HomeMy WebLinkAbout1991 Ordinance No. 001ORDINANCE NO . /
SERIES Cl,' tt,e"""l991
BY A\JlllORIT'i
COUNC IL BILL NO . 79
INTROOIJCID BY CXXJNCIL
MEMBER KOLTAY
AN ORDlllANCE APPROI/ING EN1"ER.ING INTO AN AGR@!ENT WITH THE DEPAR'IMENl' OF
IICXJSING AND URB!IN DEVEUlPMENl' TO PARTICIPATE lN TilE sn:rrm 312
REHABIU·rATim LOAN mX,RAM .
WHEREAS, the .:nglewood City Council has consi s tently s upported the
City's involve,ent in hoosing rehabilitation through its support of
Carmunity Develqxrent Block Grant applications, the Urban Hares teading
applications and other hou sing prograrns; and
WIIERFAS, section 312 Rl.!habilitation Loan Program makes l oans to
o,,ner--occupants and invest ors within rur city-wide ms, target area ; and
Wlll!REAS , section 312 Loan Program can also be used t o finance the
rehabilitation requ~ in the Englewood Urban llcmasteading Program ; and
NCJ~, 'fflEREfC!U!, BE IT CEllQIED BY THE CITY CXXJNCIL CF THE CIT'i CF
l:NGLfH:lCD • OJI..CIVlllO • n!l\T:
Saction l. The ;<;:nglewood City Camcil hereby approves the N:iREEMENl'
~ PUBLIC S::.OIES PARTICIPATING IN TIIE SOCTICl>l 312 REIWIILITATICl>l LOAN
PRCXiR/\t-f PART I -LCWI PROCESSING, between the City of Englewood and the
Departn"ent of Housing and Urban Developrent to participater in the Section
312 Rehabilitation Loan Progrlll1I and authorized the Mayor to send a Letter
of Intent to HUD no later than lleceM>er 31, 1990, in the arrount of
$425,000. Said /\gree!'lent generally provi des:
I. Purpose of /\greerent: The p-.Jblic Body has responsibility and
j urisdiction to carry o ut cne or nore local C£Jmun ity
Developrent Block Grant (ma:;), Uri.a, Develq::mant Action
Grant (UD!\Gl, or Urban P.ale steading Programs with resources
prcr,ided in part by the Secretary pursuant to applicable
regula tion s , policies and requiren-ents. I n connection with
such Proqram( s ), this Agreerrent autho rizes the Public Body to
process , and ~o sul:rnit to th? Secretary with t.:ne Public
Body's re:.-amendation to app,:"Y". applicati.ons by private
orooertv ,-,,,mers for rehabili'tatio'l loans under section 312 of
the
0
llousing Act of 1964, as arrende<l (4~ U.S.C. 1452b,
ciereinafter referred t o as "Section 312 l oans"). This
Agreerrent delineates th£ lega l relationship bL tween the
Secretary and the Public Body with respect to the making of
such loans . All Public Bodies authorized co process Section
312 loa'ls for the Secretary's approval shall execute this
PART I; Public Bodies which are also authorized to approve
certain Section 312 loans a, behalf of the Secretary shall in
adrl.1t.:cn 9e!')arately ex~te ?.~ II-1...0:AL r.DAN APPROVAL,
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1-,hic-h shall be deemed incorpor ated by re f erence in this
.~')r eerent aft er its e xecution by the parties thereto .
II. ~lian-e with Pr ogram Requ i rerents . In carrying oot l oan
processi ng e r a;,proval activiti es under this Agr eerent , the
Public Body s ha ll empty with all applicable laws (including
5'!!ction 312), the Secr etary's Sect ion 312 r egul ations at 24
CFR Part 510, all othe r applic able Federal r egulat ions, this
1\greerent and the secre tary's additional requirerents,
policies , and procedures in the Sect ion 312 Rehabilitat ion
Loan Program Handbook (JruD-7375.01 REV-2), the Case
Managerent System Notice (CPD 86-13), and any applicable
successor or additional issuances (hereinafter collective l y
referred to as "Program Requirements"). Under thi s
~eerent, and L'l accordance with such Program Requ i rerents ,
the Public Body's loan pr=essing duties generally i nclude,
but are not limited to, the following:
a .
b .
c.
d .
e.
f.
h.
l\ccepting 5£ction 312 inquiries and initially screening
prospective lx,rr,,wers to check -.tiether they may qualify
far a Section 312 loan;
Assisting prospective borrCMers in CDll)leting the HUD
application forms;
Cbtaining 11nd verifying informatioo oo the prospective A
lx>ntMer's credit, finances and p,:q,erty; W
Inspecting the property that is the subject of a Section
312 applicatioo and assuring that work write-ups and
cost estilllates are prepared in acoordance with Program
Requirements;
Assi sting the prospective lx,rro,,,er to ootain a
contractor;
Determining whether the prcspecti ve lx>rrower, his or her
property, and the proposed work neet the e ligibility
requirerents o f the Section 312 Rehabilitation Loan
Program;
Determining whether the borrower is an acceptable credit
risk, and c ertifying the l oan to JruD as a;,provable under
all Program Requirerent s, which includes certifying that
the rehabilitation is a part of , or is necessary o r
a;,propr iate to the execution o f, a C'DBG, UD.l\G or Urba.
Hates teading Pr ogram ;
Arranging for loan settlerent, including assuring t.'1at
the loan is made using the a;,propriate HUD loan
docurents, correctly C011>leted ;
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• i. Conducting oon struction inspections , requestin loan
disburseirents fran HUD on behalf of the borrower , using
such disb.irs eirents to make progress and final
oonst ruccion payrre nts to the bo rrc,.er (or to the
contractor on behalf of the borrower) , and assisting in
resolving disputes ooncerning con s t ruction , in
accordance with the Program Requirerent s; and
j . lJtl>lerent~ the other requirerents o f the Case
Managerren t System Notice (CPD 86-13 or successor
issuance );
The foregoing brief em1reration of the Public Body's duties shall
not be oonstrued to expand, define or limit the du t ies of the Public
Body described in the P1 ""' Requirerents . I n the event of any
conflict between the foregoing description and the Program
Requirements, the Program Requirements shall be oontrolling .
III. Effect Of Public Body's Failure To Catply.
a. Goverment Actioos Against Public Bodies . The Secretary
reserves the right to take aaninistrative oorrective or
reredi;; action, in accordance wi th Section 9 of this
:\g"1!1!11'ent, against a Public Body >mich fails to CClll)ly
with the Program Requirenents. This Agreement sets
forth ooly the Secretary's adninistrative rerredies i:.....,der
the section 312 Program, and nothing in this Agreement
shall be construed as either expanding or limiting any
otherwise available civ il or criminal actions by the
wu.ted States or the Secretary against the Public Body,
or any enployee or contracto r of the Public Body,
,;nether or not acting within the scope of their
authcrity .
b . Actions By Govern'!1!11t Agains t Borrower Or Third Parties.
The legal rights of the Governrrent and a borrower wi th
respect to a'ly section 312 loan are controlled by the
loan docu;re,,ts executed with respect to that loan .
Nothing in this Aqreeme.'lt shall be construed to irrpair
the rights of t.l\e United States or the Secretary to
collect a Section 312 loan in accordance with the loan
documents , or to take any othm,.,ise available civil o r
criminal action against a borrower or any third party in
connection wit..'1 a Section 31"! l oan .
c . Actions by Borrower or Th ird Parties Against Governnent .
The Public Body acts as an independent oontractor and
not as t..'1e secretary's agen t in performing its functions
under this Agreerent . As stated in the Rehab ilitation
I.oar, Agreeren~ bet-.een the Secretary and each borrower,
•.ne i«retary dccepts no legal responsibility t o the
,")QITt~r to supervise the Public &:xjy in ~rformi.ng any
fu11ct i on unoor the Section 312 program . Al though the
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Secrctllr)I r'IMdates under the Prog ram Requiren-ent s that ••
t ho Public Body undertake certain functions in
rroc ssing, approval, settlen-ent and dis bursen-ent of
Section 312 loans, the Secretary does so for the
financial benefit of the United States and in
furtherance o f national program objectives, not for t.t,P
dir ect benefit of the individual borro,,er. The failu.
o f the Public Body prq:,erty to perfonn any o f the
Program Requirerents shall rot cre a te or justify any
c laim against the Secretary on the part o f a Section 312
borro,,er , or any other person ( including any
r ehabilitation oontractor or supplier or a tenant in an
assisted property), and it shall not oonstitute grounds
for the borrower or any third party to contes t the
validity of any Section 312 processed or approved by the
Public Body under this Agreement .
d. /\ction by Borro,,er or Third Parties Agains t Public Body . '!he
extent of liability , if any, of the Public Body to the
bo~r or any third party with respect to any function
perfomed by the Public Body under this Agreement or the
Program RequiremenU shall be determined in accordance with
applicable State and local law. Nothing in this Agreement
shall be construed to mandate liability, or create a cause of
action of any kind, by the borrower or any third party
against the Public Body or by the Public Body against the A.
borrower. W'
e. Defend and lbld Rarml..,,,s. Notwithstanding any other
provision of this Agreement, including Section 3.c. above,
the Public Body will warrant , defend and hold harmless the
Governn-ent with respect to any and all claims and l osses
caused by its failure to ca,ply 1oi.th the Program Requ.irenents
o r the requirerents of applicable State and local law in its
proce-;sing or approval of Section 312 loans under this
Agreemmt, or in the subsequent settlerent and aanini strati on
of loans.
IV. Program Mninistratio n and Record-Keeping:
a. The Public Body agrees t.>iat i t will , a t all prq:,er ti.ms,s ,
provide or cause to be provided carpetent an d a dequate
architectura l, engineering , f inancial, legal and other
t ec!U1ical sk i lls needed in aanin istering the Section 312
Program , carply i nc;i •·ith the Proc;,rarn Requ irerents , and
supervising a.-.d inspectL"lg rehabi litat i on wo r k financed by
Sec i on 312 loans 9rocessed o r a;:>?roved under this Agreerent .
The Public Body nay reta in €!1l'loyees to carry out its duties
under hiF !lq r eerent, or (a s permitted by S ate and local
l c11w) i t may en ter into a,e or rrore services oon tracts with
individuals or pr i ate nonprofit or for-9 r ofit or ganizations ,_
including financial inst i tutio~s , tc !)er fonn all or any of
1 ts fnnc ions in connection w.: t.h t.'ie Section 312 loari
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r r11m, ex ept for loan approval. If any such contract for
MJ:Vicos is funded in whole o r in pan by Cll~ funds pursuant
to 24 crn 570 .202 (b )(9) or 570 .20 6, all applicabl-a
roquir nts of 24 CFR Part 570 a pply to the selection of the
contrnc tor ( if selected by the Public Body, rather than a
borro..ier) 3nd the performance of the eo..rvices rende.ted under
contract, a s further explained in the Program
Requirements . If any s uch contract for services will be
f unded with S.."Ction 312 funds by inclusion of an arrount in an
approved loan to ~nsate the contractor for the
contractor• s services, the contractor shall be selected in
accordance with Section 6-5.b. of the current Section 312
Rehabilitat.ian I.Dan Program Handbook, or carparable
provisions o f arrt successor issuance, in addition to all
other require!Mnts flowing fran the use of Section 312 funds,
such as equal opportunity and minority anil .onen's business
enterprise requirerre!lts . Notwi.t.',stan<ilng the existence of
any such contract for service~, HUL will hold the Public Body
responsible far CCl!l)liance with the, Program Req~irements, as
fully as if the Public Body itself had perfonred the
contracted se.xvices. l<herever the i:.:!rm "Public Body" is used
in this Agreement, it includes any of the Public Body's
errployees or contractors who t>"l"form services related to the
section 312 program.
b. The Public Body shall keep and maintain full and accura.~e
books and records with respa"t to its adninistration of the
Section 312 loan program. At a mi nim.1111 , "full and acr..::-ate
books and records" shall include the specific itEmS, which
shall be retained for the specific periods, set forth in
Section 13-2 h. of the current Section 312 Rehabilitation
Loan Program Handbook , or carparable provisions of any
successor issuance. The Public Body shall , at any ti.ire
during normal business hours , and as often as the Secretacy
or ·,., ca,ptroller Ger.0 .1:al of the llniL-d States may dean
necessary, permit the Secretacy or carptroller Gener al or
their representatives to inspect, make excerpts e,r
t,:anscripts of, copy, and audit , a~d and all of its books and
records related to the Section 312 program.
v. !laking and TeJ:TTli.nating Loan Obligations:
a . Upon receipt of the cbcurrent ation required by the Pr og r am
Requirerrents to be s u:mitted to the Secretacy for loan
approval, the Secretacy will review the loan for ca,;,liance
with all such Requirement s and will advise the Public Body
whether or not t.'1e l ea~ is apprcved by sending t.1-ie Public
Body wr i t e-an :10tification of loan a;,proval follCMed by one or
rrore valida ed copies of the approved application . Un til
both the written notification and validated applica:ion(s )
are received, t.he Public Body is not aut.'icr1zed to advise any
pot ential bon a,er that his or her loan appllca ion hns
aoor oved by the Sec retary. '!'he Secretary 1s not lec;al ly
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camli.tted to make a Sect ion 312 loan to any bor ra,ier until
the written notifica tion of approval i s sent to the Public
Bodi, after r eco rdation of the loan obligation by the
applicable mm !legiona l Accoun ting Di v i sion .
b. After notification of l oan approval as described in Section
4 .a . above and befor e l oan set tlerrent (closing ), t he
Secret,cry and/or the Public Body may c ancel an appr oved
Section 312 loan on ly for the follc:,,;ing r eason s:
( i ) Failure of the borra,ier and the Public Body to pay the
required awlication fee and any escro., arrount s , provide
MY necessary SUpplerrental Financing, and c l ose the loan
in IICCOrdance with the Program requirements and wi thin
the tire peri o d specified;
( ii l The loan is CMCeled with the consent o f the borra,ier
pursuant to procedures in the current HMdbook,
HDD-7374.01 REV-2 or any successor issurance;
( iii l The loan is rescin.:ed by a borro..ier in accordance with
Truth-in-I.ending procedllres;
(iv ) My reason stated in Paragraphs 6.a . (5) through (8) of
the Rehabilitation Loan Agreerrent required to be
l!lOl!Cllted between the borra,ier and the Secretary at loan A
closing, or c:cnparable provisions in any successor form W,
of Agreerrent.
c. lifter loan settlenent, the Secretary and/ or the Public Body
may CMCel or terminate the loan au y for the reasons set
forth in Paragraph 6 of the Rehabilitation Loan Agree,rent
between the Secretary and the borrc,.,er with respect to the
approved loan .
VI. Rights Under Other Contracts: The r i ght s of the parties under
this Agreeme:nt shall be in additi on to , and not in derogation of ,
the rights of the sane partie s under the separate contract for
Federal ass istance for any o f the Pub lic Body 's Programs descr ibed
in Section 1 hereof .
VII. Effective Date anrl Tem of Agrcerrent:
a . This ,"-Cjreen-ent shall take effect on the date agreed by the
parties or on the date of its execution by the l ast of the
parties her eto to execute this Agreen-ent , whichever date is
l ater.
b. This .~greerent s.'1 all remain in effect un t il suspended or
terminated in accor dance with Section 8 or 9 of this
;,greerent . As l ong as this Agreerrent is in effect, the
?u.':>lic Body may process and sul:Jllit Section 312 loans to the -
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Secretary for appr oval, s ubject to the availabilit y of
Sect ion 312 funds for obligati o n .
VIII. Voluntary Suspens ion or Termination:
a. suspensi on at Public Body Request . 1 lhenever the Public Body
believes that i t l acks the capac ity t o process or approve
l oans in accordance with the Program Requirerrents, as
applicable , i t shall give the Secretary notice that it is
tetp0rarily suspending both Parts I and II of this Agreemen t,
or only Part II of t his l\greelrent , as applicable . In
addition , the Publir. <>Ody may ,m in its discretion, give the
Secretary notice for any other reason that it is tarporarily
suspending Parts I and II, or Part II ooly, a t any o ther
ti.Ire. /\ny s u :h ,::uspension shall be e f f ective .i.mredia t e l y
when sent or at any later ti.Ire specified by the Public Body ,
up to thirty ( 30) calendar day s after the notic e is sent ,
provided that the Secr etary may require the Public Body to
continue under Part II for a specified period, not to exceed
sixty days, in order to 8CCallrOdate the addit ional loan
approval ljOrkload if the Public Body has el ect ed to suspend
its functions ooly under Part II of this l\greerrent. After a
suspension at the pJblic Body 's request under this Secti on
8. a. , the suspended functi a,s under this l\greerrent may not be
reinstated except with the written consent of both parties .
b . Termination. Parts I and II of this P,,Jreement , or Part II
onl y , shall terminate without any further action by e i ther
party tereto after a period of time in consecutive c alendar
1T011ths of suspension agreed to by the parties , unless earlier
terminated for cause o r convenience by the Secr e tary. In
addition, the Public Body may give t h-a Secr etary notice that
it is terminat i ng this Agreerrent at any ti..rre for any reason .
~r.y s uch termination shall be e ffective .i.mredia tely when
sent , provided that the Secret ary may require the Public Body
to continue under Part II for a specified period , not to
exceed si,cty ( 60 ) days , in order to accamodate the
a dditional loan approval "-'Jrkl oad if the Public Body has
e lected to terminat e its funct i on s only under Part II o f this
Agreerent .
c. Effect of SUspension or Termination . l·;tii le Pa..--ts I and II of
this Agreenent are suspended or terminated under Section 8 or
9 hereof, the Public Body is not authorized to submit
additional loans to the Secr etary for approval , or to ,.._.,,,rove
a dditional l oans, and it shall incur no additional costs
under the CDB:i program for processing or approving Section
312 loans, unless otherwise specifically authorized in
writing by the secretary . However, unless other,1ise
specifically directed by the secreta..7 in writ ing , the Public
Body shall continue to take all loans approved by the
secretary c-r the Public Body, as applicable , prior to the
notice o f suspcnsio:1 o r emJ.nati on , including the
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performance of affirmat i ve activitie s such as closing A
app roved loans , inspecting properties being rehabilitated, -
and request i ng disburserrent o f l oan funds on behalf of the
borra.er; and it may continue to incur costs under the CDBG
p rogram for those continuing loan adni.nistra tion activities .
If only Part II of this agreerrent is suspended or tenninated
under Section 8 or 9 hereof, the Public Dody may continue to
process and s ul:rnit loans to the Secretary for approval , and
it may incur costs und-ar the a:>BG program for that activity ,
but it may not approve the Section 312 loans under Part II,
nor may ~ t incur a:>BG program costs for that function .
IX. Corrective Or Rerredial l\ctions: The Secretary may take corrective
or rerredial actions against the Public Body if the Secretary
determines, in his 'lr r e sole judgment, that the Public Body has
failed to o:llply with one or m:,re of the Program Requirerrents.
Prior to initiating any corrective. or rerredial actions ur.der
Paragraphs c. through j. o f this Section, the Secretary shall give
the Public Body thirty days advance rotice in writing or the
secretary's specific findings of nonc:arpliance with Program
Requirerents and of the proposed corrective or reredial action(s).
The Public Body may subnit infomation to mitigate or rebut the
Secretary's findings during such thirty day period and the
Secretarv will consider such infomatioo, rut the corrective or
renedial · action(so will remain in effect unless m:,dified or
withdra,,f by the Secretary. Corrective or reredial actions may
include <.ne or r.ore of the following:
a. Directing the public Body to sulxnit to additional informatioo
on their Section 312 Loan Program activities and/or progress
schedlles or other types of reports;
b. Issuing a letter of warning advising the Public Body of the
specif.ic program deficiency(s) of further actions which will
be taken if the appropriate corrective action ( s) are not
taken;
c. Reducing the internal HUD Section 312 loan fund assigment
for the Public Body for the curr.ant fiscal year or reducing
any such assign.rre.nt for the next fiscal year;
d. suspending Parts I and II , or only Part II, o f t h i s
l\greerent, for a succ eeding fiscal year s ubject to correction
of specific deficienci es noted by the Secre t ary ;
e . Reques• ing the Pub lic Body t o volun~arily make loc,,l public
f inds available to a borrcrwer to ~le t e the rehabilitation
of his or her pr q,e..-t.y 1..tiere HUD de tennines that the Pub l ic
Bodv 's defic i ent aarllJli s u ation resul ted in r ehabili.ta i on
that did no t neet l:ot.'i the requirerrents o f the reha!:>ilitation
contract and r e a sonable stancards of quality for the work
involved ;
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f. lldvising t he Public Body that i t may no longer pr ocess
certain c l ass es o f Secti on 312 loan applications un til
s peci fic defi c iencies i n the processing o f s uch applications
are corrected by the Pub lic Body ; prov i ded that the Public
Body shall cont inue t o admi nister alr eady appr oved loans o f
the affected c l asses un less othen ,ise specified in writ i ng by
the Sec r e t ary ;
g. lldvis ing the public Body t hat it may no longer approve
certain c l asse s o f Section 3J 7 loan appl ica t ions un t il
specific defi dc ir., ~s in the approval of sueh ap'?lica tions
are lJOrrected by t he Public Body ; p r ovi ded that the Public
Body shall continue to acrninister alre ady a pproved loans o f
the affected c l asses unless otherwise specified in wr i ting by
the Secret arr
h. Giv i ng t he Public !Jody wr itten notice of s uspension of Part I
and Part II, or only Part II, of this l\greerrent for specified
cause f or a speci f ied period; pr ovided that such suspension
shall have t he ef fect set f orth in Section 8.c. of this
Agreerent unless otherwise specif ied in wr i ting by the
Secretary;
i. Giving the Public llody written not~ce of t ermin'lti,.)fl of Part
I and Part II, or only Part II, o f this l\greerrent for
specified cause; provided that such termination shall have
the effect set forth in Section 8 .c. of this l\greerrent unl ess
otherwise specified in writing by the Secretary;
j. Declaring an area or a l ocali t y ine ligible for f urther
s,,ction 312 l ending ; p r ov i ded that the Public Body s hall
continue to acrninister Sectio n 312 loans already approved in
the area or l ocalit y unl ess otherwise specified in wr i ting by
the Secretary .
X. Ack.'lOWl edcirent of Receipt : By causing this l\greerrent to be duly
execut ed and i t s seal to be hereunto affixed and a t tested , the
Public Body a-cknowl edge s that it has received a copy o f the
current Section 312 Rehabi litation Loan Program Handbock an d the
cash Man aqarenl Sy stem Notice . The Public Body further
ackno,,ledges that it will infnrm the applicable HUIJ Fiel d Office ,
in writing , if there is any change in •·he Public Body Contact
Person listed in Section 11 o f this ,. eerrent, so that the
Secretary ray notify the Public !Jody of any revisions to the
Pro:;ram Re:j1irerents .
XI. Pu),Jic llod) Contact : The following is the name , title, address
a'ld telephone nuirner of the primary Publil; Body contact person.
This is the p<>··son to who the Secretary will direct all notices
under this Agreerent and al l issuances or other infonnat1on or
requ1rarents frcr, tr.e Secretary concerning the Section 312 Loan
Pro.1ra"'l. The Public SOC"f agrees that i~ -.,111 iPTrediately infom
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the socretary i f the narre, titl e , address or telephone nurrber of
the Pcblic Body contact chanqes .
I nt roduced , read in f u ll, and passed on first reading on the 17th day
of oeceirber, 1990.
Published as a Bill for an Ordinance on the 20th day of oecemt:er ,
1990.
Read by t itle and passe d on final r eading on the 7th day of Januaxy ,
1991
Published by title as ordinance !lo. j_, Series of 1991, on the 10 th
day of January , 1991.
~tu ~~ bJ/'. Cv:~
Patricia H. era,,, City Clerk
I, Patri c i a H. era,,, City Clerk of the City of l:)lglE!\,000, colorado~
hereby certify that the aboVe and foregoing is a true copy of the Ord.in
passed on final reading and published by t itl e as ordinance No . I , series
of 1991. -f4:l/4✓,t; ~
Patricia H. ere,,,
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DATE
ec embe r 17 , 19 90
IN I T IATED BY
STAFF' SOU RC E
ISSUE/ ACTION PROPOSED
COUNC I L COMHUNI~ATION
AGEN DA ITEM SUBJECT
ll (e )
Depa r tment o ! Community Development
Section 312 Re h a b
Loan ?rogr11m
Richard s . Wanu s h, Director of Community Ce\·elopment
.;pprove a Bill !or Ordinance ·!nt er i:1g into an a g reeme nt wi t h the Departme nt o f Hous-
ing and Urba n De v e lo pment to part ici ·_Jate in the Section 312 Reha bi i t at ion Lo a n
?rog r am .
P REVI OUS COUNCIL ACTION
None relating t o Section 312. Howe \·er , the council has consist.ent-Y support e d the
City's involveme nt 1.n housi ng rehabi itat ion through it s support of the Commun i t y
:>@\·e l opm e nt Block Grant app l ·cat!.ons, t he Urban Homesteading applications, and o the r
!icu s ing p r og rams.
STAF F ANALYSIS
:~pt"ov @me n t of a ny existing r es iden:ial, nonresidentia l , mixed use, single r oom oc -
C'..!pancy and conr;rega :.e housing t h rough the continuation o ! the :'lousing Reha bilita-
:!.on ?rogram a:-:': :h e ::nqlewood. 3..:s:..:-,ess Re v~lvJ..ng Loa n f 1.:nd .
BACKGROUND
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loans are equal tr> the sum o f the respective maximum amounts. The p r og r am p:-ohibits
the combinati on of Section )12 funds with the Rental ,~ehabilitation Program .
The 312 loan can inc lude the costs o f repairs to con·ect code deficiencies ,
we atherization items, historic p re servation requirements, incipient code de f icien-
ci es and general prope rty im provements (G Pl). CPI can not exceed 40\ of the total
loan am ount. r.oom addi ti ons and garages are al lowa ble GPI wo 1·k items . An ap~l icant
i s eligible if their housing expenses, excluding utility costs, do not excePt r' 28\ o!
thei r gross monthly income and thei r long te rm debt, including the housing expenses,
doe s n o t exceed JC\. For applicants o ffered a )\ i ntere st rate, eq ulty is dete r-
mi ned by a discou nted 80\ loan to ,.-alue ratio . Fo r all others, equity is det ermin e d
b y a non -d iscounted 90\ loan t o v a lue rat io . The SectionJ12 loa n also allows f o r
t he refinancing o f existing mo rt gage loans f e r 01,me r ·occupants earni ng less than 95t
of the median incorr,e if certain conditions :.re met.
Current rehab staff would oversee the applica t ion and the constructior phases of t he
res i dent i al loan p r oces s . 'these phases do not di ffer from those o f the existing
loan p r og ram. All loans wo · . .tl-i be approved by HUD r-ather than by our Rehab Le.an Com -
mi t.tee. Permanent loans 6re ser vice d by a n independent agent which would be respon -
sible to HUD for t he coll e ction and t he default. p r oced ures.
The Section 312 Loan Program no: on y can t>e used t o finance the r-ehabilitat on re-
quired in the Urban Homesteading Progr am, but. also can be used to assist the lo-..·-
income hom e owners cu rrentl) on the rehab wait ing list . The Economic De v elorment
Division can use the loans t o assis t non re side ntial invest ors .
A Lett er o f !nt.ent. must be submitte d to HUD no later than December 31 J..nc!icatlng the
amount of Sect ion 312 funds anticipa t ed to be u sed in 19 9 1. St.a!! lS anticip&ting
u sing S425,000 --S165,000 for Urban Homes :eading, S60,000 for regular rehabilit a-
tion, and S200,000 for commer-cial loans.
!h e approv ed 1991 bud;et f o r the Community De\·e C?ment Depa::-tfl'e n t ....-1 l l be &v !ilable
:o adm inls t.er the program. r-:o additional non:.es .... 111 be required.