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HomeMy WebLinkAbout1984-07-17; City Council; 7820 Exhibit 06; OFFICIAL REQUEST TO STATE OF CALIFORNIA FOR MORTGAGE REVENUE BOND ALLOCATION Exhibit 06I QHI apii& -Y FPJ &% CITY OF CARLSBAD HOME FINANCING PROGRAM RULES AND REGULATIONS ESTABLISHING ELIGIBILITY CRITERIA FOR MORTGAGORS These Rules and Regulations are made pursuant to Part 5 of Division 31 of the Health and Safety Code of the State of California and relate to the City's Home Financing Program of purchasing loans made to qualified persons and families from qualified lending institutions, as hereinafter defined. In order to be eligible to become a mortgagor under this program, a person or family must comply with the criteria set forth in these Rules and Regulations. In developing the criteria, the City has considered factor: such as the amount of personal or family income available for housing needs, household size, costs and condition of available housing, and eligibility of potential mortgagors for federal housing assistance. Section 1. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes of these Rules and Regulations have the meanings herein specified, to be equally applicable to both the singulal and plural forms of any of the terms herein defined. Unless otherwise defined, all terms used in these Rules and Regulations shall have the meanings assigned to such terms in the Act. "Act" means Part 5 of Division 31 of the Health and Safety Code of the State of California, as now in effect and a: it may from time to time hereafter be amended or supplemented. "Bonds"' means the City of Carlsbad Single Family Residential Mortgage Revenue Bonds, Issue of 1985 authorized by, and at any time outstanding pursuant to, the Indenture. "City" means the City of Carlsbad, California. "Code" means the Internal Revenue Code of 1954, as amended, and all regulations and rulings promulgated thereunde "Indenture" means the trust indenture to be entered into by the City with a bank as trustee providing for the issuance of the Bonds, as the same will be approved by the City under the Act or as it may from time to time thereafter be supplemented, modified or amended by any supplemental indentur in accordance with the terms and provisions hereof. L "Loan" means a loan evidenced by a note secured by a first lien deed of trust which meets all the requirements of the Program and which has been purchased from a Lending Institution pursuant to the Program. "Lending Institution" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, or other financial institution or governmental agency which customarily provides service or otherwise aids in the financing of home mortgages, or any holding company for any of the foregoing. "Median Household Income" means the highest of (1) statewide median household income for the State of California as determined by the City, (2) county median household income for the County of San Deigo as determined by the City, and (3) median family income for the San Diego Primary Metropolitan Statistical Area for a family of four, as published by the United States Department of Housing and Urban Development, as may be adjusted from time to time by the City, or as may be otherwise reasonably determined by the City in accordance with the Act. "Mortgage Insurer" means a Person qualified to issue mortgage insurance, and approved by the City to issue mortgage insurance under the Program. "Mortgagor" means any Person or Persons who meet the requirements of the Program and has received a Loan. "Person" means any individual partnership, copartnership, firm, company, corporation, lending institution, association, joint stock company, trust, estate, political subdivision, state agency or any other legal entity, or its legal representatives, agents or assigns. "Program" means the City's program of purchasing Loans pursuant to the Indenture, the Act, these Rules and Regulations, and all other rules and regulations adopted pursuant to the Act with respect to the purchase of Loans pursuant to the Indenture. '*Residence" means real property and improvements thereon consisting of a single family detached or attached (condo- minium, rowhouse, townhouse) residential unit located within the City which can reasonably be expected to become the principal residence of a Mortgagor within 60 days after a Loan has been made to such Mortgagor and which otherwise cornplies with the requirements of the Program. -2 - I "Rules and Regulations" means these rules and regulations establishing eligibility criteria for mortgagors adopted by the City, as they may be supplemented or amended from time to time, Section 2. Eligibility Criteria for Mortgagors. A Person or Persons who complies with the following criteria is deemed by the City to be a person or family of low or moderate income and unable to pay the amounts at which unassisted private enterprise is providing suitable, decent, safe and sanitary housing and shall be eligible to become a Mortgagor under the Program. (A) The maximum household income of the Mortgagor, as determined pursuant to Section 3 of these Rules and Regulations, shall not exceed: 1. 150% of Median Household Income with respect to a Residence of which the Mortgagor will be the first occupant or with respect to the resale of such a Residence; or, 2. 120% of Median Household Income with respect to a Residence of which the Mortgagor will not be the first occupant (except in the case of the resale of a Residence to which subparagraph (1 ) hereof applies ) . (B) Each Mortgagor shall submit an affidavit stating his or her: (1) intention to occupy the Residence as his or her principal place of residence within 60 days and for a minimum of two years after the Loan has been made; (ii) promise not to permit the Residence to be used in a trade or business; (iii) non-ownership of his or her principal residence at all times during the immediately preceding three-year period (except that this requirement may be waived to the extent permitted by the Code without adversely affecting the exemption from federal income taxation of the interest on the Bonds); and (iv) income as meeting the requirements of these Rules and Regulations. (C) The Mortgagor shall meet credit standards established by the City, the Lending Institution and the Mortgagor Insurer as the case may be. Section 3. Determination of Household Income. For purposes of determining whether a potential Mortgagor meets the maximum household income eligibility requirements set forth in Section 2 of these Rules and Regulations, household income shall mean and include the current annual adjusted gross incomc of a potential Mortgagor for federal income tax purposes, together with the current annual adjusted gross incomes of all persons over the age of eighteen who intend to reside in the -3- \ Residence for which the Loan is made as their principal place of residence, regardless of whether such persons resided with such Mortgagor at any time in the past. Section 4. Assumption of Loans. Any Loan may be assumed upon the Mortgagor's sale, transfer or other disposition of the Residence provided that the purchaser of such Residence is an eligible Mortgagor under the Program and provided further that the sale, transfer or other disposition conforms in all respects with the requirements of the Program, the Act, and the Code. Section 5. Miscellaneous. (A) Waiver. To the extent permitted by the Act, the City shall have the right to waive any rule or regulation herein contained, and any failure on the part of the City to enforce any rule or regulation herein shall not affect the validity of any contract entered into between the City and a Lending Institution pursuant to the Program. (B) Governing Law. All questions with respect to the construction of these Rules and Regulations shall be governed by the laws of the State of California. (C) Section Headings. The headings of the several sections of these Rules and Regulations, and any table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. (D) Severability. If any one or more of the provisions contained in these Rules and Regulations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions hereof and such invalidity, illegality or unenforceability shall not affect any other provision hereof, and these Rules and Regulations shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. -4- 5514p/2062/07 k CITY OF CARLSBAD HOME FINANCING PROGRAM RULES AND REGULATIONS ESTABLISHING ELIGIBILITY CRITERIA FOR LENDING INSTITUTIONS These Rules and Regulations are made pursuant to Part 5 of Division 31 of the Health and Safety Code of the State of California and relate to the City's home financing program of purchasing loans, made to qualified persons and families, from qualified lending institutions, as hereinafter defined. In order to be eligible to originate and service loans under this program, a lending institution must comply with the criteria set forth in these Rules and Regulations. SECTION 1. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all pur- poses of these Rules and Regulations have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless other- wise defined, all terms used in these Rules and Regulations shall have the meanings assigned to such terms in the Act. "Act" means Part 5 of Division 31 of the Health and Safety Code of the State of California, as now in effect and as it may from time to time hereafter be amended or supplemented. "Bonds" means the City of Carlsbad Single Family Residential Mortgage Revenue Bonds, Issue of 1985 authorized by, and at any time outstanding pursuant to, the Indenture. "City" means the City of Carlsbad, California. "Indenture" means the trust indenture to be entered into by the City with a bank as trustee providing for the issuance of the Bonds, as the same will be adopted by the City under thc Act or as it may from time to time thereafter be supplemented, modified or amended by any supplemental indenture in accordanct with the terms and provisions thereof. "Lending Institution" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, 03 other financial institution or governmental agency which customarily provides service or otherwise aids in the financinc of loans, or any holding company for any of the foregoing. * t. "Loan" means an obligation of a Mortgagor evidenced by a note and secured by a first lien deed of trust with respect to a Residence, which note has been or is expected to be purchased by the Trustee from a Lending Institution pursuant to the Pro- gram. "Mortgage Sale and Service Agreement" means an agreement entered into by the City with the Trustee and a qualified Lending Institution for the sale and servicing of Loans. "Mortgagor" means any Person who meets the requirements of the Program and has received a Loan. "Person" means any individual, partnership, copartner- ship, firm, company, corporation, lending institution, associa- tion, joint stock company, trust, estate, political subdivi- sion, state agency or any other legal entity, or its legal representatives, agents or assigns, "Program" means the City's program of purchasing Loans pursuant to the Indenture, the Act, these Rules and Regula- tions, and all other rules and regulations adopted pursuant to the Act with respect to the purchase of Loans pursuant to the Indenture. "Residence" means real property, and improvements thereon consisting of a single family detached or attached (condomin- ium, rowhouse, townhouse) residential unit located within the City which can reasonably be expected to become the principal residence of the Mortgagor within a reasonable period of time (not to exceed 60 days) after the making of the Loan to the Mortgagor. "Trustee" means the trustee appointed by the City pur- suant to the Indenture, or its successor= SECTION 2. Eligibility Criteria for Lending Institu- tions. In order to be eligible to originate and service Loans under the Program, a Lending Institution shall comply with the following criteria: (A) The Lending Institution shall be authorized to dc business in the State of California and shall have full legal authority to originate and service Loans under the Program. (B) The Lending Institution shall be approved by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation to sell and service the type of Loans pur- chased under the Program. -2- * Y (C) The Lending Institution shall have been engaged in business as a lending institution €or at least three years prior to its participation in the Program. (D) The Lending institution shall have a combined capital and surplus of at least one million dollars ( $1,000,000 ) . (E) The Lending Institution's delinquency ratios for all mortgage loan contracts of 60 days or more shall not exceed the average as reported by the San Francisco Federal Home Loan Bank Board. (F) The Lending Institution shall be one which transacts business in the City (other than in connection with the Program) and must have originated Loans in the City prior to January, 1985. (G) Loan processing fees proposed by the Lending Institution shall not exceed: (a) for Loan origination: (i) one percent of the original principal amount of the Loan plus (ii) an amount equal to any and all costs paid or incurred by the Lending Institution in connection with the making of a Loar for the following items: title insurance, recording charges, escrow and tax contract fees, and insurance premiums, plus (iii) an amount not to exceed three hundred dollars ($300) plus an additional one hundred dollars ($100) in the case of a co-signer for the cost of a credit report, a surveyo an appraisal, abstract and attorneys' fees, and similar charges relating to origination, providec that fees and charges set forth in clauses (ii) and (iii) hereof do not exceed amounts charged in the area with respect to mortgages not originated in connection with an issue of tax-exempt bonds; and (b) for Loan servicing: a monthly fee of onetwelfth (1/12) of one quarter of one percent (.25%) of the unpaid balance of each Loan as of the day preceding thl last day on which a scheduled payment on the Loan was due. (H) The Lending Institution shall be willing to exe- cute the Mortgage Sale and Service Agreement in the form presented by the City. (I) The Lending Institution shall be willing to ser- vice the Loans it originates. -3- # * SECTION 30 Criteria for Selection of Lending Institu- tions. Lending Institutions shall be selected to participate in the Program on the basis of the minimum standards set forth in Section 2 of these Rules and Regulations and on the basis of demonstrated ability to handle the origination and servicing of conventional single family mortgage loans, selection by one or more of the developers participating in the Program, and acceptability to the underwriters of the Bonds. SECTION 40 Miscellaneous. (A) Waiver. The City shall have the right to waive any rule or regulation herein contained, and any failure on tht part of the City to enforce any rule or regulation herein shall not affect the validity of any contract entered into between the City and a Lending Institution pursuant to the Program. (B) Governing Law. All questions with respect to the construction of these Rules and Regulations shall be governed by the laws of the State of California. (C) Section Headings. The headings of the several sections of these Rules and Regulations, and any table of con- tents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. (D) Severability. If any one or more of the pro- visions contained in these Rules and Regulations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions hereof and such in- validity, illegality or unenforceability shall not affect any other provision hereof, and these Rules and Regulations shall be construed as if such invalid, illegal or unenforceable pro- vision had never been contained herein. -4- 5 5 14p / 2 062 /O 7