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HomeMy WebLinkAbout85-48 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 2 3 4 5 RESOLUTION NO. 85-48 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH APPROVING THE COMMUNITY DEVELOPMENT COMMISSION OF MENDOCINO COUNTY'S REQUEST TO PARTICIPATE IN THE CALIFORNIA HOUSING FINANCING AGENCY MULTIFAMILY REHABILITATION AND INFILL NEW CONSTRUCTION PROGRAM AND AUTHORIZING THE PROGRAM WITHIN THE CITY OF UKIAH JURISDICTIONAL BOUNDARIES WHEREAS, the California Housing Finance Agency ("the Agency") intends to issue Multifamily Rehabilitation Revenue Bonds for the purpose of establishing a program to finance the rehabilitation and development of multifamily rental housing and infill new construction (the "Program"); and WHEREAS, the Community Development Commission of Mendocino County desires to request that the Agency reserve proceeds of the Bonds and loans for properties located within the jurisdiction of the City of Ukiah; and WHEREAS, the Agency requires that the local governing body approve of a public entity's request to participate in the program and authorize the program within the jurisdiction of the local government; NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Ukiah; 1. That the Council of the City of Ukiah hereby approves the Community Development Commission of Mendocino County's Request to participate in the California Housing Finance Agency Multifamily Reha- bilitation and Infill New Construction Program; and 2. That the Council of the City of Ukiah authorizes the Program within the City of Ukiah jurisdictional boundaries. 6 7 8 9 10 11 19. 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28 The foregoing Resolution was introduced by Councilmember Kelley who moved for its adoption, seconded by Councilmember Henderson and carried this 6th day of February, 1985 by the following roll call vote: AYES: Councilmembers Henderson, Kier, Kelley and Mayor Myers NOES: Councilmembwer Hickey ABSENT: None WHEREUPON, The Mayor declared the Resolution No. 85-48 adoped, AND SO ORDERED. D. Kent Payne, City Clerk Charles G. Myers, Mayor MEMORANDUM DATE: TO: FROM: February 6, 1985 The Honorable Mayor and Councilmembers D. Kent Payne, City Manager SUBJECT: RESOLUTION APPROVING CALIFORNIA HOUSING AUTHORITY TO PARTICIPATE IN MULTIFAMILY REHABILITATION AND INFILL NEW CONSTRUCTION PROGRAM WITHIN THE BOUNDARIES OF UKIAH New Business - 10c ~'S~-- q ~ TO: KENT PAYNE FROM: Becky Jondahl I. AGENDA DATE/COMMITTEE DATE ,,~' Agenda Title .-...,,.-:::.,,CI.TY OF. UKIAH .- - ACTION 'AGENDA SUMMARY DATE SUBMITTED: 11 January 1985 REPLY NECESSARY: YES NO INFORMATION ONLY: YES X NO CALIFORNIA HOUSING FINANCE AGENCY RESOLUTION Time Frame: Urgent Routine X Date Required: II. Brief Summary: California HOusing Finance Agency (CHFA) is in the process of selling tax exempt bonds for the purpose of providing financing for multifamily housing. Twenty percent of each proposed project will be set aside for low-income families. In order to participate in this program, the City must pass a resolution allowing the Community Devel- opment Commission to participate and authorizing the Program within the City Limits of Ukiah. Attached you will find a summary of the above program. Solutions: Alternatives: Personnel: No City Personnel Limited C.D.C. staff Fiscal Impact: None. Recommended Ac t ion/Mo t ion: Introduce and pass attached ResolUtion. ResoUrce Person REBECCA JONDAHL To be Present X On Call Phone Ext. III. ACTIQN 1) Approved 2) Denied 3) Referred to 4) S) Date of Action 6 February 1985 Approved as Revised Committee; Calendared for Agenda Return to Department for Additional Information.Staff to clarify by Memo Other CHFA MULTIFAMILY REHABILITATION AND INFILL NEW CONSTRUCTION.PROGRAM PROGRAM SUMMARY SUMMARY The California Housing Finance Agency recently developed a Multifamily Rehabilitation and Infill New Construction Program for use by fifteen (15) communities in California. Under the Program, CHFA issued revenue bonds to provide long-term financing for rental rehabilitation projects. The Agency is planning to issue bonds in late fall 1984 for additional communities and development. Funds will be available to localities able to use at least $400,000 in a 12 month period beginning in the late fall 1984 The type of loans will be as follows- ' · Rehabilitation Loans of at least $25,000 for existing owners for 15 years, secured by second deeds of trust; and A~cquisition-Rehabilitation Loans of at least $50,000 for new owners for 24 years, amortized for 30 years, and secured by a first deed of trust. New Construction Loans of at least $50,000 for development of small renta years, amortized for 30 years and secured by a first deed of trust. ' PROGRAM PURPOSE · ® Provide a steady source of tax-exempt financing for rental rehabilitation projects and in particular to' o finance the remaining Section 8 Moderate Rehabilitation units in the state, while certificates are still available; and o provide financing for communities which are participating in the Rental Rehabilitation Grant Program, Rental Rehabilitation Demonstration, or have ongoing CDBG or other efforts. Provide a source of tax-exempt financing for small infill new construction projects. 3. Enable communities to utilize statewide bond issues at a low effective interest rate, rather than attempting to structure their own small, separate bond issues for rental rehabilitation projects. 4. Streamline procedures so that local governments review and approve individual projects, rather than CHFA. HOW LOCALITIES MAY CHOOSE TO USE THE FUNDS Localities will use the rehabilitation bond proceeds to support their local housing efforts. Examples of how communities have used the funds in the first issue are as follows: . . Use bond proceeds to finance acquisition and rehabilitation in tandem with remaining Section.8 Moderate Rehabilitation allocations. Use bond proceeds in conjunction with HUD Rental Rehabilitation Demonstration or the new Rental Rehab Grant Program. Use bond proceeds in conjunction with CDBG supported rehabilitation and/or Section 8 Existing to support locally designed rental ~- rehabilitation efforts. . Use bond proceeds exclusively to support acquisition and rehabilitation of projects within target areas with or without other government subsidies. 5. Use bond proceeds to support the sale of move on properties which have been acquired and recently rehabilitated by the locality . 6. Use bond proceeds to finance small new construction projects. WHO HAS PART I C I PATED Fifteen Calfornia localities are participating in this first issue. They range in population from 5,000 to 3,000,000. Experience in rehabilitation is generally significant, although three localities are initiating their first rental rehabilitation effort in conjunction with the bond program. The majority of the localities committed other resources such as CDBG and/or Section 8 to the bond program. The selected communities are expected to use at least $400,000 in a 12 month period. ELIGIBILITY FOR LOANS PROPERTY Each property must' . . 0 ® be two (2) units or more after rehabilitation. In the case of new construction, the development may not exceed 19 units; be located within 'the selected jurisdiction and on the published TEFRA hearing list; provide complete dwelling units including kitchens and baths after rehabil i tation; include no more than 24.99% of the loan proceeds for the purchase of land; be occupied by at least 20% low/moderate income for the life of the loan or at least 13.5 years in the case of loans prepaid. The Agency will establish rent levels annually for the affordable units. If the unit is occupied by a Section 8 Certificate holder, the contract rent established by the local Housing Authority may be charged for those units. The "affordable units" must be representative of all other units in the project. For example, if the development includes 40 units, 20 -2 bedroom and 20 -1 bedroom, at least 20% of both the one and two bedroom units must be affordable for the life of the loan or at least half the life of the longest bond; ® ® e Be not have cooperatives or projects which are used on a transient basis; not have conversions to condominium, owner occupancy or con~nerical space for the life of the loan at least 13.5 years; and comply with any applicable local requirements. BORROWER/LOAN PROCEEDS · Borrower may not occupy the project if it is less than five (5) units. For projects which include both acquisition and rehabilitation, at least 15% of the total development cost must be expended on eligible rehabilitation work. 3. Refinancing is limited to 10% of the total locality's allocation and will be allowed only after other funds have been disbursed. CHFA reserves the right to review and approve .all requests for refinancing. TERMS AND CONDITIONS · Type of Loans - CHFA and the Bank of America anticipate offering the following ty~es of loans- a. Acquisition and Rehabilitation Loans for Existing Propertj/ 24 year loans (amortized for 30 years) with a fixed interest rate of approximately 11.5% for twelve years and a reset in the interest rate thereafter to conform to the tax-exempt bond rate at that time. be Rehabilitation Only Loans for Existing Property 1.5 year loans (fully amortizing) with a fixed interest rate of approximately 11.5%. c. New Construction Loans 24 year loans (amortized for 30 years) with a fixed interest rate of approximately 11.5% for twelve years and a reset in the interest rate thereafter to conform to the tax-exempt bond rate at that time. The specific loan rate will be determined at the time of bond closing. The procedures for reset of the interest rate will be established by CHFA and the Bank of America prior to bond sale. The amount of the reset will be tied to an index which is representative of the tax-exempt bond rate. ~Origination Fee - 3% of the loan amount plus all loan costs such as the appraisal, title insurance, and recording fees by the lender. Loan to Value Ratio - 75% Debt Service Ratio - 1.20%- all projects, except: 1.15%- projects which utilize any government subsidy such as CDBG, Section 8, Rental Rehab or local contributions. 4. _Prepayment/Assumptions ae All loans are assumable subject to approval of the new borrower by CHFA and the Bank of America. be Any and all loans may be prepaid. It is expected that a prepayment penality of 1% of the outstanding loan amount will be charged for the'first five years. The regulatory requirements are a covenant on the property and continue to exist in the event of a prepayment for at least 13.5 years from the date of loan closing. ROLES AND RESPONSIBILITIES CHFA The Agency will be responsible for working with Bank of Ameri'ca and selected local governments in designing the program and issuing bonds. Tasks include coordination of all facets of the bond issue. Ongoing responsibilities include- ao be ce de monitoring both the lender and local governments to insure that loans are made in a timely manner; insuring that local governments comply with all the program regulations, including direct monitoring of affirmative action for projects with construction costs of $250,000 or more, and prevailing wage for projects with construction costs of $400,000 or more; loan review in special cases such as loans which include refinancing and/or commerical space; providing technical assistance to local governments to insure that the monies are spent quickly and in accordance with the purposes of the program; and e. enforcement of regulatory agreement requirements when appropriate. LOCALITY Each local government is responsible, prior to bond issuance for identifying projects, determining how they would use the program in conjunction with other local housing efforts and provisions of a commitment fee equal to 3.5% of the bond proceeds set aside for that locality. Ongoing responsibilities include. a® be ce marketing and initial project identification; determining initial eligib(lity and any local subsidy; compliance with federal, state and local guidelines, including affirmative action, federal prevailing wage compliance, anti-displacement/relocation and other applicable requirements; d~ infusion of local resources such as CDBG Rental Rehabilitation and Section 8 when available; and eo monitoring at least annually, developer compliance with the Regulatory Agreement. LENDER The Bank of America, as the lender, is responsible for both the credit enhancement used to secure the bond issue and actual origination and servicing of all loans. The investor working with the local government prepares a loan package which is submitted to the Bank of America for underwriting and loan origination. Since the bank is ultimately at risk for all credit decisions made by them, the bank has final responsibility for l'oan processing and servicing. The roles of each branch of the bank and the local government varies from one locality to the next, depending on to what extent thie local government chooses to be involved in loan processing and construction. RESOLUTION No. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH APPROVING THE COMMUNITY DEVELOP- MENT COMMISSION OF ~'~NDOCINO COUNTY'S RE- QUEST TO PARTICIPATE IN THE CALIFORNIA HOUS- ING FINANCING AGENCY MULTIFAMILY REHABILITA- TION AND INFILL NEW CONSTRUCTION PROGRAM AND AUTHORIZING THE PROGRAM WITHIN THE CITY OF UKIAH JURISDICTIONAL BOUNDARIES WHEREAS, the California Housing Finance Agency ("the Agency") intentds to issue Multifamily Rehabilitation Revenue Bonds for the purpose of establishing a program to finance the rehabilitation and development of multifamily rental housing and infill new construc- tion (the "Program"); and WHEREAS, the Community Development Commission of Mendocino Coun- ty desires to request that the Agency reserve proceeds of the Bonds for loans for properties located within the jurisdiction of the City of Ukiah; and WHEREAS, the Agency requires that the local governing body app- rove of a public entity's request to participate in the program and authorize the program within the jurisdiction of the local government; NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Ukiah: 1. That the Council of the City of Ukiah hereby approves the Community Development Commission of Mendocino County's Request to participate in the California Housing Finance Agency Multifamily Rehabilitation and Infill New Construction Program; and 2. That the Council of the City of Ukiah authorizes the Program within the City of Ukiah jurisdictional boundaries. The foregoing Resolution was introduced by Councilmember who move for its adoption, seconded by Council- member and carried this ~day of , 1985 by the following roll call vote: AYES: