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HomeMy WebLinkAboutPR 18095: CEDRENA CLAYTON OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM • INTEROFFICE MEMORANDUM HOUSING ASSISTANCE PROGRAMS To: Floyd T. Johnson, City Manager From: Beverly Freeman, Acting Director of Housing and Neighborhood Revitalization Date: January 10, 2014 Re: P.R. 18095 RECOMMENDATION: The Housing Division recommends that the City Council approve Proposed Resolution No. 18095 authorizing the City Manager to execute an agreement with a low to moderate - income homeowner for participation in the City for Port Arthur's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program. BACKGROUND: The City of Port Arthur reconstructed the home at 1128 Freeman Avenue, on April 19, 2007, at a cost of $67,929. The Homeowner defaulted on the written agreement on July 22, 2011. The City of Port Arthur foreclosed and recaptured the property on November 6, 2012, in accordance with HUD regulations. In accordance with "Recapture Provisions" 24 CFR Part 92.254(a) (5) (ii), homes assisted with HOME Program funds permit a subsequent low- income purchaser of a HOME- assisted unit to assume the HOME loan. The Recapture obligation entered into by the original buyer, permits the subsequent, eligible homebuyer to assume only the balance remaining on the existing loan and affordability obligations if no additional HOME assistance is provided to the subsequent buyer. A low and moderate - income applicant has been identified, certified, and is eligible to participate in the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program as required by the U.S. Department of Housing & Urban Development. Cedrena Clayton, subsequent, eligible homeowner, now residing at 1109 Herget Avenue, will assume and complete the affordability period of eight (8) years remaining on the property located at 1128 Freeman Avenue. The remaining loan balance is $43,722.15. Ms. Clayton's current residence, 1109 Herget Avenue, has been determined to be environmentally unsafe, due to the close proximity of above ground storage tanks. BUDGETARY /FISCAL EFFECT: N/A STAFFING /EMPLOYEE EFFECT: Housing Administration staff will be responsible for administering the contract. SUMMARY: The Housing Division recommends that the City Council approve Proposed Resolution No. 18095 authorizing the City Manager to execute an agreement with a homeowner for participation in the City for Port Arthur's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program. P. R. 18095 1/10/14 BF /DF RESOLUTION NUMBER A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR AND CEDRENA CLAYTON, HOMEOWNER, FOR PARTICIPATION IN THE CITY OF PORT ARTHUR'S OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM. WHEREAS, pursuant to the Housing and Urban Development Act of 1974, the Housing and Urban Development awards Annual Community Development Block Grant (CDBG) Program funds and HOME Investment Partnership (HOME) Program 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 570 and Part 92; and, WHEREAS, the City Council, by its adoption of Resolution Number 13 -346 (authorizing submission of the 2013 Action Plan) has obligated itself to provide owner occupied rehabilitation and reconstruction housing assistance to low and moderate income persons /families; and, WHEREAS, a low and moderate income homeowner has been certified to participate in the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program; and, WHEREAS, pursuant to the "Recapture Provisions" identified in 24 CFR 92.254 (a) (5) (ii), the City has recaptured the remaining HOME loan and obligation entered into by the original buyer; and, WHEREAS, the balance remaining on the original loan is Forty Three Thousand Seven Hundred Twenty Two Dollars & 15/100 ($43,722.15); and WHEREAS, Cedrena Clayton will be responsible for assuming and completing the remaining affordability period remaining of eight (8) years on the property located at 1128 Freeman Avenue; and, WHEREAS, the proposed contract and Deed of Trust are attached hereto as in substantially the same form as Exhibits "A" & "A -1 "; and, WHEREAS, the City Council hereby authorizes the City Manager to execute a loan agreement and deed of trust between Cedrena Clayton and the City of Port Arthur for the property located at 1128 Freeman Avenue in substantially the same for as delineated in the attached Exhibit "A" and "A -1 ". NOW THEREFORE, 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 City Council hereby authorizes the City Manager to execute an Agreement between the City of Port Arthur and Cedrena Clayton for the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program for the property located at 1128 Freeman Avenue, in substantially the same form as attached hereto as Exhibits "A ", & "A -1 ". Section 3. That Cedrena Clayton will be responsible for assuming and completing the remaining affordability period of eight (8) years on the property located at 1128 Freeman Avenue. Section 4. That Cedrena Clayton will be responsible for assuming the balance remaining on the original loan is Forty Three Thousand Seven Hundred Twenty Two Dollars and 15/100 ($43,722.15). Section 5. 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 A.D., 2014, at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: MAYOR COUNCILMEMBERS NOES: DELORIS "BOBBIE" PRINCE, MAYOR ATTEST: SHERRI BELLARD, CITY SECRETARY APPROVED AS TO FORM: � _ / _ /I ii VAL TIZENO, C Y APPROVED FOR ADMINISTRATION: FLOYD T. JOHNSON, CITY MANAGER ' � Pte_ BEVERLY FRE' AN, ACTIN DIRECTOR OF HOUSING NEIGHBORHOOD REVITALIZATION EXHIBIT "A" A Deferred Loan Agreement Between the City of Port Arthur and Cedrena Clayton for the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program STATE OF TEXAS § JEFFERSON COUNTY § § PROJECT NO: HE -1128 CITY OF PORT ARTHUR § This Agreement is made and entered into by and between Cedrena Clayton of Port Arthur, Jefferson County, Texas, (the Homeowner) and the City of Port Arthur, a municipal corporation located in Jefferson County, Texas (the City). The current residence and the future residence ( "Property ") are located at: 1128 Freeman Avenue in Port Arthur, Texas, 77640; being more particularly described by its legal description as follows: Lot Twenty -two (22) and Lot Number Twenty -three (23) Res 2, Reservation, as the same appears upon the map or plat thereof, on file and of record in the Office of County Clerk of Jefferson County, Texas at Beaumont. (Also known as 1128 Freeman Avenue) DISBURSEMENT OF FUNDS: The City entered into an agreement with Cedrena Clayton for the purchase of a home located at 1128 Freeman Avenue, Port Arthur, Texas 77640. Cedrena Clayton will assume the responsibility of the remaining affordability period on the property located at 1128 Freeman, which is eight (8) years. Cedrena Clayton will also have a remaining loan balance of Forty Three Thousand Seven Hundred Twenty -Two Dollars and 15 /100 ($43,722.15) in accordance with the requirements as delineated in the HOME Guidelines and Regulations 24 Code of Federal Regulations Part 92. It is expressly understood and agreed by the parties hereto that any right or remedy provided for in this Section or in any other provision of this contract shall not preclude the exercise of any other right or remedy under this contract or under any provision of law, nor shall any action taken in the exercise of any right or remedy be deemed a waiver of any other rights or remedies. Failure to exercise any right or remedy hereunder shall not constitute a waiver of the right to exercise that or any other right or remedy at any time. I. HOMEOWNER'S DUTIES AND RESPONSIBILITIES In consideration of the remodeling and structural rehabilitation improvements more specifically described as follows: Lot Twenty -two (22) and Lot Number Twenty -three (23) Res 2 of the City of Port Arthur, Texas, as the same appear upon the map or plat thereof, on file and of record in the Office of County Clerk of Jefferson County, Texas at Beaumont. (Also known as 1128 Freeman Avenue) which will be improved at no cost to the Homeowner pursuant to means from award of HOME Investment Partnership (HOME) Program funding to the City of Port Arthur, by the Department of Housing and Urban Development (HUD) from the City of Port Arthur, Homeowner hereby agree as follows: 1.1 The Homeowner shall not transfer, assign, encumber, or sell the home or an interest herein for a period of eight years from the date of the final acceptance of all work required under the Contract. Further, the Homeowner shall not sell, assign, encumber or transfer any of his/her rights or obligations contained herein in whole or in part without the previous written consent of the City. In the event that (I) the Homeowner sells, assigns, encumbers or transfers the property or (ii) the Homeowner dies prior to the expiration of the aforementioned eight (8) year period, the Homeowner hereby agrees and understands that his/her estate, whichever is applicable, shall be liable to the City of Port Arthur for the amount of costs expended in the rehabilitation based upon the following schedule in accordance with 24 Code of Federal Regulations Part 92.254: • If the property is sold, assigned, transferred or encumbered or if the Homeowner dies within the first twelve (12) months of the affordability period, the Homeowner or his/her estate, as applicable, must repay one hundred percent (100 %) of the amount funded by the City of Port Arthur's HOME Program in accordance with 24 Code of Federal Regulations Part 92 for the rehabilitation of the home: • If the property is sold, assigned, transferred, or encumbered or if the Homeowner dies at any time during years 2 — 5 of the affordability period, the Homeowner, or his/her estate, as applicable, are responsible to reimburse eighty percent (80 %) of the amount spent on the rehabilitation. • If the property is sold, assigned, transferred, or encumbered or if the Homeowner dies at any time during years 6 — 9 of the affordability period, the Homeowner, or his/her estate, as applicable, is responsible to reimburse sixty percent (60 %) of the amount spent on rehabilitation. • If the property is sold, assigned, transferred, or encumbered or if the Homeowner dies at any time during years 10 — 13 of the affordability period, the Homeowner, or his/her estate, as applicable, is responsible to reimburse forty percent (40 %) of the amount spent on rehabilitation. • If the property is sold, assigned transferred or encumbered or if the Homeowner dies at any time during years 14 — 15 of the affordability period, the Homeowner or his/her estate, as applicable, is responsible to reimburse twenty percent (20 %) of the amount spent on rehabilitation. Such amounts shall be due and owing on the date the property is sold, assigned, transferred, or otherwise encumbered. Failure to remit the appropriate amount owed to the City of Port Arthur in 30 days from the default shall result not only in interest calculated in accordance with Chapter 2251 of the Texas Government Code, but also in the Homeowner or his/her estate, as applicable, being obligated to pay court costs and all attorneys' fees expended by the City in order to collect the amount owed to the City. 1.2 The Homeowner agrees not to make side contracts or any other agreement for additional work on the premises, unless the same is approved by the City of Port Arthur in writing and duly incorporated into the City of Port Arthur's Standard Form of Agreement for the HOME Program between Homeowner and Contractor applicable to the property (as identified in the Construction Contracts) prior to such work being performed. 1.3 The Homeowner hereby agrees that throughout the term of this contract and during all warranty applicable to the work performed under this contract, the Homeowner shall take all necessary precautions to ensure: 1.3.1 the property is clear of debris so as not to constitute a public nuisance pursuant to Chapter 33 of the Code of Ordinances of the City of Port Arthur; 1.3.2 the property remains clear of all junked and abandoned vehicles in accordance with Chapter 28 of the Code of Ordinances of the City of Port Arthur; 1.3.3 all buildings, other than residences, on the property shall be secure in compliance with Chapter 33 of the Code of Ordinances of the City of Port Arthur; and 1.3.4 the property is free of all objects or conditions that constitute a possible and probable medium of transmission of disease to or between human beings in accordance with Chapter 15 of the Code of Ordinances of the City of Port Arthur.