a clear single-family use, in the sole opinion of the Code Enforcement Officer.

C. 

Loans can only be issued to property owners and all property owners must consent to the borrowing.

D. 

Loans shall be in accordance with the following guidelines:

Loan Applicant Maximum Loan Annual Interest Rate Maximum Term
Property owner $10,000 2% per annum 10 years
E. 

Loans shall be secured by a construction covenant agreement, promissory note and open-ended mortgage. The costs of preparing these documents shall be paid by the Borough. The Borrower shall be responsible for the costs of recording the construction covenant agreement and mortgage, which cost shall be added to the amount of the loan. The construction covenant agreement shall place a restrictive covenant on the property prohibiting the property from being used as anything other than a single-family dwelling.

F. 

All payments to contractors will be made directly by the Borough on behalf of the loan recipients as submitted to the Borough Secretary.

G. 

The Code Enforcement Officer shall promulgate policies for the validation of the applicant's conversion plan. The application shall describe briefly the proposed work and shall give such additional information and shall be accompanied by such drawings of the proposed work as may be required by the Code Enforcement Officer for an intelligent understanding of the work proposed. All permits must be issued prior to payment of funds.

H. 

The Executive Committee may reasonably deny any request where incomplete information has been supplied, or where, in its opinion, the proposed conversion does not meet with the goals of this chapter.

§ 168-7 Subordination.

In those cases where it is necessary for the property owner to obtain other financing sources, with permission of the Executive Committee, the Borough Secretary may enter into a subordination agreement whereby a junior or inferior lien position is taken with respect to the loan mortgage. However, all costs associated with this agreement or filing shall be the burden of the party requesting the Borough subordinate its position.

§ 168-8 Delinquent loans.

A loan shall be considered delinquent where no payment has been received for 30 calendar days. Upon said delinquency, a written notice of delinquency shall be issued to the borrower. Whenever a loan becomes delinquent for a period greater than 60 days, the Borough Secretary shall issue a certified letter, return receipt requested, notifying the borrower of said delinquency. A late charge of 1% per annum may be charged to the loan for delinquent payments for mortgages issued on or after the effective date of this chapter. Delinquent loans will be collected upon the sale or transfer of the real estate.

§ 168-9 Records.

The Borough Secretary shall maintain all the records associated with this chapter.