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HomeMy WebLinkAbout85-289 - Resolutions RESOLUTION NO. 85-289 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, AMENDING THE RULES AND REGULATIONS RELATING TO THE 1984 AND 1985 SERIES "A" RESIDENTIAL MORTGagE REVENUE BOND PROGRAMS The City Council of the City of Rancho Cucamonga, California, does resolve as follows: WHEREAS, the City Council of the City of Rancho Cucamonga approved Rules and Regulations pertainin8 to the Residential Mortgage FinancinE Program on July 26, 1984; and WHEREAS, the Rules and Regulations contained statements identifying the maximum acquisition costs in Section 7 of Exhibit "A" of the Rules and Regulations based on the economic study prepared for the Home Mortgage Revenue Bond ProSram; and WHEREAS, wordln8 was contained in said section which gave authority to the Agency to adjust, from time to tim, the maximum price limits for new and existing homes in accordance with authorization contained in the Tax Act and Indenture; and WHEREAS, information received from the City's feasibility consultant updates the housing purchase price limits; and WHEREAS, the City Council determines it is necessary to amend the previously adopted Rules and Regulations in accordance with the findings of said study. NOW, THEREFORE, BE IT RESOLVED, that Section 7 of the Rules and Regulations contained in Exhibit "A" of Part 4 of the Authorization and Issuance Documents be amended as follows: Section 7. Maximum Ac~ulsition Costs. For purposes of the Program, the City Council has determined that the Maximum Acquisition Costs for new homes is $128,810 and for existing homes is $118,690. The Agency reserves the right to adjust the Maximum Acquisition Costs, from time to time, in accordance with the authorization contained in the Act. PASSED, APPROVED, and ADOPTED this 16tb day of October, 1985. AYES: Wright, MikeIs, Dahl, King NOES: None ASSENT: Buquet :.J~n D.' MikeIs, Mayor ATTEST: ~everly A./'Authele[, City Clerk Resolution No. 85-289 Page 2 I, BEVERLY A. AUTHELET, ClTY CLERK of the tit7 of Rancho Cucamor~a~ California, do hereby certify chat the foregoin~ Resolution was duly passed, approved, and adopted by the City Council of the City of Rancho Cucamonga, California, at a regular meeting of said City Council held on the 16th day of October, 1985. Executed this 17th day of October, 1985 at Rancho Cucamonga, California. Beverly A./Authelet, City Clerk Resolution No. 85-289 Page 3 CITY OF RANCHO CUCAMONGA HOME MORTGAGE FINANCING PROGRAM RULES AND REGULATIONS ESTABLISHING ELIGIBILITY CRITERIA FOR BORROWERS AND CRITERIA FOR HOME MORTGAGES {Adopted July 26, 1984} PREFACE These.Rules and Regulations are made pursuant to Chapters 1-5 of Part 5 of Division 31 of the Health and Safety Code of the State of California and Section 103A of the Internal Revenue Code of 1954, as amended, and relate to the City's Home Mortgage Financing Program of purchasing Home Mortgages, made to qualified persons and families, from Lenders, as hereinafter defined. These Rules and Regulations establish criteria for the'~rigination, 'servicing and administration ~f Home Mortgages under the Program. In developing the criteria, the City has considered, on a Citywide basis, factors such as the amount of personal or family income available for housing needs, household size, costs and condition of available housing, and eligibility of potential mortgagors for housing assistance. Section 1. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes of these Rules and Regulations have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise defined, all terms used in these Rules and Regulations shall have the meanings assigned to such terms in the Act, the Tax Act or the Indenture. Ac__t. "Act" means Chapters 1-5 of Part 5 of Division 31 of the Health and Safety Code of the State of California, as now in effect or as hereafter amended. Administrator. "Administrator" shall be the City Manager or such person as the City Manager shall delegate to act on his behalf in connection with ' one or more aspects of the Program. Authorized Officer. "Authorized Officer" means any one of the officers or employees of the City authorized by resolution of the City to perform the act or sign the document in question. Resolution No. 85-289 Page 4 Bonds. "Bonds" means any Bond or Bonds, as the case may be, of the City .of Rancho Cucamonga, California, Home Mortgage Revenue Bonds, 1984 Series A, authorized by and at any time outstanding pursuant to the Indenture. Commitment Contract. "Commitment Contract" means the Commitment " Contract (and Reservation of Funds) between the City and each developer of each Project, and approved and accepted by the Trustee and applicable Lender, whereby the City commits funds to purchase and the developer or other party to the Commitment Contract and the Lender agree to provide Home Mortgages for purchase by the Trustee on behalf of the City. "Cit" City. y means the City of Rancho Cucamonga, California. Home. "Home" real property improved with a residential structure and located in one of the Projects, or, with respect to Homes which have been previously occupied, located within the incorporated area of the City, the Financing of which is or may hereafter be otherwise permitted under the Act and the Indenture. Home includes single-family attached or detached residential units, townhouse residential units and condominium residential units. Home Mortqage. "Home Mortgage" means a Mortgage made and executed for the pbrpose of financing residential construction or for the purpose of financing a Home which has been previously occupied, and secured by a Mortgage, the payment of which is insured by Mortgage Insurance. Home Mortgage Application. The term "Home Mortgage Application" shal' mean a Mortgagor's application for a Home Mortgage under the Program. Home Mortgage Purchase Agreement. "Home Mortgage Purchase Agreement" shall mean an agreement by and among the City, the Trustee and a Lender providing for the origination and purchase of Home Mortgages by the Trustee on behalf of the City, in substantially the form of such Agreements delivered in connection with the issuance of the Bonds Household Income. "Household Income" means the current gross 'aggregate income as calculated by the Lender for purposes of qualifying a mortgagor for a Home Mortgage, together with the gross aggregate income of all persons who intend to reside permanently with such person in one dwelling unit, regardless of whether such persons resided with such person at any time in the past. Indenture. The term "Indenture" means the Trust Indenture dated as of July 1, 1984, concerning the Bonds between the City and the Trustee as it may from ' time to time be amended in accordance with its terms. Lender. The term "Lender" or "Lenders" shall mean any state or- national bank or trust company, savings and loan association, or mortgage banker authorized to acquire, hold and deal in mortgages and is approved by FNMA or F~LYC, as a seller/servicer of mortgages. Such Mortgage Lender shall have a place ~f business in the State, shall be authorized to.do business in the State, shall :e Resolution No. 85-289 Page 5 authorized by the City to do business with the City and to aid in Financing pursuant to the Act on behalf of the City. Median Household Incomp. "Median Household Income" shall mean the highest of {i) statewide median household income, {ii) countywide median household income, or {iii) median family income for the area as determined by the United States Department of Housing and Urban Development, as established by the City and as may be adjusted from time to time by the City. Mortgage. The term "Mortgage" shall mean a deed of trust or other instrument which constitutes a first lien {subject to Permitted Encumbrances] on real property or a leasehold interest therein and improvements thereon, together with a promissory note or similar interest bearing obligation made by a mortgagor, the repayment of which is secured by such a lien on real property located within the City and improved by a Home financed with the proceeds of the Bonds. Mortgagor. The term "Mortgagor" shall mean the maker of, and any other Person obligated on, a promissory note in connection with the acquisition of a Home through the borrowing of money pursuant to a Home Mortgage and who {i) meets the income limitations of the Indenture and the Act. {ii) {except with respect to the unrestricted 1D% of the Developer's Reservation) had a present ownership in a principal residence of such'Fr~rson at no {ime during the 3-year period ~nding on the date of execution of the applicable Mortgage as provided in the Indenture and the Tax Act, and {iii) othervise meets the requirements of the Act, the Tax Act, the Indenture and the Program..The term shall also include a subsequent purchaser of a Home who assumes the related Home Mortgage and who meets the requirements of the Act, the Tax Act and the Program and who had a present ownership in a principal residence of such purchaser at no time during the 3-year period ending on the date of purchase. The term "Mortgagor" does not include any person who signs a note and who executes and files with the Lender a statement under penalty of perjury or an affidavit that {i) he is executing the note solely for purposes of additional security to the Lender, {ii} he has no other financial interest in the property subject to'the Home Mortgage, and (iii) he has no intention to and will not occupy the premises subject to the Home Mortgage at any time; provided that the applicant who intends to oceupy the Home must have sufficient income to comply with the underwriting requirements and practices of FNMA or FHLMC or, if more restrictive of the Private Mortgage Insurer. ' Person. The term "Person" shall mean any individual, partnership, copartnership, firm, company, corporation, lending institution, association, joint stock company, trust, estate, political, subdivision, state agency or any other legal entity, or its legal representatives, agents, or assigns. Program. The term "Program" shall mean the City's Home Mortgage Financing Program of purchasing Home Mortgages pursuant to the Indenture, the Act, the Tax Act, the Ordinance and Resolution of the City establishing and implementing the Program, and these Rules and Regulations. Resolution No. 85-289 Page 6 Resolution. "Resolution" means Resolution No. 84-211, adopted by the City on July 26, 198¢, authorizing, among other things, the issuance of the Bonds and the execution of the Indenture and providing for the approval of these Rules and Regulations Rules and Reaulations. "Rules and Regulations" means these rules and regulations concerning the operation of the Program, adopted by the City on July 26, 1984, or as they may be supplemented or amended from time to time. Servicing Agreement means a contractual agreement by and among the City, the Trustee and 'a Servicer for the servicing of Home Mortgages by the Servicer, in substantially the form of such Agreements delivered in connection with the issuance of the Bonds. Special Hazard Insurance. "Special Hazard Insurance" means insurance, commonly referred to as "Difference in Conditions" insurance, which shall protect from losses on Homes caused by hazards, such as flood, mudslide and building collapse (but not earthquake), to the extent not covered by Hazard Insurance, and losses resulting from the application of a coinsurance clause in hazard insurance policies. State. The term~tate" shall ~ean the State of California. ' Tax Act. The term "Tax Act" shall mean Section 103A of the Internal Revenue Code of 1954, as amended, and regulations promulgated thereunder. Trustee. The term "Trustee" shall mean the party who is referred to as the T~ustee in the Indenture. Section 2. Eligibility Criteria for Mortgagors. A person that compli~ with the criteria hereinafter set forth in this Section is deemed by the City to a person or family of low or moderate income and unable to pay the amounts at whi~,, unassisted private enterprise is providing suitable, decent, safe and sanitary housing and shall be eligible to become a Mortgagor under the Program. To be eligible as a Mortgagor, a Person must (i) qualify as a Mortgagor under the-requirements set forth in the Indenture, (ii) execute the Mortgagor's Affidavit in form set forth as an Exhibit to the Home Mortgage Purchase Agreement, (iii) meet the income limitations set forth in the Indenture, and (iv) meet the underwriting requirements of the Lender and the applicable Private Mortgage Insurer for the Program. Section 3. Administration~ Origination and Servicing Guidelines. The administration, origination and servicing guidelines set forth in the Indenture, the Commitment Contract (and Reservation of Funds), the Home Mortgage Purchase Agreement and the Servicing Agreement, respectively, and by this reference made a part hereof, shall be adhered to by the City, the Trustee, the Administrator and the Lenders in performing their obligations in connection with the Program. Resolution No. 85-289 Page 7 Section 4. Special Rules Applicable to Reservations Pursuant to the Commitment Contract. The Tax Act permits a portion of the Bonds to be applied to the purchase of Home Mortgages with respect to which the Mortgagor had a Present Ownership Interest within the three-year period prior to the execution of the Home Mortgage. Accordingly, the Trustee may from time to time purchase Home Mortgages with respect to which the Mortgagor had such a Present Ownership Interest; but any such purchase may be made only if, at the time of such purchase, the aggregate original principal amount of all Home Mortgages theretofore and thereupon purchased pursuant to this Agreement with respect to which the Mortgagors had such a Present Ownership does not exceed ten percent (10%) of the aggregate original principal amount of all Home Mortgages theretofOre and thereupon purchased by the Trustee pursuant to this Agreement. Section 5. Median Household Income. For purposes of the Program, the applicable California statewide median household income is currently $27,143. The City reserves the right to adjust the Median Household Income from time to time in accordance with the authorization therefor contained in the Act. Section 6. Acquisition Cost. "Acquisition Cost" means the cost of acquiring a Home from the developers or other sellers as a completed residential unit. "AcquiSition Cost" includes all amounts paid, either in cash or in kind, by the ~ortgagor (or a related' party for 'the benefit of the mortgagory to the developer or other seller (or a related party for the benefit of the developer or other seller) as consideration for the Home. If the Home is purchased subject to a ground lease then the term ".Acquisition Cost" includes the capitalized value of any ground rent payable with respect thereto. If a Home is incomplete, the term "Acquisition Cost" includes the reasonable cost of completing the Home whether or not the cost of completing construction is to be financed with Bond proceeds. For example, where a mortgagor purchases a building which is so incomplete that occupancy of the building is not permitted under local law, the term "Acquisition Cost" includes the cost of completing the building so that occupancy of the building is permitted. As a further example, where a mortgagor agrees to purchase fixtures at a separate price from the seller or otherwise, the term "Acquisition Cost" includes the price paid for such fixtures. The term "Acquisition Cost" does not include usual and reasonable settlement or financing costs. "Settlement costs" include titling and transfer costs, title insurance, survey fees, and other similar costs. "Financing costs" include credit reference fees, legal fees, appraisal expenses, "points" which are paid by the buyer (but not the seller even though borne by the buyer through a higher purchase' price) or other costs of financing the Home. However, settlement costs and financing costs are excluded in determining Acquisition Cost only to the extent that such amounts do not exceed the usual and reasonable costs which would be paid by the buyer where financing is not provided through the Bonds. For example, if the purchaser agrees to pay to the seller more than a pro rata share of property taxes, such excess shall be treated as part of Acquisition Cost of a Home. In addition, if the purchaser agrees to pay to the seller an amount sufficient to pay outstanding Resolution No. 85-289 Page 8 assessment liens, such payment shall be treated as part of Acquisition Cost of a Home. The term "Acquisition Cost" also does not include the value of services performed by the mortgagor or members of the mortgagor's family in completing the Home. Section 7. Maximum Acouisition Cost. Based on the "safe harbor" Purchase price limitations most recently published by the United States Treasury Department, the City hereby determines that the Average Area Purchase Price for the Riverside- San Bernadino Primary Metropolitan Statistical Area is $110,600 and $117,700 for new and existing homes, respectively. Therefore, the maximum price limits for Homes in the Program are as follows: 110% of the Average Area Purchase Price is $121,600 and $129,470 for new and existing homes, respectively", subject to adjustment from time to time, in accordance with the Indenture and the Tax Act. Section 8. Program Implementation. The Administrator of the City's Program shall be the City Manager. Decisions concerning the Program will be made for the City by the Administrator. It will be the policy of the City to investigate the facts and circumstances surrounding any requests for actions or approvals by the City and to discuss the requested actions or approvals with the person or~persons makin~ such requests and, i f'tS~e Administrator deems it desirable or it is required by the Indenture, with the Trustee. In all instances, the City will act with due regard for the security of the Bonds issued in connection with the Program, the City's goals for the Program and the terms and conditions of the Indenture and these Rules and Regulations. · Section 10. Amendments. These Rules and Regulations may be modified e- amended in accordance with the provisions hereof. Copies of a)l such modificati< or amendments shall be transmitted to each of the Lenders, the developers who ha. entered into Commitment Contracts and the Trustee. Section 11. Special Hazard Insurance Polic)?. In order to maintain the rating on the Bonds issued in connection with the Program, the Trustee will keep and maintain a Special Hazard Insurance Policy issued by an insurer to be selected under the Program, or a replacement policy as provided in the Indenture. Section 12. Miscellaneous. (A) Waiver. To the extent permitted by the Act, the City shall have the right to waive any rule or regulation herein contained, and any failure on the part of the City to enforce any rule or regulation herein shall not affect the validity of any contract entered into pursuant tothe Program. (B) Governinq Law. All questions with respect to the construction cf these Rules and Regulations shall be governed by the laws of the State 3f California. Resolution No. 85-289 Page 9 (C) SeCtion Headings. The headings of the several sections of these Rules and Regulations, and any table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. (D) Severability. If any one or more of the provisions contained in these Rules and Regulations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions hereof and such invalidity, illegality or enforceability shall not affect any other Provision hereof, and these Rules and Regulations shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.