HomeMy WebLinkAboutCC Resolution 12280 (Purchase BMR)CITY COUNCIL OF THE CITY OF SAN RAFAEL
RESOLUTION NO. 12280
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL
APPROVING A SEVENTY THOUSAND DOLLAR CONTRACT WITH MARIN
HOUSING TO ADMINISTER THE OWNERSHIP BELOW MARKET RATE HOUSING
PROGRAM AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE
CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE
UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS
OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA
WHEREAS, the City Council (the "City Council") of the City of San Rafael (the "City")
has adopted and amended, from time to time, the Redevelopment Plan (the "Redevelopment
Plan") for the Central San Rafael Redevelopment Project Area (the "Project Area"); and
WHEREAS, the Redevelopment Agency of the City of San Rafael (the "Agency") is
responsible for administering the Redevelopment Plan to cause redevelopment of the Project
Area, including the provision of housing available at affordable housing cost to low and
moderate income households; and
WHEREAS, the Agency has established a Low and Moderate Income Housing Fund (the
"Fund") pursuant to Health and Safety Code Section 33334.3; and
WHEREAS, San Rafael Municipal Code Section 14.16.030 requires the majority of new
housing developments in the City Council to provide housing affordable to low and moderate
income households on site and for those units to remain affordable over time; and
WHEREAS, there are presently 116 affordable ownership units in the City of San Rafael
with long term resale restrictions; and
WHEREAS, Marin Housing has administered the Below Market Rate Home Ownership
Program for the City of San Rafael, the County of Marin and the majority of cities in the County
for many years; and
WHEREAS, Marin Housing and the City of San Rafael desire to enter into a formal
contract to administer the program for a cost of $70,000 and the City of San Rafael does not have
sufficient funds to fund this contract; and
WHEREAS, the program meets the Agency's goals of providing housing opportunities
to low and moderate -income persons, all of the units have affordability restrictions of a minimum
of forty-five years meeting the requirement of Health and Safety Code Section 33334.3.
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WHEREAS, it is proposed that the Agency fund the Agency Loan with Seventy
Thousand Dollars ($70,000) from the Agency's Low and Moderate Income Housing Fund (the
"Housing Fund"); and
WHEREAS, Health and Safety Code Section 33334.2(g) authorizes expenditure of
Housing Fund monies outside the Project Area upon a finding by the Agency and the City
Council that such use will be of benefit to the Project Area; and
WHEREAS, by staff report accompanying this Resolution and incorporated into this
Resolution by this reference (the "Staff Report"), the City Council has been provided with
additional information upon which the findings and actions set forth in this Resolution are based.
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds and
determines that the above recitals are true and correct and have served as the basis, in part, for the
findings and actions of the City Council set forth below.
BE IT FURTHER RESOLVED that, based on information and analysis set forth in the
above Recitals and contained in the Staff Report accompanying this Resolution, the City Council
hereby finds and determines pursuant to Health and Safety Code Section 33334.2(g) that the use
of moneys from the Housing Fund for the administration of the Below Market Rate Home
Ownership Program will be of benefit to the Project Area and the program of redevelopment
pursuant to the Redevelopment Plan.
BE IT FURTHER RESOLVED that the City Council hereby approves allocation of
Seventy Thousand Dollars ($70,000) of Housing Fund monies to fund the contract with Marin
Housing.
BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon
adoption.
I, JEANNE M. LEONCINI, City Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a special meeting of the
City Council held on the 20`h day of June 2007, by the following vote, to wit:
AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips & Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAIN: COUNCILMEMBERS: None
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JEANNE M. LEONCINI, City Clerk
MAROktrN
HOUSING
Making Housing More Affordable
Memorandum of Understanding
This Memorandum of Understanding ("MOU") is entered into as of July 1, 2007, between the
Housing Authority of the County of Marin (the "Housing Authority") and The City of San Rafael
(the "Jurisdiction") with respect to the administration of the Below Market Rate Homeownership
Program (the "BMR Program"). This MOU shall define all of the policies and procedures which
shall govern the pre -development planning, consulting services, initial sale, monitoring, resale
and refinance of each unit within the Jurisdiction that is administered by Marin Housing through
the BMR Program (the "BMR Unit").
The Housing Authority and the jurisdiction agree as follows:
1. BMR Program Fees. The Housing Authority shall be paid for services and activities
provided in support of the BMR Program with respect to the Jurisdiction's BMR Units
according to the attached Exhibit A --BMR Program Fee Schedule. The Fee Schedule shall
be reviewed and revised annually by the parties to this MOU.
2. Term of MOU. Regardless of the term of the resale restrictions recorded with the BMR Unit,
the term of this MOU shall be for two years from the date of this MOU, with an option to
renew for subsequent years, upon the written approval of both parties to this MOU.
3. Notices. Notices shall be sent to the following addresses:
Housing Authority: Housing Authority of the County of Marin
Attention: Executive Director
4020 Civic Center Drive
San Rafael, CA 94903-4173
Jurisdiction: City of San Rafael
Kenneth Nordhoff, City Manager
P.O. Box 151560
San Rafael, CA 94915-1560
4. Authority responsibilities. The Housing Authority shall utilize the following documents
prepared by Goldfarb and Lipman and approved by Housing Authority and Jurisdiction for all
BMR unit sales that occur within the contract term:
• Resale and Refinancing Restriction Agreement and Option to Purchase (2005)
• Buyer's Disclosure Statement — Marin County Below Market Rate Home Ownership
Program (2005)
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• Housing Authority Deed of Trust and Security Agreement securing the Resale and
Refinancing Restriction Agreement and Option to Purchase (2005), with Administrative
Checklist
• Below Market Rate Housing Agreement, three party agreement by and between the
Authority, Jurisdiction, and Developer.
The Housing Authority staff shall record or cause to be recorded the Resale and
Refinancing Restriction Agreement and Option to Purchase, and the Housing Authority
Deed of Trust on each property at the close of escrow.
The Authority shall provide the initial unit pricing information for the Below Market Rate
Housing Agreement pursuant to the affordability requirements established by the
Jurisdiction.
The Authority shall be responsible for maintaining and updating all BMR program
documents including the documents listed above, to assure program compliance with
applicable mortgage loan programs, including Fannie Mae and CaIHFA. Authority staff will
consult with Jurisdiction regarding lender requests to modify or subordinate Authority
documents.
5. Jurisdiction Responsibilities. Each jurisdiction will be responsible for executing and
recording the initial three -party (Authority, Jurisdiction, and Developer) Below Market
Housing Agreement. The Authority will provide the template to Jurisdiction.
6. Priorities and Preferences in the Selection of Buyers. The Housing Authority will utilize
a lottery system to select prospective buyers from among all BMR applicants. The Housing
Authority will utilize a standard definition of live/work in Marin County as a priority in the
selection of prospective buyers for any BMR Unit. If the jurisdiction desires to implement
any other priorities or preferences in the selection of buyers for any BMR Unit, the
jurisdiction must assume all of the duties associated with the selection of the buyer for the
BMR Unit. The Housing Authority will not participate in any buyer selection or qualification
that requires the use of any other priority or preference system.
7. Exercise of Option Pursuant to Resale Restriction and Option to Purchase. The
Housing Authority will notify the Jurisdiction in writing within five working days of receiving
information that an "Option Event", as defined by the Resale Restriction Agreement, has
occurred. The written notification shall include the nature of the Option Event, the current
resale price, and any other information that will assist the Jurisdiction in deciding the proper
course of action. Within ten working days of receipt of such notice by the Authority, the
Jurisdiction will provide written instructions to the Authority to:
a) exercise the Option; or
b) assign Jurisdiction the option to purchase the BMR unit, with the Jurisdiction assuming
responsibility to enforce the Resale Restriction Agreement and Deed of Trust; or
c) file a Notice of Abandonment
If the Jurisdiction requests the Authority to exercise the Option, the Authority will:
a) fund the sale through available resources; or
b) utilize the funds collected through resales to purchase the unit, or
c) the Jurisdiction will provide the Housing Authority with a short term loan to complete the
purchase event.
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For the CITY OF SAN RAFAEL:
Authorize ato NAME ? DATE
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FWMARIUSING:
BARBARA COLLINS, Executive Director D
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Exhibit A
BMR Program Fee Schedule
Effective July 1, 2007
Annual Participation Fee. The Jurisdiction shall pay to the Housing Authority an annual
participation fee proportional to the Jurisdiction's share of BMR units administered by the
Housing Authority. The fee will be based on the actual cost of total program operation by the
Housing Authority, and will not increase over the course of this agreement.
The annual participation fee will include all services set forth in Exhibit B, except consultant fees
resulting from option events, or administrative fees to be borne by BMR owners. Exceptions will
be charged at actual cost to Marin Housing and the jurisdiction will be provided with an estimate
of those costs.
Jurisdictions will be invoiced on an annual basis. Invoices shall reflect all administrative sales
fee proceeds from BMR sales in that Jurisdiction, and this amount shall be deducted from the
annual invoice. Separate fees for Additional Fee Services shall be billed separately to the
Jurisdiction on an event basis.
See Exhibit B for a list of services included in Annual Retainer
Corte Madera County Larkspur
BMR Units 31 91 25
% of Inventory 9% 29% 8%
Mill Valley San Anselmo San Rafael Tiburon TOTAL
25 3 117 24 316
8% 1% 37% 8% 100%
% of Operating $18,528.88 $54,391.22 $14,942.64 $14,942.64 $1,793.12 $69,931.57$14,344.94 $188,875.00
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Exhibit B
BMR Program Scope of Services
Marin Housing Authority ("Authority") agrees to provide at no additional cost to the Jurisdiction
all administrative duties necessary for the initial sale and resale of BMR units and program
administration noted or referenced in this section.
• Efficient and professional coordination of BMR initial sale and resale activities. Refer to
Exhibit C 'BMR Re -Sale Services' for more detail.
• Administration of the BMR lottery list and system
• Provide first-time Homebuyer Counseling regarding mortgages, refinancing, and HOA's
• Process refinancing and subordination requests from owners of BMR units
• Create and distribute an annual newsletter to BMR participants
• Annual monitoring of at least one third of existing BMR units to verify current owner for
compliance with the Resale Restrictions (e.g., continuing owner occupancy, property
upkeep, not over -encumbering the property, etc.)
• Provide biannual status reports to the Jurisdiction on BMR sales activity and related
inventory information (e.g., BMR owner demographics, current affordability levels, number of
BMR resales, sales fees, etc.)
• Respond to routine inquiries from BMR owners, lenders, realtors and developers regarding
how the BMR program works, how the resale restrictions work, how to determine
affordability, how to apply for capital improvements, what is the resale procedure, what is
the policy on renting, matters dealing with inheritance and changes on title, etc.
• Available 'on call' to meet with the Jurisdiction and prospective developers to discuss the
locality's inclusionary requirements and how they can be met through the BMR Program,
and explain how to determine a specific 'affordable' sales price to be applied to a general
income level target
• Provide current Median Household Income information to Jurisdictions and prospective
developers and explain the nuances of Income Limits, Median Income, the relationship
between them, and how they are typically used to determine affordability
• Consult with Jurisdictions and instruct attorneys regarding Option Events including over -
encumbrance, default, death, inheritance, and rental allowances
• Administer the American Dream Downpayment Initiative
• Apply for funding and administer Mortgage Credit Certificate Program
• Administer Marin City Downpayment Assistance Program
• Administer other housing assistance programs provided by Jurisdictions
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Additional Fee Services to Jurisdiction
• Jurisdiction agrees to pay the direct cost of legal or other outside service fees arising from
an option event.
Fee Services applicable to BMR Owners and/or Applicants (not to be borne by
Jurisdiction)
• Incidental BMR Program Fees
• BMR Lottery Application: The application fee for individuals to enter the lottery for BMR units
that are sold by Marin Housing shall be an annual fee $50 for the calendar year, payable at
the time of submitting an application.
• BMR Resale Price Valuation: The fee for preparing a BMR Resale Price Valuation shall be
$50, payable by the owner, in advance.
• Capital Improvements: There shall be no fee for inspecting and approving the value of
capital improvements to be added to the BMR Resale Price in advance or at the time of
upgrade. Requests for capital improvement adjustments to the BMR Resale Price at the
time of sale shall carry a $100 fee. The Housing Authority will not consider any capital
improvements that total less than $1,000 and that the Housing Authority has not approved in
writing.
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Exhibit C
BMR Re -Sale Services
MHA receives letter from BMR Owner ("Seller") notifying MHA of Owner's Intent to Sell.
2. MHA calculates BMR Re -Sale Price as of date of receipt of letter (worksheet & cover letter)
and sends to Seller within 5 days; and prepares list for "Receipt of Documents" for later use.
3. MHA sends Seller an acknowledgement letter confirming BMR Re -Sale Price and proposed
schedule to complete the re -sale transaction; and advises seller to order Resale Inspection
from City if Code Regulations state that City requires; and ask Seller to send us copy.
4. MHA contacts local jurisdiction to inform them of resale and determine if locality wants to do
anything other than re -sell to a qualified first-time homebuyer.
5. MHA advises Jurisdiction of any additional costs related to title, recording fees, and legal
costs.
6. MHA makes an appointment and performs an inspection of the BMR unit to review condition
of the unit, assess any capital improvements to be factored into the price as well as any
necessary repairs or adjustments to the price, and reviews details of the re -sale process with
the Seller; and requests HOA disclosure documents from seller (see detailed below in #7).
7. MHA orders Contractor's Inspection (to be charged to Seller out of close of escrow).
Contractor's Inspection will prevent last-minute complaints by Buyer, after close of escrow.
8. MHA contracts for any repairs or replacement items with a licensed, insured, general
contractor. MHA will secure three competitive bids to complete the work.
9. MHA orders from Condo Certs (cost to be charged out of close of escrow to seller) HOA
Disclosure Docs, including Real Estate Transfer Disclosure Statement and "Request For
Response" from Management Co, and requests from Se/lertheir HOA disclosure documents,
minutes, etc; lists them on a Receipt for Documents index; performs a review of documents
and does any necessary follow-up to verify that the packet is complete. (MHA) meets later
with Buyer, who signs for receipt of docs, including Natural Hazard Disclosure Report and
Earthquake Safety Booklet.
10. MHA order Natural Hazard Disclosure Report.
11. MHA conducts outreach and marketing; establishes deadline for applications; sets date for
lottery.
12. MHA orders Preliminary Title Report from the title company and a Structural Pest Control
Report from a local termite inspection company. MHA reviews both reports and contacts
HOA, if necessary, regarding follow-up on repairs.
13. MHA performs lottery (generally within one week of Notice to Sell) to select list of prospective
buyers from among all eligible applicants utilizing Access database and random number
generator software program.
14. MHA sends out a letter with the lottery results to the top 10 to 15 names and invites those
applicants to an Open House to be conducted by the Seller on a specified weekend. The
letter describes follow-up procedures if the applicant is interested, and lists the required
documentation the applicant will need to bring to the interview.
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15. MHA logs and tracks confirmation of interest from the applicants and schedules
appointments for eligibility interviews with those who ranked highest in the lottery.
16. MHA conducts an eligibility interview to screen the applicant for BMR program eligibility and
applicant's ability to qualify for financing. MHA provides an overview of the BMR Program,
the Resale Restrictions and financing options. MHA also reviews with the applicant a pro
forma financial analysis of the purchase transaction (typically runs 2 to 3 hours per interview
session).
17. MHA contacts the applicant's lender to verify feasibility of the proposed financing and any
outstanding issues (e.g., credit/debt issues, funds available for down payment and closing,
gift funds, required documentation, etc.); and remains in contact regarding pre -approval for
financing.
18. Once an applicant has been determined eligible and has provided evidence of loan pre -
approval, MHA draws up a Standard Residential Purchase Agreement, which is signed in a
one -on one session with MHA, first by the Buyer and then by the Seller. The Purchase
Agreement includes the proposed terms of the Buyer's financing and establishes the
proposed date for the close of escrow. Attachments to the Purchase Agreement include the
BMR Program Transaction Fee Disclosure and the BMR Buyer's Disclosure Statement, and
any Addendum regarding Buyer/Seller credits, if applicable. Make sure that Buyer
understands family inheritance rules before signing Disclosure.
MHA gives Buyer a general presentation all of the required disclosure documents, lists them
on a Receipt for Documents index, and gives to Buyer, who signs for receipt of each item.
19. MHA sends via Registered Mail the "Exercise of Option" letter, within 60 days of receipt of
owner's "Notice to Sell".
20. MHA provides copies of the signed Purchase Agreement (including any Addenda), Contact
Sheet, Preliminary Title Report, Resale Restrictions and Buyer Eligibility Letter to the Lender.
21. MHA forwards Buyer's initial deposit of 3% of the purchase price to the Title Company along
with Escrow Instructions, Contact Sheet, and the original executed Resale Restriction
documents to be recorded at the close of escrow.
22. MHA receives Mortgage Credit Certificate application forms completed by the Buyer and the
Lender and MHA issues an MCC Commitment Letter confirming reservation of an MCC
allocation for that specific transaction. This process may periodically alternate with the use of
American Dream funds administration.
23. MHA interviews and qualifies at least one additional applicant (next in line from the lottery) to
fill a back-up position should the selected Buyer drop out for any reason or fail to obtain final
loan approval.
24. MHA continues to follow up with the Buyer, Seller, Lender and the Title Company to
coordinate final steps, resolve any outstanding issues and see the transaction through to a
successful close of escrow.
25. MHA does final walk-thru with Buyer 3 days prior to close of escrow; while Seller is
responsible for any applicable repairs.
26. MHA coordinates with Seller to bring keys to MHA and we give keys to Buyer at the close of
escrow.
27. MHA receives BMR post -loan -closing documents from the Title Company (BMR Sales
Transaction Fee, HUD -1 Settlement Statement, recording information for the Resale
Restriction documents, Request for Notice of Default, etc.).
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28. MHA receives MCC post -loan -closing documents from the Lender and issues the MCC.
29. MHA updates both the BMR and the MCC databases and the relevant files to document the
BMR re -sale transaction and the newly issued MCC.
*** American Dream or MCC will be explained to applicant, as available.
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