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Home My WebLink About2013 Ordinance No. 013• • • ORDINANCE NO . .!3z SERIES OF 2013 BY AUTHORITY COUNCIL BILL NO. 11 INTRODUCED BY COUNCIL MEMBER WOODWARD AN ORDINANCE AUTHORIZING AN INTERGOVERNMENTAL AGREEMENT ENTITLED "DELEGATION AND PARTICIPATION AGREEMENT" BETWEEN THE CITY OF ENGLEWOOD AND CITY AND COUNTY OF DENVER FOR ENGLEWOOD'S PARTICIPATION IN THE METRO MORTGAGE ASSISTANCE PLUS PROGRAM. WHEREAS , the City and County of Denver in cooperation with the Metro Mayors Caucus has instituted a program to provide down payment and closing cost assistance (DP A) paired with competitive, fixed-rate, 30 year VA and FHA loans; and WHEREAS, the Metro Mortgage Assistance Plus Program (MMA Plus) is a $15 million program available to all members of the Metro Mayors Caucus (MMC) upon the execution of an intergovernmental agreement with the City and County of Denver; and WHEREAS , there is no cost to the participating Metro Mayors Caucus member jurisdictions; and WHEREAS , the Delegation and Participation Agreement with Denver, allows MMA Plus mortgage loans with down payment assistance to be made in that jurisdiction; and WHEREAS, Denver will be reimbursed upon the resulting sale of the mortgage loan when pooled with other loans into a Government National Mortgage Association (GNMA); and WHEREAS , loans may be made by participating mortgage lenders to homebuyers in participating jurisdictions subject to certain guidelines; and WHEREAS , the passage of this Ordinance authorizes the "Delegation and Participation Agreement" between the City and County of Denver and the City of Englewood. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD , COLORADO , AS FOLLOWS: Section 1. The City Council of the City of Englewood, Colorado, hereby authorizes the "Delegation and Participation Agreement" between the City and County of Denver, attached hereto as Exhibit A. Section 2. The Mayor and the City Clerk are authorized to sign and attest said "Delegation and Participation Agreement" for and on behalf of the City of Englewood, Colorado . 9 b ii lntroduced, read in full, and passed on first reading on the 15th day of April, 2013. Published by Title as a Bill for an Ordinance in the City's official newspaper on the 19th day of April, 2013. Published as a Bill for an Ordinance on the City's official website beginning on the 17 11 ' day of April, 2013 for thirty (30) days . Read by title and passed on final reading on the 6th day of May, 2013. Publi shed by title in the City's official newspaper as Ordinance No.Q, Series of 2013, on the 10th day of May, 2013. Published by title on the City's official website beginning on the 8th day of May, 2013 for thirty (30) days . ndy P . Penn, Mayor I, Loucrishia A. Ellis, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing is/. ~ue copy of the Ordinance p assed on final reading and published by title as Ordinance No. .5, Series of 20 I 3. • • • • • • DELEGATION AND PARTICIPATION AGREEMENT This DELEGATION AND PARTICIPATION AGREEMENT, dated as of___ , 2013 (this "Delegation and Participation Agreement"), is by and between the CITY OF ENGLEWOOD, COLORADO ("Englewood") , a legally and regularly created, established, organized and existing political subdivision under the Constitution and statutes of the State of Colorado ("Englewood") and the CITY AND COUNTY OF DENVER, COLORADO, a legally and regularly created, established, organized and existing political subdivision under the Constitution and statutes of the State of Colorado ("Denver"); RECITALS: WHEREAS, the State of Colorado (the "State") Constitution Article XIV, Section l 8(2)(a) provides that nothing in the Constitution shall prohibit any of the State's political subdivisions from cooperating with one another to provide any service lawfully authorized to each of the cooperating units ; and WHEREAS, Denver is authorized pursuant to its Charter to promote the financing of residential facilities for low and middle income persons or families or facilities intended for use as the sole place of residence by the owners or intended occupants and to promote the health, safety and general welfare of the people of Denver; and WHEREAS , Denver has sponsored its 2013 Metro Mortgage Assistance Plus Program to provide competitive fixed rate 30-year mortgage loans which will be coupled with down payment and closing cost assistance grants in connection with financing mortgage loans for residential facilities, intended for use as the sole place of residence by the owners thereof, for low-and middle-income families (the "Program"); and WHEREAS, Denver has invited Englewood to participate in the Program; and WHEREAS , Englewood has the full legal authority to participate in the Program pursuant to [its Charter/the general powers granted to it in Title 31 , Article 15 , Colorado Revised Statutes , as amended] and the Ordinance adopted by the Englewood City Council authorizing Englewood 's participation in the Program pursuant to this Delegation and Participation Agreement ( collectively the "Act"); and WHEREAS, Englewood desires to delegate to Denver the authority of Englewood to take action and exercise power under the Act on behalf of the Englewood with respect to the Program within Englewood's boundaries; NOW THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, Englewood and Denver hereby agree as follows: Section 1. Englewood hereby delegates to Denver the authority of Englewood to take action and exercise power under the Act on behalf of Englewood with respect to the Program within Englewood's boundaries. Section 2. Denver hereby accepts the delegation of authority from Englewood pursuant to Section 1 hereof and agrees to abide by each of the terms and conditions of this Delegation and Participation Agreement in connection with the use of such delegation . Denver agrees to make the Program available to Englewood for the origination of home mortgages within Englewood's boundaries . 1 E X I H I B I T A Section 3. The participation of Englewood in the Program, and all undertakings, obligations, dutie s and • rights of Eng lewood and Denver under this Delegation and Participation Agreement, are contingent upon the implementation of the Program. Section 4 . In the event that the Program is not implemented by Denver or the Program is discontinued by Denver, this Delegation and Participation Agreement, and all duties, obligations and rights of Denver and Englewood hereunder, shall termi nate. If the Program is not implemented or is terminated, Englewood agrees to hold Denver hamiless for any costs or any other liabilities incutTed by Englewood with respect to the adoption and approval of this Delegation and Participation Agreement or any other Englewood actions related thereto. Section 5. Englewood's participation in the Program pursuant to this Delegation and Paiiicipation Agreement shall not be construed as creating or constituting a general obligation or multiple fiscal year direct or indirect indebtedness or other financial obligation whatsoever of Englewood nor a mandatory payment obligation of Englewood in any fiscal year during which this Delegation and Participation Agreement shall be in effect. [Signatures on the following pages ] 2 • • • • • IN WITNESS WHEREOF , Englewood and Denver have caused this Delegation and Participation Agreement to be executed and be effective as of____ , 2013. CITY OF ENGLEWOOD , COLORADO [SEAL] By ________________ _ Randy P . Penn, Mayor ATTEST: By _________________ _ Loucrishia A. Ellis, City Clerk CITY AND COUNTY OF DENVER, COLORADO By ________________ _ Manager of Finance [Signature Page to Delegation and Participation Agreement] 3 .. -. • • • COUNCIL COMMUNICATION Date Agenda Item Subject: Metro Mortgage April 15, 2013 Assistance Plus Program 9 a i Delegation and Participation Agreement INITIATED BY: Community Development STAFF SOURCE: Harold Stitt, Senior Planner, Department. Janet Grimmett, Housing Finance Specialist COUNCIL GOAL AND PREVIOUS COUNCIL ACTION City Council discussed this matter at the April 1, 2013 Study Session. RECOMMENDED ACTION Staff seeks Council's approval of an ordinance authorizing an Intergovernmental Agreement between the City and County of Denver and the City of Englewood for Englewood's participation in the Metro Mortgage Assistance Plus Program . BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED The City & County of Denver in cooperation with the Metro Mayors Caucus has instituted a program to provide down payment and closing cost assistance (DPA) paired with competitive, fixed-rate, 30- year VA & FHA loans. The Metro Mortgage Assistance Plus Program (MMA Plus) is a $15 Million program available to all members of the Metro Mayors Caucus (MMC) upon the execution of an Intergovernmental Agreement with the City & County of Denver. There is no cost to the participating Metro Mayors Caucus member jurisdictions . To participate, the jurisdiction must execute a two-page "Delegation and Participation Agreement" with Denver, allowing MMA Plus mortgage loans with down payment assistance to be made in that jurisdiction. Upon receipt of an executed Participation Agreement the jurisdiction will be added to the eligible loan area for the duration of the program. MMA Plus will provide competitive rate 30-year, fixed FHA and VA mortgage loans to qualifying low and moderate income homebuyer families . In addition, homebuyers will receive a DPA grant equal to 4% of the loan amount. The source of the 4 % DPA grant funding is housing funds that Denver makes available for the program. Denver will be reimbursed upon the resulting sale of the mortgage loan when pooled with other loans into a Government National Mortgage Association (GNMA) Certificate. GNMA, or Ginnie Mae, was established in 1968 to promote home ownership. As a wholly owned government corporation within the Department of Housing and Urban Development (HUD), Ginnie Mae 's mission is to expand affordable housing in the United States by channeling capital into the nation 's housing finance markets. Loans may also be made by participating mortgage lenders to homebuyers in participating jurisdictions under the following guidelines: Eligible Borrowers • There is no first-time homebuyer requirement in this program. • With regard to citizenship requirements, follow applicable Agency (FHA, VA) guidelines • Buyers must occupy the property within 60 days of clos i ng. • Applicants must be considered irrespective of age, race, color, religion , national origin Buyers must have a minimum FICO credit score of 640, the mid score must be the minimum or above. If an Agency (FHA, etc.) has a higher minimum, follow Agency guidelines. If a participating lender has a higher minimum for other loans and wishes to require a higher minimum for loans, then lenders must use the higher minimum. For home buyers with NO FICO score, manual underwriting shall be permitted. Underwriters must follow the manual underwriting guidelines for the loan product. Maximum Debt-to-Income (DTI) Ratio The maximum DTI ratio is 45%. Homebuyer Education Homebuyer education is required for borrowers. Education may be HUD approved courses, CHFA (including CHFA's online Neighborworks curriculum eHomeAmerica course). Income Limits Use Form 1003 Credit Qualifying Income The limits are as follows : 1-2 person households= $91,100 3 or more person households = $103 ,000 Eligible Area Mortgage loans under the program may be made to qualifying borrowers throughout the City and County of Denver and the City of Littleton and in other participating MMC jurisdictions. Lenders will be notified as other cities choose to participate. Purchase Price Limits There are no purchase price limits in this program . Property Requirements • New or existing, one-four units, detached or attached, condos, town homes, manufactured homes that meet servicer/insurer/guarantor requirements. • Mobile, recreational, seasonal or other types of vacation or non-permanent homes are not permitted . • Land may not exceed the size required to maintain basic livability. • Properties purchased in the program must be residential units. Financing It's expected that lenders have reviewed some preliminary documentation and believe that applicants will also qualify for credit. Excessive cancellations will be reviewed to assure that program funds are not being utilized inappropriately. Appraisal The appraisal must indicate that the home has at least a 30 year remaining useful life. 2 • • • ... • • • Buydowns Follow Agency Guidelines. Cash Back Cash Back to the borrower is not permitted. However, borrowers are permitted a reimbursement of prepaids and overage of earnest money deposit as permitted by Agency guidelines and to the extent any minimum contribution, if any, has been satisfied . Construction to Permanent Not permitted. Cosigners Permitted to the extent permitted by FHA. Treat cosigner/income as directed by FHA. A cosigner cannot reside in the property and cannot have any ownership interest in the property (they cannot be on the Mortgage/Deed/Warranty Deed). Minimum Loan Amount There is no minimum loan amount in this program. Prepayments The first mortgage may be prepaid at any time without penalty. Recapture Tax There is no recapture tax in this program . Refinances Refinances are not permitted in this program. However, temporary, bridge or construction loans with a term or 2 years or less may be taken out with a program loan . Remaining reserves are not established by the program . Follow Agency Guidelines. FINANCIAL IMPACT There is no financial impact to the City. LIST OF ATTACHMENTS Proposed Bill for an Ordinance 3