Loading...
HomeMy WebLinkAboutReso 2001-151 - Housing Loan Policies RESOLUTION NO. 200 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING AUTHORIZING IMPLEMENTATION OF AMENDMENTS TO THE HOUSING LOAN POLICIES WHEREAS,the City of Redding has previously adopted a Housing Rehabilitation Loan Policy,a Downpayment Assistance Program Policy,and a Housing Assistance Program Policy by City Council action; and WHEREAS, the City Council deems it to be in the best interest of the citizens of the City of Redding that the aforementioned policies be further amended as set forth in the revised Housing Rehabilitation Loan Policy, Downpayment Assistance Program Policy, and Housing Assistance Program Policy attached hereto; and WHEREAS,it has been determined that this matter is categorically exempt from the provisions of CEQA. NOW,THEREFORE,BE IT RESOLVED that these amendments to the aforementioned policies attached hereto are hereby approved and adopted. I HEREBY CERTIFY that the foregoing resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 16th day of October 2001, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Cibula, Kight, Pohlmeyer, Stegall and McGeorge NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None ./ 4/ avid L. , ge, M. / City of Redding ATTEST: Artere/ .19 CONNIE STROHMAYER:CI C •rk • APPROVED AS TO FORM: W. LEONARD WINGATE, Ci ey H:SCC Reports 5policyOLres.wpd b•-/ 176kil 777:2rewl 94. /459:SW Ca dr Jr - �1 • • SUMMARY OF PROPOSED CHANGES Suggested Changes to the Housing Rehabilitation Loan Policy 1. SECTION 3 - New exclusions for household income were added for compliance with HUD program rules in the GENERAL ELIGIBILITY REQUIREMENTS section. There are seven different additions ranging from special pay to family members serving in the Armed Forces who are exposed to hostile fire to adoption assistance payments in excess of $480 per adopted child. 2. SECTION 6 - Several General Property Improvement (GPI) line items in the eligible costs should be deleted to conform with the Property Rehabilitation Standard document(i.e., an adequate cooling system should not be considered a GPI if, in fact, the absence or deficiency of such a system threatens the health or safety of an occupant). 3. SECTION 6 - Eligible costs regarding refinance were expanded to include multifamily housing undergoing rehabilitation to permit or continue affordability. Although refinance is an atypical activity, it can be a crucial financing tool when packaging rehabilitation loans. HOME regulations require specific guidelines to be in place to describe the conditions under which a locality will refinance existing debt. 4. SECTION 5(B)- In the Terms and Conditions for Non-Profit Corporation Loans, paragraph two, the language stating that a revenue analysis must be prepared by a certified public accountant has been relocated to link the analysis with a residual receipts note method of repayment. Other methods of repayment may not require such an analysis. 5. A borrower shall pay the $100 fee only if the subordination request is approved by the Housing Loan Committee. Suggested Changes to the City of Redding Downpayment Assistance Program (DAP) Policy 1. Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards form will be given to the DAP applicant at the time an offer to purchase is made. This form will be provided to staff with signatures from both the DAP applicant and seller. 2. An Acquisition Notice will be provided to the seller prior to the DAP applicant making an offer to purchase. This form will be provided to staff with signatures from both the DAP applicant and seller. 3. The recapture language now includes reference to the HOME Program rules including the number of years for affordability. 4. First-time home buyer qualification criteria is now described in detail to meet HOME Program requirements. 5. Language stating that the borrower(s) must obtain a first mortgage from a lender that is in the business of providing residential real estate loans is also included to meet HOME Program requirements. 6. A DAP borrower shall pay the$100 fee only if the subordination request is approved by the Housing Loan Committee. Deleted: The $100 non-refundable fee must be paid up front with the subordination request. 7. New exclusions for household income were added for compliance with HUD program rules similar to item #1 in the City of Redding Housing Loan Policy. Suggested Changes to City of Redding Housing Assistance Program (HAP) Policy The proposed changes to this policy are very similar to the DAP policy and include all of the changes noted above with the following additions: 1. The Federal Home Loan Bank mortgage in an amount not to exceed $10,000, shall not be included in the combined loan-to-value ratio of 95%. 2. In the definition section: TENANT shall mean a person who rents or is otherwise in lawful possession of a dwelling, including a sleeping room which is owned by another. 3. The DAP brochure is referenced as Attachment A to describe occupancy and non- occupancy time frame requirements. 4. Housing Expense Ratio section. Included in the housing expense ratio are homeowner association dues, if mandatory. Any portion of the dues associated with utility costs may be excluded. 5. In cases where applicant(s) have past bankruptcies, foreclosures, or other credit issues, the Housing Loan Committee, at its sole discretion, may require the long-term debt ratio to be less than the 38 percent standard.