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HomeMy WebLinkAbout1995 07-05 EDAP Regular Session EDA AGENDA CITY OF BROOKLYN CENTER JULY 5, 1995 6:00 P.M. COUNCIL CHAMBERS CITY HALL r 1. Call to Order�`� 2. Roll Call 3. Commission Consideration Item a. Resolution Authorizing Execution of Program Application Commitment Agreement for the 1995 Minnesota Housing Finance Agency's Minnesota City Participation Program t 4. Adjournment Council Meeting Date 715/95 City of Brooklyn Center Agenda Item Number Request For Council Consideration Item Description: Resolution Authorizing Execution of Program Application Commitment Agreement for the 1995 Minnesota Housing Finance Agency's Minnesota City Participation Program Department Approval: Tom ublitz, Community Development Specialist Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommendation: Staff recommends approval of Resolution Authorizing Execution of Program Application Commitment Agreement for the 1995 Minnesota Housing Finance Agency's Minnesota City Participation Program. Summary Explanation: (supporting documentation attached Yes ) At the May 22, 1995, EDA meeting, the EDA Board authorized the submission of an application for the 1995 MHFA first-time a home buyer program known as the Minnesota City Participation Pro Y P b Y ram P g (MCPP). The FDA's application was approved and staff received the 1995 MCPP agreements from MHFA on June 28, 1995, with the requirement that the documents be executed and returned to MHFA no later than July 7, 1995. The FDA's application was approved by the MHFA, along with 42 other cities statewide. This will be the fourth year the City of Brooklyn Center will participate in the MCPP. In 1994, over 1.7 million dollars in mortgage loans were used in the City of Brooklyn Center. For the 1995 MCPP, $43,750,000 in mortgage funds have been allocated to the 43 cities in the program. Brooklyn Center's allocation for the 1995 program is $589,984. In 1994, our initial allocation was $1,099,041. The reason for a lower allocation in 1995 is that the mortgage funds have been allocated on a per capita basis, and, as a result, with the number of jurisdictions applying and the populations of those jurisdictions, the per capita formula restricted us to a lower allocation than we have received in past years. However, if the program proceeds as it has in past years, we should be able to draw upon additional mortgage funds after the four month set aside when any unused mortgage funds from other cities are placed in a unified pool which can be drawn upon by participating jurisdictions. If this holds true, I anticipate that we may be able to do more loans than our initial allocation of mortgage funds would permit. Interest rates on the mortgages are yet to be determined and will be set after the MHFA sells the bonds for the pool of mortgage funds. Request For Council Consideration Page 2 The eligibility requirements for borrowers remain unchanged from last year's program, which means the income limit for households purchasing homes under the first -time home buyer program is set at $40,800, adjusted by household size. The house price limits will also be the same as last year and are set at $95,000 maximum. All cities participating in the MCPP are required to submit a program application commitment agreement, a copy of which is included with this memorandum. The agreement sets forth the operating terms and conditions of the MCPP and is the same for all 43 cities participating in the program. In addition to executing the program application commitment agreement, the Brooklyn Center EDA is also required to submit an application deposit of one percent (1 %) of the allocation, which totals $5,899.84. This application deposit will be returned in full to the EDA when the bonds are issued by MHFA. Additionally, a non - refundable processing fee of $120 must also be submitted to MHFA. Essentially, the only cost to the City for the MCPP is the $120 processing fee and staff time needed to respond to inquiries about the program and any efforts aimed at promoting the program in the City. Also included with this memorandum is the MCPP 1995 fee schedule which lists all the participating jurisdictions and their final allocation of mortgage funds under the program. MCPP 1995 Fee Schedule Applicant Final Allocation Processing Total Fees Allocation Fee Fee Due 'City of Albert Lea $379,635 $3,796.35 $80.00 $3,876.35 Anoka HRA $361,459 $3,614.59 $80.00 $3,694.59 Austin HRA $453,308 $4,533.08 $100.00 $4,633.08 Belle Plaine HRA $100,000 $1,000.00 $20.00 $1,020.00 Bemidji EDA $230,800 $2,308.00 $40.00 $2,348.00 Brainerd HRA $258,776 $2,587.76 $60.00 $2,647.76 Brooklyn Center EDA $589,984 $5,899.84 $120.00 $6,019.84 Brooklyn Park EDA $1,201,866 $12,018.66 $240.00 $12,258.66 Buffalo HRA $156,692 $1,566.92 $40.00 $1,606.92 Columbia Heights HRA $392,847 $3,928.47 $80.00 $4,008.47 Crystal EDA $492,264 $4,922.64 $100.00 $5,022.64 City of Detroit Lakes $150,076 $1,500.76 $40.00 $1,540.76 City of Duluth $1,765,590 $17,655.90 $360.00 $18,015.90 Eden Prairie HRA $877,584 $8,775.84 $180.00 $8,955.84 Elbow Lake EDA $100,000 $1,000.00 $20.00 $1,020.00 Elk River HRA $256,501 $2,565.01 $60.00 $2,625.01 City of Fregus Falls $257,804 $2,578.04 $60.00 $2,638.04 Fridley HRA $584,898 $5,848.98 $120.00 $5,968.98 City of Glencoe $100,000 $1,000.00 $20.00 $1,020.00 City of Hopkins $339,231 $3,392.31 $60.00 $3,452.31 Hutchinson HRA $247,300 $2,473.00 $40.00 $2,513.00 Lake City EDA $100,000 $1,000.00 $20.00 $1,020.00 Little Falls HRA $154,687 $1,546.87 $40.00 $1,586.87 Mankato HRA $649,969 $6,499.69 $120.00 $6,619.69 City of Maple Grove $750,000 $7,500.00 $160.00 $7,660.00 City of Maple Lake $100,000 $1,000.00 $20.00 $1,020.00 City of Moorhead $681,047 $6,810.47 $140.00 $6,950.47 Morrison County HRA $250,000 $2,500.00 $60.00 $2,560.00 City of Mounds View $260,761 $2,607.61 $60.00 $2,667.61 New Hope EDA $449,896 $4,498.96 $80.00 $4,578.96 Owatonna HRA $415,675 $4,156.75 $80.00 $4,236.75 City of Perham $100,000 $1,000.00 $20.00 $1,020.00 Plymouth HRA $500,000 $5,000.00 $100.00 $5,100.00 Rice County HRA $1,057,063 $10,570.63 $220.00 $10,790.63 Richfield HRA $734,829 $7,348.29 $140.00 $7,488.29 Robbinsdale EDA $297,959 $2,979.59 $60.00 $3,039.59 City of Sauk Rapids $182,684 $1,826.84 $40.00 $1,866.84 MCPP 1995 Fee Schedule Applicant Final Allocation Processing Total Fees Allocation Fee Fee Due City of St. Louis Park $904,920 $9,049.20 $180.00 $9,229.20 Stevens County HRA $217,670 $2,176.70 $40.00 $2,216.70 Swift County HRA $220,213 $2,202.13 $40.00 $2,242.13 Winona HRA $500,000 $5,000.00 $100.00 $5,100.00 Wright County $1,316,666 $13,166.66 $260.00 $13,426.66 City of Zimmerman $100,000 $1,000.00 $20.00 $1,020.00 MINNESOTA HOUSING FINANCE AGENCY MINNESOTA CITIES PARTICIPATION PROGRAM REQUEST FOR ISSUANCE OF BONDS The undersigned does hereby request and authorize the Minnesota Housing Finance Agency (hereinafter referred to as the "MHFA ") to issue bonds on its behalf under the MHFA Minnesota Cities Participation Program, and to perform any and all acts necessary to issue such bonds, including, but not limited to, the advancement of any funds or fees, which the undersigned agrees to reimburse to the MHFA. By: Its: • (MCPP Rqst for Issnee of Bnds) MINNESOTA HOUSING FINANCE AGENCY MINNESOTA CITIES PARTICIPATION PROGRAM PROGRAM APPLICATION - COMMITMENT AGREEMENT THIS APPLICATION AND AGREEMENT is made and entered into by and between the Brooklyn Center Economic Development Authority (hereinafter refereed to as the "City"), with its office at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430, and the Minnesota Housing Finance Agency (hereinafter referred to as the "MHFA "), with its office at 400 Sibley Street - Suite 300, St. Paul, Minnesota 55101 -1998. WITNESSETH: WHEREAS, the M1 HFA, under the provisions of Minn. Stat. §474A.061 Subd. 2a (1995 Suppl.), is authorized to issue qualified mortgage bonds, as such term is used in the Internal Revenue Code of 1986, as amended through the date of this agreement, on behalf of the City, and it has issued, or will issue, such bonds on the behalf thereof; and WHEREAS, the MHFA has implemented the Minnesota Housing Finance Agency Minnesota Cities Participation Program (hereinafter referred to as the "Program "), and is using, or will use, the proceeds from the issuance of such bonds to fund the Program; and WHEREAS, the City has requested and received a set -aside of funds from the Program; and WHEREAS, the City wishes to obtain a commitment by MHFA to purchase mortgage notes and mortgages (hereinafter referred to as "Mortgages ") which will be originated by a lender or lenders which meet MHFA requirements for participation in programs funded by qualified mortgage bonds, designated by the City (hereinafter cumulatively referred to as the "Lender "); and WHEREAS, Mortgages to be purchased by the MHFA pursuant to the commitment requested by the City must only be for residences located within a geographic area to be established and designated by the City; and WHEREAS, the MHFA is willing to issue a commitment wherein it will agree to purchase Mortgages which are i originated by the Lender, (ii) eviewed when required b MHFA in � � () q Y the its sole ti g 0 on and discretion, n p sc eno , by an entity to be designated by the MHFA (hereinafter referred to as the "File Revi ewer"), and (iii) are in accordance with the terms and conditions of ' )> ( ) this Agreement, the Program, and a procedural manual to be supplied by the MHFA (hereinafter referred to as the "Procedural Manual "), the provisions of which are hereby incorporated by reference into this Agreement as if set forth in full herein; and WHEREAS, IVIHFA is willing to issue to the Lender a commitment under this Agreement, after it has been fully executed by all of the parties hereto (the fully executed document is hereinafter referred to as the "Program Commitment Agreement "), to purchase Mortgages originated by the Lender in accordance with the terms set forth hereinbelow, the provisions of the Program and Procedural Manual, and the terms of any other agreement entered into between the MHFA and the Lender. NOW, THEREFORE, in consideration of the covenants hereinafter contained and the mutual benefits to be derived therefrom, the parties hereto do hereby agree as follows: 1. City Requirements. All Mortgages submitted to the MHFA for purchase under the Program must comply with all of the requirements of the Program, and all of the requirements and provisions contained in the Procedural Manual and the Program Commitment Agreement. 2. Commitment and Commitment Amount. The City hereby applies for a commitment by MHFA to purchase Mortgages which (i) have been originated by the Lender, (ii) have been reviewed and approved, where applicable, by the File Reviewer, and (iii) meet the requirements of and are made in accordance with the provisions of the Program Commitment Agreement, the Program, and the Procedural Manual; and the MHFA, by accepting this Program Application - Commitment Agreement, commits to the purchase of such Mortgages in the aggregate principal amount (hereinafter referred to as the "Commitment Amount ") set forth hereinbelow. All Mortgages to be purchased by the MHFA pursuant to the Program Commitment Agreement shall be only for property which, and borrowers who, satisfy the requirements and provisions of the Program Commitment Agreement, the Program, and the Procedural Manual. the City acknowledges that the commitment herein applied for shall be effective only upon the approval thereof by I4HFA at the place provided for hereinbelow, and the delivery of a copy of the same by MHFA to the City, which approved application shall constitute the Program Commitment Agreement. City Participation Program Form 95 -1 1 (Ver - 6/2195) 3. Variance in Commitment Amount. A variance of Fifteen Thousand and No /100 Dollars ($15,000.00) in the total principal amount of Mortgages purchased under the Program e Commitment Agreement, above or below the Commitment Amount, shall be deemed by the MHFA to constitute compliance with the Program Commitment Agreement. 4. Commencement of Activity. Upon the acceptance, execution, and delivery of the Program Commitment Agreement by MHFA to the City, the City shall select and designate Lender, and shall have Lender enter into and execute a Lender Application - Commitment Agreement in a form to be supplied by the MHFA. Lenders must meet MHFA requirements for participation in programs funded by qualified mortgage bonds. 5. Commitment Term. The term of the Program Commitment Agreement and the City's participation in the Program (hereinafter referred to as the "Commitment Term ") shall commence on a date to be selected and specified by the MHFA, and shall continue for a period of time to be established by the MHFA, in its sole option and discretion, provided, however, such time period shall not be less than Six (6) months. The MHFA shall transmit a written notification to the City of the date on which the Commitment Term shall commence. The Program Commitment Agreement, and the City's participation in the Program, shall automatically terminate, without the need for any action by either parry hereto, at the end of the Commitment Term. 6. Set -Aside Term. The Commitment Amount shall be set -aside and held by the MHFA for the sole use by the City for a period of time to be established by the MHFA, in its sole option and discretion, provided, however, such time period shall not be less than Four (4) months (hereinafter referred to as the "Set -Aside Term ") commencing on a date to be selected and specified by the MHFA. The MHFA shall transmit a written notification to the City of the date on which the Set -Aside Term shall commence. Any portion of the Commitment Amount not reserved for the purchase of qualifying Mortgages as of the end of the Set -Aside Term shall be cancelled and returned to the MHFA for redistribution under the Program in accordance with the provisions contained in the Procedural Manual. In addition, any portion of the Commitment Amount reserved for Mortgages which are not delivered to the MHFA for purchase within the time period delineated in the Procedural Manual for such purchase, shall be cancelled and returned to the MHFA for redistribution under the Program, and any funds contained in the Program at the end of the Commitment Term shall become funds of the MHFA, and transferred to whatever program the MHFA, in its sole option and discretion, may designate. 7. Commitment Fees. No commitment fee all be payable e s b the City Y Y for the commitment by the MHFA to purchase qualifying Mortgages. 8. Purchase Price. The purchase price of each Mortgage to be purchased by MHFA hereunder shall be as set forth in the Procedural Manual. 9. Mortgage Terms. The interest rate for all Mortgages shall be set from time to time by the MHFA, at its sole option and discretion, by way of a written statement to the City and the Lender; provided, however, any change in interest rate shall only apply to Mortgages for which an individual commitment is issued after the City and the Lender have received such notification of interest rate change. Mortgages shall meet all requirements of the Program, and those set forth in the Program Commitment Agreement, the Procedural Manual, and either the Originating Lender Application- Commitment Agreement or the Direct Seller Application- Commitment Agreement, whichever is applicable. cable. P 10. Area Limitation. The City hereby specifically agrees that the MHFA shall, pursuant to the Program Commitment Agreement, be required to purchase only those Mortgages which are for residences located within a geographic area to be established and designated by the City. 11. Warranties. The City hereby warrants to MHFA that, upon approval and delivery of the Program Commitment Agreement by MHFA and the subsequent purchase by and delivery of Mortgages to MHFA pursuant thereto, all such Mortgages will have been made in compliance with, and will be in full compliance with, the terms and conditions contained in the Program Commitment Agreement, the Program, and the Procedural Manual, and all warranties set forth in the Procedural Manual are adopted and made by the City, and shall be applicable to each such Mortgage. 12. Servicing. The servicing of Mortgages shall be the sole responsibility of MHFA, or of those servicing institutions which MHFA may designate in its sole option and discretion. 13. Remedies. Time is of the essence hereof. In the event that the City defaults in the observance or performance of any covenant or condition in the Program Commitment Agreement or Procedural Manual, or in the event that any warranty made by the City with respect to any Mortgage is found to be untrue, then the MHFA shall be entitled to all remedies at law or in equity including, but not limited to; (i) the right to rescind acceptance of the Program Commitment Agreement, (ii) the right to seek equitable relief by way of injunction (mandatory or prohibitory) to City Participation Program Form 95 -1 2 (Va - C2/95) prevent the breach or threatened breach of any of the provisions of the Program Commitment Agreement, or to enforce the performance thereof, (iii) the right to seek damages, including consequential damages, arising by virtue of the MHFA's sale of its debt securities in reliance on the City's observance and performance of the provisions of the Program Commitment Agreement, and (iv) the right to terminate the Program Commitment Agreement, and upon such termination the City shall have no further rights pursuant hereto, provided, however, that such termination shall not diminish MHFA's rights specified in the Program Commitment Agreement and in the Procedural Manual. All such remedies shall be cumulative, and the exercise by the MHFA of any one or more of them shall not in anyway alter or diminish the MHFA's right to any other remedy provided herein or by law. 14. Contract Documents. All Mortgage transactions between the City and the MHFA pursuant to the Program Commitment Agreement are on a contractual basis. The contract in each instance consisting of the Program Commitment Agreement and the provisions and requirements contained in the Procedural Manual, with all amendments and supplements thereto in any form in effect as of the date of the MHFA's acceptance of the Program Commitment Agreement. 15. Assignment. Neither this Program Application - Commitment Agreement, the Program Commitment Agreement, nor any interest therein is assignable or transferable by the City, or by operation of law, without the prior written consent of the MHFA. 16. Paragraph Captions and Program Headings. The captions and headings f g P P g g P g o the paragraphs of this Agreement are for convenience only, and shall not be used to interpret or define � Y> rp the provisions thereof. 17. Applicable Law. The Program Commitment Agreement is made and entered into in the State of Minnesota, and all questions relating to the validity, construction, performance and enforcement hereof shall be governed by the laws of the State of Minnesota. 18. Agreement Conditional Upon MHFA Approval. The Program Commitment Agreement shall be a binding obligation of the MHFA upon its execution by the MHFA and delivery of a copy of the same to the City. In the event that this Program Application- Commitment Agreement is not, for any reason, so executed and delivered by the MHFA on or before the day of , 1995, it shall be null and void and of no force or effect. 19. Issuance of Bonds. The City does hereby authorize the MHFA to issue, on behalf of the City, qualified mortgage bonds, as such term is used in the Internal Revenue Code of 1986, . in an amount equal to the Commitment Amount, and the MHFA agrees to so issue such bonds if and when federal law authorizes and the MHFA deems it is economically feasible to do so. (THE REMAINING PORTION OF THIS PAGE IS INTEN'T'IONALLY LEFT BLANK) City Participation Program Form 95 -1 3 (Ver - 612/95) 1995. IN WITNESS WHEREOF, the City has set its hand this _ day of CITY: BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY By: (Signature of Authorized Officer) (Printed or Typewritten Name of Authorized Officer) REQUESTED CONINIITMENT AMOUNT Maximum MHFA APPROVAL MHFA hereby accepts the above Program Application- Commitment Agreement and approves and grants the following: APPROVED COMMITMENT AMOUNT $589,984 MINNESOTA HOUSING FINANCE AGENCY By: Michael Haley Its: Director, Minnesota Homes Division Signed this day of July, 1995. SUMMARY (To be completed by MHFA) City's requested commitment amount Maximum Commitment Amount granted by MHFA 5589.984 City Participation Pro Form 95 -1 4 (Ver - 6/2/95) Commissioner introduced the following resolution • and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF PROGRAM APPLICATION COMMITMENT AGREEMENT FOR THE 1995 MINNESOTA HOUSING FINANCE AGENCY'S MINNESOTA CITY PARTICIPATION PROGRAM WHEREAS, the Brooklyn Center Economic Development Authority has submitted an application for the Minnesota Housing Finance Agency's Minnesota City Participation Program to provide mortgage funds for qualified first time home buyers in the City of Brooklyn Center; and WHEREAS, the Minnesota Housing Finance Agency has granted an allocation under the Minnesota City Participation Program to the Brooklyn Center Economic Development Authority in the same amount of $589,984; and WHEREAS, the Program Application Commitment Agreement sets forth the terms and conditions of the Minnesota City Participation Program for the Brooklyn Center Economic Development Authority and the Minnesota Housing Finance Agency; and WHEREAS, execution of the Program Application Commitment Agreement by the Brooklyn Center Economic Development Authority is a requirement to participate in the Minnesota City Participation ram. ation Pro Y P g NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority n and for the City of Brooklyn Center as follows: Y Y Y 1. The Brooklyn Center EDA hereby authorizes its Executive Director to execute the Program Application Commitment Agreement, including the Request for Issuance of Bonds, for the 1995 Minnesota City Participation Program on behalf of the Brooklyn Center Economic Development Authority. 2. The Brooklyn Center Economic Development Authority authorizes payment of a fully refundable deposit fee in the amount of $5,899.94 to the Minnesota Department of Finance. 3. The Brooklyn Center Economic Development Authority authorizes payment of a processing fee in the amount of $120 to the Minnesota Department of Finance. • Date President EDA RESOLUTION NO. 16 The motion for the adoption of the foregoing resolution was duly seconded by commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted.