Loading...
HomeMy WebLinkAbout1984-07-17; City Council; 7820 Exhibit 10; OFFICIAL REQUEST TO STATE OF CALIFORNIA FOR MORTGAGE REVENUE BOND ALLOCATION Exhibit 104 P;B -35z-9 ? @H\&v- ID ?+=,e c t" CITY OF CARLSBAD HOME FINANCING PROGRAM RULES AND REGULATIONS ESTABLISHING ELIGIBILITY CRITERIA FOR MORTGAGORS 7/17/R 84- PREFACE These Rules and Regulations are made pursuant to Part 5 Division 31 of the Health and Safety Code of the State California and related to the City's Home Financing Program purchasing loans made to qualified persons and families fr qualified lending institutions, as hereinafter defined. order to be eligible to become a mortgagor under this progra a person or family must comply with the criteria set forth these Rules and Regulations. In developing the criteria, the City has considered facto such as the amount of personal or family income available f housing needs, household size, costs and condition of availab housing, and eligibility of potential mortgagors for feder housing assistance. Section 1. Definitions. Unless the context otherwi requires, the terms defined in this section shall for a purposes of these Rules and Regulations have the meanin herein specified, to be equally applicable to both the singul and plural forms of any of the terms herein defined. Unle otherwise defined, all terms used in these Rules a Regulations shall have the meanings assigned to such terms the Act. "Act" means Part 5 of Division 31 of the Health a Safety Code of the State of California, as now in effect and it may from time to time hereafter be amended or supplemented. **BOnds" means the City of Carlsbad Single Fami Residential Mortgage Revenue Bonds, Issue of 1983 authoriz by, and at any time outstanding pursuant to, the Indenture. "Code" means the Internal Revenue Code of 1954, amended, and all regulations and rulings promulgated thereunde /' 4- "Indenture" means the trust indenture to be entered in by the City with a bank as trustee providing for the issuanl of the Bonds, as the same will be adopted by the City under t' Act or as it may from time to time thereafter be supplementec modified or amended by any supplemental indenture in accordan1 with the terms and provisions hereof. **Lo+n" means a loan evidenced by a note secured by first lien deed of trust which meets all the requirements 1 the Program and which has been purchased from a Lendii Institution pursuant to the Program. "Lending Institution" means any bank, trust compan! savings bank, national banking association, savings and lor association, building and loan association, mortgage banker, ( other financial institution or governmental agency whic customarily provides service or otherwise aids in the financii of home mortgages, or any holding company for any of tE foregoing. "Median Household Income" means the highest of (1 statewide median household income for the State of Californi as determined by the City, (2) county median household incolr as determined by the City, and (3) median family income for th San Diego Standard Metropolitan Statistical Area for a famil of four, as published by the United States Department c Housing and Urban Development, as may be adjusted from time t time by the City, or as may be otherwise reasonably determine by the City in accordance with the Act. "Mortgage Insurer" means a Person qualified to issu mortgage insurance, and approved by the City to issue mortgag insurance under the Program. "Mortgagor" means any Person or Persons who meet th 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 lega representatives, agents or assigns. "Program" means the City's program of purchasing Loan pursuant to the Indenture, the Act, these Rules an Regulations, and all other rules and regulations adopte pursuant to the Act with respect to the purchase of Loan pursuant to the Indenture. -2- !5098P/2062/06 s v "Residence" means real property, and improvements there( consisting of a single family detached or attached (condc minium, rowhouse, townhouse) residential unit (but nc including a mobile home, that is a residence transportable j one or more sections built on a chassis which is not designt or intended to be permanently affixed to the ground), locatt within the City, which can reasonably be expected to become tl principal residence of the Mortgagor within a reasonable peric of time (not to exceed 60 days) after the making of the Loan 1 the Mortgagor. "Rules and Regulations" means these rules and regulatioi establishing eligibility criteria for mortgagors adopted by tk City, as they may be supplemented or amended from time to time. Section 2. Eligibility Criteria for Mortgagors. Person or Persons who complies with the following criteria i deemed by the City to be a person or family of low or moderat income and unable to pay the amounts at which unassiste private enterprise is providing suitable, decent, safe ar sanitary housing and shall be eligible to become a Mortgagc under the Program. (A) The maximum household income of the Mortgagor, a letermined pursuant to Section 3 of these Rules ar: Regulations, shall not exceed: 1. 150% of Median Household Income with respect to Residence of which the Mortgagor will be the first occupan or with respect to the resale of such a Residence; or, 2. 120% of the Median Household Income with respec to a Residence of which the Mortgagor will not be the firs occupant (except in the case of the resale of a Residenc to which subparagraph (1) hereof applies). (B) Each Mortgagor shall submit an affidavit stating hi lor her: (i) intention to occupy the Residence as his or he :?rincipal place of residence within 60 days and for a minimu (of two years after the Loan has been made; (ii) promise not t ,?errnit the Residence to be used in a trade or business; (iii .ion-ownership of his or her principal residence at all time during the immediately preceding three-year period (except tha this requirement may be waived to the extent permitted by th 'Zode without adversely affecting the exemption from federa. income taxation of the interest on the Bonds); and (iv) incomt (3s meeting the requirements of these Rules and Regulations. -3- !jO98P/ 2 062/ 06 * (C) The Mortgagor shall meet credit standards establisk by the City, the Lending Institution and the Mortgagor Insur as the case may be. Section 3. Determination of Household Income. E purposes of determining whether a potential Mortgagor meets t maximum household income eligibility requirements set forth Section- 2 of these Rules and Regulations, household incc shall mean and include the current annual aggregate income of potential Mortgagor, together with the current annual aggrega incomes of all persons who intend to reside in the Resider for which the Loan is made as their principal place residence, regardless of whether such persons resided with su Mortgagor at any time in the past. Section 4. Assumption of Loans. Any Loan may be assum upon the Mortgagor's sale, transfer or other disposition of t Residence provided that the purchaser of such Residence is eligible Mortgagor under the Program and provided further th the sale, transfer or other disposition conforms in a respects with the requirements of the Program, the Act, and t Code. Section 5. Miscellaneous. (A) Waiver. To the extent permitted by the Act, t City shall have the right to waive any rule or regulati herein contained, and any failure on the part of the City enforce any rule or regulation herein shall not affect tl validity of any contract entered into between the City and Lending Institution pursuant to the Program. (B) Governing Law. All questions with respect to tl construction of these Rules and Regulations shall be governc by the laws of the State of California. (C) Section Headings. The headings of the severi sections of these Rules and Regulations, and any table ( contents appended hereto, shall be solely for convenience ( reference and shall not affect the meaning, construction ( effect hereof. (D) Severability. If any one or more of the provisioi contained in these Rules and Regulations shall for any reasc be held to be invalid, illegal or unenforceable in any respect then such provision or provisions shall be deemed severabl from the remaining provisions hereof and such invalidit4 illegality or enforceability shall not affect any othc provision hereof, and these Rules and Regulations shall L construed as if such invalid, illegal or unenforceabl provision had never been contained herein. - 4- 509a~/2062/06 *.j ,' 1. CITY OF CARLSBAD HOME MORTGAGE FINANCE PROGRAM RULES AND REGULATIONS ESTABLISHING ELIGIBILITY CRITERIA FOR LENDING INSTITUTIONS These Rules and Regulations are made pursuant to Part 5 Division 31 of the Health and Safety Code of the State California and related to the City's program of purchasing ho mortgages, made to qualified persons and families, fr qualified lending institutions, as hereinafter defined. order to be eligible to originate and service home mortgag under this program, a lending institution must comply with t' criteria set forth in these Rules and Regulations. SECTION 1. Definitions. Unless the context otherwi requires, the terms defined in this section shall for a. purposes of these Rules and Regulations have the meanin$ herein specified, to be equally applicable to both the singuli and plural forms of any of the terms herein defined. Unles otherwise defined, all terms used in these Rules ai Regulations shall have the meanings assigned to such terms 1 the Act. "Act" means Part 5 of Division 31 of the Health ar Safety Code of the State of California, as now in effect and i it may from time to time hereafter be amended or supplemented. "BOnds" means the City of Carlsbad Single Famil Residential Mortgage Revenue Bonds, Issue of 1983 authorize 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 int by the City with the Trustee providing for the issuance of th Bonds, as the same will be adopted by the City under the Act c as it may from time to time thereafter be supplemented modified or amended by any supplemental indenture in accordanc with the terms and provisions thereof. "Lending Institution" means any bank, trust company savings bank, national banking association, savings and loa association, building and loan association, mortgage banker, o other financial institution or governmental agency whic customarily provides service or otherwise aids in the financin of home mortgages, or any holding company for any of th foregoing. *'Loan" means an obligation of a Mortgagor evidenced by note and secured by a first lien deed of trust with respect a Residence, which note has been or is expected to be purchas by the Trustee from a Lending Institution pursuant to t Program. "Mortgage Sale and Service Agreement" means an agreeme entered into by the City with the Trustee and a qualifi Lending Institution for the sale and servicing of Loans. "Mortgagor" means any person who meets the requiremer of the Program and has received a Loan. "Person" means any individual, partnership, copartne ship, firm, company, corporation, lending institutio association, joint stock company, trust, estate, politic subdivision, state agency or any other legal entity, or i legal representatives, agents or assigns. "Program" means the City's program of purchasing Loa pursuant to the Indenture, the Act, these Rules a Regulations, and all other rules and regulations adopt pursuant to the Act with respect to the purchase of Loa pursuant to the Indenture. "Residence" means real property, and improvements there consisting of a single family detached or attached (cond minium, rowhouse, townhouse) residential unit (but n including a mobile home, that is a residence transportable : one or more sections built on a chassis which is not design or intended to be permanently affixed to the ground), locatf within the City, which can reasonably be expected to become tl principal residence of the Mortgagor within a reasonable peric of time (not to exceed 60 days) after the making of the Loan 1 the Mortgagor. "Trustee" means the trustee appointed by the Cil pursuant to the Indenture, or its successor. SECTION 2. Eligibility Criteria for Lending Institi tions. In order to be eligible to originate and service Loa] under the Program, a Lending Institution shall comply with tl following criteria: (A) The Lending Institution shall be authorized to d business in the State of California and shall have full lege authority to originate and service Loans under the Program. (B) The Lending Institution shall be approved by tk Federal National Mortgage Association or the Federal Home Loe Mortgage Corporation to sell and service the type of Loar purchased under the Program. -2- 5100P/2062/06 P (C) The Lending Institution shall have a combin capital and surplus of at least five hundred thousand dolla ($500,000). (D) The Lending Institution's delinquency ratios f all mortgage loan contracts of 60 days or more shall not exce the average as reported by the San Francisco Federal Home Lo Bank Board. (E) The Lending Institution shall be one whi transacts business in the City (other than in connection wi the Program). (F) Loan processing fees proposed by the Lendi Institution shall not exceed: (a) for Loan origination: one-half of o percent (1/2%) of the original principal amount of the Lo, plus an amount not to exceed actual costs for a cred: report, a survey, an appraisal, abstract and attorney: fees, and similar charges relating to origination; and (b) for Loan servicing: a monthly fee ( one-twelfth (1/12) of twenty hundredths of one percei (.20%) of the unpaid balance of each Loan as of the di preceding the last day on which a scheduled payment on tl Loan was due. (G) The Lending Institution shall be willing 1 execute the Mortgage Sale and Service Agreement in the foi presented by the City. (H) The Lending Institution shall be willing 1 service the Loans it originates. (I) The Lending Institution shall obtain from financial institution whose long-term debt carries a Standard Poor's Corporation rating of not less than "AA-" a guaranty ( the Lending Institution's obligation to advance delinquent Lo; payments pursuant to the Mortgage Sale and Service Agreement. SECTION 3. Criteria for Selection of Lending Institr; tions. Lending Institutions shall be selected to participat in the Program on the basis of the minimum standards set fort in Section 2 of these Rules and Regulations and on the bases c (i) demonstrated ability to handle the origination ar servicing of conventional single family mortgage loans, (ii selection by one or more developers participating in tl- Program, and (iii) ultimate acceptability to the underwriter of the Bonds. -3- 5100P/2062/06 8 t . SECTION 4. Miscellaneous. (A) Waiver. The City shall have the right to wai any rule or regulation herein contained, and any failure on t part of the City to enforce any rule or regulation herein sha not affect the validity of any contract entered into betwe the City and a Lending Institution pursuant to the Program. (B) Governing Law. All questions with respect the construction of these Rules and Regulations shall ' governed by the laws of the State of California. (C) Section Headings. The headings of the sever< sections of these Rules and Regulations, and any table contents appended hereto, shall be solely for convenience reference and shall not affect the meaning, construction effect hereof. (D) Severability. If any one or more of t' provisions contained in these Rules and Regulations shall f any reason be held to be invalid, illegal or unenforceable any respect, then such provision or provisions shall be deem. severable from the remaining provisions hereof and SUC invalidity, illegality or enforceability shall not affect ai other provision hereof, and these Rules and Regulations sha: be construed as if such invalid, illegal or unenforceab: provision had never been contained herein. -4- 5100P/2062/06