HomeMy WebLinkAbout6805RESOLUTION NO. 6805
A RESOLUTION APPROVING AN AGREEMENT FOR PUEBLO
URBAN HOMESTEAD AFFORDABLE HOUSING PROGRAM BETWEEN
THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND
UNIVERSAL LENDING CORPORATION, MORTGAGE BANKERS AND
AUTHORIZING THE CITY MANAGER TO EXECUTE THE SA14E
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, COLORADO that:
SECTION 1
The Pueblo Urban Homestead Program Subsidy Agreement between
Pueblo, Colorado, A Municipal Corporation and Universal Lending
Corporation, Mortgage Bankers, 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
HOWARD WHTTT -QCK
COUNCIL PERSON
APPROVED:
PRES OF THE COUNCIL
ATTEST:
M/14MA
This agreement is made and entered into this �� day of a
, 19-[, by and between Universal Lending Corpor ati n
("ULC"), and the City of Pueblo, a municipal corporation ( "CITY ") (the
"Agreement")
WHEREAS, the Federal Home Loan Bank of Topeka ("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
SFAS, Columbia Savings, a Federal Savings and Loan Association
( "Columbia "), in cooperation with the City of Pueblo 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
No /100 Dollars ($127,489) which application was approved by the FHLB;
and,
SFAS, the City of Pueblo will be in charge of administering the
Pueblo Urban Homestead Program ("PUHP") through the acquisition of
federally -owned and privately -owned residential properties within the
City's community development neighborhoods from the Department of Housing
and Urban Development ( "HUD ") for use in connection with the PUHP for
conditional conveyance of such properties to eligible PUHP Participants
and, through agreements for program administration with Columbia, and
BANK; and,
SAS, The City, in cooperation with Columbia, HUD and ULC
has developed the PUHP which requires eligible and qualified PUHP
Participants to obtain financing to complete necessary repairs to PUHP
properties; and,
SFAS, ULC is a Federal Housing Administration - approved mortgagee;
and,
VMUA ULC has been approved by the Colorado Housing and Finance
Authority ( "C FA") as a seller /servicer for Bond money; and,
SFAS, ULC desires to provide loan assistance to qualified PUHP
participants for the rehabilitation of PUHP properties using Section
203(k) loans insured by the Federal Housing Administration, and cHFA
funds; and,
SFAS, The City and ULC desire to implement the PUHP utilizing the
direct subsidy to be received from the FHLB and the 203(k) and CHFA funds
pursuant to the terms, conditions and procedures imposed on those funds by
their respective authorizing legislation, the regulations governing their
use and the requirements promulgated by their overseeing agencies.
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ULC agrees to allocate $500,00 0 of funds set aside by C[FA for the
purchase of Federal Housing Administration Section 203(k) loans to
accomnodate the purchase and rehabilitation by eligible PUHP Participants
of PUHP properties. These loans shall be referred to as 11 203(k) PUHP
Loans ", and shall be secured with a first mortgage against the PUHP
property.
ULC agrees to allocate $127,48 9 of subsidy funds provided by the FHLB
for assistance to eligible purchasers of PUHP properties with downpayment,
closing costs, and prepaid expense requirements associated with the
purchase of PUHP properties, and purchase and rehabilitation expenses of
those properties calculated according to a formula specified by Columbia.
These loans shall be known as "Columbia Loans" and shall be secured with a
second or third mortgage against the PUHP property.
ULC shall have the sole authority and responsibility to apply federal
203(k), CFIF'A and FHLB requirements to determine the eligibility of
borrowers for 203(k) PUHP Loans and Columbia Loans; and, to approve
properties and proposed rehabilitation upon said properties pursuant to
the provisions of Section 203(k) and all applicable regulations and
guidelines.
II. OOMMCNAL CONVEZ NCC OF THE
With each PUHP Participant approved by ULC and selected by the City
through qualifying criteria, the City will execute (1) a Purchase and Sale
Contract ( "Sales Contract ") and (2) a PUHP Purchase Agreement (the
"Purchase Agreement ") which shall set forth the terms and conditions of
the sale of property to the participant as required by the Federal Home
Loan Bank Act and the Federal Housing Finance Board regulations. The City
will also execute a Special Warranty Deed which will conditionally convey
title to the PUHP property to the Participant's name, subject to a Right
of Re -Entry for Condition Broken as defined by the Purchase Agreement.
Under the terms of said Purchase Agreement each Participant will agree
to substantially rehabilitate the property, maintain it and occupy it as
his /her primary residence for at least five (5) years. After said five
year period, if the Participant has satisfied all conditions subsequent
set forth in the Purchase Agreement, the City will record, and deliver to
the Participant a Certificate of Satisfaction and a Renunciation of Right
of Re -Entry whereby the City will divest itself of any Right of Re -Entry
previously reserved. The Participant will then hold fee simple title to
the PUHP property.
III. IRAN REPAYMENT GUARANTEE BY EHM
The City recognizes that the loan security offered for the 203(k)
Loans may be at risk during the five year period of conditional title; and
also that the loans made to Participants pursuant to this Agreement will
be at interest rates substantially below prevailing market rates.
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To eliminate any risk arising out of the conditional conveyance of PUHP
property, and in consideration of the preferred interest rates afforded to
Participants, the City agrees to guarantee the repayment of each 203(k)
Loan made pursuant to this Agreement. This guarantee shall remain in
effect only while the City is vested with Right of Re -Entry in a PUHP
Property, and shall be effective only upon the default of the Participant
as defined in this Article III, paragraph 1, and according to the
following terms and conditions:
1. The Participant shall be in default for purposes of this guarantee
if he /she:
a. fails to make any payment, or part thereof, for 60 consecutive
days from the original due date or such payment; or
b. defaults under the Deed of Trust from the Participant, to the
Public Trustee of the County in which the PUHP Property is
located for the benefit of ULC; or
C. shall have made a general assignment for the benefit of
creditors, or any proceeding shall be instituted by or against
such Participant seeking to adjudicate him /her a bankrupt or
insolvent, or if all or any part of the property or an interest
therein is foreclosed upon or is sold, transferred or assigned by
Participant; or
d. The Participant fails to keep all PUHP property insured for fire
and extended coverage in an amount specified by ULC, with loss
payable to ULC, the City and Columbia (as applicable) the FHLB;
or
e. The Participant fails to pay all taxes and assessments against
the PUHP property; AMID
2. ULC has notified the City of any loan payment which is 30 days
past due, or any other event of default within 10 days of ULC's
acquisition of knowledge of such default, by certified mail, return
receipt requested, sent to City of Pueblo at the following address:
Department of Housing And Community Development, 1 City Hall Place, Third
Floor, Pueblo, CO 81001; and
3. ULC has made reasonable and diligent attempts to collect
delinquent payments and /or remedy other events of default, including at
least:
a. transmittal of notification to the Participant, by certified
mail, return receipt requested, sent to the Participant's last
Dawn residential address, of the nature of default and the
amount of action needed to cure the default, and
b. certified attempt to contact the Participant by telephone at
his /her last known residential and work telephone numbers; and
C. certified attempt to contact the Participant, in person, at the
last known residential address; and
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d. If the Participant fails to cure his /her default on or before the
expiration of 30 days from the date of certified notice to
Participant of said default by ULC, then ULC shall send a Notice
of Default to the City by certified mail, return receipt
requested, to the address indicated infra at Article III,
paragraph 2. Said Notice of Default shall set forth the name
of the Participant, the nature of the default, the amount needed
to reinstate the loan, and documented collection efforts. The
City shall commence the cure of the default within 20 days of
receipt of the Notice of Default either by: (1) tendering the
amount required to reinstate the loan and continue to make
payments on the loan; or (2) paying the entire outstanding loan
balance. The City shall have the sole discretion to select the
method of curing the default.
4. In order to encumber the City's conditional interest in the PUHP
property during the five year period in which it retains a conditional
right of re- entry, and in order to make City's interest in the property
subordinate to the interests of the Secretary of HUD, the City will
execute the first mortgage Deed of Trust.
IV.
ULC agrees to allow a qualified borrower to assume the loan of a
Participant in the event the Participant defaulted on the terms of the
Purchase Agreement or City is required to guarantee repayment of the
loan. The qualifications of a proposed assumptor shall be determined by
ULC in accordance with the requirements and limitations upon 203(k) PUHP
and CHFA loans, as well as the Federal Home Loan Bank Act Affordable
Housing Program.
ULC, in cooperation with the CHFA, shall have sole authority and
responsibility to qualify a new borrower and is entitled to a maximum of
five hundred and no /100 dollars ($500.00) for fees and costs incurred as a
result of the assumption process. The guarantee under Section III of this
agreement shall apply to any loan that is assumed by replacement
Participant under this program. ULC agrees that it will make a
determination within ten (10) calendar days after completion of processing
the assumptor's loan application regarding the eligibility of a proposed
assumptor presented to ULC by City, that it will notify City of its action
and the reasons therefore within two (2) days of taking such action; and
that it will not unreasonably withhold approval.
V. MAN TEES
Upon approval by ULC of a 203(k) loan application referred to ULC by
City, ULC shall receive the allowable closing costs as provided by 203(k)
loan regulations, as well as fees allowed pursuant to the commitment of
funds as outlined by the CHFA. The loan amount shall be established using
HUD and CHFA guidelines. Items known as prepaid expenses for taxes,
hazard insurance premiums, and interest adjustments, shall also be
appropriated and accounted for in the 203(k) PUHP Loans and Columbia Loans
as permitted in the applicable law and regulations. These costs shall be
charged to the Participant or City (as seller) as is customary.
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The 203(k) PUHP Loans shall be made at an interest rate of no more
than eight and one -half percent (8.50 %), or any other rate of interest
mutually agreed upon by City, ULC and CHFA.
The Columbia Loans shall be made on a 20 year deferred basis at no
interest.
The 203(k) PUHP Loans shall be made for a term of 20 years. The
Columbia Loans shall be deferred loans with terms of 20 years. Both types
of loans are due upon sale of the PUHP Property.
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The first payment date of the 203(k) PUHP Loans shall be the first day
of the second month following the loan closing. In the event the property
will not be habitable during the rehabilitation period, the monthly
payments (up to a maximum of 6 months) that would become due and payable
during that rehabilitation period can be included in the loan amount and
paid out of the construction fund.
Bank agrees to review and consider loan applications, to act on such
loan applications within ten (10) days of completion of processing, and to
notify City of its actions and the reasons therefore within two (2) days
of taking action on the loan application.
Loan application will include or be accompanied by, to the extent
feasible, the following:
1. The borrowers) name(s), address, telephone number, and the
address, telephone number, and the address and legal description
of the City property.
2 Borrower(s) income and sources of income, major debts and monthly
payments.
3. Purposes of the loan, including a summary of work to be done for
improvement of the property and the estimated cost.
4. The required exhibits for rehabilitation under FHA 203(k).
5. Credit report and preliminary title report shall be ordered by
Bank and a copy of the title report shall be furnished by City.
The covenants herein contained shall bind, and the benefits and
advantages inure to, the respective successors and assigns of the parties
hereto.
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This agreement may be modified or amended only with the prior written
consent of the parties.
City and ULC agree that the only relationship established through this
Agreement is for the provision of 203(k) PUHP and Columbia Loans and Loan
guarantees as provided for in this Agreement.
The term of this Agreement shall expire one year from the date of the
Agreement (although the repayment guarantee shall survive the Term of this
Agreement) .
CITY OF PUEBLO, A MNICIPAL CORPORATION
Attest: I
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