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02-170council File # OA — � ID E'' ; � r°'� 3 ! !. £ � is,� 'a ;t, +o i� � 1.' { i�b i�t L.a Green Sheet # ��C �3 � 2 4 5 6 10 11 12 13 14 15 16 17 18 14 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Presented By Referred To Resolution # RESOLUTION CITY OF SAINT PAUL, MINNESOTA �� Committee: ➢ate APPROVING A SINGLE FANIILY HOUSING PROGRAM TO BE FINANCED BY THE ISSUANCE OF SINGLE FAMILY MORTGAGE REVEN UE 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 WHEREAS, the MinneapolisJSaint Paul Housing Finance Boazd (the "Boazd"), a joint powers board organized under a Joint Powers Agreement (the "Joint Powers Agreement") by and between the Minneapolis Community Development Agency (the "Agency"), the Housing and Redevelopment Authority ofthe 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 prograxn relating to the Minneapolis and the Saint Paul entitlement allocations available in 2002 and certain recycling refunding bonds (the "Program"), to be financed by the issuance of one or more series of mortgage revenue oblagations, mortgage revenue refunding obligations and/or moftgage credit certificates ("MCCs") pursuant to Minnesota Statutes, Sections 469A01 to 469.Q47, Chapters 462A, 462C and 474A and Section 471.59 (collectively, the "Act"); and WIIEREAS, pursuant to the Act, the Board is authorized to issue bonds from time to time and to use the proceeds of its bonds to make or purchase mortgage loans or to purchase participations in morCgage loans from lending institutions and to issue MCCs in order to finance the construction and rehabilitation, and to facilitate the purchase and sa1e, of single family housing for eligible persons or families under the Act and to issue bonds to refund previously issued bonds; and WHEREAS, the Program will provide below market interest rate mortgage loan financing or income tas credits primarily to persons of low or moderate income purchasing single family homes to be used as their principal places of residence and which aze located within the geographic limits of the City or Minneapolis; and ba. - t'10 WI�REAS, the Act requires adoption of the Program after a public heaxing held thereon following publication of notice in a newspaper of general circulation in the City and Minneapolis at least fifieen days in advance of the hearing; and 4 WI�REAS, the City Council has on the date hereof conducted a public hearing on the Program, after publication of notice as required by the Act; and 10 I1 12 13 14 15 16 17 18 19 20 21 WI�REAS, the Program was submitted to the Metropolitan Council at ar before the tune of publication of notice of the pubiic hearing on such Program, and the Metropolitan Council was afforded an oppommity to present comments at the public hearing, a11 as required by the Act; and WFIEREAS, the Program provides for the issuance of single fanuly 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 orpurchased mortgage loans, or to purchase securities the proceeds of which would be used to purchase mortgage loans, and the issuance of MCCs to finance the acquisi6on, primarily by low and moderate income persons and families, of singie family housing located within the geographic boundaries of the City or Minneapolis; and 22 WHEREAS, it is proposed that the Program be approved and the Board be authorized to issue Bonds and 23 MCCs pursuant to the Program and the Joint Powers Agreemetit; and 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 WHEREAS, it appears that the Program and the issuance of Bonds andlor MCCs by the Baard or the Authority are 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 Pxogram 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 all actions as may be necessary or appropriate to cany out the Program in accordance with the Act and any other applicable laws and regulations. 2. The issuance of the Bonds andlor MCCs pursuant to the Program is hereby approved subject to agreement by the Board or the Authority and the purchasers of the Bonds, if any, and by the Board or the Authority as issuex of the MCCs, as to the exact terms of The Pxogram MCCs. 3. The Bonds may be issued in one or mare series at the time or times and pursuant to terms determined by the Boatd, and be structured so as to take advantage of whatever means are available and are pernutted by law to enhance the security for, or marketability 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 Board. All such determinations by the Board must comply with the applicable provisions of the Act and the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder. -2- o �-_ 1'?0 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 ar the MCCs by the Boazd, or prior to the taking of any action by the Boazd to undertake and implement the Program. 10 11 12 13 14 15 16 5. Nothing in this Resolurion or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Program other than as specified and authorized by sepazate actions of the City and other than the revenues derived from the Program or otherwise granted to the City for this purpose. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any properiy or funds of the City except the revenues and proceeds pledged to tt�e payment thereof, nor shall the City be subject to any liability thereon. The holders of the Bonds shall never have the right to compel any exercise ofthe taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payxnent against any property of the City. The Bonds shall recite in substance that the principal and interest thereon, aze payable solely from the revenues and proceeds pledged to the payment thereo£ The Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation of indebtedness. 17 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. r'� � C� � { ..� 's ° a { Fy,+a i y D � Adoption Certified by Council SecYetary By: Approved by i BY: -3- Requested by Department of: Plannin & �conomic Develo ment ay: � Approved by Financial Sexvic Hy: Fox'm Approved by City A orney 1 � Adopted by Council: Date y�p .� '�.p p a� DEPAR'iME1�T/bFF[CE/COUNCIL: DATE INITIATED GREEN SHEET No.• 110237 p1 ' I`� PED uosioz . - CON"TACT PERSON & PIiONE: r � i�TUUUwTe -" Rvir[ACruwTe Jenny Wolfe, 6-6555 '-✓ l nEe�r.�Nr n� a cirvcouivcu, M1fUST BE ON COUNCIL AGENDA BY (DATE) ASSIGN /[�,,�� NiIMBER ? CITYATIORNEY_(JQ(! _CRYCLERK For Public Hearing on 2/27IO2 FoR �t ROUTLYG ��CIAL SERV DQt. � _FI� IANCIAL SERV/ACCTG ORDER " 3 MAYOR (OR ASST.) _ �;�s?�reh f!�+�+�r TOTAL # OF SIGNATURE PAGES 1(onel (CLIP ALL LOCAT[ONS FOR SIGNATURE) ACI'ION�REQUESTED: ��� .& � Signature on attached Resolution for adoption at a Public Hearing on February 27, 2002. RECOMMENDA170NS: Approve (A) or Reject (R) PERSONAL SERVICE CONTRACCS bNST ANSWER THE POLLOWING QUESTIONS: - PLANNING COMMISSiON 1. Has this person/firtn ever worked under a conVac[ for this department? CIS COMMITTEE Yes No ' CNIL SERVICE COMMISSION 2. Has this person/firm ever been a ciTy employee? Yes No 3. Does this person/firm possess a skill not normally possessed by any wrcent ciTy employee? Yes No Explain all yes answeB on separate sheet and at[ach to green sheet IN[TIATNG PROBLEM, ISSUE, OPPOR'I"UNTTY (Whq Wha[, When, Where, Why): Approving a 2002 Single Family Housing Program to be financed by the issuance of Single Family Mortgage Revenue Bonds and Mortgage Credit Certificates. Bond proceeds will be used to provide loans for low or moderate income persons and families. ADVANTAGESIFAPPROVED: The City if able to provide loans at lower interest rates through the issuance of tax-free bonds. The program allows the City to better serve first time home buyers. DISADVANTAGES IF APPROVED: None. DISADVANTAGES IF NOT APPROVED: Loan funds at lower interest rate would not be available for low or moderate income persons. TOTAL Ah100NT OF TRANSACTIOY: 3 NA COST/REVENUE BUDGETED (CIRCLE OYE): Y"ES YO FUND[NG SOURCE: ACT[VITY NU1VtBER: FIYA\CL4L INFORMATION: (EXPLAI� � C'�-- 1'1 c MINNEAPOLIS/SAINT PAUL 2002 SINGLE FAMILY JOINT BOARD PROGRAM The City of Minneapolis, Mimiesota ("Minneapolis"), the Minneapolis Community Development Agency (the "Agency"), the CiTy of Saint Paul, Minnesota ("Saint Paul") and the Housing andRedevelopmentAuthoriTy ofthe Cityof SaintPaul, 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 Internal 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 described herein (the "Program") pursuant to authority confened 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 "Tssuers" 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 "Cifies") is dependent upon maintaining an adequate, decent, 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 for other persons and families to the extent necessary to promote economic integration as provided in the Act; 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 far home improvements. To meet such needs, the Issuers intend to issue one ar more series of single family mortgage revenue bonds and single family mortgage revenue refunding bonds ("Bonds") to cause the origination ofmortgage loans to finance the acquisition, construction, rehabilitation or improvement of single family housing in the Cifies (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, conshuction, 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 aggregate principal amount of approximately (a) $40,5�8,000 for Minneapolis and $25,369,000 for SaintPaul, representing certain carried forward 2153805v1 Ol�l' allocarion and 2002 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 outstauding bonds; and (c) such principal amount of taxable bonds as may be necessary or convenient to fiirther the purposes of this Program. Mortgage loans fmanced through the issuance of the Bonds and those in connection with which the MCCs will be issued, will be subject to the following terms (or, for Bonds as to which these requirements do not apply as a matter of law, to such other terms approved by the Board): purchase price - the maximum purchase price for fmanced homes shall not exceed the lesser of (a) 90% (ll0% in "targeted areas" or areas treated as tazgeted areas) of the applicable "average area purchase price" determined by the United States Deparhnent 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 an 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 m�imum income of the mortgagors sha11 be the lower of (a) the income restrictions imposed by federa] t� 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 general Program income limits. Income limits under Section 462C.03, Subd. 2 sha11 be adjusted for family size by deducting $1,000 per adult and $1,200 per child in the family. In connection with this Program: (i) (a) in connection witl� 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 Cities and which are FIIA/VA approved sellers of mortgage loans as well as other financial institutions and mortgage lenders which are FIIt1/VA, or FNMA/FHLMC approved sellers of mortgage loans and aze reasonably acceptable to any master servicer acting onbehalf of the Issuers, will be eligible for consideration for origination of such loans; the Cities will not lunit participation in the Program to a single lender unless other lenders are not willing to participate for tk�e 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 particular lenders but wiil be auailable with respect to the origination of qualifying mortgage loans by any participating lender; 2153805v1 oa.• t�� (ii) loans will not be made available or set aside for 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 expect to act as, or to contract with, a program administrator and a servicer to provide services to ensure that the Program will be consistent with this Program, the Act and applicable federal law; (iv) as indicated above, up to $7,867,000 of carried forwazd allocation and $58,080,000 of the 2002 entitlement allocations of the Caties 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 respecfive entitlement 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 tas credit for mortgage interest paid, thereby enabling such persons to qualify for mortgages 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 are located in previously unincarporated real property annexed by the Cities within one year prior to the date of adoption of this Program will be financed under this Program; (viii) prohibitions or limitations on assumption will be imposed to the extent required by federal iaw relating to the tax 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 aggregate principal amount of Bonds issued and the amount which either of the Issuers may elect not to issue in favor of MCCs; (x) the estimated aggregate 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; 2153805v1 oa--t'lo (xi) the Bonds, if issued, may be issued in one or more series tuned for sale consistent with the needs of the Cities in 2Q02, or, if any bond allocation is carried forwazd, in 2003; (�i) refinancing of e�sting indebtedness will be pernutted only where the mortgage loan also finances substantial "rehabilitation" as that term is defined under 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) wili 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 E�ibit 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 program administrator referenced in item (iii) above. 2153805v1 . EXHIBIT A p y• l'1 O TO JOINT BOARD PROGRAM MORTGAGE CREAIT CERTIFICATE ELECTION (Pursuant to Temp. Reg. § 1.25-4T) (i) Tssuer name: [Name� [Address] TIN: [Number] (ii) lssuer's Applicable limit, per § 146 of the Internal Revenue Code of 1986: [ALLOCATION FOR 2002: $ � [CARRYFORWARD ALLOCATION FROM PREVIOUS YEAR: $ � (iii) The aggregate amount of qualified mortgage bonds issued during the calendar year.: [Amount] (iv) The amount of the 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) for 2001: [Date and amount] (vi) The amount of qualified mortgage bonds that the issuer elects not to issue: [Amount] State Certification attached. Dated: , 2002. CITY OF [CITY] By Mayor Z�sssos�i A - 1 council File # OA — � ID E'' ; � r°'� 3 ! !. £ � is,� 'a ;t, +o i� � 1.' { i�b i�t L.a Green Sheet # ��C �3 � 2 4 5 6 10 11 12 13 14 15 16 17 18 14 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Presented By Referred To Resolution # RESOLUTION CITY OF SAINT PAUL, MINNESOTA �� Committee: ➢ate APPROVING A SINGLE FANIILY HOUSING PROGRAM TO BE FINANCED BY THE ISSUANCE OF SINGLE FAMILY MORTGAGE REVEN UE 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 WHEREAS, the MinneapolisJSaint Paul Housing Finance Boazd (the "Boazd"), a joint powers board organized under a Joint Powers Agreement (the "Joint Powers Agreement") by and between the Minneapolis Community Development Agency (the "Agency"), the Housing and Redevelopment Authority ofthe 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 prograxn relating to the Minneapolis and the Saint Paul entitlement allocations available in 2002 and certain recycling refunding bonds (the "Program"), to be financed by the issuance of one or more series of mortgage revenue oblagations, mortgage revenue refunding obligations and/or moftgage credit certificates ("MCCs") pursuant to Minnesota Statutes, Sections 469A01 to 469.Q47, Chapters 462A, 462C and 474A and Section 471.59 (collectively, the "Act"); and WIIEREAS, pursuant to the Act, the Board is authorized to issue bonds from time to time and to use the proceeds of its bonds to make or purchase mortgage loans or to purchase participations in morCgage loans from lending institutions and to issue MCCs in order to finance the construction and rehabilitation, and to facilitate the purchase and sa1e, of single family housing for eligible persons or families under the Act and to issue bonds to refund previously issued bonds; and WHEREAS, the Program will provide below market interest rate mortgage loan financing or income tas credits primarily to persons of low or moderate income purchasing single family homes to be used as their principal places of residence and which aze located within the geographic limits of the City or Minneapolis; and ba. - t'10 WI�REAS, the Act requires adoption of the Program after a public heaxing held thereon following publication of notice in a newspaper of general circulation in the City and Minneapolis at least fifieen days in advance of the hearing; and 4 WI�REAS, the City Council has on the date hereof conducted a public hearing on the Program, after publication of notice as required by the Act; and 10 I1 12 13 14 15 16 17 18 19 20 21 WI�REAS, the Program was submitted to the Metropolitan Council at ar before the tune of publication of notice of the pubiic hearing on such Program, and the Metropolitan Council was afforded an oppommity to present comments at the public hearing, a11 as required by the Act; and WFIEREAS, the Program provides for the issuance of single fanuly 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 orpurchased mortgage loans, or to purchase securities the proceeds of which would be used to purchase mortgage loans, and the issuance of MCCs to finance the acquisi6on, primarily by low and moderate income persons and families, of singie family housing located within the geographic boundaries of the City or Minneapolis; and 22 WHEREAS, it is proposed that the Program be approved and the Board be authorized to issue Bonds and 23 MCCs pursuant to the Program and the Joint Powers Agreemetit; and 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 WHEREAS, it appears that the Program and the issuance of Bonds andlor MCCs by the Baard or the Authority are 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 Pxogram 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 all actions as may be necessary or appropriate to cany out the Program in accordance with the Act and any other applicable laws and regulations. 2. The issuance of the Bonds andlor MCCs pursuant to the Program is hereby approved subject to agreement by the Board or the Authority and the purchasers of the Bonds, if any, and by the Board or the Authority as issuex of the MCCs, as to the exact terms of The Pxogram MCCs. 3. The Bonds may be issued in one or mare series at the time or times and pursuant to terms determined by the Boatd, and be structured so as to take advantage of whatever means are available and are pernutted by law to enhance the security for, or marketability 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 Board. All such determinations by the Board must comply with the applicable provisions of the Act and the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder. -2- o �-_ 1'?0 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 ar the MCCs by the Boazd, or prior to the taking of any action by the Boazd to undertake and implement the Program. 10 11 12 13 14 15 16 5. Nothing in this Resolurion or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Program other than as specified and authorized by sepazate actions of the City and other than the revenues derived from the Program or otherwise granted to the City for this purpose. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any properiy or funds of the City except the revenues and proceeds pledged to tt�e payment thereof, nor shall the City be subject to any liability thereon. The holders of the Bonds shall never have the right to compel any exercise ofthe taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payxnent against any property of the City. The Bonds shall recite in substance that the principal and interest thereon, aze payable solely from the revenues and proceeds pledged to the payment thereo£ The Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation of indebtedness. 17 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. r'� � C� � { ..� 's ° a { Fy,+a i y D � Adoption Certified by Council SecYetary By: Approved by i BY: -3- Requested by Department of: Plannin & �conomic Develo ment ay: � Approved by Financial Sexvic Hy: Fox'm Approved by City A orney 1 � Adopted by Council: Date y�p .� '�.p p a� DEPAR'iME1�T/bFF[CE/COUNCIL: DATE INITIATED GREEN SHEET No.• 110237 p1 ' I`� PED uosioz . - CON"TACT PERSON & PIiONE: r � i�TUUUwTe -" Rvir[ACruwTe Jenny Wolfe, 6-6555 '-✓ l nEe�r.�Nr n� a cirvcouivcu, M1fUST BE ON COUNCIL AGENDA BY (DATE) ASSIGN /[�,,�� NiIMBER ? CITYATIORNEY_(JQ(! _CRYCLERK For Public Hearing on 2/27IO2 FoR �t ROUTLYG ��CIAL SERV DQt. � _FI� IANCIAL SERV/ACCTG ORDER " 3 MAYOR (OR ASST.) _ �;�s?�reh f!�+�+�r TOTAL # OF SIGNATURE PAGES 1(onel (CLIP ALL LOCAT[ONS FOR SIGNATURE) ACI'ION�REQUESTED: ��� .& � Signature on attached Resolution for adoption at a Public Hearing on February 27, 2002. RECOMMENDA170NS: Approve (A) or Reject (R) PERSONAL SERVICE CONTRACCS bNST ANSWER THE POLLOWING QUESTIONS: - PLANNING COMMISSiON 1. Has this person/firtn ever worked under a conVac[ for this department? CIS COMMITTEE Yes No ' CNIL SERVICE COMMISSION 2. Has this person/firm ever been a ciTy employee? Yes No 3. Does this person/firm possess a skill not normally possessed by any wrcent ciTy employee? Yes No Explain all yes answeB on separate sheet and at[ach to green sheet IN[TIATNG PROBLEM, ISSUE, OPPOR'I"UNTTY (Whq Wha[, When, Where, Why): Approving a 2002 Single Family Housing Program to be financed by the issuance of Single Family Mortgage Revenue Bonds and Mortgage Credit Certificates. Bond proceeds will be used to provide loans for low or moderate income persons and families. ADVANTAGESIFAPPROVED: The City if able to provide loans at lower interest rates through the issuance of tax-free bonds. The program allows the City to better serve first time home buyers. DISADVANTAGES IF APPROVED: None. DISADVANTAGES IF NOT APPROVED: Loan funds at lower interest rate would not be available for low or moderate income persons. TOTAL Ah100NT OF TRANSACTIOY: 3 NA COST/REVENUE BUDGETED (CIRCLE OYE): Y"ES YO FUND[NG SOURCE: ACT[VITY NU1VtBER: FIYA\CL4L INFORMATION: (EXPLAI� � C'�-- 1'1 c MINNEAPOLIS/SAINT PAUL 2002 SINGLE FAMILY JOINT BOARD PROGRAM The City of Minneapolis, Mimiesota ("Minneapolis"), the Minneapolis Community Development Agency (the "Agency"), the CiTy of Saint Paul, Minnesota ("Saint Paul") and the Housing andRedevelopmentAuthoriTy ofthe Cityof SaintPaul, 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 Internal 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 described herein (the "Program") pursuant to authority confened 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 "Tssuers" 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 "Cifies") is dependent upon maintaining an adequate, decent, 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 for other persons and families to the extent necessary to promote economic integration as provided in the Act; 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 far home improvements. To meet such needs, the Issuers intend to issue one ar more series of single family mortgage revenue bonds and single family mortgage revenue refunding bonds ("Bonds") to cause the origination ofmortgage loans to finance the acquisition, construction, rehabilitation or improvement of single family housing in the Cifies (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, conshuction, 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 aggregate principal amount of approximately (a) $40,5�8,000 for Minneapolis and $25,369,000 for SaintPaul, representing certain carried forward 2153805v1 Ol�l' allocarion and 2002 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 outstauding bonds; and (c) such principal amount of taxable bonds as may be necessary or convenient to fiirther the purposes of this Program. Mortgage loans fmanced through the issuance of the Bonds and those in connection with which the MCCs will be issued, will be subject to the following terms (or, for Bonds as to which these requirements do not apply as a matter of law, to such other terms approved by the Board): purchase price - the maximum purchase price for fmanced homes shall not exceed the lesser of (a) 90% (ll0% in "targeted areas" or areas treated as tazgeted areas) of the applicable "average area purchase price" determined by the United States Deparhnent 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 an 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 m�imum income of the mortgagors sha11 be the lower of (a) the income restrictions imposed by federa] t� 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 general Program income limits. Income limits under Section 462C.03, Subd. 2 sha11 be adjusted for family size by deducting $1,000 per adult and $1,200 per child in the family. In connection with this Program: (i) (a) in connection witl� 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 Cities and which are FIIA/VA approved sellers of mortgage loans as well as other financial institutions and mortgage lenders which are FIIt1/VA, or FNMA/FHLMC approved sellers of mortgage loans and aze reasonably acceptable to any master servicer acting onbehalf of the Issuers, will be eligible for consideration for origination of such loans; the Cities will not lunit participation in the Program to a single lender unless other lenders are not willing to participate for tk�e 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 particular lenders but wiil be auailable with respect to the origination of qualifying mortgage loans by any participating lender; 2153805v1 oa.• t�� (ii) loans will not be made available or set aside for 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 expect to act as, or to contract with, a program administrator and a servicer to provide services to ensure that the Program will be consistent with this Program, the Act and applicable federal law; (iv) as indicated above, up to $7,867,000 of carried forwazd allocation and $58,080,000 of the 2002 entitlement allocations of the Caties 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 respecfive entitlement 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 tas credit for mortgage interest paid, thereby enabling such persons to qualify for mortgages 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 are located in previously unincarporated real property annexed by the Cities within one year prior to the date of adoption of this Program will be financed under this Program; (viii) prohibitions or limitations on assumption will be imposed to the extent required by federal iaw relating to the tax 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 aggregate principal amount of Bonds issued and the amount which either of the Issuers may elect not to issue in favor of MCCs; (x) the estimated aggregate 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; 2153805v1 oa--t'lo (xi) the Bonds, if issued, may be issued in one or more series tuned for sale consistent with the needs of the Cities in 2Q02, or, if any bond allocation is carried forwazd, in 2003; (�i) refinancing of e�sting indebtedness will be pernutted only where the mortgage loan also finances substantial "rehabilitation" as that term is defined under 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) wili 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 E�ibit 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 program administrator referenced in item (iii) above. 2153805v1 . EXHIBIT A p y• l'1 O TO JOINT BOARD PROGRAM MORTGAGE CREAIT CERTIFICATE ELECTION (Pursuant to Temp. Reg. § 1.25-4T) (i) Tssuer name: [Name� [Address] TIN: [Number] (ii) lssuer's Applicable limit, per § 146 of the Internal Revenue Code of 1986: [ALLOCATION FOR 2002: $ � [CARRYFORWARD ALLOCATION FROM PREVIOUS YEAR: $ � (iii) The aggregate amount of qualified mortgage bonds issued during the calendar year.: [Amount] (iv) The amount of the 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) for 2001: [Date and amount] (vi) The amount of qualified mortgage bonds that the issuer elects not to issue: [Amount] State Certification attached. Dated: , 2002. CITY OF [CITY] By Mayor Z�sssos�i A - 1