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Home My WebLink About1984-04-03; City Council; 7702; Rehabilitation Loan Program Lender-. 6. C d) &L5- ( ClBOF CARLSBAD - AGEND BILL q L AB# 7 70 2. DEPT. HD MTG.4/3/86, ClfY MGF DEPT.- CITY AlT' OF REHABILITATION LOAN PROGRAM RECOMMENDED ACTION: TITLE: SELECTION OF LENDER FOR CONTINUATION City Council direct staff to enter into a one year agreement with Bank of America to continue servicing the existing Rehabilitation Loan Program. ITEM EXPLANATION: On May 7, 1982, the City entered into an agreement with Bank of America to provide services for the Community Development Block Grant Rehabilitation Loan Program. This agreement will terminate April 20 , 1984. At the direction of the Rehabilitation Loan Committee, staff solicited proposals from ten (10) local banks. Three (3) banks responded with proposals which staff has reviewed and presented to the Rehabilitation Loan Committee and Housing and Redevelopment Advisory Committee. Both Committees recommend continuing with Bank of America. Staff concurs with their recommendations. I F1SCAL IMPACT There is no fiscal impact to the City as all monies utilized in the Rehabilitation Loan Program are Federal Community Development Block Grant funds. I EXHIBITS: * I I- Memorandum to Director of Building and Planning dated March 23, 1954. I 2- Letter of Comrnitment from Bank of America dated February 28, 1984. 0 > 0 u 3- Memorandum to Director of Building and Planning dated March 27, 1984 (Loan Program Update). n+ z 2 21 2 G a 2 0 z 3 0 0 * I .j 0 0 EXHIBIT I '. A March 23, 1984 TO : DIRECTOR OF BUILDING AND PLANNING FROM: Administrative Assistant/Redevelopment VIA : Community Redevelopment Manager SELECTION OF LENDER FOR CONTINUATION OF REHABILITATION LOAN PROGRAM RECOMMENDATION: The City enter into a one year agreement with Bank of America to continue servicing the Rehabilitation Loan Program. BACKGROUND: The City's agreement with Bank of America to service the Rehabilitat Loan Program expires April 20, 1984. The County of San Diego has informed the City that HUD will allow a one year contract agreement with a bank for the program. At the request of the Loan Committee, staff solicited proposals from local banks. Ten (10) banks were contacted with three (3) banks responding with proposals. Banks that responded are: - Bank of America - Security Pacific National Bank - First Interstate Bank ANALY S IS : The proposals offered by the three banks are very comparable with flexible program options such as interest subsidy, principal reduction and compensating balances (collateralization). Both Bank of America and First Interstate Bank have local offies with personnel to service the loans. The local offices of Security Pacific would act as an interbank mailing point with all loan servicing done by the main branch in Downey. SUMMARY: All proposals would meet the basic needs of the City's Rehabilitatio Program. Staff feels; however, there is no benefit offered by ,. , . selection of Lende for Rehab. Program - ’ Director of Buildi/i and Planning 0 As March 23, 1984 PAGE 2 another bank that would provide better service to the program than Bank of America. It is especially beneficial to have personnel at the local branch. The Rehabilitation Loan Committee discussed the proposals at their meetings of March 20, and March 23, 1984 and recommended continuing with Bank of America. Staff will present the item to the Housing and Redevelopment Advisory Committee at their regular meeting on March 26, 1984. Selection of a lender is scheduled for Council action at their meeting of April 3, 1984. %eT PATT CRATTY PC:al -1 0 EXHIBIT 2 B BANKOFAMERICA REGIONAL ADMINISTRATION February 28, 1984 Chris Salomone Community Development Administrator Department of Housing and Redevelopment 3096 Harding Street Carlsbad, CA 92008 Subject: Proposal for the City of Carlsbad Residential/Commercial Rehabilitation Loan Program Dear Chris: Please accept this letter as the Bank of America's commitment and interest to renew the contract between the City of Carlsbad and Bank of America NT & SA. This has been an excellent partnership which the Bank of America would like to take this opportunity to continue. The Bank of America is prepared to continue your revolving loan fund/compensating balance program enabling you to create the maximum loan pool (depending on utilization of "shared risk" loans). Your contract will continue to offer the following services: 1. 2. 3. 4. 5. 6. 7. 8. 9. Deposit of lump sum drawdown to accrue interest at highest legal rate. Interest to be utilized in rehabilitation projects . Undisbursed loan fund account at no charge to Authority or Borrower during construction stage. Repayment program commences upon completion of construction. Bank will continue to absorb approximately $600 in loan fees (lot book, appraisal and recording, waiver of any origination fees). Bank will not charge a packaging fee to political entity or borrower . "Deferred Loans" are a component of every comprehensive contract, and will be processed for $37.50 plus out of pocket expenses. Revolving loan fund ultimately returns all funding to city. Your local branch, Carlsbad-El Camino Real, under the management of Jay Howard, will be servicing your entire loan portfolio. A Community Development Department services over 100 contractees throughout California but will continue to assist your local branch whenever necessary. BANK OFAMERICA wnow TRUST AND SAVINGS ASSOCIATION 625 BROADWAY SUITE 1400 SAN DIEGO. CALFORNLA 92101 I, . I, -A , 0 0 Chris Salomone February 28, 1984 Page -2- 10. The Community Development Department working with your Carlsbad-El Camino Real Office of Bank of America, will put at your disposal, resources of other departments, shou1.d- . programing needs require same. In reiterating, the Bank of America would enjoy continuing the partnership with the City of Carlsbad and assisting you in your continuing efforts to stabilize and improve housing and commercial strips in Carlsbad. I will look forward to seeing you in the near future. Sincerely, <e* Lois C. Cyr Assistant Vice President Community Development Administrator cc: Larry Hartwig Jay Howard Ernie Wise BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ' -,, - -. . March 27, 1984 0 * EXHIBIT 3 TO : DIRECTOR OF BUILDING AND PLANNING FROM : Administrative Assistant II/Redevelopment CDBG REHABILITATION LOAN PROGRAM UPDATE On May 7, 1982, the City entered into an agreement with Bank of America to provide services for the Community Development Block Grant Rehabilitation Loan Program. This agreement will terminate April 20, 1984. Funds are still available to continue making low interest loans to owners and leasees of commercial property and residents and absentee owners of residential property. The following is the current status of commercial and residential loans and program balances: CDBG FUNDS RECEIVED Commercial $163,862 Residential Funds 79,189 Sub-Total -$243 ,,05'1 LOANS MADE AND PENDING Commercial- Residential Loans and grants made $76,575 $23,616 Pending Loan 12 , 500 8,000 Sub-total $89,075 $31,616 TOTAL LOANS/GRANTS MADE AND PENDING $120,691 . .. , -- FUNDS CURRENTLY ON DEPOSIT Regular interest bearing account $ 68,445 Non-interest bearing account 43,616 Time Certificate Deposit 152,137 Total Available $264,.198 At their meeting on March 26, 1984, the Housing and Redevelopment Advisory Committee discussed selection of a lender to continue servic the loan program. The committee voted to recommend to the City Counc that the City enter into an agreement with Bank of: America to continu servicing the Loan Program. /*+ PATT PC: a