00-224council File # ��_�v-�`'�
Resolution #
Green Sheet # �o l 6 �Sy
Presented By
RESOLUTION
CITY OF SAIPiT PAUL, M{NNESOTA
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APPROVING A SINGLE FAMTLY HOUSING PROGIZAM TO BE
FINANCBD BY THE ISSUANCE OF SINGLE FAMILY MORTGAGE
REVENiJE BONDS AND MORTGAGE CREDIT CERTIFICATES
WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes, Chapter 462C
(the "Housing Act"), the City of Saint Paul, Minnesota (the "City") is authorized to adopt a housing plan and
carry out programs for the financing of single family housing for persons of low and moderate income; and
WfIEREAS, the Minneapolis/Saint Paul Housing Finance Board (the "Board"), a joint powers board
organized under a Joint Powers Agreement (the "Joint Powers AgreemenY') by and between the Minneapolis
Community Development Agency (the "Agency"), the Housing and Redevelopment Authority of the City of
Saint Paul, Minnesota (the "Authority") and the City of Minneapolis, Minnesota ("Minneapolis") and
accepted by the City, and under the laws of the State of Minnesota, proposes to undertake a single family
housing program relating to the Minneapolis and the Saint Paul entitlement allocafions available in 2000 and
certain recycling refunding bonds (the "Program"}, to be financed by the issuance of one or more series of
mortgage revenue obligations, mortgage revenue refunding obligations and/or mortgage credit certificates
("MCCs") pursuant to Minnesota Statutes, Sections 469.001 to 469.047, Chapters 462A, 462C and 474A and
Section 471.59 (collecfively, the "AcY'); and
WHEREAS, pursuant to the Act, the Board is authorized to issue bonds from time to tune and to use
the proceeds of its bonds to make or purchase mortgage loans or to purchase participations in mortgage loans
from lending institutions and to issue MCCs in order to finance the construction and rehabilitafion, and to
facilitate the purchase and sale, of single family housing for eligible persons or families under the Act and to
issue bonds to refund previously issued bonds; and
WIIEREAS, the Program will provide below market interest rate mortgage loan financing or income
t� credits primarily to persons of low or moderate income purchasing single family homes to be used as their
principal places of residence and which ue located within the geographic limits of the City or Minneapolis;
and
WHEREAS, the Act requires adoption of the Program after a public hearing held thereon following
publication of notice in a newspaper of general circulation in the City and Minneapolis at least fifteen days in
advance of the hearing; and
WHEREAS, the City Council has on the date hereof conducted a public heazing on the Program, after
publication of notice as required by the Act; and
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39 WIIEREAS, the Program was submitted to the Metropolitan Council at or before the time
40 of publication of notice of the public hearing on such Program, and the Metropolitan Council
41 was afforded an opportunity to present comments at the public hearing, all as required by the
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Act; and
WHEREAS, the Program provides for the issuance of single family mortgage revenue
bonds or revenue refunding bonds in one or more series pursuant to the Act (the "Bonds") to
make or purchase or cause to be made or purchased mortgage loans, or to purchase securities the
proceeds of which would be used to purchase mortgage loans, and the issuance of MCCs to
fmance the acquisition, primarily by low and moderate income persons and families, of single
family housing located within the geograpkuc boundaries of the City ar Minneapolis; and
WHEREAS, it is proposed that the Program be approved and the Board be authorized to
issue Bonds and MCCs pursuant to the Program and the Joint Powers Agreement; and
WHEREAS, it appears that the Program and the issuance of Bonds and/or MCCs by the
Boazd or the Authority aze in the best interests of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SAINT PAUL AS FOLLOWS:
1. The Program is hereby approved in its entirety in substantially the form on file
with the City. The officers of the City and the Board are authorized to take ali actions as may be
necessary or appropriate to carry out the Program in accordance with the Act and any other
applicable laws and regulafions.
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65 2. The issuance of the Bonds ancUor MCCs pursuant to the Program is hereby
66 approved subject to agreement by the Board or the Authority and the purchasers of the Bonds, if
67 any, and by the Board ar the Authority as issuer of the MCCs, as to the exact terms of the
68 Program MCCs.
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The Bonds may be issued in one or more series at the time or times and pursuant
to terms detemuned by the Board, and be structured so as to take advantage of whatever means
are auailable and aze permitted by law to enhance the security for, or mazketability of, the Bonds,
provided that any such financing structure must be approved by the Board. The MCCs may be
issued at the time or times and pursuant to terms determined by the Boazd. All such
determinations by the Boazd must comply with the applicable provisions of the Act and the
Internai Revenue Code of 1986, as amended, and regulations promulgated theteunder.
4. The Boazd is authorized to take a11 actions which may be necessary or desirable in
connection with the issuance of the Bonds and the MCCs, acting on behalf of the City, and no
further approval or consent of the City shall be required prior to the issuance of the Bonds or the
MCCs by the Boazd, or prior to the taking of any action by the Board to undertake and
implement the Program.
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84 5. Nothing in this Resolution or the documents prepared pursuant hereto shall
85 authorize the expenditure of any municipal funds on the Program other than as specified and
86 authorized by separate actions of the CiTy and other than the revenues derived from the Program
87 or otherwise granted to the City for this purpose. The Bonds shall not constitute a chazge, lien or
88 encumbrance, legal or equitable, upon any property or funds of the City except the revenues and
89 proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon.
90 The holders of the Bonds shall never have the right to compel any exercise of the tasing power of
91 the City to pay the outstanding principal on the Bonds or the interest thereon, oz to enforce
42 payment against any properiy of the City. The Bonds shall recite in substance that the principal
93 and interest thereon, aze payable solely from the revenues and proceeds piedged to the payment
94 thereof. The Bonds shall not constitute a debt of the City within the meaning of any
95 constitutional or statutory limitation of indebtedness.
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6. Any one or more series of the Bonds or the MCCs may be issued by the Authority
in lieu of issuance by the Board, at the discretion of the Authority.
Adoption Certified by Council Secretary
By: ��
a—. � C
Approved by Mayor: e— �U/LL°✓"u /��
By:
Requested by Department of:
Plannin & Economic Dev lo ment
By:
Form Approved by City Attorney
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Approved by Mayor for Submission to Council
By:
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Adopted by CounCil: Date ����._�n $' a(.,` p(p
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DEPARTMENT/OFFICE/COUNCIL DATE INITIATED GREEN SHEET No '101684
PED 2/23/00 -
CONTACT PERSON & PHONE � ��{��
e0t Direc[or Ciry Council
AI Carison 6-6676
Ciry Attomey �� � Crty Clerk
MUST BE ON COUNCIL AGENDA BY (DATE)
March 8, 2000 � Financial Servicrs Dir. � Fnancial/ACC[g
�Mayor •.. JU'i�QtRiL
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TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQUESTED '
Sign attached resolution approving the 2000 Mpls/St. Paul Single Family Housing Program. This will be a Public Hearing.
Notice has been placed in the Pioneer Press.
RECOMMENDATION Approve (A) or Reject (R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE
FOLLOWING QUESTIONS:
PLANNING COMMISSION 7, Has this person/firm ever worked under a contract for
CIB COMMITTEE this department? yes no
CIVIL SERVICE COMMISSION 2. Has this person/firm ever been a city employee?
yes na
3. Does this person/firm possess a skill not normally
possessed by any current city employee?
yes no
4. Is this person/firm a targeted vendor? yes no
5. Explain all yes answers on separate sheet and attach to
green sheet.
INITIATING PROBLEM ISSUE, OPPORTUNITY (who, what, when, where, why)
The city receives an annual housing bond authority allocation of $16,131,000 from the State to issue tax-exempt bonds
for housing activities. The resolution adopts a housing program which stipuiates how the authority may be used such as
single tamily mortgage revenue bonds, mortgage credit certificates or multi-family housing, under the single family
program. The bonds can be used to provide mortgage loans to finance or finance and rehab their homes. The program is
targeted to lower income first-time homebuyers.
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ADVANTGES IF APPROVED �g, ��
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DISADVANTAGESIFAPPROVED ���� �� ���.����
DISADVANTAGES IF NOT APPROVED '1 d rn� G`��t��
Cour�c� �e$�a,�
TOTAL AMOUNT OF TRANSACTION S COST/REVENUE 6UD6ETED ���LE�J�E1,�� NO
FUNDING SOURCE �
FINANCIAL INFORMATION (EXPLAIN)
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Interdepartmental Memorandum
CITY OF SAINT PAUL
To: Council President Bostrom
Council member Benanav
Council member Blakey
Council member Coleman
Council member Harris
Council member Lanhy
Council member Reiter
From: Brian Sweeney � /�,� „—
Allen Carlson
�Q�
Date: Febniary 23, 2000
Re: Approval of 2000 Minneapolis/Saint Paul Single Family Housing Program To Be
Financed by the Issuance of Single Family Mortgage Revenue Bonds and Mortgage
Credit Certificates
Purpose
The purpose of this report is to describe the nature and purpose of Saint Paul's 2000 Single
Family Housing Program and to recommend its adoption.
Background
In 1984, the Cities of Minneapolis and Saint Paul and their respective development agencies
created the Minneapolis/Saint Paul Housing Finance Boazd (Joint Board) far the purpose of
providing decent, safe, sanitary, and affordable housing to residents of both cities. Membership
of the Joint Board is comprised of three council members from each city. Saint Paul's current
members are Council members Blakey, Bostrom and Lantry. Through the Joint Board, the two
cities sponsor their single family mortgage programs by issuing both taac exempt mortgage
xevenue bonds and mortgage credit certificates. Current programs financed through the Joint
Board include Take Credit! which provides a federal tas credit to persons purchasing their first
homes in either Saint Paul or Minneapolis and CityLiving 1999A and 1999B of the bond-
financed Home Buyer Programs. Using a portion of the year 2000 bonding allocation, staff is
proposing issuance of up to $15,000,000 of bonds to continue financing the first-time homebuyer
program.
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Program Description
The 2000 Single Family Housing Program is included as E�ibit A to the attached Council
Resolution. Saint Paul will have a totai bonding authority of $17,779,000 for the 2000 Program
($1,648,000 of 1999 carryforward authority and $16,131,000 of 2000 bonding authority). The
1999 Program inciudes a description of the program eligibility requirements dictated by federal
and state legislation and serves as the basis for future use of Saint Paul's and Minneapolis,
enritlement allocations of mortgage bond authority. Ongoing Program parameters include a
masiinum purchase price of 90% of average azea purchase price (which current translates to
$121,862 for an existing single family home) and a maximum household income of 100% of area
median income (currently $63,600).
Upon adoption by the Joint Board, the 2000 Program will be filed with the State Department of
Revenue as required by Minnesota Statutes, Chapter 462C. The attached resolution does not
obligate the City ar HRA to expend any funds. In addition, the resolution specifies that neither
the City or HRA will be subject to any liability for bonds or mortgage credit certificates issued to
finance the Program. Approval of the Program does not preclude the City or HRA from issuing
multifamily revenue bonds.
Public Purpose
Through its single family mortgage programs, the Joint Boazd helps Saint Paul families become
homeowners. In addition, by providing financing which accommodates both the purchase and
the rehabilitation of single family homes, the Joint Board helps the City to meet its goal of
improving its housing stock.
Recommendation
Staff recommends approval of the attached resolution giving approval to the issuance by the
MinneapolislSaint Paul Housing Finance Board of single family mortgage revenue bonds and
mortgage credit certificates to finance the City's 2000 Single Family Housing Program.
Allen Carlson
266-6616
Sponsor: Chair Bostrom
K1Shazed\CARLS�AP\CiTyLiving2000A\cc ipt wpd
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MINNEAPOLIS/SAINT PAUL
2000 SINGLE FANIILY JOINT' BOARD PROGRAM
The City of Minneapolis, Minnesota (`iVlinneapolis"), the Minneapolis Community
Development Agency (the "A�enc}�'), the City of Saint Paul, Mimiesota ("Saint Paul") and the
Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authorit}��,
actin� individually or jointly through the Minneapolis/Saint Paul Housing Finance Board (the "Joine
Board") (all together, the "Issuers") propose to issue mortgage credit certificates ("MCCs") under
Section 25 of the Intemal Revenue Code of 1986, as amended (together with regulations
promul�ated thereunder, the "Code"), or new money mortgage revenue bonds and certain mortgage
revenue refunding bonds under Section 143 of the Code in one or more series, in either case to
finance the single family housin� program described herein (the "Program") pursuant to authority
conferred by Minnesota Statutes, Chapters 462C, 462A, 469 and 474A, all as amended, (and any
other general or special law authority for the issuance of obligations to finance a single family
housing program or development) (all together, the "AcY'). Any action specified herein to be made
by the "Issuers" may be made by one or more of them acting in concert or individually.
In creating this Program, the Issuers find and determine:
• that the preservation of the quality of life in Minneapolis and Saint Paul (the "Cities") is
dependent upon maintainin� an sdequate, decent, safe and sanitary housing stock;
• that maintaining such housing stock is a public purpose and will benefit the residents of
the Ciries;
• that a need exists within the Cities to provide additional affordable owner-occupied
housin� for low and moderate income persons and families; and
■ that a need exists for mortgage credit to be made available for both existing and new
owner-occupied housing, for rehabilitation of existing singie family housing and for home
improvements.
To meet such needs, the Issuers intend to issue one or more series of single family mortgage
revenue bonds and single family mortgage revenue refunding bonds ("Bonds") to cause the
ori�ination of mort�age loans to finance the acquisition, construcrion, rehabilitation or improvement
of sin�le family housin� in the Cities (or either of them). In addition to or in lieu of issuing Bonds,
the Issuers (or any one or more of them) may undertake a MCC program to issue MCCs to
mortgagors who obtain mortgage loans to fmance the purchase, construction, rehabilitation or
improvement of single family housing in the Cities (or either of them). The Issuers may issue
Bonds, or will elect not to issue bonds in favor of MCCs, in an a�gregate principal amount not
exceeding (a) $31,117,000 for Minneapolis and $17,779,000 for Saint Paul, representing certain
carried forwazd allocation and 2000 entitlement bond allocation of Minneapolis and Saint Paul; (b)
an amount up to $20,500,000 to refund the Series 1999A-3 Bonds and Series 1999B-2 Bonds issued
in 1999; (c) approximately $33,000,000 to recycle refund prepayments and repayments of certain
outstanding bonds; (d) up to $2,800,000 to refund the Issuer's Phase VIII Bonds, and (e) such
I900139v1 Q4QSN0l!.DOC)
d o ��a�
principal amount of tasable bonds as may be necessary or convenient to fiuther the purposes of this
Prograzn.
Mort�a�e loans financed throu�h the issuance of the Bonds and those in connection with
which the MCCs will be issued, will be subject to the followin� terms (or, for Bonds as to which
these requirements do not apply as a matter of law, to such other terms approved by the Boazd):
purchase Qrice - the masimum purchase price for financed homes shall not exceed
the lesser of (a) 90% (110% in "tar�eted areas" or areas treated as tazgeted areas) of the
applicable "average azea purchase price" detemuned by the United States Department of the
Treasury or by the Issuers on the basis of more complete information, or (b) 3 times the
applicable income limit for the Program imposed by Minnesota law (except that in certain
azeas the purchase price shall not exceed 4 times the applicable income lunit to the extent
consistent with applicable federal law);
income limits - the maximum income of the mortgagors shall be the lower of (a) the
income restrictions imposed by federal tas law or (b) the income restrictions imposed by
Minnesota Statutes, Secrion 462C.03, Subd. 2, including the restriction of Subd. 7 that for
the first six months of the Program, 50% of the money available to make mortga�e loans or
the "non-issued bond amount" of MCCs must be reserved for persons and families with
adjusted incomes not greater than 90% of the general Pro�am income limits. Income Innits
under Section 462C.03, Subd. 2 shall be adjusted for family size by deducting $1,000 per
adult and $1,200 per child in the family.
In connection �vith this Program:
(i) (a) in connection with any mortga�e loans financed with the proceeds of
mortga�e revenue bonds, any financial institutions described in Section 462C.03, Subd. 4,
and other mort�a�e lenders with offices located in the Cities and which are FHA/VA
approved sellers of mortgage loans as weil as other financial institutions and mortgage
lenders which aze FHANA; or FNMAlFHI,MC approved sellers of mortgage loans and are
reasonably acceptable to any master servicer acting on behalf of the Issuers, will be eligble
for consideration for ori�ination of such loans; the Cities will not limit participation in the
Program to a single lender unless other lenders are not willing to participate for the
consideration offered; the Agency and the Authority shall be eligible for consideration for
origination of loans;
(b) in connection with issuance of MCCs, MCCs will not be limited to
loans originated by particulaz lenders but will be available with respect to the origination of
qualifyin� mort�age loans by any participating lender;
(ii) loans will not be made available or set aside for the exclusive use of
developers or builders except, in the case of mort;age loans financed with the proceeds of
mortga�e revenue bonds, for new housing described in Section 462C.071, Subd. 2;
1900139c1 (I4QSN01!.DOC) Z,
c'�o -�'a-�
(iii) the Issuers expect to act as, or to contract with, a program adminisirator and
a servicer to provide services to ensure that the Pro�am will be consistent with this
Pro�am, the Act and applicable federal law;
(iv) as indicated above, up to 511,256,000 of carried forward allocation and
537,640,000 of the 2000 enritlement allocarions of the Cities may be used in the Program,
provided, however, that no provision of this Program shall in any way prevent either
Minneapolis or Saint Paul from using all or a portion of its respective entitlement
allocarion(s) for multifamily housin� or any other authorized purpose. In addition, any
election made by the Cities to issue MCCs in lieu of Bonds may be revoked in whole or in
part, at any time durin� the calendaz year in which the elecrion was made as pemutted by
Section 25 of the Intemal Revenue Code and Section 1.25-4T(c)(3) of the Treasury
Regulations. The resulting unused enritlement allocation may be used to issue bands for
single family housing or other authorized purposes;
(v) the Prograzn will meet the needs of low and moderate income families by
providing below-mazket rate financing for the acquisition or rehabilitation of single family
homes or by providing a tax credit for mort�a�e interest paid, thereby enabling such persons
to qualify for mortga�es which would be unavailable at market rates;
(vi) the Issuers hereby request a waiver by the Minnesota Housing Finance
Agency of the provisions of Section 462C.03, Subd. 5;
(vii) no homes which aze located in previously unincorporated real property
annexed by the Cities within one yeaz prior to the date of adoption of this Pro�am will be
financed under this Pro�am;
(viii) prohibitions or limitations on assumption will be imposed to the extent
required by federal law relating to the ta� exempt status of Bonds or to the continued
validity of MCCs issued pursuant to the Program; provided that the Issuers may impose
more stringent limitations at their discretion;
(ix) the estimated amount of mortgage loans to be made or purchased pursuant to
this Program is approximately equal to the a��egate principal amount of Bonds issued and
the amount which either of the Issuers may elect not to issue in favor of MCCs;
(x) the esUmated a��egate principal amount of the Bonds, or estimated "non-
issued bond amount" (as such term is used in Section 25(d)(2)(B) of the Code) of MCCs
issued in lieu of the Bonds, is set forth above;
(xi) the Bonds, if issued, may be issued in one or more series timed for sale
consistent with the needs of the Cities in 2000, or, if any bond allocarion is carried forwazd,
in the first half of 2001;
(xii) refinancing of existing indebtedness will be permitted only where the
mort�a�e loan also finances substantial "rehabilitation" as that term is defined under
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Minnesota Statutes, Section 462C.01 and Section 462C.03, Subd. 11 and under Section 143
of the Code;
(xiii) to the extent required by the Act, during the first ten (10) months of the
origination period, loans financed by the Bonds (but not mortgage loans assisted by MCCs)
will be made for existing housing;
(xiv) the following additional provisions shall apply only to issuance of MCCs
pursuant to this Pro�am:
20%;
(1) the "certificate credit rate" (as used in Section 25 of the Code) will be
(2) a copy of the form which will be used to elect the nonissued bond
amount is attached hereto as Eachibit A; and
(3) the Issuers will ensure compliance with the requirements of Section
25 of the Code by use of an MCC procedural manual for the Program and by use of
the oroeram administrator referenced in item (iii) above.
1900139v( Q4QSNOL'.DOC)
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EXHIBIT A
TO
JOINT BOARD PROGRAM
MORTGAGE CREDTT CERTIFICATE ELECTION
(Pursuant to Temp. Reg. § 1.25-4T)
(i) Issuer name:
[Name]
[Address]
TIN:
[Number]
(ii) Issuer's Applicable lunit, per § 146 of the Intemal Revenue Code of 1986:
[ALLOCATION FOR 2000: $ �
[CARRYFORWARD ALLOCATION FROM 1999: $ 1
(iii) The aggregate amount of qualified mortgage bonds issued during the calendaz yeaz::
[Amount]
(iv) The amount of the Issuer's applicable limit that it has surrendered to other issuers during Yh�
calendaz year:
[Amount]
(v) The date and amount of any previous elections under 1.25-4T(c) for 2000:
[Date and amount}
(vi) The amount of qualified mortgage bonds that the issuer elects not to issue:
[Amount]
State Certification attached.
Dated: , 2000
CITY OF [CTTY]
By
Mayor
�wotsm-i �taQstvou.DOC) A - 1
council File # ��_�v-�`'�
Resolution #
Green Sheet # �o l 6 �Sy
Presented By
RESOLUTION
CITY OF SAIPiT PAUL, M{NNESOTA
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APPROVING A SINGLE FAMTLY HOUSING PROGIZAM TO BE
FINANCBD BY THE ISSUANCE OF SINGLE FAMILY MORTGAGE
REVENiJE BONDS AND MORTGAGE CREDIT CERTIFICATES
WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes, Chapter 462C
(the "Housing Act"), the City of Saint Paul, Minnesota (the "City") is authorized to adopt a housing plan and
carry out programs for the financing of single family housing for persons of low and moderate income; and
WfIEREAS, the Minneapolis/Saint Paul Housing Finance Board (the "Board"), a joint powers board
organized under a Joint Powers Agreement (the "Joint Powers AgreemenY') by and between the Minneapolis
Community Development Agency (the "Agency"), the Housing and Redevelopment Authority of the City of
Saint Paul, Minnesota (the "Authority") and the City of Minneapolis, Minnesota ("Minneapolis") and
accepted by the City, and under the laws of the State of Minnesota, proposes to undertake a single family
housing program relating to the Minneapolis and the Saint Paul entitlement allocafions available in 2000 and
certain recycling refunding bonds (the "Program"}, to be financed by the issuance of one or more series of
mortgage revenue obligations, mortgage revenue refunding obligations and/or mortgage credit certificates
("MCCs") pursuant to Minnesota Statutes, Sections 469.001 to 469.047, Chapters 462A, 462C and 474A and
Section 471.59 (collecfively, the "AcY'); and
WHEREAS, pursuant to the Act, the Board is authorized to issue bonds from time to tune and to use
the proceeds of its bonds to make or purchase mortgage loans or to purchase participations in mortgage loans
from lending institutions and to issue MCCs in order to finance the construction and rehabilitafion, and to
facilitate the purchase and sale, of single family housing for eligible persons or families under the Act and to
issue bonds to refund previously issued bonds; and
WIIEREAS, the Program will provide below market interest rate mortgage loan financing or income
t� credits primarily to persons of low or moderate income purchasing single family homes to be used as their
principal places of residence and which ue located within the geographic limits of the City or Minneapolis;
and
WHEREAS, the Act requires adoption of the Program after a public hearing held thereon following
publication of notice in a newspaper of general circulation in the City and Minneapolis at least fifteen days in
advance of the hearing; and
WHEREAS, the City Council has on the date hereof conducted a public heazing on the Program, after
publication of notice as required by the Act; and
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39 WIIEREAS, the Program was submitted to the Metropolitan Council at or before the time
40 of publication of notice of the public hearing on such Program, and the Metropolitan Council
41 was afforded an opportunity to present comments at the public hearing, all as required by the
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Act; and
WHEREAS, the Program provides for the issuance of single family mortgage revenue
bonds or revenue refunding bonds in one or more series pursuant to the Act (the "Bonds") to
make or purchase or cause to be made or purchased mortgage loans, or to purchase securities the
proceeds of which would be used to purchase mortgage loans, and the issuance of MCCs to
fmance the acquisition, primarily by low and moderate income persons and families, of single
family housing located within the geograpkuc boundaries of the City ar Minneapolis; and
WHEREAS, it is proposed that the Program be approved and the Board be authorized to
issue Bonds and MCCs pursuant to the Program and the Joint Powers Agreement; and
WHEREAS, it appears that the Program and the issuance of Bonds and/or MCCs by the
Boazd or the Authority aze in the best interests of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SAINT PAUL AS FOLLOWS:
1. The Program is hereby approved in its entirety in substantially the form on file
with the City. The officers of the City and the Board are authorized to take ali actions as may be
necessary or appropriate to carry out the Program in accordance with the Act and any other
applicable laws and regulafions.
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65 2. The issuance of the Bonds ancUor MCCs pursuant to the Program is hereby
66 approved subject to agreement by the Board or the Authority and the purchasers of the Bonds, if
67 any, and by the Board ar the Authority as issuer of the MCCs, as to the exact terms of the
68 Program MCCs.
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The Bonds may be issued in one or more series at the time or times and pursuant
to terms detemuned by the Board, and be structured so as to take advantage of whatever means
are auailable and aze permitted by law to enhance the security for, or mazketability of, the Bonds,
provided that any such financing structure must be approved by the Board. The MCCs may be
issued at the time or times and pursuant to terms determined by the Boazd. All such
determinations by the Boazd must comply with the applicable provisions of the Act and the
Internai Revenue Code of 1986, as amended, and regulations promulgated theteunder.
4. The Boazd is authorized to take a11 actions which may be necessary or desirable in
connection with the issuance of the Bonds and the MCCs, acting on behalf of the City, and no
further approval or consent of the City shall be required prior to the issuance of the Bonds or the
MCCs by the Boazd, or prior to the taking of any action by the Board to undertake and
implement the Program.
�o -aay
84 5. Nothing in this Resolution or the documents prepared pursuant hereto shall
85 authorize the expenditure of any municipal funds on the Program other than as specified and
86 authorized by separate actions of the CiTy and other than the revenues derived from the Program
87 or otherwise granted to the City for this purpose. The Bonds shall not constitute a chazge, lien or
88 encumbrance, legal or equitable, upon any property or funds of the City except the revenues and
89 proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon.
90 The holders of the Bonds shall never have the right to compel any exercise of the tasing power of
91 the City to pay the outstanding principal on the Bonds or the interest thereon, oz to enforce
42 payment against any properiy of the City. The Bonds shall recite in substance that the principal
93 and interest thereon, aze payable solely from the revenues and proceeds piedged to the payment
94 thereof. The Bonds shall not constitute a debt of the City within the meaning of any
95 constitutional or statutory limitation of indebtedness.
.,
.
6. Any one or more series of the Bonds or the MCCs may be issued by the Authority
in lieu of issuance by the Board, at the discretion of the Authority.
Adoption Certified by Council Secretary
By: ��
a—. � C
Approved by Mayor: e— �U/LL°✓"u /��
By:
Requested by Department of:
Plannin & Economic Dev lo ment
By:
Form Approved by City Attorney
�� 7 � �� �1
Approved by Mayor for Submission to Council
By:
����/�-' '�, �
Adopted by CounCil: Date ����._�n $' a(.,` p(p
�
0 0 -aay
DEPARTMENT/OFFICE/COUNCIL DATE INITIATED GREEN SHEET No '101684
PED 2/23/00 -
CONTACT PERSON & PHONE � ��{��
e0t Direc[or Ciry Council
AI Carison 6-6676
Ciry Attomey �� � Crty Clerk
MUST BE ON COUNCIL AGENDA BY (DATE)
March 8, 2000 � Financial Servicrs Dir. � Fnancial/ACC[g
�Mayor •.. JU'i�QtRiL
��
TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQUESTED '
Sign attached resolution approving the 2000 Mpls/St. Paul Single Family Housing Program. This will be a Public Hearing.
Notice has been placed in the Pioneer Press.
RECOMMENDATION Approve (A) or Reject (R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE
FOLLOWING QUESTIONS:
PLANNING COMMISSION 7, Has this person/firm ever worked under a contract for
CIB COMMITTEE this department? yes no
CIVIL SERVICE COMMISSION 2. Has this person/firm ever been a city employee?
yes na
3. Does this person/firm possess a skill not normally
possessed by any current city employee?
yes no
4. Is this person/firm a targeted vendor? yes no
5. Explain all yes answers on separate sheet and attach to
green sheet.
INITIATING PROBLEM ISSUE, OPPORTUNITY (who, what, when, where, why)
The city receives an annual housing bond authority allocation of $16,131,000 from the State to issue tax-exempt bonds
for housing activities. The resolution adopts a housing program which stipuiates how the authority may be used such as
single tamily mortgage revenue bonds, mortgage credit certificates or multi-family housing, under the single family
program. The bonds can be used to provide mortgage loans to finance or finance and rehab their homes. The program is
targeted to lower income first-time homebuyers.
q � c;� a
ADVANTGES IF APPROVED �g, ��
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DISADVANTAGESIFAPPROVED ���� �� ���.����
DISADVANTAGES IF NOT APPROVED '1 d rn� G`��t��
Cour�c� �e$�a,�
TOTAL AMOUNT OF TRANSACTION S COST/REVENUE 6UD6ETED ���LE�J�E1,�� NO
FUNDING SOURCE �
FINANCIAL INFORMATION (EXPLAIN)
0 0 -a �-�t
Interdepartmental Memorandum
CITY OF SAINT PAUL
To: Council President Bostrom
Council member Benanav
Council member Blakey
Council member Coleman
Council member Harris
Council member Lanhy
Council member Reiter
From: Brian Sweeney � /�,� „—
Allen Carlson
�Q�
Date: Febniary 23, 2000
Re: Approval of 2000 Minneapolis/Saint Paul Single Family Housing Program To Be
Financed by the Issuance of Single Family Mortgage Revenue Bonds and Mortgage
Credit Certificates
Purpose
The purpose of this report is to describe the nature and purpose of Saint Paul's 2000 Single
Family Housing Program and to recommend its adoption.
Background
In 1984, the Cities of Minneapolis and Saint Paul and their respective development agencies
created the Minneapolis/Saint Paul Housing Finance Boazd (Joint Board) far the purpose of
providing decent, safe, sanitary, and affordable housing to residents of both cities. Membership
of the Joint Board is comprised of three council members from each city. Saint Paul's current
members are Council members Blakey, Bostrom and Lantry. Through the Joint Board, the two
cities sponsor their single family mortgage programs by issuing both taac exempt mortgage
xevenue bonds and mortgage credit certificates. Current programs financed through the Joint
Board include Take Credit! which provides a federal tas credit to persons purchasing their first
homes in either Saint Paul or Minneapolis and CityLiving 1999A and 1999B of the bond-
financed Home Buyer Programs. Using a portion of the year 2000 bonding allocation, staff is
proposing issuance of up to $15,000,000 of bonds to continue financing the first-time homebuyer
program.
00 -�a�,
Program Description
The 2000 Single Family Housing Program is included as E�ibit A to the attached Council
Resolution. Saint Paul will have a totai bonding authority of $17,779,000 for the 2000 Program
($1,648,000 of 1999 carryforward authority and $16,131,000 of 2000 bonding authority). The
1999 Program inciudes a description of the program eligibility requirements dictated by federal
and state legislation and serves as the basis for future use of Saint Paul's and Minneapolis,
enritlement allocations of mortgage bond authority. Ongoing Program parameters include a
masiinum purchase price of 90% of average azea purchase price (which current translates to
$121,862 for an existing single family home) and a maximum household income of 100% of area
median income (currently $63,600).
Upon adoption by the Joint Board, the 2000 Program will be filed with the State Department of
Revenue as required by Minnesota Statutes, Chapter 462C. The attached resolution does not
obligate the City ar HRA to expend any funds. In addition, the resolution specifies that neither
the City or HRA will be subject to any liability for bonds or mortgage credit certificates issued to
finance the Program. Approval of the Program does not preclude the City or HRA from issuing
multifamily revenue bonds.
Public Purpose
Through its single family mortgage programs, the Joint Boazd helps Saint Paul families become
homeowners. In addition, by providing financing which accommodates both the purchase and
the rehabilitation of single family homes, the Joint Board helps the City to meet its goal of
improving its housing stock.
Recommendation
Staff recommends approval of the attached resolution giving approval to the issuance by the
MinneapolislSaint Paul Housing Finance Board of single family mortgage revenue bonds and
mortgage credit certificates to finance the City's 2000 Single Family Housing Program.
Allen Carlson
266-6616
Sponsor: Chair Bostrom
K1Shazed\CARLS�AP\CiTyLiving2000A\cc ipt wpd
ba -��-�1
MINNEAPOLIS/SAINT PAUL
2000 SINGLE FANIILY JOINT' BOARD PROGRAM
The City of Minneapolis, Minnesota (`iVlinneapolis"), the Minneapolis Community
Development Agency (the "A�enc}�'), the City of Saint Paul, Mimiesota ("Saint Paul") and the
Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authorit}��,
actin� individually or jointly through the Minneapolis/Saint Paul Housing Finance Board (the "Joine
Board") (all together, the "Issuers") propose to issue mortgage credit certificates ("MCCs") under
Section 25 of the Intemal Revenue Code of 1986, as amended (together with regulations
promul�ated thereunder, the "Code"), or new money mortgage revenue bonds and certain mortgage
revenue refunding bonds under Section 143 of the Code in one or more series, in either case to
finance the single family housin� program described herein (the "Program") pursuant to authority
conferred by Minnesota Statutes, Chapters 462C, 462A, 469 and 474A, all as amended, (and any
other general or special law authority for the issuance of obligations to finance a single family
housing program or development) (all together, the "AcY'). Any action specified herein to be made
by the "Issuers" may be made by one or more of them acting in concert or individually.
In creating this Program, the Issuers find and determine:
• that the preservation of the quality of life in Minneapolis and Saint Paul (the "Cities") is
dependent upon maintainin� an sdequate, decent, safe and sanitary housing stock;
• that maintaining such housing stock is a public purpose and will benefit the residents of
the Ciries;
• that a need exists within the Cities to provide additional affordable owner-occupied
housin� for low and moderate income persons and families; and
■ that a need exists for mortgage credit to be made available for both existing and new
owner-occupied housing, for rehabilitation of existing singie family housing and for home
improvements.
To meet such needs, the Issuers intend to issue one or more series of single family mortgage
revenue bonds and single family mortgage revenue refunding bonds ("Bonds") to cause the
ori�ination of mort�age loans to finance the acquisition, construcrion, rehabilitation or improvement
of sin�le family housin� in the Cities (or either of them). In addition to or in lieu of issuing Bonds,
the Issuers (or any one or more of them) may undertake a MCC program to issue MCCs to
mortgagors who obtain mortgage loans to fmance the purchase, construction, rehabilitation or
improvement of single family housing in the Cities (or either of them). The Issuers may issue
Bonds, or will elect not to issue bonds in favor of MCCs, in an a�gregate principal amount not
exceeding (a) $31,117,000 for Minneapolis and $17,779,000 for Saint Paul, representing certain
carried forwazd allocation and 2000 entitlement bond allocation of Minneapolis and Saint Paul; (b)
an amount up to $20,500,000 to refund the Series 1999A-3 Bonds and Series 1999B-2 Bonds issued
in 1999; (c) approximately $33,000,000 to recycle refund prepayments and repayments of certain
outstanding bonds; (d) up to $2,800,000 to refund the Issuer's Phase VIII Bonds, and (e) such
I900139v1 Q4QSN0l!.DOC)
d o ��a�
principal amount of tasable bonds as may be necessary or convenient to fiuther the purposes of this
Prograzn.
Mort�a�e loans financed throu�h the issuance of the Bonds and those in connection with
which the MCCs will be issued, will be subject to the followin� terms (or, for Bonds as to which
these requirements do not apply as a matter of law, to such other terms approved by the Boazd):
purchase Qrice - the masimum purchase price for financed homes shall not exceed
the lesser of (a) 90% (110% in "tar�eted areas" or areas treated as tazgeted areas) of the
applicable "average azea purchase price" detemuned by the United States Department of the
Treasury or by the Issuers on the basis of more complete information, or (b) 3 times the
applicable income limit for the Program imposed by Minnesota law (except that in certain
azeas the purchase price shall not exceed 4 times the applicable income lunit to the extent
consistent with applicable federal law);
income limits - the maximum income of the mortgagors shall be the lower of (a) the
income restrictions imposed by federal tas law or (b) the income restrictions imposed by
Minnesota Statutes, Secrion 462C.03, Subd. 2, including the restriction of Subd. 7 that for
the first six months of the Program, 50% of the money available to make mortga�e loans or
the "non-issued bond amount" of MCCs must be reserved for persons and families with
adjusted incomes not greater than 90% of the general Pro�am income limits. Income Innits
under Section 462C.03, Subd. 2 shall be adjusted for family size by deducting $1,000 per
adult and $1,200 per child in the family.
In connection �vith this Program:
(i) (a) in connection with any mortga�e loans financed with the proceeds of
mortga�e revenue bonds, any financial institutions described in Section 462C.03, Subd. 4,
and other mort�a�e lenders with offices located in the Cities and which are FHA/VA
approved sellers of mortgage loans as weil as other financial institutions and mortgage
lenders which aze FHANA; or FNMAlFHI,MC approved sellers of mortgage loans and are
reasonably acceptable to any master servicer acting on behalf of the Issuers, will be eligble
for consideration for ori�ination of such loans; the Cities will not limit participation in the
Program to a single lender unless other lenders are not willing to participate for the
consideration offered; the Agency and the Authority shall be eligible for consideration for
origination of loans;
(b) in connection with issuance of MCCs, MCCs will not be limited to
loans originated by particulaz lenders but will be available with respect to the origination of
qualifyin� mort�age loans by any participating lender;
(ii) loans will not be made available or set aside for the exclusive use of
developers or builders except, in the case of mort;age loans financed with the proceeds of
mortga�e revenue bonds, for new housing described in Section 462C.071, Subd. 2;
1900139c1 (I4QSN01!.DOC) Z,
c'�o -�'a-�
(iii) the Issuers expect to act as, or to contract with, a program adminisirator and
a servicer to provide services to ensure that the Pro�am will be consistent with this
Pro�am, the Act and applicable federal law;
(iv) as indicated above, up to 511,256,000 of carried forward allocation and
537,640,000 of the 2000 enritlement allocarions of the Cities may be used in the Program,
provided, however, that no provision of this Program shall in any way prevent either
Minneapolis or Saint Paul from using all or a portion of its respective entitlement
allocarion(s) for multifamily housin� or any other authorized purpose. In addition, any
election made by the Cities to issue MCCs in lieu of Bonds may be revoked in whole or in
part, at any time durin� the calendaz year in which the elecrion was made as pemutted by
Section 25 of the Intemal Revenue Code and Section 1.25-4T(c)(3) of the Treasury
Regulations. The resulting unused enritlement allocation may be used to issue bands for
single family housing or other authorized purposes;
(v) the Prograzn will meet the needs of low and moderate income families by
providing below-mazket rate financing for the acquisition or rehabilitation of single family
homes or by providing a tax credit for mort�a�e interest paid, thereby enabling such persons
to qualify for mortga�es which would be unavailable at market rates;
(vi) the Issuers hereby request a waiver by the Minnesota Housing Finance
Agency of the provisions of Section 462C.03, Subd. 5;
(vii) no homes which aze located in previously unincorporated real property
annexed by the Cities within one yeaz prior to the date of adoption of this Pro�am will be
financed under this Pro�am;
(viii) prohibitions or limitations on assumption will be imposed to the extent
required by federal law relating to the ta� exempt status of Bonds or to the continued
validity of MCCs issued pursuant to the Program; provided that the Issuers may impose
more stringent limitations at their discretion;
(ix) the estimated amount of mortgage loans to be made or purchased pursuant to
this Program is approximately equal to the a��egate principal amount of Bonds issued and
the amount which either of the Issuers may elect not to issue in favor of MCCs;
(x) the esUmated a��egate principal amount of the Bonds, or estimated "non-
issued bond amount" (as such term is used in Section 25(d)(2)(B) of the Code) of MCCs
issued in lieu of the Bonds, is set forth above;
(xi) the Bonds, if issued, may be issued in one or more series timed for sale
consistent with the needs of the Cities in 2000, or, if any bond allocarion is carried forwazd,
in the first half of 2001;
(xii) refinancing of existing indebtedness will be permitted only where the
mort�a�e loan also finances substantial "rehabilitation" as that term is defined under
I900139v1 (14QSN0t!.DOC) 3
Do -aa�l
Minnesota Statutes, Section 462C.01 and Section 462C.03, Subd. 11 and under Section 143
of the Code;
(xiii) to the extent required by the Act, during the first ten (10) months of the
origination period, loans financed by the Bonds (but not mortgage loans assisted by MCCs)
will be made for existing housing;
(xiv) the following additional provisions shall apply only to issuance of MCCs
pursuant to this Pro�am:
20%;
(1) the "certificate credit rate" (as used in Section 25 of the Code) will be
(2) a copy of the form which will be used to elect the nonissued bond
amount is attached hereto as Eachibit A; and
(3) the Issuers will ensure compliance with the requirements of Section
25 of the Code by use of an MCC procedural manual for the Program and by use of
the oroeram administrator referenced in item (iii) above.
1900139v( Q4QSNOL'.DOC)
aa-�
EXHIBIT A
TO
JOINT BOARD PROGRAM
MORTGAGE CREDTT CERTIFICATE ELECTION
(Pursuant to Temp. Reg. § 1.25-4T)
(i) Issuer name:
[Name]
[Address]
TIN:
[Number]
(ii) Issuer's Applicable lunit, per § 146 of the Intemal Revenue Code of 1986:
[ALLOCATION FOR 2000: $ �
[CARRYFORWARD ALLOCATION FROM 1999: $ 1
(iii) The aggregate amount of qualified mortgage bonds issued during the calendaz yeaz::
[Amount]
(iv) The amount of the Issuer's applicable limit that it has surrendered to other issuers during Yh�
calendaz year:
[Amount]
(v) The date and amount of any previous elections under 1.25-4T(c) for 2000:
[Date and amount}
(vi) The amount of qualified mortgage bonds that the issuer elects not to issue:
[Amount]
State Certification attached.
Dated: , 2000
CITY OF [CTTY]
By
Mayor
�wotsm-i �taQstvou.DOC) A - 1
council File # ��_�v-�`'�
Resolution #
Green Sheet # �o l 6 �Sy
Presented By
RESOLUTION
CITY OF SAIPiT PAUL, M{NNESOTA
��
Re£erred To Committee: Date
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APPROVING A SINGLE FAMTLY HOUSING PROGIZAM TO BE
FINANCBD BY THE ISSUANCE OF SINGLE FAMILY MORTGAGE
REVENiJE BONDS AND MORTGAGE CREDIT CERTIFICATES
WHEREAS, pursuant to the Minnesota Municipal Housing Act, Minnesota Statutes, Chapter 462C
(the "Housing Act"), the City of Saint Paul, Minnesota (the "City") is authorized to adopt a housing plan and
carry out programs for the financing of single family housing for persons of low and moderate income; and
WfIEREAS, the Minneapolis/Saint Paul Housing Finance Board (the "Board"), a joint powers board
organized under a Joint Powers Agreement (the "Joint Powers AgreemenY') by and between the Minneapolis
Community Development Agency (the "Agency"), the Housing and Redevelopment Authority of the City of
Saint Paul, Minnesota (the "Authority") and the City of Minneapolis, Minnesota ("Minneapolis") and
accepted by the City, and under the laws of the State of Minnesota, proposes to undertake a single family
housing program relating to the Minneapolis and the Saint Paul entitlement allocafions available in 2000 and
certain recycling refunding bonds (the "Program"}, to be financed by the issuance of one or more series of
mortgage revenue obligations, mortgage revenue refunding obligations and/or mortgage credit certificates
("MCCs") pursuant to Minnesota Statutes, Sections 469.001 to 469.047, Chapters 462A, 462C and 474A and
Section 471.59 (collecfively, the "AcY'); and
WHEREAS, pursuant to the Act, the Board is authorized to issue bonds from time to tune and to use
the proceeds of its bonds to make or purchase mortgage loans or to purchase participations in mortgage loans
from lending institutions and to issue MCCs in order to finance the construction and rehabilitafion, and to
facilitate the purchase and sale, of single family housing for eligible persons or families under the Act and to
issue bonds to refund previously issued bonds; and
WIIEREAS, the Program will provide below market interest rate mortgage loan financing or income
t� credits primarily to persons of low or moderate income purchasing single family homes to be used as their
principal places of residence and which ue located within the geographic limits of the City or Minneapolis;
and
WHEREAS, the Act requires adoption of the Program after a public hearing held thereon following
publication of notice in a newspaper of general circulation in the City and Minneapolis at least fifteen days in
advance of the hearing; and
WHEREAS, the City Council has on the date hereof conducted a public heazing on the Program, after
publication of notice as required by the Act; and
00 - a-ay
39 WIIEREAS, the Program was submitted to the Metropolitan Council at or before the time
40 of publication of notice of the public hearing on such Program, and the Metropolitan Council
41 was afforded an opportunity to present comments at the public hearing, all as required by the
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Act; and
WHEREAS, the Program provides for the issuance of single family mortgage revenue
bonds or revenue refunding bonds in one or more series pursuant to the Act (the "Bonds") to
make or purchase or cause to be made or purchased mortgage loans, or to purchase securities the
proceeds of which would be used to purchase mortgage loans, and the issuance of MCCs to
fmance the acquisition, primarily by low and moderate income persons and families, of single
family housing located within the geograpkuc boundaries of the City ar Minneapolis; and
WHEREAS, it is proposed that the Program be approved and the Board be authorized to
issue Bonds and MCCs pursuant to the Program and the Joint Powers Agreement; and
WHEREAS, it appears that the Program and the issuance of Bonds and/or MCCs by the
Boazd or the Authority aze in the best interests of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SAINT PAUL AS FOLLOWS:
1. The Program is hereby approved in its entirety in substantially the form on file
with the City. The officers of the City and the Board are authorized to take ali actions as may be
necessary or appropriate to carry out the Program in accordance with the Act and any other
applicable laws and regulafions.
64
65 2. The issuance of the Bonds ancUor MCCs pursuant to the Program is hereby
66 approved subject to agreement by the Board or the Authority and the purchasers of the Bonds, if
67 any, and by the Board ar the Authority as issuer of the MCCs, as to the exact terms of the
68 Program MCCs.
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The Bonds may be issued in one or more series at the time or times and pursuant
to terms detemuned by the Board, and be structured so as to take advantage of whatever means
are auailable and aze permitted by law to enhance the security for, or mazketability of, the Bonds,
provided that any such financing structure must be approved by the Board. The MCCs may be
issued at the time or times and pursuant to terms determined by the Boazd. All such
determinations by the Boazd must comply with the applicable provisions of the Act and the
Internai Revenue Code of 1986, as amended, and regulations promulgated theteunder.
4. The Boazd is authorized to take a11 actions which may be necessary or desirable in
connection with the issuance of the Bonds and the MCCs, acting on behalf of the City, and no
further approval or consent of the City shall be required prior to the issuance of the Bonds or the
MCCs by the Boazd, or prior to the taking of any action by the Board to undertake and
implement the Program.
�o -aay
84 5. Nothing in this Resolution or the documents prepared pursuant hereto shall
85 authorize the expenditure of any municipal funds on the Program other than as specified and
86 authorized by separate actions of the CiTy and other than the revenues derived from the Program
87 or otherwise granted to the City for this purpose. The Bonds shall not constitute a chazge, lien or
88 encumbrance, legal or equitable, upon any property or funds of the City except the revenues and
89 proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon.
90 The holders of the Bonds shall never have the right to compel any exercise of the tasing power of
91 the City to pay the outstanding principal on the Bonds or the interest thereon, oz to enforce
42 payment against any properiy of the City. The Bonds shall recite in substance that the principal
93 and interest thereon, aze payable solely from the revenues and proceeds piedged to the payment
94 thereof. The Bonds shall not constitute a debt of the City within the meaning of any
95 constitutional or statutory limitation of indebtedness.
.,
.
6. Any one or more series of the Bonds or the MCCs may be issued by the Authority
in lieu of issuance by the Board, at the discretion of the Authority.
Adoption Certified by Council Secretary
By: ��
a—. � C
Approved by Mayor: e— �U/LL°✓"u /��
By:
Requested by Department of:
Plannin & Economic Dev lo ment
By:
Form Approved by City Attorney
�� 7 � �� �1
Approved by Mayor for Submission to Council
By:
����/�-' '�, �
Adopted by CounCil: Date ����._�n $' a(.,` p(p
�
0 0 -aay
DEPARTMENT/OFFICE/COUNCIL DATE INITIATED GREEN SHEET No '101684
PED 2/23/00 -
CONTACT PERSON & PHONE � ��{��
e0t Direc[or Ciry Council
AI Carison 6-6676
Ciry Attomey �� � Crty Clerk
MUST BE ON COUNCIL AGENDA BY (DATE)
March 8, 2000 � Financial Servicrs Dir. � Fnancial/ACC[g
�Mayor •.. JU'i�QtRiL
��
TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQUESTED '
Sign attached resolution approving the 2000 Mpls/St. Paul Single Family Housing Program. This will be a Public Hearing.
Notice has been placed in the Pioneer Press.
RECOMMENDATION Approve (A) or Reject (R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE
FOLLOWING QUESTIONS:
PLANNING COMMISSION 7, Has this person/firm ever worked under a contract for
CIB COMMITTEE this department? yes no
CIVIL SERVICE COMMISSION 2. Has this person/firm ever been a city employee?
yes na
3. Does this person/firm possess a skill not normally
possessed by any current city employee?
yes no
4. Is this person/firm a targeted vendor? yes no
5. Explain all yes answers on separate sheet and attach to
green sheet.
INITIATING PROBLEM ISSUE, OPPORTUNITY (who, what, when, where, why)
The city receives an annual housing bond authority allocation of $16,131,000 from the State to issue tax-exempt bonds
for housing activities. The resolution adopts a housing program which stipuiates how the authority may be used such as
single tamily mortgage revenue bonds, mortgage credit certificates or multi-family housing, under the single family
program. The bonds can be used to provide mortgage loans to finance or finance and rehab their homes. The program is
targeted to lower income first-time homebuyers.
q � c;� a
ADVANTGES IF APPROVED �g, ��
m �: �. 8 m � �-
p ��� �� ����
DISADVANTAGESIFAPPROVED ���� �� ���.����
DISADVANTAGES IF NOT APPROVED '1 d rn� G`��t��
Cour�c� �e$�a,�
TOTAL AMOUNT OF TRANSACTION S COST/REVENUE 6UD6ETED ���LE�J�E1,�� NO
FUNDING SOURCE �
FINANCIAL INFORMATION (EXPLAIN)
0 0 -a �-�t
Interdepartmental Memorandum
CITY OF SAINT PAUL
To: Council President Bostrom
Council member Benanav
Council member Blakey
Council member Coleman
Council member Harris
Council member Lanhy
Council member Reiter
From: Brian Sweeney � /�,� „—
Allen Carlson
�Q�
Date: Febniary 23, 2000
Re: Approval of 2000 Minneapolis/Saint Paul Single Family Housing Program To Be
Financed by the Issuance of Single Family Mortgage Revenue Bonds and Mortgage
Credit Certificates
Purpose
The purpose of this report is to describe the nature and purpose of Saint Paul's 2000 Single
Family Housing Program and to recommend its adoption.
Background
In 1984, the Cities of Minneapolis and Saint Paul and their respective development agencies
created the Minneapolis/Saint Paul Housing Finance Boazd (Joint Board) far the purpose of
providing decent, safe, sanitary, and affordable housing to residents of both cities. Membership
of the Joint Board is comprised of three council members from each city. Saint Paul's current
members are Council members Blakey, Bostrom and Lantry. Through the Joint Board, the two
cities sponsor their single family mortgage programs by issuing both taac exempt mortgage
xevenue bonds and mortgage credit certificates. Current programs financed through the Joint
Board include Take Credit! which provides a federal tas credit to persons purchasing their first
homes in either Saint Paul or Minneapolis and CityLiving 1999A and 1999B of the bond-
financed Home Buyer Programs. Using a portion of the year 2000 bonding allocation, staff is
proposing issuance of up to $15,000,000 of bonds to continue financing the first-time homebuyer
program.
00 -�a�,
Program Description
The 2000 Single Family Housing Program is included as E�ibit A to the attached Council
Resolution. Saint Paul will have a totai bonding authority of $17,779,000 for the 2000 Program
($1,648,000 of 1999 carryforward authority and $16,131,000 of 2000 bonding authority). The
1999 Program inciudes a description of the program eligibility requirements dictated by federal
and state legislation and serves as the basis for future use of Saint Paul's and Minneapolis,
enritlement allocations of mortgage bond authority. Ongoing Program parameters include a
masiinum purchase price of 90% of average azea purchase price (which current translates to
$121,862 for an existing single family home) and a maximum household income of 100% of area
median income (currently $63,600).
Upon adoption by the Joint Board, the 2000 Program will be filed with the State Department of
Revenue as required by Minnesota Statutes, Chapter 462C. The attached resolution does not
obligate the City ar HRA to expend any funds. In addition, the resolution specifies that neither
the City or HRA will be subject to any liability for bonds or mortgage credit certificates issued to
finance the Program. Approval of the Program does not preclude the City or HRA from issuing
multifamily revenue bonds.
Public Purpose
Through its single family mortgage programs, the Joint Boazd helps Saint Paul families become
homeowners. In addition, by providing financing which accommodates both the purchase and
the rehabilitation of single family homes, the Joint Board helps the City to meet its goal of
improving its housing stock.
Recommendation
Staff recommends approval of the attached resolution giving approval to the issuance by the
MinneapolislSaint Paul Housing Finance Board of single family mortgage revenue bonds and
mortgage credit certificates to finance the City's 2000 Single Family Housing Program.
Allen Carlson
266-6616
Sponsor: Chair Bostrom
K1Shazed\CARLS�AP\CiTyLiving2000A\cc ipt wpd
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MINNEAPOLIS/SAINT PAUL
2000 SINGLE FANIILY JOINT' BOARD PROGRAM
The City of Minneapolis, Minnesota (`iVlinneapolis"), the Minneapolis Community
Development Agency (the "A�enc}�'), the City of Saint Paul, Mimiesota ("Saint Paul") and the
Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authorit}��,
actin� individually or jointly through the Minneapolis/Saint Paul Housing Finance Board (the "Joine
Board") (all together, the "Issuers") propose to issue mortgage credit certificates ("MCCs") under
Section 25 of the Intemal Revenue Code of 1986, as amended (together with regulations
promul�ated thereunder, the "Code"), or new money mortgage revenue bonds and certain mortgage
revenue refunding bonds under Section 143 of the Code in one or more series, in either case to
finance the single family housin� program described herein (the "Program") pursuant to authority
conferred by Minnesota Statutes, Chapters 462C, 462A, 469 and 474A, all as amended, (and any
other general or special law authority for the issuance of obligations to finance a single family
housing program or development) (all together, the "AcY'). Any action specified herein to be made
by the "Issuers" may be made by one or more of them acting in concert or individually.
In creating this Program, the Issuers find and determine:
• that the preservation of the quality of life in Minneapolis and Saint Paul (the "Cities") is
dependent upon maintainin� an sdequate, decent, safe and sanitary housing stock;
• that maintaining such housing stock is a public purpose and will benefit the residents of
the Ciries;
• that a need exists within the Cities to provide additional affordable owner-occupied
housin� for low and moderate income persons and families; and
■ that a need exists for mortgage credit to be made available for both existing and new
owner-occupied housing, for rehabilitation of existing singie family housing and for home
improvements.
To meet such needs, the Issuers intend to issue one or more series of single family mortgage
revenue bonds and single family mortgage revenue refunding bonds ("Bonds") to cause the
ori�ination of mort�age loans to finance the acquisition, construcrion, rehabilitation or improvement
of sin�le family housin� in the Cities (or either of them). In addition to or in lieu of issuing Bonds,
the Issuers (or any one or more of them) may undertake a MCC program to issue MCCs to
mortgagors who obtain mortgage loans to fmance the purchase, construction, rehabilitation or
improvement of single family housing in the Cities (or either of them). The Issuers may issue
Bonds, or will elect not to issue bonds in favor of MCCs, in an a�gregate principal amount not
exceeding (a) $31,117,000 for Minneapolis and $17,779,000 for Saint Paul, representing certain
carried forwazd allocation and 2000 entitlement bond allocation of Minneapolis and Saint Paul; (b)
an amount up to $20,500,000 to refund the Series 1999A-3 Bonds and Series 1999B-2 Bonds issued
in 1999; (c) approximately $33,000,000 to recycle refund prepayments and repayments of certain
outstanding bonds; (d) up to $2,800,000 to refund the Issuer's Phase VIII Bonds, and (e) such
I900139v1 Q4QSN0l!.DOC)
d o ��a�
principal amount of tasable bonds as may be necessary or convenient to fiuther the purposes of this
Prograzn.
Mort�a�e loans financed throu�h the issuance of the Bonds and those in connection with
which the MCCs will be issued, will be subject to the followin� terms (or, for Bonds as to which
these requirements do not apply as a matter of law, to such other terms approved by the Boazd):
purchase Qrice - the masimum purchase price for financed homes shall not exceed
the lesser of (a) 90% (110% in "tar�eted areas" or areas treated as tazgeted areas) of the
applicable "average azea purchase price" detemuned by the United States Department of the
Treasury or by the Issuers on the basis of more complete information, or (b) 3 times the
applicable income limit for the Program imposed by Minnesota law (except that in certain
azeas the purchase price shall not exceed 4 times the applicable income lunit to the extent
consistent with applicable federal law);
income limits - the maximum income of the mortgagors shall be the lower of (a) the
income restrictions imposed by federal tas law or (b) the income restrictions imposed by
Minnesota Statutes, Secrion 462C.03, Subd. 2, including the restriction of Subd. 7 that for
the first six months of the Program, 50% of the money available to make mortga�e loans or
the "non-issued bond amount" of MCCs must be reserved for persons and families with
adjusted incomes not greater than 90% of the general Pro�am income limits. Income Innits
under Section 462C.03, Subd. 2 shall be adjusted for family size by deducting $1,000 per
adult and $1,200 per child in the family.
In connection �vith this Program:
(i) (a) in connection with any mortga�e loans financed with the proceeds of
mortga�e revenue bonds, any financial institutions described in Section 462C.03, Subd. 4,
and other mort�a�e lenders with offices located in the Cities and which are FHA/VA
approved sellers of mortgage loans as weil as other financial institutions and mortgage
lenders which aze FHANA; or FNMAlFHI,MC approved sellers of mortgage loans and are
reasonably acceptable to any master servicer acting on behalf of the Issuers, will be eligble
for consideration for ori�ination of such loans; the Cities will not limit participation in the
Program to a single lender unless other lenders are not willing to participate for the
consideration offered; the Agency and the Authority shall be eligible for consideration for
origination of loans;
(b) in connection with issuance of MCCs, MCCs will not be limited to
loans originated by particulaz lenders but will be available with respect to the origination of
qualifyin� mort�age loans by any participating lender;
(ii) loans will not be made available or set aside for the exclusive use of
developers or builders except, in the case of mort;age loans financed with the proceeds of
mortga�e revenue bonds, for new housing described in Section 462C.071, Subd. 2;
1900139c1 (I4QSN01!.DOC) Z,
c'�o -�'a-�
(iii) the Issuers expect to act as, or to contract with, a program adminisirator and
a servicer to provide services to ensure that the Pro�am will be consistent with this
Pro�am, the Act and applicable federal law;
(iv) as indicated above, up to 511,256,000 of carried forward allocation and
537,640,000 of the 2000 enritlement allocarions of the Cities may be used in the Program,
provided, however, that no provision of this Program shall in any way prevent either
Minneapolis or Saint Paul from using all or a portion of its respective entitlement
allocarion(s) for multifamily housin� or any other authorized purpose. In addition, any
election made by the Cities to issue MCCs in lieu of Bonds may be revoked in whole or in
part, at any time durin� the calendaz year in which the elecrion was made as pemutted by
Section 25 of the Intemal Revenue Code and Section 1.25-4T(c)(3) of the Treasury
Regulations. The resulting unused enritlement allocation may be used to issue bands for
single family housing or other authorized purposes;
(v) the Prograzn will meet the needs of low and moderate income families by
providing below-mazket rate financing for the acquisition or rehabilitation of single family
homes or by providing a tax credit for mort�a�e interest paid, thereby enabling such persons
to qualify for mortga�es which would be unavailable at market rates;
(vi) the Issuers hereby request a waiver by the Minnesota Housing Finance
Agency of the provisions of Section 462C.03, Subd. 5;
(vii) no homes which aze located in previously unincorporated real property
annexed by the Cities within one yeaz prior to the date of adoption of this Pro�am will be
financed under this Pro�am;
(viii) prohibitions or limitations on assumption will be imposed to the extent
required by federal law relating to the ta� exempt status of Bonds or to the continued
validity of MCCs issued pursuant to the Program; provided that the Issuers may impose
more stringent limitations at their discretion;
(ix) the estimated amount of mortgage loans to be made or purchased pursuant to
this Program is approximately equal to the a��egate principal amount of Bonds issued and
the amount which either of the Issuers may elect not to issue in favor of MCCs;
(x) the esUmated a��egate principal amount of the Bonds, or estimated "non-
issued bond amount" (as such term is used in Section 25(d)(2)(B) of the Code) of MCCs
issued in lieu of the Bonds, is set forth above;
(xi) the Bonds, if issued, may be issued in one or more series timed for sale
consistent with the needs of the Cities in 2000, or, if any bond allocarion is carried forwazd,
in the first half of 2001;
(xii) refinancing of existing indebtedness will be permitted only where the
mort�a�e loan also finances substantial "rehabilitation" as that term is defined under
I900139v1 (14QSN0t!.DOC) 3
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Minnesota Statutes, Section 462C.01 and Section 462C.03, Subd. 11 and under Section 143
of the Code;
(xiii) to the extent required by the Act, during the first ten (10) months of the
origination period, loans financed by the Bonds (but not mortgage loans assisted by MCCs)
will be made for existing housing;
(xiv) the following additional provisions shall apply only to issuance of MCCs
pursuant to this Pro�am:
20%;
(1) the "certificate credit rate" (as used in Section 25 of the Code) will be
(2) a copy of the form which will be used to elect the nonissued bond
amount is attached hereto as Eachibit A; and
(3) the Issuers will ensure compliance with the requirements of Section
25 of the Code by use of an MCC procedural manual for the Program and by use of
the oroeram administrator referenced in item (iii) above.
1900139v( Q4QSNOL'.DOC)
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EXHIBIT A
TO
JOINT BOARD PROGRAM
MORTGAGE CREDTT CERTIFICATE ELECTION
(Pursuant to Temp. Reg. § 1.25-4T)
(i) Issuer name:
[Name]
[Address]
TIN:
[Number]
(ii) Issuer's Applicable lunit, per § 146 of the Intemal Revenue Code of 1986:
[ALLOCATION FOR 2000: $ �
[CARRYFORWARD ALLOCATION FROM 1999: $ 1
(iii) The aggregate amount of qualified mortgage bonds issued during the calendaz yeaz::
[Amount]
(iv) The amount of the Issuer's applicable limit that it has surrendered to other issuers during Yh�
calendaz year:
[Amount]
(v) The date and amount of any previous elections under 1.25-4T(c) for 2000:
[Date and amount}
(vi) The amount of qualified mortgage bonds that the issuer elects not to issue:
[Amount]
State Certification attached.
Dated: , 2000
CITY OF [CTTY]
By
Mayor
�wotsm-i �taQstvou.DOC) A - 1