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HomeMy WebLinkAboutCC RESO 13,580RESOLUTION N0. 13,580 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF NATIONAL CITY, CALIFORNIA AND THE CALIFORNIA HOUSING FINANCE AGENCY FOR A TITLE I HOME IMPROVEMENT LOAN PROGRAM WHEREAS, the City of National City has been a participating City in the California Housing Finance Agency (CHFA) Home Ownership and Home Improvement Loan Program (HOHI) for several years and said Program has benefited home ownership and home improvement in National City; and WHEREAS, CHFA, by letter dated June 1, 1981, has invited the City of National City to participate in its Title I Program, a single family owner occupied home improvement loan program now being developed by CHFA under the Mortgage Subsidy Bond Act of 1980 and the CHFA has offered an Agreement for such participation; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of National City, California that the Mayor of the City is hereby authorized to execute, on behalf of the City of National City an Agreement entitled "California Housing Finance Agency Home Ownership and Home Improvement Loan Program (HOHI) Locality/Lender Operating Agreement for CHFA Title I Home Improvement Loans" for participation by the City of National City in said Home Improvement Loan Program. PASSED AND ADOPTED this 23rd day of June, 1981. ATTEST: Ione 'ampbell, City erk 8b CALIFORNIA HOUSING FINANCE AGENCY HOME OWNERSHIP AND HOME IMPROVEMENT LOAN PROGRAM (HOHI) LOCALITY/LENDER OPERATING AGREEMENT • FOR CHFA TITLE I HOME IMPROVEMENT LOANS THIS AGREEMENT is entered into this 24th day of June. 1981 , between the qf National City. California ("Locality") and Security Pacific National Bank ("Lender"). Lender and Locality agree as follows: ARTICLE I. -.AUTHORIZATION • This Agreement is entered into pursuant to the applicable provisions of the Zenovich-Moscone-Chacon Housing and Home Finance Act, constituting Division 31 (commencing with Section 50000) of the Health and Safety Code of the State of California (the "Act"); the rules and regulations promulgated pertaining to the sale and servicing of mortgage loans in `those areas desig- nated by resolution of the CHFA pursuant to Chapter Six, Part 3 of the Act as "Neighborhood Preservation Areas" ("Rules and Regulations");- and all agreements, contracts, commitments manuals, instruction letters and other documents pertaining to the HOHI Program; the National Housing Act of 1937, as amended, and the regulations promulgated pursuant thereto pertaining to the Title I Class 1(a) and (b) Property Improvement Loan Program; and the Title I Property Improvement Loan Operating Handbook ("Guide") . ARTICLE II. - LOAN APPLICATION PACKAGE The Locality shall refer all persons applying for a loan under this Agreement to the Lender by forwarding to the Lender a Loan Application Package consisting of at least the following documents and materials: A. Letter of Introduction from the Locality; B. FHA Title I Loan Application, Application Supplement, and State of California Fair Lending Notice; C. Construction Contract or Bids or Description of work with cost estimate; • D. CHFA Previous Loan Certification; E. Applicant Authorization of Confidential Disclosure; 5/81 -1- yield tables to ascertain the subsidy payment required to achieve various below market interest rates. The subsidy amount shall be forwarded by the Lender to the CHFA at the time the CHFA purchases the loan. C. In cases where a borrower prepays a CHFA loan, the CHFA shall refund to the Locality the unused prepaid interest subsidy, provided that such loan prepayment occurs during the first one- half (h) of the original loan term, and that such refund exceeds $50.00. No refund shall occur if a claim for loss is submitted to the FHA. ARTICLE VI. - LOAN DOCUMENTATION f, DISBURSEMENT A. The Locality shall obtain a dated and signed rehabilita- tion contract. The contract must specify the type of improve- ments and the itemized cost of those improvements. If the property owner performs the work himself or herself, the Locality must certify the rehabilitation specifications and the itemized cost of each improvement. B. The Locality shall forward the executed contract or the Locality -certified specifications to the Lender with a request for the loan documents. C. The Lender shall prepare and forward the loan documenta- tion at the interest rate previously determined and advise the Locality of the interest subsidy due if the interest rate is to be subsidized. Payments on the loan shall be in equal monthly installments. The first payment is due 30 days after the Note date.. D. The Locality shall obtain the borrower's signature on the loan documentation (including the CHFA-required certifi- cates), arrange for notarization, and return all documents to the Lender. E. The Lender shall ,forward to the Locality the loan proceeds in the form of one or more checks payable to the borrower. If more than one check is necessary, the Locality will inform the Lender of the number of checks to be issued. The CHFA requires that the loan funds be disbursed only after completion of a specified percentage of the rehabilitation. The Locality must inspect the work and "sign off" before each payment is made. ARTICLE VII. — COMPLETION CERTIFICATE A. When the Locality has been notified that construction has been completed, the Locality shall make a final inspection. B. When satisfied that construction is complete, the Locality shall execute the completion certificate (FHA-2). - 5/81 (1) The certificate must be properly completed and signed by both the borrowers and the contractor(s). It must be dated the day it is signed by the borrowers, and the borrowers must sign it only AFTER work has been completed. The completion certificate shallcompanied by the necessary lien releases. (2) The Locality shall forward the completed and signed completion certificate to the Lender. ARTICLE VIII. - COLLECTION OF FUNDS The Lender shall collect all monthly payments made on the loans originated under this loan program. There shall be no additional charge to the borrower or the Locality for the servicing of the loans except charges to the borrower resulting from late payments, defaults and/or foreclosures. The Federal Government, the CHFA and/or the Lender or their designees are not barred by this provision from collecting amounts from the borrower which represent a loss of principal, interest and/or administrative or legal costs resulting from a foreclosed loan. ARTICLE IX. - DELINQUENCY AND FORECLOSURE The Lender shall forward to the Locality a monthly report regarding defaults and foreclosure or proposed foreclosure proceedings. The Locality shall have the option to cure any default of the borrower. The report by the Lender to .the Locality of the loan delinquencies may be made less frequently than once a month if the Lender finds that the number of delin- quent loans is too small to justify monthly reporting, or the Locality elects to waive such reporting. ARTICLE X. - LOCALITY'S LOAN LIABILITY The Locality shall not be liable or responsible in any manner, in the event of the borrower's default on the promissory note with the CHFA or the Lender, so long as the loan originally conformed to the CHFA eligibility requirements. ARTICLE XI. - TERMINATION The term of this Agreement shall be from the date of execu- tion by the Locality and the Lender until December 31, 1982 unless earlier terminated. This Agreement may be amended so long as such amendment is in writing and agreedupon by both the Locality and the Lender and approved by the CHFA. Termination of this Agreement may be made by either the Locality or the Lender so long as written notice of intent to terminate is given by the S/81 -4 other party at least 30 days prior to the termination date. Any termination of this Agreement shall not affect the operation hereof as it relates to loans outstanding at the time of said termination. Date June 24. 1981 For Locality Date For Lender Title Mayor Title 5/81 -5-