Way paved for loans to two homeowners

Dan Kulin

Tuesday, July 27, 2004 | 9:23 a.m.

A misunderstanding by a bank instead of an unintentional roadblock from City Hall was the cause of at least one downtown Henderson resident's recent troubles getting a loan, a city official said.

Last week two downtown Henderson homeowners complained to the City Council that they were told they could not get a mortgage because their property was recently rezoned from residential to commercial.

City officials theorized the loans were problematic because either the federal government only backs home loans on residentially-zoned property, or that some lenders worried they wouldn't be able to sell a loan for a home on commercial property on the secondary mortgage market.

City Redevelopment Manager Robert Ryan said Monday that the problem has been solved, and the root of the banker's concern was whether the loan would sell.

"The bank officer didn't understand that those could be sold on the secondary market," Ryan said, adding that city officials had to show lenders the loan could be sold.

Although the problem with the loans has apparently been fixed, Ryan said another potential problem has arisen with the residences, which in April were rezoned for commercial uses.

Ryan said that under current zoning rules, if more than half of one of a home that's on commercial property is destroyed, by a fire for example, the law would not allow the homeowner to rebuild their home. This is because the residential use of the home doesn't conform to the zoning's commercial use.

Ryan said the City Council might be asked to create an exemption to that rule.

The two homeowners who complained to the council last week could not be reached for comment Monday.

Patrick Wilson and Brad Jensen, who both have homes on Utah Way in downtown Henderson, spoke to the council during its July 20 council meeting to complain about their predicaments.

Wilson said he was looking into a home equity loan and was being told no.

Jensen said he was being turned down for a loan he needed to finalize the purchase of land in Utah. The situation surprised and upset council members who said the rezoning was intended to make future redevelopment easier, not hurt any current homeowners. Council members said they were willing to do almost anything to fix the problem, including rezoning the land again.

But even with the problem apparently fixed, Ryan said there was a chance Jensen would need $85,000 to $90,000, possibly from the city, to go through with the purchase while waiting for loan.

"After we spoke this morning Mr. Jensen called and said that he was able to arrange alternative financing over the past several days. So it appears that the issue is resolved," Ryan said.