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00-1203� �«� r �,=_� �. Council File # CO — �10 R Resolution # Presented By Referred To Green Sheet # y �q � �� RESOLUTION CITY OF SAINT PAUL, MINNESOTA 30 Committee: Date 2 APPROVING A SINGLE FAMII,Y HOUSING PROGRAM TO BE FINANCED 3 BY TI� ISSUANCE OF SINGLE FAMII,,Y MORTGAGE REVENLJE BONDS 4 AND MORTGAGE CREDTT CERTIFICATES 7 WHEREAS, pursuant to the Mimiesota Municipal Housing Act, Mivuesota Statutes, Chapter 462C (the 8 "Housing AcP'), the City of Saint Paul, Minnesota (the "City'� is authorized to adopt a housing plan and cany out 9 programs for the financing of single family housing for persons of low and moderate income; and 10 11 WE3EREAS,theMiuneapolis/SaintPaulHousingFinanceBoard(the`Board"),ajointpowersboardorganized 12 under a Joint Powers Agreement (the "Joint Powers AgreemenY� by and between the Minneapolis Community 13 Development Agency (the "Agency"), the Housing and Redevelopment Authority ofthe City of Saint Paul, Minnesota 14 (the "Authorit}�') and the City of Mirnieapolis, Mnuiesota ("Minneapolis") and accepted by the City, and under the 15 laws ofthe State of Mivnesota, proposes to undertake a single family housing progam relating to the Mimieapolis and 16 the Saint Paul entitlement allocations available in 2001 and certain recycling refunding bonds (the "Prograui"), to be 17 financed by the issuance of one or more series of mortgage revenue obligations, mortgage revenue refunding 18 obligarions and/armortgage credit certificates ("MCCs'� pursuant to Minnesota Statutes, Sections 469.001 to 469.047, 19 Chapters 462A, 462C and 474A and Section 471.59 (coliectively, the "Act'�; and 20 21 WHEREAS, pursuant to the Act, the Boazd is authorized to issue bonds from time to time and to use the 22 proceeds ofits bonds to make orpurchase mortgage loans or to purchase participations in mortgage loans from lending 23 institutions and to issue MCCs in order to fivance the construction and rehabilitation, and to facilitate the purchase and 24 sa1e, of single family housing for eligibie persons or families under the Act and to issue bonds to refixnd previously 25 issued bonds; and 26 27 WHEREAS,theProgramwillprovidebelowmarketinterestratemortgageloanfinancingorincometascredits 28 primarily to persons of low or moderate income purchasing single family homes to be used as their principal places 29 of residence and which are located within the geographic limits of the City or Mnuieapolis; and 30 �R�G(�IAL 31 32 33 34 35 36 37 38 39 40 41 oa �tyos WHEREAS, the Act requires adoption ofthe Progrun after a public hearing held thereon following publication of norice in a newspaper of generai 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 hearing on the Prograzn, after publicarion of notice as required by the Act; and WHEREA5, the Program was submitted to the Melropolitan Council at or before the rime of publication of notice of the public hearing on such Prog•am, and the Metropolitan Council was afforded an opporhmity to present comments at the public hearing, all as required by the Act; and 42 WI�REAS, the Program provides for the issuance of single family mortgage revenue bonds or revenue 43 refunding bonds in one or more series pursuant to the Act (the `Bonds") to make or purchase or cause to be made or 44 purchased mortgage loans, ar to purchase securifies the proceeds of which would be used to purchase mortgage loans, 45 and the issuance of MCCs to finance the acquisition, primarily by low and moderate income persons and families, of 46 single family housing located within the geographic boundaries of the City or Miimeapolis; and 47 48 49 50 51 52 53 54 55 56 57 WHEREAS, it is proposed that the Prog�atn be approved and the Board be authorized to issue Bonds and MCCs pursuant to the Progam and the Joint Powers Agreement; and WIIEREAS, it appears that the Progcuil and the issuance of Bonds and(or MCCs by the Board or the Authority are in the best interests of the City. NOW, THEREFORE, BE IT RESOLVED BY Tf � CITY COUNCIL OF THE CITY OF SAINT PAUL AS FOLLOWS: The Prog}aui is hereby approved in its entirety in substanrially the form on file with the City. The 58 officers of the City and the Board are authorized to take all actions as may be necessary or appropriate to carry out the 59 Progratn in accordance with the Act and any other applicable laws and regulations. 60 2. The issuance of the Bonds and/or MCCs pursuant to the Program is hereby approved subject to 61 agreement by the Board or the Authority and the purchasers of the Bonds, if any, and by the Board or the Authority 62 as issuer of the MCCs, as to the exact terms of the Progratn MCCs. 63 The Bonds may be issued in one or more series at the time or times and pursuant to terms detennnied 64 by the Board, and be siructured so as to take advantage of whatever means are available and are pemutted by law to 65 enhance the security for, or mazketability of, the Bonds, provided that any such financing structure must be approved ����1�!�L o0-��.4� 66 by the Boazd. The MCCs maybe issued at the time or times and pnrsnaut to terms detenniuedby the Boazd. All such 67 deternunations by the Boazd must comply with the applicable provisions of the Act and the Internal Revenue Code 68 of 1986, as aznended, and regulations pzomulgated thereunder. 69 4. The Board is authorized to take all actions which may be necessary or desirable in connection with the 70 issuance ofthe Bonds and the MCCs, acting on behalf ofthe City, and no further approval or consent of the City shall 71 be required prior to the issuance of the Bonds or the MCCs by the Boazd, or prior to the takuig of any action by the 72 Board to undertake and implement the Program. 73 5. Nothing in this Resolution or the documents prepared pursuant hereto sYiall authorize the expenditlu 74 of any municipal funds on the Prograln other than as specified and authorized by separate acYions of the City and other 75 than the revenues derived from the Program or otherwise granted to the City for this purpose. The Bonds shall not 76 constitute a charge, lien or encumbrance, legal or equitable, upon any properly or fimds ofthe City except the revenues 77 and proceeds pledged to the payment thereof, nar shall the City be subject to any liability thereon. The holders of the 78 Bondss1�a11neverhavetherighttocompelanyexerciseofthetaxingpoweroftheCitytopaytheoutstandingprincipal 79 on the Bonds or the interest thereon, or to enforce payment against any property of the City. The Bonds shall recite 80 in substance that the principal and interest thereon, are payable solely from the revenues and proceeds pledged to the 81 payment thereof. The Bonds sha11 not constitute a debt ofthe City within the meaning of any consritutional or statutory 82 liinitation of indebtedness. 83 6. Any one ar more series of the Bonds or the MCCs may be issued by the Authority in lieu of issuance 84 by the Board, at the discretion of the Authority. � O�IGI�IAL (� e - i��=� RequesCed by Department of: Planninq & Economic DeveloDment 8� w� / c � Form Approved by City Attorney Adopted by Council: Date � O� Adoption Certified by Council Secretary �,�j�(� �,�X�{}�L B�. ��,�. � _ �� /y ��� Approved by Mayor for Submission to Council Approved by Mayor: Date G•' � R��. . -�»�- `rl���%yj6'(�-L� ��>---��=.5,�!�C�'�"" � (/ n u � Y DEPARTMENT/OF[�TCE/COUNCII,: DATE INITfATED GREEN SHEET No.• 39317 �O "Ia.p� PED(West Team 12l14l00 ' CONTACI' PERSON & PHONE: miTTni✓DATE wTT�ALDATE Joan Trulsen 66694 � 1 D�enx Dm� a crrY covrrcn, p�I� 2 CITYATTORNEY MUST BE ON COUNCII. AGENDA BY (DATE) ��ER FINANCIAI. SERV DIR _ FINANCIAI. SERV/ACCTG December27 FOR 3 MAYOR(ORASST.)� _ ROUTING Consent Agenda o�Ex Sponsor: Councilmember Kathy Lantry TOTAL # OF SIGNATURE PAGES I_(CLIP ALI. LOCATIONS FOR SIGNATORE) acrioN xEQUESx�n: SIGNATURES RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI, SERVICE CON712ACT5 MUST ANSWER'[`HE FOLLOWING QUESTIONS: PLANNING COMMISSION 1. Has this personJfirm ever worked under a contract £or this depaztrnenY! CIB COMMITI"EE Yes No CML SERVICE COMMISSION 2. Has this person/firm ever been a ciry employee? Yes No 3. Does this person/firtn possess a skill not nortnally possessed by any cu�rent city employee? Yes No Explain aIi yes answers on separate sheet and attach to green sheet INTTIATING PROBLEM, ISSUE, OPPORTUNITY (Whq What, When, Where, Why): Approving a 2001 Single Family Housing Program to be financed by the issuing Single Family Mortgage Revenue bonds and Mortgage Credit Certificates. Proceeds will be used to provide loans for low or moderate income persons and families. ADVANTAGES IF APPROVED: The City is able to provide loans at lower interest rates through the issuance of tasc-free bonds. The program allows the City to better serve first tvne homebuyers. DISADVANTAGES IF APPROVED: None F$���Yt�? �'�^ [l�£' °� . DISADVANTAGES IF NOT APPROVED: Loan funds at lower interest rate would not be available for low or moderate income persons. TOTAL AMOUNT OF TRANSACTION: $ COST/REVENUE BUDGETED: FONDING SOURCE: AGTIVITY NUMBER: FINANCIAL INFORMATION: (EXPLAIN) � � �� . ' � � �t,_-�. \.�`� _ _ . _ � _ �_ Q Ct i C` C r,,•-, � 2 M \USers\TRULSEN�BONDS�2001 SF Progam�@eeoshett wpd �s�s�� �a�� � �'S �� s�. �� 00 - �yo 3 Exhibit A NIINNEA.POLIS/SAINT PAUL 2001 SINGLE FAMII.Y JOINT BOARD PROGRAM The City of Mimieapolis, Minnesota ("Minneapolis"), the Minneapolis Community Development Agency (the "Agenc}�'), the City of Saint Paul, Minnesota ("Saint Paul") and the Housing and Redevelopment Authority ofthe City of Saint Paul, Minnesota (the "Authority"), acting individually or jointly through the Minneapolis/Saint Paul Housing Finance Board (the "Joint 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 promulgated 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 housing program deseribed 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 "Act"). 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 maintaining an adequate, deceni, safe and sanitary housing stock; ■ that maintaining such housing stock is a public purpose and will benefit the residents of the Cities; ■ that a need exists within the Cities to provide additional affordable owner-occupied housing 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 single family housing and for home improvements. To meet such needs, the Issuers intend to issue one or more series of single fanuly mortgage revenue bonds and single family mortgage revenue refunding bonds (`Bonds") to cause the origination of mortgage loans to finance the acquisifion, construcfion, rehabilitation or improvement of single family housing 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 finance the purchase, construcrion, rehabilitation or improvement of single fanuly 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 aggregate principal amount of ao-1�.03 approximately (a) $32,396,000 for Minneapolis and $29,262,000 for Saint Paul, representing certain carried forward allocation and 2001 entitlement bond allocation of Minneapolis and Saint Paul; (b) an amount up to $65,000,000 to refund outstanding mortgage revenue bonds and to recycle refund prepayments and repayments of certain outstanding bonds; and (c) such principal amount of taacable bonds as may be necessary or convenient to further the purposes of this Program. Mortgage loans financed through the issuance of the Bonds and those in connecrion with which the MCCs will be issued, will be subject to the following terms (or, far Bonds as to which these requirements do not apply as a matter of law, to such other terms approved by the Board): purchase rice - the maacamum purchase price for financed homes shall not exceed the lesser of (a) 90% (110% in "targeted areas" or areas treated as targeted azeas) of the applicable "average areapurchase price" determined by the United States Depariment ofthe 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 areas the purchase price shall not exceed 4 times the applicable income limit to the extent consistent with applicable federal law); income limits - the maacimum income of the mortgagars shall be the lower of (a) the income restrictions imposed by federal taac law or (b) the income restrictions imposed by Minnesota Statutes, Section 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 mortgage loans or the "non-issued bond amount" of MCCs must be reserved for persons and families with adjusted incomes not greater than 90% ofthe generai Program income limits. Income limits under Section 462C.03, Subd. 2 shail be adjusted for family size by deducting $1,000 per adult and $1,200 per chiid in the family. In connection with this Program: (i) (a) in connection with any mortgage loans financed with the proceeds of mortgage revenue bonds, any fmancial institutions described in Section 462C.03, Subd. 4, and other mortgage lenders with offices located in the Cifies and which aze FHA/VA approved sellers of mortgage loans as well as other financial institutions and mortgage lenders which are FfIA/VA, or F'NMA/FHLMC approved sellers ofmortgage loans and are reasonably acceptable to any master servicer acring on behalf ofthe Issuers, will be eligible for consideration for originafion of such loans; the Ciries 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 originarion of 2 aa-�ao� qualifying mortgage loans by any participating lender; (ii) loans will not be made available or set aside far the exclusive use of developers or builders except, in the case of mortgage loans financed with the proceeds of mortgage revenue bonds, for new housing described in Section 462C.071, Subd. 2; {iii) the Issuers eapect to act as, or to contract with, a program acltniiustrator and a servicerto provide services to ensure that the Programwill be consistent with this Program, the Act and applicable federal law; (iv) as indicated above, up to $24,018,000 of carried forward allocation and $37,640,000 of the 2001 entitlement ailocations of the Cities may be used in the Program, provaded, however, that no provision of this Program shall in any way prevent either Minneapolis or Saint Paui from using all ar a portion of its respective enritiement allocation(s) for multifamily housing 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 during the calendar year in which the election was made as permitted by Section 25 of the Internal Revenue Code and Section 1.25-4T(c)(3) of the Treasury Regulations. The resulting unused entitlement allocation may be used to issue bonds for single family housing or other authorized purposes; (v) the Program will meet the needs of low and moderate income families by providing below-market rate financing for the acquisition or rehabilitation of single family homes or by providing a ta:c credit for mortgage interest paid, thereby enabling such persons to qualify for mortgages which would be unavailable at market rates; (vi) the Issuers hereby xequest a waiver by the Minnesota Housing Finance Agency of the provisions of Section 462C.03, Subd. 5; (vii) no homes which are located in previously unincorporated real property annexed by the Cities within one yeaz prior to the date of adoption of this Program wili be financed under tlus Program; (viii) prohibirions or limitations on assumption will be imposed to the extent required by federal law relating to the tas 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 Prog�ram is approximately equal to the aggregate principal amount of Bonds issued and the amount which either of the Issuers may elect not to issue in favor of MCCs; 00 -�a9.s (x) the estimated aggregate principal amount of the Bonds, or estimated "non- issued bond amounY' (as such term is used in 5ection 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 tuned for sale consistent with the needs of the Cities in 2001, or, if any bond allocation is carried forward, in the first half of 2002; (xii) refinancing of existing indebtedness will be permitted only where the mortgage loan also finances substantial `Yehabilitation" as that term is defined under Minnesota Statutes, Section 462C.01 and Secrion 462C.03, Subd. l l 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 Program: (1) the "certificate credit rate" (as used in Section 25 of the Code) will be 20%; (2) a copy of the form which will be used to elect the nonissued bond amount is attached hereto as Exhibit A; and (3) the Issuers will ensure compliance with the requirements of Secrion 25 of the Code by use of an MCC procedural manual for the Program and by use of the program administrator referenced in item (aii) above. � 00 -1aa3 EXffiBIT A TO 70INT BOARD PROGRAM MORTGAGE CREDIT CERT`IF'ICATE ELECTION (Pursuant to Temp. Reg. § I .25-4T) (i) Issuer name: [Name] [Address] TIN: [Number] (ii) Issuer's Applicable limit, per § 146 of the Internal Revenue Code of 1986: [ALLOCATION FOR 2001: $ 1 [CARRYFORWARD ALLOCATION FROM PPREVIOUS YEAR: $ 1 (iii) The aggregate amount of qualified mortgage bonds issued during the calendar year:: [Amount] (iv) The amount ofthe Issuer's applicable limit that it has surrendered to other issuers during the calendar year: [Amount] (v) The date and amount of any previous elections under 1.25-4T(c) far 2001: [Date and amount] (vi) The amount of qualified mortgage bonds that the issuer elects not to issue: [Amount] State Certification attached. Dated: , 2001 CITY OF [CTTY] By Mayor I�I �-�yo3 Interdepartmental Memorandum CITY OF SAINT PAUL To: Council President Bostrom Council member Benanau Council member Biakey Council member Coleman Council member Harris Council member Lanhy Council member Reiter From: 7oan Trulsen Date: December 27, 2000 Re: Approving a Single Family Housing Program to be Financed by the Issuance of Single Famil� Mortgage Revenue Bonds and Mortgage Credit Certificates Purpose The purpose of this report is to describe the nature and purpose of Saint PauPs 2001 Single Family Housing Progam 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 Board (Joint Boazd) for 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 Lanhy. Through the Joint Board, the two cities sponsor their singie family mortgage programs by issuing both tazc exempt mortgage revenue bonds and mortgage credit certificates. Current programs fmanced 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 2000A-1 and 2000A-2 of the bond-financed Home Buyer Programs. Using a portion of the year-2000 carry-forwazd bonding allocarion and funds from the City's recycling program, staff is proposing to issue Single Family Mortgage Revenue bonds to continue fmancing the first-rime homebuyer program during 2001. a 6 � \yH3 Program Description The 2001 Singie Family Housing Pmgram is included as Eachibit A to the attached Council Resolution. Saint Paul will have a total bonding authority of $29,262,000 for the 2001 Program ($13,131,000 of 2000 carryforward authoriry and $16,131,000 of 2001 bonding authority). The 2001 Program includes a descriprion of the program eligibility requirements dictated by federal and state legislarion and serves as the basis for future use of Saint Paul's and Mituieapolis, entitlement allocations of mortgage bond authority. Ongoing Program pazameters include, for bonds issued with current allocation, a maa�unum purchase price of 90% of average area purchase price (which currently translates to $149,485 for a single family home) and a maacimum household income of 100% of area median income (currently $68,600). The attached resolurion does not obligate the City or 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 FIRA from issuing mulfifamily revenue bonds. Public Purpose Through its single family mortgage programs, the Joint Board 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 Boazd 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 Minneapolis/Saint Paul Housing Finance Board of single family mortgage revenue bonds and mortgage credit certificates to fmance the City's 2001 Single Family Housing Program. 3oan Trulsen 266-6694 Sponsor: Council member Lantry ' � �«� r �,=_� �. Council File # CO — �10 R Resolution # Presented By Referred To Green Sheet # y �q � �� RESOLUTION CITY OF SAINT PAUL, MINNESOTA 30 Committee: Date 2 APPROVING A SINGLE FAMII,Y HOUSING PROGRAM TO BE FINANCED 3 BY TI� ISSUANCE OF SINGLE FAMII,,Y MORTGAGE REVENLJE BONDS 4 AND MORTGAGE CREDTT CERTIFICATES 7 WHEREAS, pursuant to the Mimiesota Municipal Housing Act, Mivuesota Statutes, Chapter 462C (the 8 "Housing AcP'), the City of Saint Paul, Minnesota (the "City'� is authorized to adopt a housing plan and cany out 9 programs for the financing of single family housing for persons of low and moderate income; and 10 11 WE3EREAS,theMiuneapolis/SaintPaulHousingFinanceBoard(the`Board"),ajointpowersboardorganized 12 under a Joint Powers Agreement (the "Joint Powers AgreemenY� by and between the Minneapolis Community 13 Development Agency (the "Agency"), the Housing and Redevelopment Authority ofthe City of Saint Paul, Minnesota 14 (the "Authorit}�') and the City of Mirnieapolis, Mnuiesota ("Minneapolis") and accepted by the City, and under the 15 laws ofthe State of Mivnesota, proposes to undertake a single family housing progam relating to the Mimieapolis and 16 the Saint Paul entitlement allocations available in 2001 and certain recycling refunding bonds (the "Prograui"), to be 17 financed by the issuance of one or more series of mortgage revenue obligations, mortgage revenue refunding 18 obligarions and/armortgage credit certificates ("MCCs'� pursuant to Minnesota Statutes, Sections 469.001 to 469.047, 19 Chapters 462A, 462C and 474A and Section 471.59 (coliectively, the "Act'�; and 20 21 WHEREAS, pursuant to the Act, the Boazd is authorized to issue bonds from time to time and to use the 22 proceeds ofits bonds to make orpurchase mortgage loans or to purchase participations in mortgage loans from lending 23 institutions and to issue MCCs in order to fivance the construction and rehabilitation, and to facilitate the purchase and 24 sa1e, of single family housing for eligibie persons or families under the Act and to issue bonds to refixnd previously 25 issued bonds; and 26 27 WHEREAS,theProgramwillprovidebelowmarketinterestratemortgageloanfinancingorincometascredits 28 primarily to persons of low or moderate income purchasing single family homes to be used as their principal places 29 of residence and which are located within the geographic limits of the City or Mnuieapolis; and 30 �R�G(�IAL 31 32 33 34 35 36 37 38 39 40 41 oa �tyos WHEREAS, the Act requires adoption ofthe Progrun after a public hearing held thereon following publication of norice in a newspaper of generai 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 hearing on the Prograzn, after publicarion of notice as required by the Act; and WHEREA5, the Program was submitted to the Melropolitan Council at or before the rime of publication of notice of the public hearing on such Prog•am, and the Metropolitan Council was afforded an opporhmity to present comments at the public hearing, all as required by the Act; and 42 WI�REAS, the Program provides for the issuance of single family mortgage revenue bonds or revenue 43 refunding bonds in one or more series pursuant to the Act (the `Bonds") to make or purchase or cause to be made or 44 purchased mortgage loans, ar to purchase securifies the proceeds of which would be used to purchase mortgage loans, 45 and the issuance of MCCs to finance the acquisition, primarily by low and moderate income persons and families, of 46 single family housing located within the geographic boundaries of the City or Miimeapolis; and 47 48 49 50 51 52 53 54 55 56 57 WHEREAS, it is proposed that the Prog�atn be approved and the Board be authorized to issue Bonds and MCCs pursuant to the Progam and the Joint Powers Agreement; and WIIEREAS, it appears that the Progcuil and the issuance of Bonds and(or MCCs by the Board or the Authority are in the best interests of the City. NOW, THEREFORE, BE IT RESOLVED BY Tf � CITY COUNCIL OF THE CITY OF SAINT PAUL AS FOLLOWS: The Prog}aui is hereby approved in its entirety in substanrially the form on file with the City. The 58 officers of the City and the Board are authorized to take all actions as may be necessary or appropriate to carry out the 59 Progratn in accordance with the Act and any other applicable laws and regulations. 60 2. The issuance of the Bonds and/or MCCs pursuant to the Program is hereby approved subject to 61 agreement by the Board or the Authority and the purchasers of the Bonds, if any, and by the Board or the Authority 62 as issuer of the MCCs, as to the exact terms of the Progratn MCCs. 63 The Bonds may be issued in one or more series at the time or times and pursuant to terms detennnied 64 by the Board, and be siructured so as to take advantage of whatever means are available and are pemutted by law to 65 enhance the security for, or mazketability of, the Bonds, provided that any such financing structure must be approved ����1�!�L o0-��.4� 66 by the Boazd. The MCCs maybe issued at the time or times and pnrsnaut to terms detenniuedby the Boazd. All such 67 deternunations by the Boazd must comply with the applicable provisions of the Act and the Internal Revenue Code 68 of 1986, as aznended, and regulations pzomulgated thereunder. 69 4. The Board is authorized to take all actions which may be necessary or desirable in connection with the 70 issuance ofthe Bonds and the MCCs, acting on behalf ofthe City, and no further approval or consent of the City shall 71 be required prior to the issuance of the Bonds or the MCCs by the Boazd, or prior to the takuig of any action by the 72 Board to undertake and implement the Program. 73 5. Nothing in this Resolution or the documents prepared pursuant hereto sYiall authorize the expenditlu 74 of any municipal funds on the Prograln other than as specified and authorized by separate acYions of the City and other 75 than the revenues derived from the Program or otherwise granted to the City for this purpose. The Bonds shall not 76 constitute a charge, lien or encumbrance, legal or equitable, upon any properly or fimds ofthe City except the revenues 77 and proceeds pledged to the payment thereof, nar shall the City be subject to any liability thereon. The holders of the 78 Bondss1�a11neverhavetherighttocompelanyexerciseofthetaxingpoweroftheCitytopaytheoutstandingprincipal 79 on the Bonds or the interest thereon, or to enforce payment against any property of the City. The Bonds shall recite 80 in substance that the principal and interest thereon, are payable solely from the revenues and proceeds pledged to the 81 payment thereof. The Bonds sha11 not constitute a debt ofthe City within the meaning of any consritutional or statutory 82 liinitation of indebtedness. 83 6. Any one ar more series of the Bonds or the MCCs may be issued by the Authority in lieu of issuance 84 by the Board, at the discretion of the Authority. � O�IGI�IAL (� e - i��=� RequesCed by Department of: Planninq & Economic DeveloDment 8� w� / c � Form Approved by City Attorney Adopted by Council: Date � O� Adoption Certified by Council Secretary �,�j�(� �,�X�{}�L B�. ��,�. � _ �� /y ��� Approved by Mayor for Submission to Council Approved by Mayor: Date G•' � }���. . �s>/Ji-i..�, �n., � �"-_-�`�J'Y-^�j('�C�'�"" � V n u � Y DEPARTMENT/OF[�TCE/COUNCII,: DATE INITfATED GREEN SHEET No.• 39317 �O "Ia.p� PED(West Team 12l14l00 ' CONTACI' PERSON & PHONE: miTTni✓DATE wTT�ALDATE Joan Trulsen 66694 � 1 D�enx Dm� a crrY covrrcn, p�I� 2 CITYATTORNEY MUST BE ON COUNCII. AGENDA BY (DATE) ��ER FINANCIAI. SERV DIR _ FINANCIAI. SERV/ACCTG December27 FOR 3 MAYOR(ORASST.)� _ ROUTING Consent Agenda o�Ex Sponsor: Councilmember Kathy Lantry TOTAL # OF SIGNATURE PAGES I_(CLIP ALI. LOCATIONS FOR SIGNATORE) acrioN xEQUESx�n: SIGNATURES RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI, SERVICE CON712ACT5 MUST ANSWER'[`HE FOLLOWING QUESTIONS: PLANNING COMMISSION 1. Has this personJfirm ever worked under a contract £or this depaztrnenY! CIB COMMITI"EE Yes No CML SERVICE COMMISSION 2. Has this person/firm ever been a ciry employee? Yes No 3. Does this person/firtn possess a skill not nortnally possessed by any cu�rent city employee? Yes No Explain aIi yes answers on separate sheet and attach to green sheet INTTIATING PROBLEM, ISSUE, OPPORTUNITY (Whq What, When, Where, Why): Approving a 2001 Single Family Housing Program to be financed by the issuing Single Family Mortgage Revenue bonds and Mortgage Credit Certificates. Proceeds will be used to provide loans for low or moderate income persons and families. ADVANTAGES IF APPROVED: The City is able to provide loans at lower interest rates through the issuance of tasc-free bonds. The program allows the City to better serve first tvne homebuyers. DISADVANTAGES IF APPROVED: None F$���Yt�? �'�^ [l�£' °� . DISADVANTAGES IF NOT APPROVED: Loan funds at lower interest rate would not be available for low or moderate income persons. TOTAL AMOUNT OF TRANSACTION: $ COST/REVENUE BUDGETED: FONDING SOURCE: AGTIVITY NUMBER: FINANCIAL INFORMATION: (EXPLAIN) � � �� . ' � � �t,_-�. \.�`� _ _ . _ � _ �_ Q Ct i C` C r,,•-, � 2 M \USers\TRULSEN�BONDS�2001 SF Progam�@eeoshett wpd �s�s�� �a�� � �'S �� s�. �� 00 - �yo 3 Exhibit A NIINNEA.POLIS/SAINT PAUL 2001 SINGLE FAMII.Y JOINT BOARD PROGRAM The City of Mimieapolis, Minnesota ("Minneapolis"), the Minneapolis Community Development Agency (the "Agenc}�'), the City of Saint Paul, Minnesota ("Saint Paul") and the Housing and Redevelopment Authority ofthe City of Saint Paul, Minnesota (the "Authority"), acting individually or jointly through the Minneapolis/Saint Paul Housing Finance Board (the "Joint 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 promulgated 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 housing program deseribed 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 "Act"). 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 maintaining an adequate, deceni, safe and sanitary housing stock; ■ that maintaining such housing stock is a public purpose and will benefit the residents of the Cities; ■ that a need exists within the Cities to provide additional affordable owner-occupied housing 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 single family housing and for home improvements. To meet such needs, the Issuers intend to issue one or more series of single fanuly mortgage revenue bonds and single family mortgage revenue refunding bonds (`Bonds") to cause the origination of mortgage loans to finance the acquisifion, construcfion, rehabilitation or improvement of single family housing 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 finance the purchase, construcrion, rehabilitation or improvement of single fanuly 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 aggregate principal amount of ao-1�.03 approximately (a) $32,396,000 for Minneapolis and $29,262,000 for Saint Paul, representing certain carried forward allocation and 2001 entitlement bond allocation of Minneapolis and Saint Paul; (b) an amount up to $65,000,000 to refund outstanding mortgage revenue bonds and to recycle refund prepayments and repayments of certain outstanding bonds; and (c) such principal amount of taacable bonds as may be necessary or convenient to further the purposes of this Program. Mortgage loans financed through the issuance of the Bonds and those in connecrion with which the MCCs will be issued, will be subject to the following terms (or, far Bonds as to which these requirements do not apply as a matter of law, to such other terms approved by the Board): purchase rice - the maacamum purchase price for financed homes shall not exceed the lesser of (a) 90% (110% in "targeted areas" or areas treated as targeted azeas) of the applicable "average areapurchase price" determined by the United States Depariment ofthe 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 areas the purchase price shall not exceed 4 times the applicable income limit to the extent consistent with applicable federal law); income limits - the maacimum income of the mortgagars shall be the lower of (a) the income restrictions imposed by federal taac law or (b) the income restrictions imposed by Minnesota Statutes, Section 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 mortgage loans or the "non-issued bond amount" of MCCs must be reserved for persons and families with adjusted incomes not greater than 90% ofthe generai Program income limits. Income limits under Section 462C.03, Subd. 2 shail be adjusted for family size by deducting $1,000 per adult and $1,200 per chiid in the family. In connection with this Program: (i) (a) in connection with any mortgage loans financed with the proceeds of mortgage revenue bonds, any fmancial institutions described in Section 462C.03, Subd. 4, and other mortgage lenders with offices located in the Cifies and which aze FHA/VA approved sellers of mortgage loans as well as other financial institutions and mortgage lenders which are FfIA/VA, or F'NMA/FHLMC approved sellers ofmortgage loans and are reasonably acceptable to any master servicer acring on behalf ofthe Issuers, will be eligible for consideration for originafion of such loans; the Ciries 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 originarion of 2 aa-�ao� qualifying mortgage loans by any participating lender; (ii) loans will not be made available or set aside far the exclusive use of developers or builders except, in the case of mortgage loans financed with the proceeds of mortgage revenue bonds, for new housing described in Section 462C.071, Subd. 2; {iii) the Issuers eapect to act as, or to contract with, a program acltniiustrator and a servicerto provide services to ensure that the Programwill be consistent with this Program, the Act and applicable federal law; (iv) as indicated above, up to $24,018,000 of carried forward allocation and $37,640,000 of the 2001 entitlement ailocations of the Cities may be used in the Program, provaded, however, that no provision of this Program shall in any way prevent either Minneapolis or Saint Paui from using all ar a portion of its respective enritiement allocation(s) for multifamily housing 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 during the calendar year in which the election was made as permitted by Section 25 of the Internal Revenue Code and Section 1.25-4T(c)(3) of the Treasury Regulations. The resulting unused entitlement allocation may be used to issue bonds for single family housing or other authorized purposes; (v) the Program will meet the needs of low and moderate income families by providing below-market rate financing for the acquisition or rehabilitation of single family homes or by providing a ta:c credit for mortgage interest paid, thereby enabling such persons to qualify for mortgages which would be unavailable at market rates; (vi) the Issuers hereby xequest a waiver by the Minnesota Housing Finance Agency of the provisions of Section 462C.03, Subd. 5; (vii) no homes which are located in previously unincorporated real property annexed by the Cities within one yeaz prior to the date of adoption of this Program wili be financed under tlus Program; (viii) prohibirions or limitations on assumption will be imposed to the extent required by federal law relating to the tas 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 Prog�ram is approximately equal to the aggregate principal amount of Bonds issued and the amount which either of the Issuers may elect not to issue in favor of MCCs; 00 -�a9.s (x) the estimated aggregate principal amount of the Bonds, or estimated "non- issued bond amounY' (as such term is used in 5ection 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 tuned for sale consistent with the needs of the Cities in 2001, or, if any bond allocation is carried forward, in the first half of 2002; (xii) refinancing of existing indebtedness will be permitted only where the mortgage loan also finances substantial `Yehabilitation" as that term is defined under Minnesota Statutes, Section 462C.01 and Secrion 462C.03, Subd. l l 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 Program: (1) the "certificate credit rate" (as used in Section 25 of the Code) will be 20%; (2) a copy of the form which will be used to elect the nonissued bond amount is attached hereto as Exhibit A; and (3) the Issuers will ensure compliance with the requirements of Secrion 25 of the Code by use of an MCC procedural manual for the Program and by use of the program administrator referenced in item (aii) above. � 00 -1aa3 EXffiBIT A TO 70INT BOARD PROGRAM MORTGAGE CREDIT CERT`IF'ICATE ELECTION (Pursuant to Temp. Reg. § I .25-4T) (i) Issuer name: [Name] [Address] TIN: [Number] (ii) Issuer's Applicable limit, per § 146 of the Internal Revenue Code of 1986: [ALLOCATION FOR 2001: $ 1 [CARRYFORWARD ALLOCATION FROM PPREVIOUS YEAR: $ 1 (iii) The aggregate amount of qualified mortgage bonds issued during the calendar year:: [Amount] (iv) The amount ofthe Issuer's applicable limit that it has surrendered to other issuers during the calendar year: [Amount] (v) The date and amount of any previous elections under 1.25-4T(c) far 2001: [Date and amount] (vi) The amount of qualified mortgage bonds that the issuer elects not to issue: [Amount] State Certification attached. Dated: , 2001 CITY OF [CTTY] By Mayor I�I �-�yo3 Interdepartmental Memorandum CITY OF SAINT PAUL To: Council President Bostrom Council member Benanau Council member Biakey Council member Coleman Council member Harris Council member Lanhy Council member Reiter From: 7oan Trulsen Date: December 27, 2000 Re: Approving a Single Family Housing Program to be Financed by the Issuance of Single Famil� Mortgage Revenue Bonds and Mortgage Credit Certificates Purpose The purpose of this report is to describe the nature and purpose of Saint PauPs 2001 Single Family Housing Progam 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 Board (Joint Boazd) for 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 Lanhy. Through the Joint Board, the two cities sponsor their singie family mortgage programs by issuing both tazc exempt mortgage revenue bonds and mortgage credit certificates. Current programs fmanced 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 2000A-1 and 2000A-2 of the bond-financed Home Buyer Programs. Using a portion of the year-2000 carry-forwazd bonding allocarion and funds from the City's recycling program, staff is proposing to issue Single Family Mortgage Revenue bonds to continue fmancing the first-rime homebuyer program during 2001. a 6 � \yH3 Program Description The 2001 Singie Family Housing Pmgram is included as Eachibit A to the attached Council Resolution. Saint Paul will have a total bonding authority of $29,262,000 for the 2001 Program ($13,131,000 of 2000 carryforward authoriry and $16,131,000 of 2001 bonding authority). The 2001 Program includes a descriprion of the program eligibility requirements dictated by federal and state legislarion and serves as the basis for future use of Saint Paul's and Mituieapolis, entitlement allocations of mortgage bond authority. Ongoing Program pazameters include, for bonds issued with current allocation, a maa�unum purchase price of 90% of average area purchase price (which currently translates to $149,485 for a single family home) and a maacimum household income of 100% of area median income (currently $68,600). The attached resolurion does not obligate the City or 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 FIRA from issuing mulfifamily revenue bonds. Public Purpose Through its single family mortgage programs, the Joint Board 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 Boazd 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 Minneapolis/Saint Paul Housing Finance Board of single family mortgage revenue bonds and mortgage credit certificates to fmance the City's 2001 Single Family Housing Program. 3oan Trulsen 266-6694 Sponsor: Council member Lantry ' � �«� r �,=_� �. Council File # CO — �10 R Resolution # Presented By Referred To Green Sheet # y �q � �� RESOLUTION CITY OF SAINT PAUL, MINNESOTA 30 Committee: Date 2 APPROVING A SINGLE FAMII,Y HOUSING PROGRAM TO BE FINANCED 3 BY TI� ISSUANCE OF SINGLE FAMII,,Y MORTGAGE REVENLJE BONDS 4 AND MORTGAGE CREDTT CERTIFICATES 7 WHEREAS, pursuant to the Mimiesota Municipal Housing Act, Mivuesota Statutes, Chapter 462C (the 8 "Housing AcP'), the City of Saint Paul, Minnesota (the "City'� is authorized to adopt a housing plan and cany out 9 programs for the financing of single family housing for persons of low and moderate income; and 10 11 WE3EREAS,theMiuneapolis/SaintPaulHousingFinanceBoard(the`Board"),ajointpowersboardorganized 12 under a Joint Powers Agreement (the "Joint Powers AgreemenY� by and between the Minneapolis Community 13 Development Agency (the "Agency"), the Housing and Redevelopment Authority ofthe City of Saint Paul, Minnesota 14 (the "Authorit}�') and the City of Mirnieapolis, Mnuiesota ("Minneapolis") and accepted by the City, and under the 15 laws ofthe State of Mivnesota, proposes to undertake a single family housing progam relating to the Mimieapolis and 16 the Saint Paul entitlement allocations available in 2001 and certain recycling refunding bonds (the "Prograui"), to be 17 financed by the issuance of one or more series of mortgage revenue obligations, mortgage revenue refunding 18 obligarions and/armortgage credit certificates ("MCCs'� pursuant to Minnesota Statutes, Sections 469.001 to 469.047, 19 Chapters 462A, 462C and 474A and Section 471.59 (coliectively, the "Act'�; and 20 21 WHEREAS, pursuant to the Act, the Boazd is authorized to issue bonds from time to time and to use the 22 proceeds ofits bonds to make orpurchase mortgage loans or to purchase participations in mortgage loans from lending 23 institutions and to issue MCCs in order to fivance the construction and rehabilitation, and to facilitate the purchase and 24 sa1e, of single family housing for eligibie persons or families under the Act and to issue bonds to refixnd previously 25 issued bonds; and 26 27 WHEREAS,theProgramwillprovidebelowmarketinterestratemortgageloanfinancingorincometascredits 28 primarily to persons of low or moderate income purchasing single family homes to be used as their principal places 29 of residence and which are located within the geographic limits of the City or Mnuieapolis; and 30 �R�G(�IAL 31 32 33 34 35 36 37 38 39 40 41 oa �tyos WHEREAS, the Act requires adoption ofthe Progrun after a public hearing held thereon following publication of norice in a newspaper of generai 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 hearing on the Prograzn, after publicarion of notice as required by the Act; and WHEREA5, the Program was submitted to the Melropolitan Council at or before the rime of publication of notice of the public hearing on such Prog•am, and the Metropolitan Council was afforded an opporhmity to present comments at the public hearing, all as required by the Act; and 42 WI�REAS, the Program provides for the issuance of single family mortgage revenue bonds or revenue 43 refunding bonds in one or more series pursuant to the Act (the `Bonds") to make or purchase or cause to be made or 44 purchased mortgage loans, ar to purchase securifies the proceeds of which would be used to purchase mortgage loans, 45 and the issuance of MCCs to finance the acquisition, primarily by low and moderate income persons and families, of 46 single family housing located within the geographic boundaries of the City or Miimeapolis; and 47 48 49 50 51 52 53 54 55 56 57 WHEREAS, it is proposed that the Prog�atn be approved and the Board be authorized to issue Bonds and MCCs pursuant to the Progam and the Joint Powers Agreement; and WIIEREAS, it appears that the Progcuil and the issuance of Bonds and(or MCCs by the Board or the Authority are in the best interests of the City. NOW, THEREFORE, BE IT RESOLVED BY Tf � CITY COUNCIL OF THE CITY OF SAINT PAUL AS FOLLOWS: The Prog}aui is hereby approved in its entirety in substanrially the form on file with the City. The 58 officers of the City and the Board are authorized to take all actions as may be necessary or appropriate to carry out the 59 Progratn in accordance with the Act and any other applicable laws and regulations. 60 2. The issuance of the Bonds and/or MCCs pursuant to the Program is hereby approved subject to 61 agreement by the Board or the Authority and the purchasers of the Bonds, if any, and by the Board or the Authority 62 as issuer of the MCCs, as to the exact terms of the Progratn MCCs. 63 The Bonds may be issued in one or more series at the time or times and pursuant to terms detennnied 64 by the Board, and be siructured so as to take advantage of whatever means are available and are pemutted by law to 65 enhance the security for, or mazketability of, the Bonds, provided that any such financing structure must be approved ����1�!�L o0-��.4� 66 by the Boazd. The MCCs maybe issued at the time or times and pnrsnaut to terms detenniuedby the Boazd. All such 67 deternunations by the Boazd must comply with the applicable provisions of the Act and the Internal Revenue Code 68 of 1986, as aznended, and regulations pzomulgated thereunder. 69 4. The Board is authorized to take all actions which may be necessary or desirable in connection with the 70 issuance ofthe Bonds and the MCCs, acting on behalf ofthe City, and no further approval or consent of the City shall 71 be required prior to the issuance of the Bonds or the MCCs by the Boazd, or prior to the takuig of any action by the 72 Board to undertake and implement the Program. 73 5. Nothing in this Resolution or the documents prepared pursuant hereto sYiall authorize the expenditlu 74 of any municipal funds on the Prograln other than as specified and authorized by separate acYions of the City and other 75 than the revenues derived from the Program or otherwise granted to the City for this purpose. The Bonds shall not 76 constitute a charge, lien or encumbrance, legal or equitable, upon any properly or fimds ofthe City except the revenues 77 and proceeds pledged to the payment thereof, nar shall the City be subject to any liability thereon. The holders of the 78 Bondss1�a11neverhavetherighttocompelanyexerciseofthetaxingpoweroftheCitytopaytheoutstandingprincipal 79 on the Bonds or the interest thereon, or to enforce payment against any property of the City. The Bonds shall recite 80 in substance that the principal and interest thereon, are payable solely from the revenues and proceeds pledged to the 81 payment thereof. The Bonds sha11 not constitute a debt ofthe City within the meaning of any consritutional or statutory 82 liinitation of indebtedness. 83 6. Any one ar more series of the Bonds or the MCCs may be issued by the Authority in lieu of issuance 84 by the Board, at the discretion of the Authority. � O�IGI�IAL (� e - i��=� RequesCed by Department of: Planninq & Economic DeveloDment 8� w� / c � Form Approved by City Attorney Adopted by Council: Date � O� Adoption Certified by Council Secretary �,�j�(� �,�X�{}�L B�. ��,�. � _ �� /y ��� Approved by Mayor for Submission to Council Approved by Mayor: Date G•' � }���. . �s>/Ji-i..�, �n., � �"-_-�`�J'Y-^�j('�C�'�"" � V n u � Y DEPARTMENT/OF[�TCE/COUNCII,: DATE INITfATED GREEN SHEET No.• 39317 �O "Ia.p� PED(West Team 12l14l00 ' CONTACI' PERSON & PHONE: miTTni✓DATE wTT�ALDATE Joan Trulsen 66694 � 1 D�enx Dm� a crrY covrrcn, p�I� 2 CITYATTORNEY MUST BE ON COUNCII. AGENDA BY (DATE) ��ER FINANCIAI. SERV DIR _ FINANCIAI. SERV/ACCTG December27 FOR 3 MAYOR(ORASST.)� _ ROUTING Consent Agenda o�Ex Sponsor: Councilmember Kathy Lantry TOTAL # OF SIGNATURE PAGES I_(CLIP ALI. LOCATIONS FOR SIGNATORE) acrioN xEQUESx�n: SIGNATURES RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI, SERVICE CON712ACT5 MUST ANSWER'[`HE FOLLOWING QUESTIONS: PLANNING COMMISSION 1. Has this personJfirm ever worked under a contract £or this depaztrnenY! CIB COMMITI"EE Yes No CML SERVICE COMMISSION 2. Has this person/firm ever been a ciry employee? Yes No 3. Does this person/firtn possess a skill not nortnally possessed by any cu�rent city employee? Yes No Explain aIi yes answers on separate sheet and attach to green sheet INTTIATING PROBLEM, ISSUE, OPPORTUNITY (Whq What, When, Where, Why): Approving a 2001 Single Family Housing Program to be financed by the issuing Single Family Mortgage Revenue bonds and Mortgage Credit Certificates. Proceeds will be used to provide loans for low or moderate income persons and families. ADVANTAGES IF APPROVED: The City is able to provide loans at lower interest rates through the issuance of tasc-free bonds. The program allows the City to better serve first tvne homebuyers. DISADVANTAGES IF APPROVED: None F$���Yt�? �'�^ [l�£' °� . DISADVANTAGES IF NOT APPROVED: Loan funds at lower interest rate would not be available for low or moderate income persons. TOTAL AMOUNT OF TRANSACTION: $ COST/REVENUE BUDGETED: FONDING SOURCE: AGTIVITY NUMBER: FINANCIAL INFORMATION: (EXPLAIN) � � �� . ' � � �t,_-�. \.�`� _ _ . _ � _ �_ Q Ct i C` C r,,•-, � 2 M \USers\TRULSEN�BONDS�2001 SF Progam�@eeoshett wpd �s�s�� �a�� � �'S �� s�. �� 00 - �yo 3 Exhibit A NIINNEA.POLIS/SAINT PAUL 2001 SINGLE FAMII.Y JOINT BOARD PROGRAM The City of Mimieapolis, Minnesota ("Minneapolis"), the Minneapolis Community Development Agency (the "Agenc}�'), the City of Saint Paul, Minnesota ("Saint Paul") and the Housing and Redevelopment Authority ofthe City of Saint Paul, Minnesota (the "Authority"), acting individually or jointly through the Minneapolis/Saint Paul Housing Finance Board (the "Joint 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 promulgated 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 housing program deseribed 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 "Act"). 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 maintaining an adequate, deceni, safe and sanitary housing stock; ■ that maintaining such housing stock is a public purpose and will benefit the residents of the Cities; ■ that a need exists within the Cities to provide additional affordable owner-occupied housing 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 single family housing and for home improvements. To meet such needs, the Issuers intend to issue one or more series of single fanuly mortgage revenue bonds and single family mortgage revenue refunding bonds (`Bonds") to cause the origination of mortgage loans to finance the acquisifion, construcfion, rehabilitation or improvement of single family housing 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 finance the purchase, construcrion, rehabilitation or improvement of single fanuly 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 aggregate principal amount of ao-1�.03 approximately (a) $32,396,000 for Minneapolis and $29,262,000 for Saint Paul, representing certain carried forward allocation and 2001 entitlement bond allocation of Minneapolis and Saint Paul; (b) an amount up to $65,000,000 to refund outstanding mortgage revenue bonds and to recycle refund prepayments and repayments of certain outstanding bonds; and (c) such principal amount of taacable bonds as may be necessary or convenient to further the purposes of this Program. Mortgage loans financed through the issuance of the Bonds and those in connecrion with which the MCCs will be issued, will be subject to the following terms (or, far Bonds as to which these requirements do not apply as a matter of law, to such other terms approved by the Board): purchase rice - the maacamum purchase price for financed homes shall not exceed the lesser of (a) 90% (110% in "targeted areas" or areas treated as targeted azeas) of the applicable "average areapurchase price" determined by the United States Depariment ofthe 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 areas the purchase price shall not exceed 4 times the applicable income limit to the extent consistent with applicable federal law); income limits - the maacimum income of the mortgagars shall be the lower of (a) the income restrictions imposed by federal taac law or (b) the income restrictions imposed by Minnesota Statutes, Section 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 mortgage loans or the "non-issued bond amount" of MCCs must be reserved for persons and families with adjusted incomes not greater than 90% ofthe generai Program income limits. Income limits under Section 462C.03, Subd. 2 shail be adjusted for family size by deducting $1,000 per adult and $1,200 per chiid in the family. In connection with this Program: (i) (a) in connection with any mortgage loans financed with the proceeds of mortgage revenue bonds, any fmancial institutions described in Section 462C.03, Subd. 4, and other mortgage lenders with offices located in the Cifies and which aze FHA/VA approved sellers of mortgage loans as well as other financial institutions and mortgage lenders which are FfIA/VA, or F'NMA/FHLMC approved sellers ofmortgage loans and are reasonably acceptable to any master servicer acring on behalf ofthe Issuers, will be eligible for consideration for originafion of such loans; the Ciries 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 originarion of 2 aa-�ao� qualifying mortgage loans by any participating lender; (ii) loans will not be made available or set aside far the exclusive use of developers or builders except, in the case of mortgage loans financed with the proceeds of mortgage revenue bonds, for new housing described in Section 462C.071, Subd. 2; {iii) the Issuers eapect to act as, or to contract with, a program acltniiustrator and a servicerto provide services to ensure that the Programwill be consistent with this Program, the Act and applicable federal law; (iv) as indicated above, up to $24,018,000 of carried forward allocation and $37,640,000 of the 2001 entitlement ailocations of the Cities may be used in the Program, provaded, however, that no provision of this Program shall in any way prevent either Minneapolis or Saint Paui from using all ar a portion of its respective enritiement allocation(s) for multifamily housing 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 during the calendar year in which the election was made as permitted by Section 25 of the Internal Revenue Code and Section 1.25-4T(c)(3) of the Treasury Regulations. The resulting unused entitlement allocation may be used to issue bonds for single family housing or other authorized purposes; (v) the Program will meet the needs of low and moderate income families by providing below-market rate financing for the acquisition or rehabilitation of single family homes or by providing a ta:c credit for mortgage interest paid, thereby enabling such persons to qualify for mortgages which would be unavailable at market rates; (vi) the Issuers hereby xequest a waiver by the Minnesota Housing Finance Agency of the provisions of Section 462C.03, Subd. 5; (vii) no homes which are located in previously unincorporated real property annexed by the Cities within one yeaz prior to the date of adoption of this Program wili be financed under tlus Program; (viii) prohibirions or limitations on assumption will be imposed to the extent required by federal law relating to the tas 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 Prog�ram is approximately equal to the aggregate principal amount of Bonds issued and the amount which either of the Issuers may elect not to issue in favor of MCCs; 00 -�a9.s (x) the estimated aggregate principal amount of the Bonds, or estimated "non- issued bond amounY' (as such term is used in 5ection 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 tuned for sale consistent with the needs of the Cities in 2001, or, if any bond allocation is carried forward, in the first half of 2002; (xii) refinancing of existing indebtedness will be permitted only where the mortgage loan also finances substantial `Yehabilitation" as that term is defined under Minnesota Statutes, Section 462C.01 and Secrion 462C.03, Subd. l l 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 Program: (1) the "certificate credit rate" (as used in Section 25 of the Code) will be 20%; (2) a copy of the form which will be used to elect the nonissued bond amount is attached hereto as Exhibit A; and (3) the Issuers will ensure compliance with the requirements of Secrion 25 of the Code by use of an MCC procedural manual for the Program and by use of the program administrator referenced in item (aii) above. � 00 -1aa3 EXffiBIT A TO 70INT BOARD PROGRAM MORTGAGE CREDIT CERT`IF'ICATE ELECTION (Pursuant to Temp. Reg. § I .25-4T) (i) Issuer name: [Name] [Address] TIN: [Number] (ii) Issuer's Applicable limit, per § 146 of the Internal Revenue Code of 1986: [ALLOCATION FOR 2001: $ 1 [CARRYFORWARD ALLOCATION FROM PPREVIOUS YEAR: $ 1 (iii) The aggregate amount of qualified mortgage bonds issued during the calendar year:: [Amount] (iv) The amount ofthe Issuer's applicable limit that it has surrendered to other issuers during the calendar year: [Amount] (v) The date and amount of any previous elections under 1.25-4T(c) far 2001: [Date and amount] (vi) The amount of qualified mortgage bonds that the issuer elects not to issue: [Amount] State Certification attached. Dated: , 2001 CITY OF [CTTY] By Mayor I�I �-�yo3 Interdepartmental Memorandum CITY OF SAINT PAUL To: Council President Bostrom Council member Benanau Council member Biakey Council member Coleman Council member Harris Council member Lanhy Council member Reiter From: 7oan Trulsen Date: December 27, 2000 Re: Approving a Single Family Housing Program to be Financed by the Issuance of Single Famil� Mortgage Revenue Bonds and Mortgage Credit Certificates Purpose The purpose of this report is to describe the nature and purpose of Saint PauPs 2001 Single Family Housing Progam 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 Board (Joint Boazd) for 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 Lanhy. Through the Joint Board, the two cities sponsor their singie family mortgage programs by issuing both tazc exempt mortgage revenue bonds and mortgage credit certificates. Current programs fmanced 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 2000A-1 and 2000A-2 of the bond-financed Home Buyer Programs. Using a portion of the year-2000 carry-forwazd bonding allocarion and funds from the City's recycling program, staff is proposing to issue Single Family Mortgage Revenue bonds to continue fmancing the first-rime homebuyer program during 2001. a 6 � \yH3 Program Description The 2001 Singie Family Housing Pmgram is included as Eachibit A to the attached Council Resolution. Saint Paul will have a total bonding authority of $29,262,000 for the 2001 Program ($13,131,000 of 2000 carryforward authoriry and $16,131,000 of 2001 bonding authority). The 2001 Program includes a descriprion of the program eligibility requirements dictated by federal and state legislarion and serves as the basis for future use of Saint Paul's and Mituieapolis, entitlement allocations of mortgage bond authority. Ongoing Program pazameters include, for bonds issued with current allocation, a maa�unum purchase price of 90% of average area purchase price (which currently translates to $149,485 for a single family home) and a maacimum household income of 100% of area median income (currently $68,600). The attached resolurion does not obligate the City or 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 FIRA from issuing mulfifamily revenue bonds. Public Purpose Through its single family mortgage programs, the Joint Board 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 Boazd 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 Minneapolis/Saint Paul Housing Finance Board of single family mortgage revenue bonds and mortgage credit certificates to fmance the City's 2001 Single Family Housing Program. 3oan Trulsen 266-6694 Sponsor: Council member Lantry '