HomeMy WebLinkAbout4.07 Mortgage Credit Certificate Program (000-40
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: February 13, 1989
SUBJECT: Agreement with Alameda County regarding
Mortgage Credit Certificate (MCC)
Program
EXHIBITS ATTACHED: Exhibit A: Letter from John Shepherd,
Assistant Planning Director,
Alameda County Housing and
Community Development with
draft resolution and draft
agreement
Attachment 1: January 23, 1989 City
Council Agenda Statement
regarding Alameda County
Homeownership Assistance
Program
RECOMMENDATION: 1) Adopt resolution authorizing Mayor
to sign agreement for Mortgage
Credit Certificate Program
2 Authorize additional appropriation
ro riation
of $4, 000 to Planning Contract
Services account
FINANCIAL STATEMENT: The cost to the City of establishing the
program will not exceed $4, 000. An
additional appropriation from the
unallocated reserves will be required.
DESCRIPTION:
In January 1989 , the City Council indicated interest in
participating in a Joint County-Cities Mortgage Credit
Certificate (MCC) Program to assist first-time home buyers. To
proceed with establishing the program, the City needs to enter
into an agreement with Alameda County.
After the agreement is completed, the County will apply to
the State for an allocation. The State has indicated it will
make the first allocations under the program in March 1989 .
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ITEM NO.
HCD
ALAMEDA COUNTY PLANNING DEPARTMENT
Housing & Community Development Program
January 30, 1989
Larry Tong
City of Dublin
P.O. Box 2340
Dublin, CA 94568
Dear Mr. Tong:
SUBJECT: Resolution and Cooperative Agreement with County to Implement Mortgage
Credit Certificate (MCC) Program
In response to the survey we conducted in December, 1988, eleven cities indicated
an interest in participating with the County in a Mortgage Credit Certificate (,"CC)
Program for first-time homebuyers. Based upon the response, we plan to apply to
the State for an allocation of approximately $60 million.
As the next step in proceeding with the implementation of the Program, each city
must adopt the enclosed resolution which includes as Exhibit A a cooperative
agreement with the Cou-�ty. The resolution authorizes submission of an analication
to the State for an allocation for issuance of ZNEC's, the transfer of t':e _
allocation to the County and payment of a portion of costs of establishing the 'r-C
Program, not to exceed $4,000.
On January 25, 1989, the California Debt Limit Allocation Committee (CDLAC) held
its first meeting for 1989 and indicated that it would make the first allocations
for the year at its March meeting. To be considered for an allocation at the March
meeting, applications must be submitted by March 1 at 5:00 p.m. To meet the State
deadline, we must receive the adopted resolution and executed agreement no later
than Friday, February 24_, 1989.
To provide more information about the program and discuss the next steps in th°
program, we have scheduled a meeting *for Monday, February 6, 1989, from 11:00 to
noon in Room 176, 22=4 Viest �-Iinton Avenue, Havward.
If you have any questions or need more information t-efore the meeting, give me a
call.
Sincerely,
DEB � fl
«,. �; 198 '
John N. Shecherd
Assistant. Planning Director
Housing & Community Development
JNS/dvs:1223H
_ 1S
r:
HIBIT
224 W.WINTON AVENUE• ROOiNI 169•HAYWARD,CA 9-:544.415/670-5404
RESOLUTION NO.
A RESOLUTION APPPOIIPIG A MORTGAGE CREDIT CERTIFICATE PROGRAM IN COOPERATION
WITH THE COUNTY OF ALANEDA, AUTHORIZING THE MAYOR AND THE CITY CLERK TO
EXECUTE FOR AND ON BEHALF OF THE CITY OF A COOPERATIVE
AGREEMENT BETWEEN THE COUNTY OF ALA4EDA AND THE CITY OF
AUTHORIZING AN APPLICATION TO THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE
FOR AN ALLOCATION FOR ISSUANCE OF.MORTGAGE CREDIT CERTIFICATES, AUTHORIZING
THE TRA11SFER OF SUCH ALLOCATION TO THE COUNTY OF ALAMEDA AND AUTHORIZING A
CONTRIBUTION TO THE COUNTY OF ALA4EDA FOR THE PAYMENT OF A PORTION OF THE
COSTS OF ESTABLISHING SUCH MORTGAGE CREDIT CERTIFICATE PROGRAM.
WHEREAS, there is a shortage in the County of Alameda (the "County") and
in the City of (the "City") of decent, safe and sanitary
housing, affordable by persons in the lower end of the home purchasing
spectrum, and a consequent need to provide assistance to such persons for the
financing of homes in the County and in the City; and
WHEREAS, the Board of Supervisors of the County intends to provide for a
home mortgage credit certificate program (the "Program") pursuant to Chapter
3.5 of Part 1 of Division 31 of the Health and Safety Code of the State of
California (the "Act") and to issue mortgage credit certificates, pursuant to
the Act and Section 25 of the Internal Revenue Code of 1986, as amended (the
"Code") , to assist in the financing of homes in the County and in the City for
persons in the lower end of the home purchasing spectrum; and
WHEREAS, the Council finds and determines that it is in the best interest
of the City to adopt the Program in conjunction with the County and to consent
to the operation of the Program by the County within the geographic boundaries
of the City; and
WHEREAS, Sections 25 and 146 of the Code limit the amount of mortgage
credit certificates that may be issued in any calendar year by entities within
a state and authorize the legislature of each state to provide the method of
allocating authority to issue mortgage credit certificate within such state;
and
IvIIEREAS, Chapter 11.8 of Division 1 of Title 2 of the Government Code of
the State of California (the "Government Code") governs the allocation in the
State of California of the state ceiling (as that term is defined in the
Government Code) among governmental units having the authority to issue
mortgage credit certificates; and
IgIIERGi\S, Section 8869.85 of the Government Code requires a local agency
to file an application for a portion of the state ceiling with or upon the
direction of the California Debt Limit Allocation Committee (the "Committee")
prior to issuing r-.ortgage credit certificates; and
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l for a portion of the state
WHEREAS, sign City has determined to apply A on behalf of the
n to the County, to authorize th.. County
ceiling and to as sig pursuant to Section 8869.85 (d) of
for a portion of the state ceiling, P of authority to issue mortgage
City �, the total amount, if any,
the Government ode, b the C ►ittee;
credit certificates allocated to the City y council of the City
NOW,
BE IT RESOLVED, by the
, as follows:
of ur se of providing
is the Program for the p P°
1. The City hereby adop persons in the lower end of the home
of homes for Pe and consents to the,
assistance in the financing proper
rt located
purchasing spectrum in the County and in the
respect to all p Pe Y
operation of the Program by the County
within the geographic boundaries of the City.
Cooperative Agreement between the County and the City (the
2. The PP
,� ti which is attached hereto as Exhibit A, is
"Agreement") , a copy Clerk are hereby authorized and directed
approved, and the Mayor and City
liver said Agreement, for and in the name and on behalf of the
execute and deliver the advice and consent of the City Attorney,
is
City. The Mayor, deems
authorized to approve any additions and consenteoflthe City rAttorney, d
Agree o with the advice to be
Agreement which h-� his approval of such add�yions or changes as so
necessary or advisable, the t•._ or of said Agreement
conclusively evidenced by the execution by
added to or changed.
is hereby authorized, on behalf of t:°
3 . The ?�' submit or his designee, y be
City,
either to submit an application, and such otheildocuments behalf of the
for an allocation of a
required or to autrdirectionooft the oCommitteeT, f or an the maximum amount
City, to or upon the in an amount not to exceed
portion of the state ceiling,for application towards the issuance of mortgage ad
for which a City may apply' n consultation with the
certificates, the final detetmhistdesigneeheupo unt to be so applied
credit the Mayor o
for to be deteiadmibistrators.
County's Program on behalf of the
nested hereby, or so much
4. The ,4ayor or his authorizeebo betreglze ount which
City, to transfer the allocation b the Ccnmittee, to the C Y
thereof as is allocated to the City y credit certificates in order to
will use such allocation to issue mortgage
n of homes throughout the County for persons in the
g
assist in the financing purchasing spectrum.
lower end of the home p
1e roper officers of the City are hereby au u exceed $4,000,sasrthe
5, The proper an amo
f the costs of establishing the Program.
The final amount of
to or upon the direction of the rh P officers of the City upon
City's share o such p
such payment shall be determined by administrators.
consultation with the County s Program
6. The Mayor, with the advice and consent of the City Attorney, is
further authorized to enter into such additional agreements with the County,
execute such other documents or take such other actions as he may deem
necessary or appropriate to carry out the purpose and intent of the Agreement
or to cooperate in the implementation of the Program, including, without
limitation, the application to or upon the direction of the Committee for an
allocation of a portion of the state ceiling for the issuance of mortgage
credit certificates and the transfer
officers of such
theallocation
con�ectionowith.thell
previous actions taken by the
Program and the actions authorized hereby are hereby ratified and approved.
7. This Resolution shall take effect immediately upon its adoption.
PASSED, APPP,OVED AND ADOPTED this day of
1989,
by the following vote:
Ayes:
Noes:
Absent:
Mayor
ATTEST:
City Clerk
(SEAL)
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1 _
EXHIBIT A
COOPERATIVE AGREEMENT BE'nIEEN THE COUNTY
OF ALAMEDA AND THE CITY OF
THIS COOPERATIVE AGREEMENT (this "Agreement") , made and entered
into as of ,1989, by and between the County of Alameda, a
political subdivision of the State of California (the "County") , and the City
of a political subdivision of the State of California
(the "City") .
W I T N E S S E T H:
WHEREAS, the County has determined to engage in a mortgage
credit certificate program pursuant to Chapter 3.5 of Part 1 of Division 31 of
the Health and Safety Code of the State of California (the "Act") to issue
mortgage credit certificates to provide assistance in the financing of homes
for persons in the lower end of the home purchasing spectrum in the County and
the City, pursuant to the Act (the "Program") ; and
WHEREAS, the County has established the Program pursuant to the
Act and has determined to cooperate with the City in the exercise of its
powers under the Act for purposes of the Program;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter provided, the parties hereto agree as follows:
SECTION 1. The County agrees to undertake the Program and to
issue mortgage credit certificates thereunder pursuant to the Act.
SECTION 2. The City hereby agrees to cooperate with the County
in the exercise jointly or otherwise of their powers for the purpose of
assisting in the financing of homes pursuant to the Act by agreeing that the
County shall exercise its powers under the Program, all as more specifically
set forth in the act, with respect to property located within the geographic
boundaries of the City. In particular, and without limiting the foregoing,
the City agrees, on the request of the County, either to apply or to authorize
the County to appropriate on behalf of the City, in accordance with Section
8869.85 of the Government Code, for an allocation of the state ceiling to
issue mortgage credit certificates and to transfer any such allocation
received to the County under the terms of Section 8869.85(d) of the Government
Code.
SECTION 3. The City agrees to undertake such further
proceedings or actions as may be necessary in order to carry out the terms and
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v - �..0 ..a:.l��.,,'���l I�yF'! �' � 'ST _ �L"Y.ir:U ��1�'�..i+.•' �. 7 C J
the intent of this Agreement. Nothing in this Agreement shall prevent th
County from entering into one or more agreements with other
subdivisions within the County, if deemed necessary e
the County. Political
Y and advisable to do so by
SECTION 4. This Agreement may be amended by one or more
supplemental agreements executed by the County and the City at an
time
except that no such amendment or supplement shall be made which shall
adversely affect the rights of the holders of an
issued by the county pursuant to the Act in conn ctiongwithCthelprogCrtificates
am.
SECTION 5. This Agreement shall continue in effect throughout
the period duri-n—g—which the County is empowered to engage in mortgage
certificate program pursuant to the Act, provided however, that the City
decline to cooperate with the County under this Agreement, connection with
credit
any such program of the County, upon notice to the Count 9 ment, in Y aY
within 15 days of receipt of notice from the Count Y to that effect
in a mortgage credit certificate r ram. Y of its intention to engage
be given to the City at least 31 days Such notice from the County shall
ment of an
mortgage credit certificate programy prior to the establish
. y such
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and attested by their proper officer
authorized, and their official seals to be hereunto affixed, thereunto duly
first above written. ed, all as of the day
COUNTY Of ALA111EDA
CITY OF
By
By
Title Mayor
ATTEST
ATTEST:
By
By
Title City Clerk
APPROVED AS TO FORM:
APPROVED AS TO FORM:
By
County Counsel By
City Attorney
0429h -5-
AGENDA STATEMENT
P CITY COUNCIL MEETING DATE: -January 23, 1989
K
SUBJECT: Alameda County Homeownership Assistance
Program
Report Prepared by Laurence L. Tong,
Planning Director
EXHIBITS ATTACHED: Exhibit A: Letter from John Shepherd,
Asst. Planning Director,
�W =~ s Alameda County Housing &
Community Development
Program
RECOM14ENDATION: 1) Indicate interest in participating
in the Mortgage Ce rtificate
- -Credit Ceificate
Program
2) Indicate no interest at this ti-.' e in
Supplemental the Mortgage Assistance
Program
FINANCIAL STATEI—ENT: None at this time. Up to $4,000 one-
time start up cost for Mortgage Credit
Certificate Procran
DESCRIPTION: Alameda County is designing a joint
County-cities program to assist first time homebuyers. The
federal Technical Corrections and Miscellaneous Revenue Act of
1988 authorizes the issuance of Mortgage Credit Certificates
(MCC's) during 1989. The MCC program would allow the homebuyer a
tax credit against federal personal income tax The tax credit
under the proposed program would be 20% of the annual mortgage
interest. The tax credit would be in addition to the usual
deduction of mortgage interest from gross income before
calculating federal income tax. The homebuyer can use the
remaining 80% of the mortgage interest amount as a deduction
in
the usual manner. Eligible homes would be existing homes under
$149,400 and new homes under $159,300. Eligible purchasers would
be first time buyers with incomes under $43,100 for one and two
person households. The program would reduce the homebuyer's
total net payment liability and make it possible to purchase a
home that he/she might not otherwise be able to afford.
Each participating city would he able to identify target
neighborhoods and/or populations for the first 9-12 months of the
18 month program. After the initial period, the 11CC program
would be available anywhere in the county where overall program
guidelines would be allowed.
Benefits from the joint County-cities prcgram would be the joint,
coordinated application process, central administration of the
program by the County, sharing of start up costs, and a
coordinated lender outreach and education prcgram. After a
relatively modest start up expense, expected not to exceed $4,000
per participating agency, the MCC program would be costless to
the City. Additional information regarding the MCC Program is
attached (See Exhibit "All) .
In addition to the MCC Program, Alameda County is exploring
possible interest in a Supplemental Mortgage Assistance Program.
Two examples of supplemental mortage assistance techniques are:
---- TTA P ----------------------------------
ITEM NO. c
in
OPIES TO: Planning
.
9 ILW§arfi Ti
!
ou
ld
� Y� "' ,���,�� i �,53 .r�.• + s �,�,� ,.4''� 5z,,t,:�1 Yt _ .
s` 1) Deferred�Pa entf8ecohd Mort a eat"it payments'�idefe'rr
r_oy de'»Yunds�forzasseeond%mortg q Y, y
p
', •s ° ThewCity would ultimately recover the�funds1plua eferred
interest n r
rovides"'°�
2) Firat'aMortaageAntere`stt abu£down�'1w&qa to no
funds gfor°a tlmortgage ra Y ..�.�..
recoup zany of�'-theWunds.
Additional information regarding the Supplemental Mortgage
� _ YI Assistance Program is attached (See Exhibit "A°) ' nterest'in
Staff recommends that the City Council;indicate its i
-
Participating Staff the MCC therrrecommendsIthat the�City Pquncil
�1 " start'up cost: Staff furt
i indicate that it is hot-interested at'this .tim-.lac ho f
Supplemental
mortgage Assistance Program due to lack:of'funds.
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