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HomeMy WebLinkAboutPR 17441: HOMEBUYERS WRITTEN AGREEMENT FOR PURCHASE OF NEW CONSTRUCTION HOME LOCATED AT 5849 TEXAS AVENUE INTEROFFICE MEMORANDUM HOUSING & NEIGHBORHOOD REVITALIZATION TO: FLOYD T. JOHNSON, CITY MANAGER FROM: BEVERLY A. FREEMAN, ACTING DIRECTOR HOUSING AND NEIGHBORHOOD REVITALIZATION DATE: DECEMBER 4, 2012 RE: P.R. 17441 — REQUEST TO PROVIDE DOWN PAYMENT/ CLOSING COST ASSISTANCE TO HOMEBUYER RECOMMENDATION: I recommend City Council adopt Proposed Resolution 17441 authorizing the City Manager to execute a Homebuyers Written Agreement providing down payment and closing costs assistance of up to $30,000 for the purchase of a new construction home located at 5849 Texas Avenue, Port Arthur, Texas. BACKGROUND: The City Council by authorization of Resolution Number 12 -160 has obligated the City to provide homebuyers assistance to qualified persons /families of the city. Community Development Block Grant (CDBG) Program funds and HOME Investment Partnership (HOME) Program funds are allocated to the City annually to provide Homebuyers assistance activities in accordance with 24 Code of Federal Regulations Part 570 and Part 92. A low and moderate income person has submitted application to the Housing & Neighborhood Revitalization Department requesting assistance with down payment and closing costs associated with the purchase of a new home. After careful review, it has been determined the applicant is eligible to participate in the program and receive assistance in the amount of up to $30,000 to assist with the down payment and closing cost associated with the purchase of a new home. A second lien will be placed on the property to secure the federal assistance provided for the period of affordability as determined by 24 Code of Federal Regulations Part 92.254. BUDGETARY /FISCAL EFFECT: Funding will be provided by the HOME Investment Partnership Program, (HOME), account number 108 - 2141 - 626.54 -01, project number HE1104. STAFFING /EMPLOYEE EFFECT: Housing Administration staff will provide assistance with execution of the Homebuyers Written Agreement. SUMMARY: I recommend City Council adopt Proposed Resolution 17441 authorizing the City Manager to execute a Homebuyers Written Agreement providing down payment and closing costs assistance of up to $30,000 for the purchase of a new construction home located at 5849 Texas Avenue, Port Arthur, Texas. P. R. 17441 12/4 /2012 - -BAF /Housing RESOLUTION NUMBER A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A HOMEBUYERS WRITTEN AGREEMENT FOR THE PURCHASE OF A NEW CONSTRUCTION HOME LOCATED AT 5849 TEXAS AVENUE, PORT ARTHUR, TEXAS. FUNDING WILL BE PROVIDED BY THE HOME INVESTMENT PARTNERSHIP PROGRAM, (HOME), ACCOUNT NUMBER 108 -2141- 626.54 -01, PROJECT NUMBER HE1104. WHEREAS, pursuant to the Housing and Urban Development Act of 1974 the Housing and Urban Development awards annual Community Development Block Grant funds and HOME Investment Partnership Program (HOME) funds to the City of Port Arthur for the primary benefit of low and moderate income persons /families in accordance with 24 Code of Federal Regulations Part 92 and Part 570; and, WHEREAS, the City Council, by its adoption of Resolution Number 12 -160, (authorizing submission of the 2012 Action Plan) the City has obligated itself to provide homebuyers assistance to low and moderate income persons /families; and, WHEREAS, a low and moderate income person has submitted application to the Housing & Neighborhood Revitalization Department requesting assistance with down payment and closing costs associated with the purchase of a new home; and, WHEREAS, after careful review, it has been determined the applicant is eligible to participate in the program and receive assistance in the amount of up to $30,000 to assist with the down payment and closing cost associated with the purchase of a home located at 5849 Texas Avenue, Port Arthur, Texas. A second lien will be placed on the property to secure the federal assistance provided for the period of affordability as determined by 24 Code of Federal Regulations Part 92.254; and, WHEREAS, the proposed Homebuyers Written Agreement is attached hereto as Exhibit "A ". BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. THAT the facts and opinions in the preamble are true and correct. Section 2. THAT the City Council hereby authorizes the City Manager to execute a Homebuyers Written Agreement providing down payment and closing costs assistance of up to $30,000 for the purchase of a new construction home located at 5849 Texas Avenue, Port Arthur, Texas, in substantially the same form as attached hereto as Exhibit "A ". Section 3. THAT a copy of the caption of this Resolution be spread upon • the minutes of the City Council. • READ, ADOPTED AND APPROVED this day of December A.D., 2012 at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: MAYOR COUNCILMEMBERS NOES: MAYOR, DELORIS "BOBBIE" PRINCE ATTEST: APPROVED AS TO FUNDS: SHERRI BELLARD, DEBORAH H. ECHOLS, CITY SECRETARY DIRECTOR OF FINANCE APP n VEED FOR Fa' M: Ct- VALECIA TIZ, CITY ATTORNEY 1 APPROVED FOR ADMINISTRATION: FLOYD T. JOHNSON, CITY MANAGER BEVERLY A RE MAN, ACTING DIRECTOR HOUSING A D NEIGHBORHOOD REVITALIZATION EXHIBIT "A" WRITTEN AGREEMENT FOR THE CITY OF PORT ARTHUR'S HOMEBUYER'S ASSISTANCE PROGRAM This APPLICANT Agreement ( "Agreement" hereinafter) is made and entered into by and between THE CITY OF PORT ARTHUR, TEXAS, through its duly authorized agent, Floyd T. Johnson, City Manager, hereinafter as PARTICIPATING JURISDICTION, and Glenda Y. Fisk, Social Security Number XX- XX -XXXX resident(s) of Port Arthur, Texas, hereinafter referred to as "APPLICANT ". This Agreement sets forth the understanding of the parties concerning the City's HOME Investment Partnership (HOME) Program Homebuyers Assistance Program requirements in accordance with 24 Code of Federal Regulations Part 92. It is the intent of this Agreement to outline what eligible activities and procedures the APPLICANT must comply with in order to qualify for a Deferred Payment Forgivable Loan from the City's Homebuyers Assistance Program. Each party has the necessary legal capacity and sufficiency to enter into this Agreement and does severally and collectively agree by the execution hereof, that they are bound to the mutual obligations and performances of the requirements described herein. 1. THE PARTICIPATING JURISDICTION receives HOME INVESTMENT PARTNERSHIP funds from the U. S. Department of Housing and Urban Development, (HUD) under the Title II of the Law of the National Housing Affordable of 1990 (National Affordable Housing Act of 1990), and is authorized to make contracts and agreements. 2. THE PARTICIPATING JURISDICTION is an Entitlement city receiving funding annually under the HOME Investment Partnerships Program established under the National Affordable Housing Act and therefore has agreed to the use of said funds as identified its Consolidated Plan. 3. THE PARTICIPATING JURISDICTION has as public policy for the authorization to develop, provide and facilitate the acquisition of decent, safe, sanitary and affordable housing in Port Arthur, Texas, and with such purpose has allocated program funds to acquire or develop affordable housing that will be sold to Low - Moderate Income residents. 4. APPLICANT has requested assistance through the HOME Investment Partnership Program to acquire a housing unit located at 5849 Texas Avenue, Port Arthur, Texas, which has a value of $98,000, established in accordance with the appraisal carried out in the same or the purchase price established, whichever is lower. 5. After conducting a detailed review of the APPLICANT's application for assistance, the PARTICIPATING JURISDICTION has determined that the APPLICANT qualifies for assistance in the amount of $30,000, which will be provided in the form of a Deferred Payment Forgivable Loan ( "DPFL "), in accordance with the 1 EQUAL HOUSING OPPORTUNITY applicable federal, state and local requirements. The funding provided will be used to assist with down payment and/or closing costs associated with the purchase of a single - family dwelling unit located at 5849 Texas Avenue, Port Arthur, Texas. 6. The DPL will be guaranteed by a 2nd Lien Deed of Trust and/or Deed Restrictions in favor of the City of Port Arthur, subordinate only to a private financial institution's superior lien for a loan in a greater amount. As an additional requirement, APPLICANT must comply with the City's Recapture Provisions established for the HOME Program in accordance to 24 Code of Federal Regulations Part 92.254. 7. Such Recapture Provisions as identified in 24 Code of Federal Regulations Part 92.254 incorporated herein as a part of the DPFL provide for the conditions that the APPLICANT must comply with prior to the disbursement of any funds. The Recapture Provisions will also be made a part of the 2nd Lien Deed of Trust supported by a Promissory Note executed between the parties at the time of actual disbursement of HOME Program funds. 8. Recapture Provisions are an essential and integral part of this agreement and are incorporated herein. 9. The APPLICANT agrees to comply with the Recapture Provisions and further understands that funds will neither be granted nor disbursed if APPLICANT does not consent to the requirements of said provisions. 10. The APPLICANT acknowledges having read the Recapture Provisions and that they have been explained by HOME Program staff APPLICANT further acknowledges and agrees to comply with the same as a condition of receiving assistance. 11. The APPLICANT acknowledges and agrees to comply with the requirement that the dwelling unit must continue to be the principal residence of the APPLICANT during the period of affordability being ten (10) years, as set forth in the Recapture Provisions, and that it may not be used for any other purpose than that of APPLICANT's principal residence during the same period. The APPLICANT acknowledges and agrees that this dwelling unit may not become rental property during the affordability period set forth in the Recapture Provisions. The APPLICANT further acknowledges and agrees that any violation of these requirements would require that the entire amount of assistance provided is subject to recapture, and must be repaid to the City, including any related expenditures, costs and attorney fees incurred by the PARTICIPATING JURISDICTION in the event of any resulting legal action. 12. THE APPLICANT acknowledges and agrees that the dwelling unit must be acquired, evidenced by the execution of a 2 Lien Deed of Trust and a Promissory Note, within six (6) months after the execution of this Agreement. This and any prior Agreements become null and void six (6) months from the execution date of this Agreement. 2 I o I EQUAL HOUSING OPPORTUNITY This document is made of record in Port Arthur, Texas on Date: PARTICIPATING JURISDICTION: APPLICANT: Floyd T. Johnson Signature City Manager City of Port Arthur CITY ATTORNEY CO- APPLICANT: Val Tizeno Signature 3 [OUAL HOUSING OPPORTUNITY