Commissioners hear plan to cap compounding on Portage Housing loans to keep homes affordable

County commissioners on June 18 received a detailed briefing on three Portage Housing construction loans whose subordinated, market-rate debt has compounded semiannually and substantially increased the amounts buyers must satisfy to complete lease-to-own purchases.

Jen, a presenter involved with the Portage Housing projects, told the board the county’s revolving loan funds are not taxpayer-general funds but are built from title and loan proceeds administered across communities. She said buyers were told they needed to seek mortgage preapproval around $60,000 but that accrued interest has pushed the required payoff closer to $70,000–$75,000 for some homes, a shift that risks barring credit-building tenants from purchasing.

The gist of the staff proposal is to rewrite the outstanding promissory notes at 0% interest, which would stop further semiannual compounding and keep final payoffs nearer to initial expectations. Jen said the three projects had original subordinate principal totals of $110,000 (Portage 1), $100,000 (Portage 2), and $100,000 (Portage 3), for a combined original principal of $310,000; to date the programs have returned roughly $336,549 in payments. She walked commissioners through per-project projections: Portage 1’s original loan was $110,000 with an estimated total paid of $465,972 under current compounding; Portage 2’s original $100,000 would show about $237,564 paid under the same structure; Portage 3’s original $100,000 would show about $228,970 paid. Jen said rewriting notes to 0% would stop growth of the debt and that the remaining Portage 1 houses (roughly 16) could pay their balances down to zero if sales continue.

Commissioners asked for follow-up detail and spreadsheet review; staff said they have briefed the participating communities (City of Kent and Revena Township) and will present the formal numbers to their boards. Jen said the request would be made consistently across the four participating jurisdictions and that while unanimous agreement was preferred, the partnership would probably continue if three of the four concurred.

The meeting also included two related formal actions: the board approved partial releases of mortgage on properties tied to Portage Housing One and Portage Housing Two (motions recorded and approved by unanimous roll call). Commissioners asked staff to provide clear, project-level payoff projections and to coordinate with other local governments before finalizing any forgiveness or note rewrite.

If approved by all partner jurisdictions and the board, rewriting the notes to 0% would stop further compounding; staff said remaining small write-offs would be limited compared with the continuing growth if no action were taken. The board requested the supporting spreadsheets and asked staff to return with formal language for any amendment, along with confirmation of how changes would affect tenants who choose not to purchase the homes.