Restructuring CVUU Loans & Changes to the Loan to Hague School
The Finance Committee and Board reviewed our financial commitments and made two major changes to improve our financial strength and stability. We refinanced our two loans with TowneBank, combining them into one loan, eliminating the balloon payment and lowering the interest rate. We also adjusted the loan we have to The Hague School (Leadership International).
CVUU’s financing for the property at 809 South Military is with TowneBank and was in two loans. The total borrowed was $1,600,000. The two loans were 1) a $1,185,000 note in a 25-year mortgage with a fixed rate of 4.5%, and 2) a $415,000 note, same interest rate with a 15-year amortization, but with a balloon of about $310,000 end of five years.
The new single loan amortizes over the original 25 years, 24 years remaining as of 11/15/19. The loan balance is $1,561,367 which matures 11-15-2043. Our monthly payments will be reduced from $9,797 to $8,594. The $310,000 balloon payment was eliminated. TowneBank lowered our interest rate from 4.5% to 4.16% which created a savings. The new loan will have no prepayment penalty, thus allowing early pay down if we choose.
We closed on the sale of 739 Yarmouth at $575,000 on 12-31-18. The Hague School has invested about $200,000 in improvements to 739 Yarmouth. They have students and excellent teachers and are doing well with their first year. Upon their purchase of 739 Yarmouth we constructed a 7-year $425,000 loan to them at 5% interest. They have been paying us $6,006 per month. As with many first-year businesses, they are experiencing some cash flow concerns that we decided to help them with temporarily. We agreed to amend the loan agreement to receive interest only payments at 7% interest for the months of October 2019 through January 2020. These payments total $9,000. Beginning in February 2020 they will resume principal and interest payments at $6,219 per month. The principal owed for the four months has been included in their monthly payments. They presently owe $386,000 on their loan which matures on 1-1-2026.
I would like to thank the Finance Committee and Board for their work on these financial changes which create a better and stronger financial future for us. I’d like to especially thank David Howell for his expertise and persistence in working with TowneBank, our attorney, and the Warrens, owners of The Hague School. We have a firm financial foundation for our future.
Anne Odell, President