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HomeMy WebLinkAbout6804RESOLUTION No. 6 8 0 4 A RESOLUTION APPROVING AN AGREE` FOR PUEBLO URBAN HOMESTEAD AFFORDABLE HOUSING PROGRAM BEIWEEJ THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND COLUMBIA SAVINGS, A FEDERAL SAVINGS AND IRAN ASSOCIATION AND AUTHORIZING THE CITY MANAGER TO EXEC[TI'E THE SAME L - .I - &oywo ICY' c•.i1g •mline �7i1�:f�i �• • :: �• Y - '• GW Wprtj The Pueblo Urban Homestead Program Subsidy Agreement between the City of Pueblo, A Municipal Corporation and Columbia Savings, A Federal Savings and Loan Association, a copy of which is attached hereto and incorporated herein, having been approved by the City Attorney, is hereby approved. The City Manager of Pueblo is authorized and directed to execute the Agreement for and on behalf of the City and the City Clerk is directed to affix the seal of the City thereto and attest the same. INTRODUCED: August 26 ,1991 DR. GILBERT GARBISO COUNCIL PERSON r PUEBLO URBAN HOMESTEAD PROGRAM SUBSIDY AGREEMENT THIS AGREEMENT is made and entered into this 27th day of January nuary , 1992, by and between the CITY OF PUEBLO ( "City "), and COLUMBIA SAVINGS, A FEDERAL SAVINGS AND LOAN ASSOCIATION ( "Columbia "). DECLARATIONS WHEREAS, the Federal Home Loan Bank of Topeka (the '"FHLB ") has implemented an Affordable Housing Program ("AHP"") pursuant to the authority granted by the United States Congress in the Federal Home Loan Bank Act (12 U.S.C. §1430[j]) and the regulations of the Federal Housing Finance Board (12 C.F.R. Part 960); and WHEREAS, Columbia submitted an application for subsidy funding to the FHLB in connection with the FHLB's AHP, which application was signed on April 15, 1991, and thereafter approved by the FHLB (the "Application "). A copy of the Application is attached hereto as Exhibit 1 and made a part hereof by this reference; and WHEREAS, FHLB approved subsidy funding pursuant to the Application in the amount of One Hundred Twenty -Seven Thousand Four Hundred Eighty -Nine and no /100 Dollars ($127,489.00); and WHEREAS, the City intends to use certain City funds and other available funds to remove vacant and boarded up properties from the Pueblo housing stock by finding eligible homeowners to rehabilitate such properties and to live in and maintain them; and WHEREAS, the City and Columbia desire to implement a Pueblo Urban Homestead Program (the "PUHP ") utilizing the direct subsidy to be received from the FHLB (the "Subsidy ") pursuant to the terms, conditions and procedures imposed by the authorizing legislation, the regulations and the FHLB. NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the parties agree as follows: 1. Compliance with Plan City and Columbia agree to utilize the Subsidy in accordance with the specific terms set forth in the Application. 2. Regulations City and 'Columbia agree to be bound by the Federal Home Loan Bank Act (12 U.S.C. S1430[j]) and the KECcas0110 regulation of the federal Housing Finance Board (12 C.F.R. Part 960), as amended from time to time. 3. Maximum Subsidy The amount that each participating household ( "Participant") will have to pay for their monthly housing cost will be no less than 285 of their gross monthly income (the "Maximum Subsidy "). Monthly housing costs, for purposes herein, will be calculated by adding the monthly principal and interest payments together with the monthly required tax, insurance, mortgage insurance premium and utilities, as set forth on Exhibit 2 attached hereto and incorporated herein by this reference. The total of these amounts must equal not less than 28% of the participating household's gross monthly income (the "Minimum Required Payment "). Prior to each loan closing, City will provide to Columbia documentation showing that the Maximum Subsidy requirement has been met with respect to the Participant whose loan is being closed. Completion and submittal of the form attached as Exhibit 2, which is incorporated herein by this reference, will be deemed satisfactory evidence of compliance. 4. Monitoring An eligible "Participant" shall mean a family which meets all of the qualifying requirements for the homeownership program adopted by the administering entities pursuant to the PUHP. Prior to Columbia providing Subsidy funds for any closing, City will provide to Columbia documentation showing the income of the household and a chart showing the maximum allowable income based on 80% of median family income adjusted by household size. Such documentation must include, but is not limited to, a copy of the Participant's signed FHA 203K loan application. The subsidy loan application shall be substantially in the form and content of attached Exhibit 3, which is incorporated herein by this reference. The chart showing maximum allowable income shall be provided concurrently with the loan application, and must be substantially in the form and content of attached Exhibit 4 , which is made a part hereof by this reference. 5. Reporting City will provide Columbia with a report which lists each recipient of AHP funds. The report format is located at attached Exhibit 5 which is made a part hereof by this reference, and lists the name, address, income, family size, whether the family is very low income (with income less than 50% of metro area median income adjusted by family size) or low and moderate income (with income between 50% to 80% of metro area median income adjusted by family size), total cost of the house, the source and amount of all funds utilized for acquisition, rehabilitation, and permanent financing. These forms will be provided to Columbia by the 15th of the month, for all loans closed during the preceding month, until the Subsidy is depleted or the program is closed out, whichever occurs first. At least annually following loan closing, City will conduct a physical inspection of the security property, and review each loan for continued Participant compliance with the provisions of the PUHP. City will provide documentation certifying as to the completion of such review and inspection and PUHP compliance by updating the report attached as Exhibit 5 to include date of the inspection and the compliance review. 6. Recapture In the event of default by the Participant during the five year period following the closing of the loan City shall make best efforts to locate another low and moderate income household to move into and assume the loans on any house that has been subsidized under the PUHP program. If the City is unable to find another low or moderate income family, any funds obtained from the sale of the property to 4a non - qualifying family over and above the senior debt on the property and direct expenses of marketing the property will be utilized by the City in connection with the PUHP program and the City shall promptly provide Columbia notice of the same. If the City is unable to utilize such funds in connection with the PUHP program, the funds shall be paid to Columbia. 7. Notice. During the five year period following loan closing, City is ll provide written notification to Columbia of any event of default not cured by the Participant during the applicable cure period. 8. Draws. City will notify Columbia three (3) business days n advance of each closing of the amount of Subsidy funds required for closing. At such time, City will provide to Columbia the Maximum Subsidy documentation specified under paragraph number 3 above. Upon review and approval of said documentation, Columbia will wire transfer funds to City, or an authorized closing agent, at least the day before the closing. City will subsequently provide evidence satisfactory to Columbia that the Subsidy funds were paid out at the closing, and that a junior lien for benefit of the City has been executed in the amount of the Subsidy, together with a copy of the executed (1) settlement statements, (2) promissory note in the subsidy amount, and (3) deed of trust for benefit of the City. follows: 9. Administration. City will provide services as (a) Market the program; houses; (b) Submit offers to_ HUD for the - 3 - purchase of above; (c) Provide reports to Columbia as described (d) Undertake an annual inspection of the property to make sure that it is in good condition and that the recipient of the Subsidy is still occupying the home; (e) Make best efforts to replace any households that move or are evicted during the first five years with another qualifying household; and (f) Provide an in -house counseling session to each Participant showing them how to maintain their home. "City" CITY OF PUEBLO January 22, 1992 Date By: — Lewis A. Quigley, City Manager "Columbia" COLUMBIA SAVINGS, A FEDERAL SAVINGS AND LOAN ASSOCIATION JanuarX 27, 1992 By: /Jo Ellen Davidson Date Its: res7 en ATTEES BY: - 4 - THIS AGIMMW, is made and entered into this day of , 19 , by and between the City of Pueblo, a municipal corporation ( "City") and Columbia Savings, a Federal Savings and Loan Association,( "Columbia"). DECLARATIONS WHEREAS, the Federal Home Loan Bank of Topeka (The "FHLB") has implemented an Affordable Housing Program ("AHP") pursuant to the authority granted by the United States Congress in the Federal Home Loan Bank Act (12 U.S.C. Section 1430(j)) and the regulations of the Federal Housing Finance Board (12 C.F.R. Part 960); and WHEREAS, Columbia submitted an application for subsidy funding to the FHLB in connection with the FHLB's AHP of One Hundred Twenty Seven Thousand Four Hundred Eighty Nine and N01100 Dollars ($127,489.00) which application was signed on April 12, 1991 and thereafter approved by the FHLB (the "Application "). A copy of the Application is attached hereto as Exhibit 1 and made a part hereof by this reference; and, MBIUAS, the City is a recipient of certain Community Development Block Grant funds to be used for housing for low - and moderate income households to purchase vacant and boarded up properties from the Pueblo housing stock by finding eligible homeowners to rehabilitate such properties and to live in and maintain them; and, WHEREAS, the City and Columbia desire to implement a Pueblo Urban Homestead Program (the "PUHP") utilizing the direct subsidy to be received from the FHLB (the "Subsidy ") pursuant to the terms, conditions and procedures imposed by the authorizing legislation, the regulations and the FHLB. NOW THEREFCRE, in consideration of the premises and mutual agreements contained herein, the parties agree as follows: 1. COMPLIANCE WITH PLAN. The City and Columbia agree to utilize the Subsidy in accordance with the specific terms set forth in the Application. 2. REGULATIONS. The City and Columbia agree to be bound by the Federal Home Loan Bank Act (12 U.S.C. Section 1430 (j)) and the regulations of the Federal Housing Finance Board (12 C.F.R. Part 960), as amended from time to time. 3. MAXD M SUBSIDY. The amount that each participating household will have to pay for their monthly housing cost will be no less that 28% of their gross monthly income (the "Maximum Subsidy "). Monthly housing costs for purposes herein, will be calculated by taking .28 x gross monthly income less taxes and insurance. The resulting amount represents the principal and interest payment that the Participant will be required to make (the "Minimum Required Payment "). Prior to each loan closing, the City will provide to Columbia documentation showing that the Maximum Subsidy requirement has been met with respect to the Participant whose loan is being closed. Completion and submittal of the form attached as Exhibit 2 which is incorporated herein by this reference, will be deemed satisfactory evidence of compliance. 4. MONITORING. An eligible "Participant" shall mean a family which meets all of the qualifying requirements for the homeownership program adopted by the administering entities pursuant to the PUHP. Prior to Columbia providing Subsidy funds for any closing, the City will provide to Columbia documentation showing the income of the household and a chart showing the maximum allowable income based on 80% of median family income adjusted by household size. Such documentation must include, but is not limited to, a copy of the Participant's signed FHA 203K loan application. The subsidy loan application shall be substantially in the form and content of attached Exhibit 3, which is incorporated herein by this reference. The chart showing maximum allowable income shall be provided concurrently with the loan application, and must be substantially in the form and content of attached Exhibit 4, which is made a part hereof by this reference. 5. REPORTING. The City will provide Columbia with a report which lists each recipient of AHP funds. The report format is located at attached Exhibit 5 which is made a part hereof by this reference, and lists the name, address, income, family size, whether the family is very low income (with income less than 50% to 80% of metro -area median income adjusted by family size), total cost of the house, the source and amount of all funds utilized for acquisition, rehabilitation, and permanent financing. These forms will be provided to Columbia by the 15th of the month, for all loans closed during the preceding month, until the subsidy is depleted or the program is closed out, whichever comes first. At least annually following loan closing, the City will conduct a physical inspection of the security property, and review each loan for continued Participant compliance with the provisions of the PUHP. The City will provide documentation certifying as to the completion of such review and inspection and PUHP compliance by updating the report attached as Exhibit 5 to include date of the inspection and the compliance review. 6. RECAPTURE. In the event of default by the Participant during the five year period following the closing of the loan, the City shall make best efforts to locate another low -and moderate income household to move into and assume the loans on any house that has been subsidized under the PUHP program. If the City is unable to find another low or moderate income family, any funds obtained from the sale of the property to a non - qualifying family over and above the senior debt on the property and direct expenses of marketing property will be paid to Columbia. 7. NOTICE. During the five year period following loan closing, the City will provide written notification to Columbia of any event of default not cured by the Participant during the applicable period. 8. DRAWS. The City will notify Columbia three business days in advance of each closing of the amount of Subsidy funds required for closing. At such time, the City will provide to Columbia the Maximum Subsidy documentation specified under paragraph number 3 above. Upon review and approval of said documentation, Columbia will wire transfer funds to the City, or an authorized closing agent, at least the day before the closing. The City will subsequently provide evidence satisfactory to Columbia that Subsidy funds were paid out at closing, and that a junior f lien of which Columbia is the beneficiary has been executed in the amount of the Subsidy. Columbia will execute an assignment of its rights in the note and deed of trust to the City subsequent to each loan closing. The assignment shall be for the purpose of servicing the loan during the initial five (5) year period, and shall become vested in the City five (5) years after the date of closing. The assignment executed by Columbia shall be substantially in the form and content of attached Exhibit 6, which is incorporated herein by this reference. 9. ADMINISTRATION. The City will provide services as follows: a. Market the program; b. Submit offers to sellers of property for the purchase of houses; C. Provide reports to Columbia as described above; d. Undertake an annual inspection of the property to make sure that it is in good condition and that the recipient of the Subsidy is still occupying the home; e. Make best efforts to replace any households that move or are evicted during the first five years with another qualifying household; and f. Provide an in -house counseling session to each Participant showing them how to maintain their home. DATE: COLUMBIA SAVINGS, A FEDERAL SAVINGS AND IRAN ASSOCIATION ATTEST: CITY OF PUEBLO BY: BY: CITY CLERK LEWIS A. QUIGLEY, CITY MANAGER c.Xhibll 1 Application APPLICATION FOR AFFORDABLE HOUSING PROGRAM COMIA SAVINGS. a Federal Savings and loan Assoc iation %me of fammuon 5850 South Ulster Circle East Addrvs Englmxxl Colo 80111 Gtr Sum zip co" JoEllen Davidson Vi President /Cunnulity R Man canna Psaais rids ( 303 ) 930 -7779 Tdepoone Number ( 303 ) 930 -7297 Fu Number Docket Number Type at Subsidy A. Subsidized Advance B. Direct Subsidy Amount S Subsidy Requested S 210,000 Term of Advance _ Financing to be Subsidized $ 1,419,000 Rate Requested Discount Requested bps C. What spread, if any, will be added to the AHP Advance Rate? N/A bps D. What is the standard spread for this type of loan? N/A bps E. Please describe how the subsidy amount requested was determined. The mortgage amunt that the targeted households can afford is calculated assuming total housing expenses at 28% of their total income. Ttie total acquisition and rehabilitation cost is estimated. After subtracting out a nominal downpayment, the difference between the project cost and the attordable mortgage was split between local funds ($95,010), state recaptured funds ($105,000) available for similar pur poses and an AHP Direct buDSid , . (See Schedule 3 - Program Cost Summary) iqlssj� A. Name of Project: PUEBLO URBAN HOMESTEAD PROGRAM B. Location of Project (please complete each item applicable). .ft City Hall P lace Address Pueblo cuunry Pueblo Colorado City state City wide emphasis in low income areas Can sus Tract(s) it traced $25,300 HUD .Median Income for the project uea Rural Dri I - C. State how project affirmatively promotes fair housing. This pro gram will implement the availability of adequate h(xising for all residents of Pueblo, providing equal access for all persons regardless of race, age, color, religion, sex, national origin, handicap or family status. The program was asses for proper location, project sign, site review and need of expanded housing choice for minorities and women. Initiation will be undertaken for: 1. Eductional meetings to inform and educate citizens; 2. Providing assistance to minority families via counseling service regarding the sale and financial process; 3. Special programs to affirmatively market the lending plan aimed at providing equal opportunity for housing finance. D. Please list sources of financing and equity in the project including construction, financing permanent financing, grants, donations and sweat equity. Attach letters of commitment, if available. Identify each source as to type by noting after name (L) for Loan, (G) for Grant, or (E) for Equity. Indicate whether proposed, requested or approved in status column. Source Type Amount Terms Status Buyer Down payment (E) RU-AHP (G) $ - 9,900 City of Pueblo (CDBG) (L) State Housing Fluids (L) 1st Mortgage Loans (L) Total Development Cost $ 105,000 $ 999,000 $ 1$1,419,000 Subsidy dollars other than AHP funds cotmnited to project Estimated project start date August, 1991 Equity Proposed 0% patient 2nd Requested 3% 15 year Approved 3% 15 year Approved 10% 20 year Approved (see CHAFA letter) Estimated project completion date September, 1992 Estimated date when ARP funds will be drawn fas August, 1991 Is the project ready to begin construction or issue tnortages at this time? Yes, No X .z. ((;ant) .: Will the project be ready to begin construction or issue mortages two months after the application deadline date? Yes x No If No, What additional commitments are needed and what is the estimated date of commitment? N/A E. Please provide a concise description of the project. (Include total project cost, number of units, number of new units, rehab units, and usual summary information. The purpose of this project is (a) to acquire and rehabilitate 30 HUD, VA, RTC or privately owned haw that have been on the market For an extended period ot time in neighborhoods 97r are concentrated and are having detrimental impact, (b) to provide here ownership opportunities for twel very low income households and eight ow - and nWerate ds, all below 80% of nedian income. Total project costs are itemized on Schedule 3 of the Program Cost ummary. e-> y of u s Departwnt of using and kk=Mtty Me u. will administer this program in a manner similar to how the ctirren� Housing and Urban Development (HUD) • 11ouses in neighborhoods with concentrations of HUD hones will be selected and their purchase negotiated with HUD. The process and movement of funds rogram Wst - Summaty. F. Type of Project: Single Family Multifamily Homeownership x Rental G. Please describe the project's feasibility, including local market condidons, that would justify the pmject/activiry. In a recent boarded -up housing survey conducted by the City of Pueblo's DHCD, 41 such properties were counted. in addition, oea r. propercteg iced below $30,000, many in need of rehabilitation. These hares provide a unique opportunity for very low income households to purchase their tirst house. rhese houses MOM M. acqutrM at an average price of $47,300 (see schedule 4 Program Cost Summary) including rehabilitation costs of the horn. After taking into account the subsidy, mime ryers w1 pay on average a mnt for P &I which is c22parable to an existing ninthly rent payment. At present the City of Pueblo's Department of Housing and Cumunity Development (DHCD) has approximatel 9U maen a households on a list who have soupht.tu participate in the programs Further advertising will be initiated, if necessary. H. Is the project sponsored by a community or nonprofit organization? Yes X No If the project involves the acdve pardcipadon of a community or nonprofit organization, please describe the sponsor's record of performance, qualifications, and capacity to carry out its project responsibilities. Describe the specific role which the sponsor will play (i.e., developer, owner, investor, manager, etc.) Name of sponsor: CITY OF PUEBLO'S DEPARLMW OF HOUSING AND Ca+1NITY DEVELOMW (MM) Address: #1 C ity Hall Place Pueblo 00 81003 Contact Person: Tony Berumpn, Directo Telephone: (719) 5 84 -0830 The DHCD is responsible for the CDBG program and has been administering several acquisition/ rehabilitation, rep a retiab Mna EW UrSan ly 40 houses are rehabbed for low incase households yearly. The DHCD has an established relationship with and Ras successfat tn bPteuenrtng LIM FM Title I program WtEft - 9 local lender. Either with a local private lender or Universal Lending Corporation, the City will contract to have a lender originate the loans under the Program. avers Lending Corporation is one of the few lenders that is familiar with the 203(k) program and they have vet a y agreed to originate and service the mortgages For tilis program, local lenders desire to participate. I. Does the applicant have any past or present financial or ownership interest in the project? If so, please describe. N/A M. 01MR OW99M A. Priorities. In the space provided, please describe the relationship of the project to the Affordable Housing Program's priorities listed below. 1. Projects, the principal purpose of which is to finance -the purchase, construction, and/or rehabilitation of owner occupied homes for very low -(50% or below median), low - and moderate (80% or below median) income households in that priority order, or This project will finance the acquisition and rehabilitation of owner- occupied hares or 12 very low inure households (50% below median) and 18 low- and moderate -inure households (80% or below median income). Program Cost Sumiary schedule 2A table 2, f6r shaded argeted groups) -4- A III . 2. Projects the principal purpose of which is to finance the purchase, construction, and/or rehabilitation of rental housing, at least 20 percent of the units of which will be occupied by and affordable for very low - income households for the remaining useful life of such housing or the mortgage term; or N/A 3. Projects that finance the purchase, and/or rehabilitadon of housing owned or held by the United States Government or any agency or instrumentality of the United States including those held by the U.S. Department of Housing and Urban Development, the Resolution Trust Corporation, Farmers Home Administration, Veterans Administration, Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation; or This project will finance the acquisition and rehabilitation of 30 hums with priority given to U.S. Government held properties including HUD, VA, FNMA, FHLM and the Resolution Trust Corporation. 4. Projects that finance the purchase, construction, and/or rehabilitation of housing, which is sponsored by any nonprofit organization, any state or political subdivision of any state, any local housing authority, or state housing finance agency; or The project sponsor is the City of Pueblo. Coordination will be. sought with a local agency administering a homeless transitional housing program and Neighborhood Housing Services effort in their target neighborhood. In addition, the City of 0 has received from the Colorado Housing and Finance Authority (CHFA) a letter of support and will set aside low interest bond money. The present bond rate under their current program is set at 8.3%. If this application is approved, this would allow more participation by homeowners under the Pueblo Urban Homestead Program. -S- A. Glualiticaddns (Cah) 5. Projects that empower the urban and rural poor through resident management, homesteading, self help housing, and similar programs that meet critical urban or rural housing needs; or Residents will be m pored through an Urban Howstead approach which will provide hcmeaanership if ttLe y' live in and maintain their haws for 5 years. lbe 20 year mortgage feature will pr ovide rapid build up of equity and provide each h"steader with a financial stake in the ccmnmity. ibis program will offer a housing choice to low- and moderate -incarn households below the 8 0% median income. 6. Projects that provide permanent housing for the homeless. Approximately two of the 30 hares will be set aside for homeless families living in transitional hcuming thrivigb tho t,ral lump less -agency_- These homes Mill be set aside for up to six mo nths. 7. Projects that are located outside of urbanized areas or that provide urban home ownership opportunities. All properties involved will be located within the City limits of Pueblo and will provide how ownership opportunities to very-low, t ancl mw erate Mcome Mo B. Targeting and effectiveness. Please describe the extent, if any, to which the project will target households with incomes below the maximum allowed by the regulations. (Include percent or number of units to be so targeted.) Number of Units 30 Number of units above 80'0 of median income 0 Number of units between 66% - 80% of median income 9 Number of units between 51% - 65% of median income 9 Number of units at 50% or below of median income 12 -6- B. (C OM)" Number of homeless units 2 Number of single room occupancy units 0 Number of handicapped units Number of elderly units 0 Number of family units 30 Describe the extent, if any, to which the projects will target the incomes below the maximum allowed by the regulations. Pu c urr e nt u h o me steading effort serves families earning up to 80% of the median family income. This project will target 12 very low inure households who are expected to have an average income of $14,088 for 3- to 6- person households (49% of median family income). The remaining 18 households will be low -to moderate -mare households with an expected average income of $20,650 (647. of the 3- to 6- person median income). Thus, all of the participating households will earn less than of the median family income and 12 of the se o s will be very low income households earning leas than 50/% of the median income. See schedule 3 ot the Program Cost Summary.- Please provide any additional information bearing on the project's effectiveness. With approximately 150 hu .s listed for sale under $30,000, the effectiveness of this program will be its ability to rehabilitate the huw..s after acqutstfton, using the, HOD 203M toan guarantee features. Low inure households would then be able to not only acquire the homes but substantially rehabilitate the property. The City of Pueblos Department of ing an CamLinity Development has a staff of eight to administer housing related programs. A full time person will supervise the Pueblo Urban Homestead Program with two rehabilitation specia is s and a Loan Process Coordinator assigned to impleurent the program. At present the department has five properties under a lease option arrangement. Wrough trial error, many ot the 5MMIRTative procedures have been streamlined, thus, allowing effective impl of this program on a larger scale. C. Please indicate the number of years the project will be retained as affordable housing and how this will be accomplished; for example, land covenants, deed restrictions, second liens, low income housing tax credits, etc. The loan agreement or other contract with the howowner will include a provision (Special Warrenty Deed ) giving the City of n lo the right to re-entry and possesstWownersntp of the property in the event of the violation of any of the conditions of the conveyance of the title- properties which the City repossess will be sold to another qualifying ami y who will receive the full benefit of the subsidy. -7- III D. Community Involvement. Please describe the extent to which the project involves nonprofit and community organizations, other than the project sponsor (s), the community interests represented by these groups and the extent to which they are local in nature. Please list any specific contributions these organizations are making to the project, such as the donation of land, cash grants, zoning variances or other concessions, social services, marketing and outreach. Please attach letters of endorsement, if available. This project will be taken before the Fair Housing Task Force for fair housing marketing implementation, Public 11ousliK Authority and neighborhood associations in the neighborhoods that are expected to be included for their endorsements and awareness. Family Counseling SUMP UM proUtcRe _ 5Mgeting ana homeownership counseling tor the selected omeowners. Each buyer is required to attend and complete a Hcxne Maintenance Course enforced by - tTW — Department of Housing and Comnmity Development. This program includes information on — budgeting as well as a personal visit by a DHCD inspector tote buyer's home to show them how to maintain the furnace and o ther systems and appliances. E. Community Stability. Please describe the extent to which the project preserves the community stability by minimizing the displacement of low- and moderate- income households and by maximizing community stability. Please describe the extent to which the project serves existing low - and moderate - income residents of the community. If the project involves any displacement, please provide a summary of the sponsor's plans, if any, to deal with the resettlement of displaced households. All of the houses that will be purchased will be vacant. Consequently, there will be no displacement of households. Market -ng e forts will ocus on reaching very low-income renters to make them aware of the program and encouraging them to a pply. HUD, VA and RTC hoaxes that have been on the market for an extended period of time. and are a major esta - -zing factor in the City of Pueblo will be given priority for acquisition. By pru chasing , rehabilitating and reox.cupying these houses with hoxmowners, neighborhood stability will be enhanc F. Innovadon. Please describe the extent to which the project involves a particularly new or unusual approach, either financial or non - financial, for meeting the housing needs for low - and moderate- income persons. There are two aspects of this proposal which are new approaches for Pueblo or are unusual; (a) the City is using CDBG and State finds in the neighborhoods to provide housing for very low income, first -time hemebuyers. Another unusual approach is utilizing a -year mortgage tor t -s type ot program which Mil acc build -up of equity and the stake in the conwnity of the 1(.wr income household. Since the homesteader does not get the immediate equity from purchasing the house for as in the Federal Urban sea -ng Program, the 20-year mortgage is a way of duplicating the Federal program's rapid buildup of equity. An innovative aspect of this proposal is the use of the. Sect -on program. -s program has been oxt the books for many years but has not been used in Pueblo. It is ideal for situations where substantial rehabilitation and the loan cowers both acquisition and rehabilitation based on a ter repair appraisal. Me owner e to the property before the rehabilitation and does not have. to pay for or go through another closing: The successful use of the 203(k ) program will serve as a nAel tor fUrEher phases of e program of programs by local lenders under their Cunnnity Rei.nvest rule. -8- VIOIIII(1f111!! Please explain how you intend to monitor and report the use of any subsidy granted, including an explanation of how the project's structure ensures that a preponderance of the assistance is received by low - and moderate- income persons. See Attactment C V. Please describe how you would recapture any subsidy in excess of the maximum subsidy specified in section 960.9 (a) of the Affordable Housing Regulations. see Attactnnent D Applicant certifies that the information in the application is correct and that the subsidy received for this project will not exceed the maximum allowable pursuant to section 960.9 of the Affordable Housing Regulations andthat the subsidy or other assistance provided shall only be for uses authorized under section 960.3 of the Affordable Housing Regulations. Applicant also agrees to•submit reports and certifications as the Bank may require. Authorized Signature of FHLB Member Institution Typed Name Title Date Signed Return four copies of this form to: Mr. Chris Imming, Community Investment Officer Federal Home Loan Bank of Topeka Townsite Plaza 2 120 East 6th Street, P.O. Box 176 Topeka, KS 66601 Telephone: (913) 233 -0507 Fax: (913) 234 -1797 -9- ATTACHMENT C Upon approval of this request, a mutually acceptable agreement between Columbia and DHCD will be adopted which will call for drawing down the AHP Direct Subsidy, on an "as needed" basis. The process for selecting households will include using HUD Section 8 Income Guidelines to assure that they are very low income or low- to moderate - income households. Columbia will be given copies of all forms and will maintain them on file. The structure of the program is such that the FHLB -AHP subsidy is deposited at loan closing into the homesteader's Real Estate Escrow Account. These funds are subsequently disbursed by Universal Lending pursuant to a rehabilitation budget approved in conjunction with the 203(K) loan, thus insuring that the subsidy will be used to benefit the low income homesteading family. Monthly reports will be submitted to Columbia on the number of houses that have been acquired. By the 15th of the month following closing, DHCD will report to Columbia as to the number of houses that have been acquired, the number of homes that have been completed with permanent financing in place, the total AHP dollars that have been drawn down and the demographics of participating households. Columbia periodically will provide this information to FHLB. Subsidy funds will be drawn and disbursed on a case -by -case basis. Columbia will confirm that program participants' income qualifications are consistent with this application and in compliance with AHP regulations. Subsequent to such verification, subsidy funds will be transmitted by Columbia to a designated closing agent to be disbursed along with the balance of funds necessary to close. Such transmittal, further disbursement and subsequent reporting of subsidy funds used will be governed by a Subsidy Agreement between Columbia Savings and DHCD. Confirmation by Columbia of compliance with AHP regulations and application provisions stated herein will be made based on the one -time income qualification of the program participant at the time of loan application /closing. Columbia will periodically report to the Federal Home Loan Bank of Topeka as to the status of the program. Annually, or as otherwise required, Columbia's Board of Directors will certify to the Bank that funds have been used in accordance with AHP regulations and consistent with application provisions sated herein. AITACHMNT D Pueblo Urban Homestead Program provisions are such that participants must pay at least 28% of their income for their housing expenses. The maximum amount of subsidy funds which may be applied from all sources may not result in lowering the participant's payment below this level. Compliance with this requirement is verified by Columbia prior to allocation /disbursement of AHP subsidy funds. Disbursement of AHP funds are made on a per unit basis, rather than in a lump sum. Adherence to maximum subsidy excesses and recapture provisions specified in section 960.9(a) of the AHP regulations is therefore provided by the applicant's affirmative pre - disbursement monitoring and verification process. Document review, funds transmittal and reporting requirements will be governed by an agreement between Columbia Savings and the City of Pueblo. Additionally, each homesteading household will receive a Special Warranty Deed with conditions for conveyance by the City of Pueblo. Should the City or Columbia discover that the homesteader is not meeting program conditions, such as making timely payments and maintaining the house in good condition, the City can evict the household and regain title to the property. In this event and upon regaining title, the City will attempt to find another eligible household. Consequently, the subsidy will continue to serve a low income household. Should the City be unable to find another qualifying family, the City will sell the house and use any excess proceeds from the sale to reimburse the FHLB -AHP subsidy funds to Columbia and then back to the FHLB of Topeka. GROSS MONTHLY INCOME X .28 Income available for housing expenses Monthly Insurance payment Monthly Taxes Money available for principle and interest payment Maximum Loan Amount URBAN HOMESTEAD APPLICATION City of Pueblo Department of Housing and Community Development One City Hall Place, Pueblo, Colorado 81003 NOTE: YOU WILL NOT BE CONSIDERED IF ANY OF THE FOLLOWING APPLY: ey h;d11 .3 1 1. You are a current homeowner. 2. You do not have continuous employment for 6 months or more and a work history of two years. 3. Size of house does not meet code for size of your family. 4. Applicant and co- applicant have not signed consent on reverse side of this form. PLEASE PRINT OR TYPE Date Applicant's Name (Last, First - Initial) Marital Status ( ) Single ( ) Married ( ) Divorced ( ) S Co- Applicant and /or Spouse (Last, First - Initial) Marital Status ( ) Single ( 1 Married ( ) Divorced ( ) Separated Address (Street) City State Zip Code Applicant Social Security No. Co- Applicant Social Security No. Home Phone Work Phone Is Applicant a Citizen of U.S. ( 1 Yes ( 1 No Is Co- Applicant a Citizen of U.S. ( ) Yes ( ) No Date of Birth Position Previous Employer — _ - -- — Date of Birth Applicant Position Co- Applicant OTHER MEMBERS OF YOUR HOUSEHOLD NAME /RELATIONSHIP AGE NAME /RELATIONSHIP AGE Applicant's Present Employer Start Date Gross Monthly Salary Address Position Previous Employer — _ - -- — How Long Gross Monthly Salary Position Co- Applicant's Present Employer Start Date Gross Monthly Salary Address Position Previous Employer How Long Gross Monthly Salary Position 11 ODUIlIV1 JP.— IJ "..uCu, uJC lvV rbC wuC VI IVrm. Any Other S ource of Income? ( ) Yes ( ) No S ou rc e Amount LOANS /CHARGE ACCOUNTS /DEBTS LENDER I MONTHLY PAYMENT CURRENT BALANCE SAVINGS AND /OR CHECKING ACCOUNTS NAME OF BANK TYPE OF ACCOUNT ACCOUNT NO. CURRENT BALANCE ZURRENT HOUSING INFORMATIOP Do You Own or Rent? Monthly Rent is Where You Live: No. Rooms No. of Bedrooms How long have you lived at this address? Approximate Monthly Utility Costs To Whom Do You Pay Rent? Address Are You Living in Substandard Housing? ( ) Yes ( ) No If Substandard, List Some Deficiencies Are You Living in Overcrowded Housing? ( ► Yes ( ) No If so, Why? Have You Previously Applied for this Program? ( ) Yes 1 1 No If so, When? CERTIFICATION I certify that the information given by me is accurate to the best of my knowledge. I give my permission for any authorized Amployee of the City of Pueblo to verify any statement made by me. I HEREBY CONSENT TO HAVING THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT SECURE A CREDIT CHECK ON MY /OUR FINANCIAL SITUATION. Date Signature Date Signature PENALTY FOR FALSE OR FRAUDULENT STATEMENT: I understand that under U.S.C., Title 18, Section 1001, any untruthful or deliberately misleading statements made by me on this application or my use of any untruthful or misleading statement on a document supporting this application, can result in prosecution under Federal law, and that I can be fined, not more than $10,000, and /or imprisoned for not more than 5 years, if found guilty. COMPLETION OF ITEMS REQUIRING ADDITIONAL SPACE Please indicate your first and second choices of houses, by address. First Choice Second Choice EXHIBIT 4 ELIGIBILITY CHART (Maximum Allowable Income based on 80`k of median family income adjusted by household size) INCOME LIMITS, APRIL, 1990, 11CD -8 1 Person 9,650 15,450 2 Person 11,050 17,650 3 Person 12,400 19,850 4 Person 13,800 22,100 5 Person 14,900 23,850 6 Person 16,000 25,600 7 Person 17,100 27,400 8 Person 18,200 29,150 ►,1 * 114 2. This chart format shall be used to comply with all reporting require- ments set forth in Paragraph 5 of the Agreement (monthly and annually) between DHCD and Columbia. EXHIBIT 6. ASSIGDM= OF NOTE AND DEED OF TRUST THIS ASSICNMENr OF NO'T'E AND DEED OF TRUST ( "Assignment "), made this day of , 1991, by COLUMBIA SAVINGS, a Federal Savings and Loan Association ( "Assignor "), with its principal address at 5850 South Ulster Circle East, Building 14, Denver Tech Center, Englewood, Colorado 80111, to the City of Pueblo, A Municipal Corporation, ( "Assignee "), with its principal office at 1 City Hall Place, P. O. Box 1427, Pueblo, Colorado 81002. WITNESSETH WHEREAS, pursuant to an Affordable Housing Program Agreement (the "Agreement "), the Assignor has agreed to utilize the direct subsidy to be received from the Federal Home Loan Bank of Topeka, Kansas ("FHLB") (the "Subsidy ") pursuant to the terms, conditions and procedures imposed by the authorizing legislation, the regulations and the FHLB to subsidize the Affordable Housing Program ( "AHP") implemented by the City of Pueblo. WHEREAS, pursuant to the AHP, the Assignor has made the loans (individually "Loan" and collectively "Loans ") as shown on Exhibit A attached hereto and by reference incorporated herein to the persons named therein and in the amounts shown thereon, each of which is evidenced by a Promissory Note (the "Note ") and secured by a Deed of Trust (the "Deed of Trust ") (collectively the "Loan Documents ") encumbering the properties shown on Exhibit A: and WHEREAS, during the five (5) year period following each Loan closing, the Assignee has agreed to service the Loan for and on behalf of the Assignor pursuant to the terms of the Agreement. Upon expiration of said five (5) year period, provided an event of default by the home buyer during the five (5) year period which would permit Assignee to exercise its right of re -entry under the Special Warranty Deed conveying the property to the home buyer (the "Right of Re- Entry ") has not occurred, the Loan Documents shall become the absolute property of the Assignee. NOW, THEREFORE, Assignor hereby grants, transfers and assigns to Assignee all of the right, title and interest of the Assignor in and to the Loan Documents, including all payments to be made thereunder. This Assignment is made upon the following understandings and agreements: 1. During the five (5) year period following the date of each of the Loan Documents, the Assignee will provide written notification to the Assignor of any event of default not cured by the home buyer during the applicable cure period. 2. In the event of default by a home buyer during the five (5) year period following the closing of the Loan and exercise by Assignee of the Right of Re- Entry, Assignee shall make best effots to locate another low or moderate income household to move into and assume the Loan on the house that has been subsidized. If Assignee is unable to find another low or moderate income family, any funds obtained from the sale of the property to a non - qualifying family over and above the senior debt on the property and direct expenses of marketing the property will be paid to the Assignor. 3. After the expiration of the five (5) year period following the Loan closing, the assignment contained herein shall become absolute and thereafter, the Assignee shall be entitled to retain for its programs any money paid to satisfy the Note and Deed of Trust. IN WITNESS WH RFOF, the Assignor has duly executed this Assignment the day and year first above written. ASSIGNOR: COLUMBIA SAVINGS, a Federal Savings and Loan Association By — Title The undersigned Assignee hereby accepts the foregoing Assignment upon the terms set forth herein. ASSIGNEE: CITY OF PUEBLO, A MUNICIPAL CORPORATION By — Title