09-86Council File # ��(
Green Sheet# 3065655
RESOLUTION
MINNESOTA
APPROVING A 2009 HOUSING FINANCE PROGRAM AND THE ISSUANCE BY Tf�
MINNEAPOLIS/SAINT PAUL HOUSING FINANCE BOARD OF SINGLE FAMILY
MORTGAGE REVENLTE BONDS AND/OR MORTGAGE CREDIT CERTIFICATES
PURSUANT Tf �RETO
2 WHEREAS, pursuant to the Mimiesota Municipal Housing Act, Mimiesota Statutes, Chapter 462C
3(the "Housing AcY'), the City of Saint Paul, Minnesota (the "City") is authorized to carry out programs for the
4 financing of single family housing for persons of low and moderate income; and
6 WHEREAS, the Minneapolis/Saint Paul Housing Finance Boazd (the `Boazd") proposes to undertake
7 a 2009 single family housing finance program (the "Program") to issue mortgage revenue bonds and
8 refunding bonds (the `Bonds") or to issue mortgage credit certificates ("MCCs") to provide a taY credit to
9 first-time homebuyers to reduce the cost of financing a home located in the City ar Minneapolis, a11 pursuant
10 to Mimiesota Statutes, Sections 469.001 to 469.047, Chapters 462A, 462C and 474A and Section 471.59
11 (together, the "AcP'); and
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13 WHEREAS, the Act requires adoption of the Program after a public hearing held thereon following
14 publicafion of norice in a newspaper of general circulation in the City and Minneapolis at least fifteen days in
15 advance of the hearing; and
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17 WHEREAS, the City Council has on the daze hereof conducted a public hearing on the Program, after
18 publication of norice as required by the Act; and
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WHEREAS, the Program was submitted to the Metropolitan Council at or before the time of
publication of notice of the public hearing thereon, and the Metropolitan Council was afforded an oppomxnity
to present comments at the public hearing, a11 as required by the Act; and
WHEREAS, the adoption of the Program and the issuance by the Boazd of Bonds and/or MCCs are in
the bestinterests ofthe City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAINT
PAUL AS FOLLOWS:
The Program is hereby approved in its entirety in substanrially the form on file with the City.
31 The officers of the City and the Boazd are authorized to take all acrions as may be necessary or appropriate to
32 carry out the Program in accordance with the Act and any other applicable laws and regulations.
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33 2. The issuance of the Bonds and/or MCCs by the Boazd pursuant to the Program is hereby
34 approved.
35 3. The Bonds may be issued in one or more series at the time or times and pursuant to tem�s
36 deternuned by the Boazd, and be structured so as to take advantage of whatever means aze available and aze
37 pernutted by law to enhance the security for, or mazketability of, the Bonds, provided that any such financing
38 structure must be approved by the Board. The MCCs may be issued at the time or times and pursuant to terms
39 deternuned by the Boazd. All such deteinzinations by the Board must comply with the applicable provisions
40 of the Act and the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder.
41 4. The Boazd is authorized to take a11 acfions which may be necessary or desirable in connection
42 with the issuance of the Bonds and/or MCCs, acting on behalf of the City, and no further approval or consent
43 of the City shall be required prior to the issuance of the Bonds or the MCCs by the Boazd, or prior to the
44 taldng of any action by the Board to undertake and implement the Program.
45 5. Nothing in this Resolution or the documents prepared pursuant hereto shall authorize the
46 expenditure of any municipal funds on the Program other than as specified and authorized by sepazate acrions
47 of the City and other than the revenues derived from the Program or otherwise granted to the City for this
48 purpose. The Bonds sha11 not consfitute a charge, lien or encumbrance, legal or equitable, upon any property
49 or funds of the City except the revenues and proceeds pledged to the payment thereof, nor shall the City be
50 subject to any liability thereon. The holders of the Bonds sha11 never have the right to compel any exercise of
51 the taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon, or to enforce
52 payment against any properiy of the City. The Bonds shall recite in substance that the principal and interest
53 thereon, aze payable solely from the revenues and proceeds piedged to the payment thereof. The Bonds shall
54 not constitute a debt of the City within the meaning of any constitutional ar statutory limitation of
55 indebtedness.
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56 6. Any one or more series of the Bonds or the MCCs may be issued by the Authority in lieu of
57 issuance by the Boazd, at the discretion of the Authority.
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Adopted by Council: Date �/a��/ �//dy Form ved b a or for S ' s' n to Council
Adoption Certified by C uncil Secretary By: � ,(�(
By: '
Approved or Date , 7 � Approvec} by e O ice of inancial Services
By: By: C
0 G
NIINNEAPOLIS/SAINT PAUL
2009 SINGLE FAMII.Y HOUSING FINANCE PROGRAM
The City of Miuneapolis, Minnesota ("Minneapolis"), the City of Saint Paul, Minnesota
("Saint Paul") and the Housing and Redevelopment Authority of the City of Saint Paul, Mimiesota
(the "Authorit}�'), acting individually or ,}ointly through the Minueapolis(Saint Paul Housing
Finance Boazd (the "Joint Boazd") (all together, the "Issuers") propose to issue mortgage revenue
bonds and certain mortgage revenue refunding bonds under Section 103 of the Intemal Revenue
Code of 1986, as amended (together with any applicable predecessor laws and with applicable
regulations, the "Code"), in one or more series, to finance the single family housing fmance
program described herein (the "Program") pursuant to authority confened by Miimesota Statutes,
Chapters 462C, 462A, 469 and 474A, a11 as amended, (and any predecessor provisions of State law
or other general or special law authority for the issuance of obligations to finance a single family
housing finance program or development) (all together, the "AcP'). 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 detemune:
■ that the preservation of the quality of life in Minneapolis and Saint Paul (the "Cities") is
dependent upon maintaining an adequate, decent, safe and sanitary housing stock;
■ that maintaining such housing stock is a pubiic 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 for home
improvements.
To meet such needs, the Issuers intend to issue one or more series of single family mortgage
revenue bonds and single family mortgage revenue refunding bonds (`Bonds") to cause the
origination of mortgage loans to finance the acquisition, conshuction, rehabilitation ar improvement
of single family housing in the Cities (or either of them). The Issuers may issue Bonds in an
aggregate principal amount of up to approxunately (a) $50,000,000 for Minneapolis and
$50,000,000 for Saint Paul, representing certain canyforward 2008 allocation and certain 2009
entitlement bond allocation of Minneapolis and Saint Paul; and (b) approximately $60,000,000 of
refunding bonds to fund the acquisition of mortgage loans, but which in any event shall be an
amount sufficient to refund outstanding mortgage revenue bonds; and (c) such principal amount of
taxable bonds as may be necessary or convenient to further the purposes of this Program.
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Mortgage loans financed through the issuance of the Bonds 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 Boazd):
purchase price - the m�imum purchase price for financed homes shall not exceed
the lesser of (a) 90% (110% in "tazgeted ateas" or azeas treated as targeted azeas) of the
applicable "average azea putchase price" determined by the United States Department of the
Treasury or by the Issuers on the basis of more complete information, or (b) 3 times the
applicable income limit for the Program imposed by Mimiesota law (except that in certain
azeas the purchase price sha11 not exceed 4 times the applicable income limit to the ea�tent
consistent with applicable federal law);
income limits - the maxixnum income of the mortgagors shall be the lower of (a) the
income restrictions nnposed by federal tas law or (b) the income restrictions imposed by
Minnesota Statutes, Secuon 462C.03, Subd. 2, including the restriction of Subd. 7 that for
the first six months of the Program, 50% of the money availabie to make mortgage loans or
the "non-issued bond amounY' of MCCs must be reserved for persons and families with
adjusted incomes not greater than 90% of the general Progam income limits. Income limits
under Section 462C.03, Subd. 2 shall be adjusted for family size by deducting $1,000 per
adult and $1,200 per child in the family.
In connection with this Program:
(i) (a) in connection with any mortgage loans financed with the proceeds of
mortgage revenue bonds, any financial 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 insritutions
and mortgage lenders which aze FF�t1/VA, ar FNMA/FHLMC approved sellers of
mortgage loans and aze reasonably acceptable to any master servicer acting on
behalf of the Issuers, will be eligible for consideration for origination of such loans;
the Cities will not limit participation in the Proa am to a single lender unless other
lenders aze not willing to participate for the consideration offered; 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 will be available with respect to the
origination of qualifying mortgage loans by any participating lender;
(ii) loans will not be made available or set aside for the exclusive use of
developers or builders;
(iii) the Issuers expect to act as, or to contract with, a program aduiinistrator and
a servicer to provide services to ensure that the Program will be consistent with this
Program, the Act and applicable federal law;
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(iv) as indicated above, the Minneapolis 2008 entitlement allocarion carried
forward for single family bonds and the Cities' 2009 entitlement allocarions may be used in
the Program, provided, however, that no provision of this Prograul shall in any way prevent
either Minneapolis or Saint Paul from using all or a portion of its respecrive enfitlement
allocaTion(s) for mulrifamily housing or any other authorized purpose. In addition, any
elecrion made by the Cities to issue Mortgage Credit Certificates ("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 pernritted by Section 25 of the Intemal Revenue Code and Secrion
1.25-4T(c)(3) of the T'reasury Regulations. The resulting unused entiflement allocation may
be used to issue bonds for single family housing or other authorized pur�wses;
(v) the Program will meet the needs of low and moderate income families by
providing below-market rate financing for the acquisition or rehabilitarion of single family
homes or by providing a tax credit for mortgage interest paid, thereby enabling such persons
to qualify for mortgages which would be unavailable at mazket rates;
(vi) no homes which are located in previously unincorporated real property
annexed by the Ciries within one yeaz prior to the date of adoption of this Program will be
financed under this Program;
(vii) prohibifions or limitations on assumpfion will be imposed to the extent
required by federal law relating to the tax exempt status of Bonds issued pursuant to the
Program; provided that the Issuers may impose more stringent limitations at their discretion;
(viii) the estimated amount of mortgage loans to be made or pwchased pursuant to
this Program is approximately equal to the aggregate principal amount of Bonds issued;
(ix) the estimated aggregate principal amount of the Bonds is set forth above;
(x) the Bonds, if issued, may be issued in one or more series timed for sale
consistent with the needs of the Cities in 2009 and the duration of any originafion period
provided in connection with the Bonds, or, if any bond allocation is carried forwazd for
single family purposes, in 2010; and
(xi) refmancing of existing indebtedness will be permitted 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.
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� Green Sheet Green Sheet
Green Sheet Green Sheet Green Sheet Green Sheet �
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DepartmenUOffice/Councii: Dateinitiated: GCeP.C� Sheet NO 3065655
PE _ Planning & Economic 05-JA4V-09
Development
Contact Person & Phone- Deoartment Sent To Person '' Dat �
Stephanie Hawkinson
0 lannin & Economic Develo me Ste haoie Aawldnson � `
266-6585 1 lavnin & Emnomic Develo m De rtment Direcror
Assign Z ' Attorne Ci Attome �
Must Be on Counci A nda by (Date): Number 3 a or's Office Ma or/Assistant
21JAN-09 �� For
Routing 4 unN Ci Coancil
Doa Type: RESOUJTION Order 5 i Clerk Ci Clerk
E-DOCUmert Required: Y
Document Contact: �����
Contact Phone:
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ToWI # of Signature Pages _(Clip All Locations for Signature) ,
Action Requested:
Signature on attached ResoluGOn for adoption at a Public Hearing on 7anuary 21, 2009 �'�g ���� 9
�' Lr �V
Rewmmendatlons: Approve (A) or Reject (R): Personal Service Contrects Must Answer the Following Questions:
Planning Commission 1. Has this person/firm ever worked under a contract for this department?
CIB Commiriee Yes No
Qvil Service Commission 2. Has ihis person/firm ever been a city employee?
Yes No
3. �oes this person/firm possess a skill not normally possessed by a�y
current ciry employee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet.
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
Approving the 2009 Single Family Housing Program to be financed by the issuance of Single Family Mortgage Revenue Bonds an.d
Mortgage Credit Certificates. Bond proceeds will be used tn provide Loans for tow or moderate income persons and families.
AdvanWges If Approved:
The City is able to provide loans at lower interest rates through the issuance of ta�c-free bonds. The program allows the City to better
serve first time home buyers. The MCCs offer tax advantages.
Disadvantages If Approved:
None.
Disadvantages If Not Approved:
Loan funds at tower interest rate or tax credits would not be available for low or moderate income persons.
Total Amount of CosURevenue Bud eted:
Transaction: 9
Funding Source: Activity Num6er:
Financial Information:
(Explain)
January 5, 2009 1:12 PM Page 1