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HomeMy WebLinkAbout4.5 Mortgage Credit Certificate Program A CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: March 11, 1991 SUBJECT: Agreement with Alameda County regarding Mortgage Credit Certificate (MCC) Program REPORT PREPARED BY: Dennis Carrington, Senior Planner EXHIBITS ATTACHED: A. Letter from Jim Mather, Housing Specialist, Alameda County Department of Housing and Community Development. B. Copy of City/County MCC Agreement. C. Copy of Program III N of Housing Element. RECOMMENDATION: Authorize the City Manager to sign the City/County Mortgage Credit Certificate Agreement 2) Authorize appropriation of $4 ,500 to Planning Contract Services account FINANCIAL STATEMENT: The cost to the City of participating in the program will be $4,500. An additional appropriation from the Contingent Reserve will be required. DESCRIPTION: The City has participated in the Mortgage Credit Certificate program since 1989 . This program enables the City to provide assistance to first time homebuyers of new and existing single family dwelling units in Alameda County. Program III N of the Housing Element directs that the City continue to participate in the MCC program. Participants in the program may receive up to a 20% credit of the annual interest paid on the mortgage against income taxes. During the period from September, 1989 to December, 1990 , 8 certificates were issued and four commitments were made that are outstanding and likely to be issued. If the program is funded at its current level , it is anticipated that 8 certificates would be issued in Dublin during 1991 . To continue participating in the program, it will be necessary for the City Council to authorize the City Manager to sign the City/County Agreement and appropriate $4 ,500 to the Planning Contract Services account. This amount represents the Dublin's share of the cost of the filing and administration fee that will be paid to the State for the MCC program this year and administrative costs of the County Department of Housing and Community Development. --------- -- ------------------------------------------------- Item No.Ir*7 Copies To: Agenda File County HCD File Dennis Carrington /MCC1991 & & �;�.30 --60 600-Z/0 H ALAMEDA COUNTY PLANNING DEPARTMENT Housing & Community Development Program January 28, 1991 R E C E I V E a JAN 24.-) 1991 Larry Tong DUBLIN PLANNING City of Dublin P.O. Box 2340 Dublin, CA 94568 Dear Mr. Tong: Subject: Application for New Alameda County MCC/SFMRB Program Attached is a copy of a cooperative agreement for the proposed MCC/SFMRB program, as was discussed at the meeting on January 22. A list of the lenders who were active in your City for the recent MCC program is also enclosed. The only changes to the agreement from the last application are references to the potential SFMRB program. This agreement does not give the County blanket authority to issue single family mortgage revenue bonds in your City; instead, the County agrees to issue bonds only for those projects approved by your City. Please return the signed agreement to the County by Friday, February 22, 1991. MCC PROGRAM The new MCC program would operate in the same manner as the recent program. The basic requirements are that the buyer be a first-time home buyer, the home must be purchased as a principal residence, and their income and the price of the home are subject to federal limits. The current limits are: INCOME: Tiro-person Household $48,365 Three-person Household $55,619 PRICE: New Home $206,730. Existing Home $189,900 The only focus policy, in addition to the basic requirements, will be that the buyer live or work in Alameda County. Please call me immediately if you would like to discuss any additional focus policies. There will be no city-specific allocation in the new program, but some limited reservations will be allowed for specific projects or for use with City second mortgage programs. To reserve MCC's for a specific project, we will need a project description and development timeline. To reserve for use with a second mortgage program, we will need to know the number of reservations and the date by which you expect to issue the second mortgages man DMOT A 224 W.WINTON AVENUE• ROOM 169• HAYWARD, CA 94544.415/670-5404 MCC/SFMRB Application January 28, 1991 Page 2 SFMRB PROGRAM The proposed SFMRB program would have the same basic buyer requirements as the MCC program. We will soon meet with developers and lenders to gauge their interest in the program. If you know of any specific projects in your city that might benefit from participation in the SFMRB program, please let us know. If you have any questions, please call me at 670-5943. inc rely, i / Jim Mather Housing Specialist Enclosures 2096H/9-10 Pa a No. 6 0128/91 Lenders and Mortgage Amount by City Lender Mortgage ---------- Amount ** DUB * BANK OF AMERICA BANK OF AMERICA 127950 • Subsubtotal * 127950 • CYPRESS FINANCIAL CYPRESS FINANCIAL 119700 • Subsubtotal * 119700 • IMCO REALTY SERVICES IMCO REALTY SERVICES 134000 • Subsubtotal * 134000 • OLD STONE BANK OLD STONE BANK 138500 • Subsubtotal * 138500 • OLD STONE BANK OF CA OLD STONE BANK OF CA 138500 • Subsubtotal * 138500 • WESTERN COLOMIAL WESTERN COLOMIAL 96000 • Subsubtotal * 96000 • WEYERHAEUSER WEYERHAEUSER 145000 • Subsubtotal * 145000 • WORLD SAVINGS WORLD SAVINGS 111200 • Subsubtotal 111200 ** Subtotal ** 1010850 COOPERATIVE AGREEMENT BETWEEN THE COUNTY OF ALAMEDA AND THE CITY OF THIS COOPERATIVE AGREEMENT (this "Agreement") , is made and entered into as of 1991, by and between the County of Alameda, a political subdivision o the State of California (the "County") , and the City of a political subdivision of the State of California (the "City" WITNESSETH: WHEREAS, the County has determined 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 with a program to issue mortgage credit certificates and single family mortgage revenue bonds (the "Program") pursuant to Part 1 and Part 5 of Division 31 of the Health and'Saf ety Code of the State of California (the "Act") ; 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 and single family mortgage revenue bonds thereunder pursuant to the Act. County agrees that issuance of single family mortgage revenue bonds with respect to property located within the geographic boundaries of the City will be only for those projects approved by the Planning Director of the City or his/her designee. SECTION 2. 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 apply 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 single family mortgage revenue bonds 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 furtner proceedings or actions as may be necessary in order to carry out the terms and the intent of this Agreement. Nothing in this Agreement shall prevent the County from enterin into one or more agreements with the other political subdivisions within the County, if deemed necessary and advisable to do so by the County. "H BIT rAnl SECTION 4. This Agreement may be amended by one or more supplemental agreements executed by the County and the City at any time, except that no such amendment or supplement shall be made which shall adversely affect the rights of the holders of the bonds or citizens wno purchase a home with assistance from the Program. SECTION S. This agreement shall continue in effect throughout the period during which the County is empowered to engage in the Program pursuant to the Act, provided however, that the City may decline to cooperate with the County under this Agreement, in connection witn any such Program of the County, upon notice to the County to that effect within 15 days of receipt of notice from the County of its intention to engage in the Program. Such notice from the County shall be given to the City at least 31 days prior to the establishment of any such Program. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their proper officers thereunto duly authorized, and their official seals to be hereunto affixed, all as of the day first above written. COUNTY OF ALAMEDA CITY OF BY BY CITY MANAGER Title ATTEST: ATTEST: BY by CITY CLERK Title APPROVED AS TO FORM: APPROVED AS TO FORM: BY BY COUNTY COUNSEL CITY ATTORNEY 2096H/7-8 N. Participate in the Alameda County Mortgage Credit Certification (MCC) Program. Through the use of a MCC, eligible first-time home buyers increase their eligibility to qualify for a mortgage loan and reduce their effective mortgage interest rate approximately 2 percentage points . MCC recipients may take 200 of their annual mortgage interest payments as a dollar for dollar tax credit against their federal income taxes . The home buyer adjusts federal income tax withholdings , increasing income available to pay the mortgage . Under the program, the City currently has two reservations issued worth $230 , 900 and seven MCC ' s remaining worth $769 , 100 . Policy Objective : Increase the eligibility of first time home buyers to qualify for mortgage loans Actions Undertaken: On January 23 , 1989 , the City indicated its interest in participating in the MCC Program. Two reservations for Dublin residents have been issued . Actions to be Undertaken: Continue participation in the program Financing : Minor administrative cost Implementation Responsibility: Planning Department Time frame : Ongoing implementation 6 . 4 CONSISTENCY WITH OTHER GENERAL PLAN 'ELEMENTS ( 65300 . 5) Government Code Section 65300 . 5 requires that the general plan and its elements comprise an integrated, internally consistent and compatible statement of policies of the City. The other elements of the General Plan are being revised in conjunction with the preparation of the revised Housing Element. Revisions will be required to Section 1 . 0 ( Background) , 2 : 0 (Land Use Element) and 6 . 0 (Housing Element Summary) of the Dublin General Plan. 1[!AvHn1B1T C 61