After charting a $70,000 loss at Sunset Meadows II in 2002 and a $30,000 loss at Sunset Meadows I, officials believe that within three years, both facilities will be in the black.
It'll cost the county less than $10,000 to get it that way.
Moffat County Housing Authority Director Keith Antonsen requested $9,493.06 from the Moffat County commissioners at their regular meeting Tuesday to offset closing costs to refinance Sunset Meadows II, an independent living center for senior citizens.
The request was approved and the unbudgeted funds will come out of the commissioners' budget for grants, contingency or miscellaneous expenditures.
Antonsen started the refinancing process in August of 2001. The current loan on the building, taken out in 1983, is at 12 percent interest, making monthly payments $16,842. It was a 40-year loan.
The restructured loan is almost too good to be true, Antonsen told the commissioners. The $1,580,100 balance will be split into three separate mortgages. The first, for $218,100, will be made through the Colorado Housing and Finance Authority at 6.5 percent interest for 30 years, making monthly payments $1,379.
"That's definitely going to do something for us when our payments were $16,000 a month," Antonsen said.
The second two will be federal mark-to-market mortgages for the remaining balance. The interest rate will be 1 percent for 30 years and the payments are determined annually based on whether the facility makes a profit. If the facility does not report cash flow, the payment is waived for that year.
If a series of payments have not been made at the end of the loan cycle, it could be extended, or could be forgiven by the federal government.
At the date of closing, $221,383 will be deposited in the facility's replacement reserve account for maintenance and improvements. The Department of Housing and Urban Development will deposit $2,400 a month into the replacement reserve account and will pay three-fourths of the closing costs.
In addition, the money the county contributed to the closing costs will be repaid over a period of 10 years at a 7.1 percent interest rate.
"There's no other available financing out there that I could find that could match this," Antonsen said.
The facility has been operating at a deficit and is three months behind on payroll, using money from the replacement reserve account to make up for the deficit.
Reducing the loan payment could make the difference between operating in the red and operating in the black, Antonsen said.
He attributes the deficit to the rising costs of goods and services and to the fact that rent for an apartment in the facility is set by HUD and cannot be increased.
Sunset Meadows I cannot be refinanced because it was built using a bond issue, but Antonsen said those bonds will be paid by 2006, eliminating $84,000 a year in bond payments and more than offsetting the annual $30,000 deficit.