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95-137- ,- - ' r � Council File � q S- � 3� Green Sheet # ' � �"'� Sg RESOLUTION SAINT PAI�L, MINNESOTA Presented By Referred To Committee: Date RESOLUTION APPROVING THE CITY OF SAINT PAUL, MINNESOTA'S SINGLE FAMILY HOUSING PROGRAM AND AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA (THE "HRA") TO ACT ON BEHALF OF THE CITY OF SAINT PAUL, MINNESOTA TO ISSUE BONDS TO REFUND IN WHOLE THE HRA'S $25,955,000 MORTGAGE REVENUE REFUNDING BONDS SERIES 1993, TO REFLIND IN PART THE HRA'S $20,000,000 SINGLE FAMILY MORTGAGE REVENUE BONDS SERIES 1991C AND ITS $3,500,000 SINGLE FAMILY MORTGAGE REVENUE BONDS REFUNDING SERIES 1991D, AND TO TAKE ACTIONS RELATED THERETO WHEREAS, pursuant to the Minnesota Municipal Housing Act, Mim�esota Statutes, Chapter 462C (tbe "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 City Council (the "City Council") of the City has prepared the Housing Plan for Local Housing far the City of Saint Paul, Minnesota, as amended, which plan was adopted pursuant to the Housing Act; and WHEREAS, the City acting under the authority of Minnesota Laws 1975, Chapter 260, as amended (Minnesota Statutes, Chapters 462A and 462C and Minnesota Laws 1975, Chapter 260 as amended shall be referred to herein as the "Act") will undertake a single family housing program in 1995 and issue one or more series of revenue obligations as described herein; and WHEREAS, pursuant to the Act and Chapter 72 of the Saint Paul Legislative Code, the City is authorized to delegate to the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the °HRA") the power to make or purchase mortgage loans or to purchase participations in mortgage loans from lending institutions in order to finance the construction and 25971 Z 3 �s - 13� rehabilitation of, and to facilitate the purchase and sale of, single family housing for eligible persons or families under the Act; and to pledge the mortgage loans so made or purchased to secure and pay mortgage revenue bonds issued by the HRA; and WHEREAS, the HRA has available to it funds derived from ta�able mortgage revenue bonds issued in 1991, and funds derived from the sale of the mortgage loans purchased in connection with prior housing programs of the City and the HRA, and the HRA now proposes to use those funds to make or purchase mortgage loans as described above and to pledge the mortgage Ioans to secure the Refunding Bonds hereinafter described; and WHEREAS, the City Council granted the HRA the power and authority to issue, and the HRA did issue, its $25,955,000 Mortgage Revenue Refunding Bonds Series 1993 (the "1993 Bonds") pursuant to an Indenture of Trust dated as of March 1, 1993 (the "1993 Indenture") by and between the HRA and First Trust National Association (the "Trustee"); and WHEREAS, the City Council granted the HRt1 the power and authority to issue, and the HRA did issue, its $20,000,000 Single Family Mortgage Revenue Bonds Refunding Series 1991 C (the "1991C Bonds") pursuant to an Indenture of Trust dated as of December 1, 1991 (the "1991 C Indenture") by and between the HRA and the Trustee; and WHEREAS, the City Council granted the HRA the power and authority to issue, and the HRA did issue, its $3,500,000 Single Family Mortgage Revenue Bonds Refunding Series 1991D (the "1991D Bonds") (the 1991C and the 1991D Bonds shall collectively be called the "1991 Bonds") pursuant to an Indenture of Trust dated as of December 1, 1991 (the °Indenture") by and between the HRA and the Trustee (the 1993 Indenture, the 1991C Indenture and the 1991D Indenture are collectively referred to herein as the "Indentures"); and WHEREAS, the program will refund part of the 1991 Bonds and all of the 1993 Bonds through the issuance of the refunding bonds (the "Refunding Bonds"). The original principal amount of the Refunding Bonds will not exceed $37,080,000; and WHEREAS, the program will provide below market interest rate mortgage loan financing primarily to persons of moderate income purchasing single family homes to be used as their principal places of residence and which are located within the geographic limits of the City; and WHEREAS, the Act requires adoption of the program after a public hearing held thereon following publication of a notice in a newspaper of general circulation in the City at Ieast fifteen days in advance of the hearing; and WHEREAS, the City Council on February 8, 1995 conducted a public hearing on the single family housing bond program, a copy of which program is attached hereto as Exhibit A (the 'Program"), after publication of notice as required by the Act; and WHEREAS, the Program was submitted to the Metropolitan Council at or before the time of publication of notice of the public hearing on such Program, and the Metropolitan Council has 259713 3 2 `is -�'�`� a so 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 I10 111 112 been afforded an opportunity to present comments at the public hearing, all as required by the Act; and WHEREAS, the Prosram provides that the HRA shall make or purchase or cause to be purchased mortgage loans, or purchase securities the proceeds of which would be used to purchase mortgage loans, to finance the acquisirion, construction, rehabilitation or improvement, primarily by moderate income persons and families, of single family housing located within the geographic boundaries of the City; and WHEREAS, the mortgage loans (or securities representing pools of such mortgage loans) so made or purchased will be pledged to secure the Refunding Bonds; and WHEREAS, it is proposed that the Program be approved and the HRA be authorized to issue the Refunding Bonds; and WHEREAS, it appears that the Program and the issuance of Refunding Bonds by the HRA 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 Program is hereby approved. Further, the issuance of the Refunding Bonds by the HRA is approved, subject to final agreement by the HRA and the purchasers of the Refunding Bonds as to the exact terms of the Refunding Bonds. The officers of the City shall do all things and take all actions as may be necessary or appropriate to carry out the Program in accordance with the Act and any other applicable laws and regulations. 2. There is hereby delegated to the HRA, acting on behalf of the City, the power and authority to issue the Refunding Bonds to refinance the 1991 Bonds (in part) and the 1993 Bonds (in whole). For the purposes of the Refunding Bonds, the HRA is hereby authorized to exercise on behalf of the City all of the powers granted to the City under the Act. The principal amount of the Refunding Bonds shall not exceed the principal amount of $37,080,000, but the Refunding Bonds shall otherwise be issued pursuant to a resolution of the Board of Commissioners of the HRA (the "Board") on such terms and conditions as the HRA shall deem required prior to the 259�12 3 3 i�� 114 115 116 117 118 119 120 121 122 123 124 125 �s-�3`1 issuance of the Refunding Bonds. The Trustee appointed by the HRA for the Refunding Bonds is hereby authorized and directed to receive the proceeds of the Refunding Bonds and to deposit the proceeds of the Refunding Bonds in the amount required to redeem the 1993 Bonds in their entirety, and the 1991 Bonds in part, under the Tndentures. The funds so received or retained by the Trustee under the Indentures aze hereby irrevocably appropriated to (a) the optional redemption of all Outstanding 1993 Bonds on June 1, 1995 (b) to the redemption of not more than $11,125,000 of the Outstanding 1991 Bonds on June 1, 1995. The Trustee is further authorized and directed to mail and publish at the time and in the manner provided in the Indentures notice of the redemption of Outstanding 1993 Bonds and 1991 Bonds on June 1, 1995 at a redemption price equal to the principal amount of the 1993 Bonds or 1991 Bonds, as applicable, plus interest accrued thereon to the date of redemption, plus a redemption premium, if any, in the amount provided for in the Indentures. The HRA shall irrevocably pledge the mortgage loans made or purchased pursuant to the Program to secure the Refunding Bonds. 126 3. The Refunding Bonds may be issued in one or more series pursuant to the time 127 128 129 130 131 Li2 or times and terms determined by the HRA, and be structured so as to take advantage of whatever means are available and are permitted by law to enhance the security for, or mazketability of, the Refunding Bonds, provided that any such financing structure must be approved by the HRA. All such determinations by the HRA must comply with the applicable provisions of the Act and the Internal Revenue Code. The HRA shall irrevocably pledge the mortgage loans made or purchased pursuant o the Program to secure the Refunding Bonds. 133 4. The HRA is authorized to take all actions which may be necessazy or desirable in 134 connection with the issuance of the Refunding Bonds, acting on behalf of the City, and no further 135 approval or consent of the City shall be required prior to the issuance of the Refunding Bonds 259772.3 L4 li6 137 138 139 140 141 142 143 144 145 146 147 148 149 150 qs-�3� by the HRA, or prior to the taking of any action by the HRA to undertake and implement the Program. 5. Nothing in this Resolution 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 HRA for this purpose. The Refunding Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City or HRA except the revenues and proceeds pledged to the payment thereof, nor shall the City or HRA be subject to any liability thereon. The holders of the Refunding Bonds shall never have the right to compel any exercise of the taxing power o£ the City or HRA to pay the outstanding principal on the Refunding Bonds or the interest thereon, or to enforce payment against any property of the City or HRA. The Refunding Bonds shall recite in substance that the Refunding Bonds, including the interest thereon, are payable solely from the revenues and proceeds pledged to the payment thereo£ The Refunding Bonds shall not constitute a debt of the City ar HRA within the meaning of any constitutional or statutory limitation of indebtedness. Requested by Department of: Adopted by Council: Date Adoption Certified by Council Secretary B Appx B . ,y�' _ . .it' � - - . � - _•�/ / , .���/ �/ � - , Form Approved by City Attorney �- Appro d by Mayor for Submission to r�cil � 66614 995 1/27/95 FOP q5�13� GREEN SHEE N° 17459 INITIAUDA E INITIAIJDATE DEPqqTMENT OIRECTOB _ (� CITV COUNCIL CITVA7T EY / D�q� T. Meyer�, BUDGET D1RE R � FIN. ffi MGL SEFiVICES D1R. MAYOR(ORASSISTA(Jn Q G. Peltie TOTAL # OF SIGNATURE PAGES i (CLIP ALL LOCATIONS FOR SIGNATURE) Approval of Single Family Housing Pxogxam and authorizing the HRA to issue bonds for the second phase of the Middle Income Program. APProve (A) or Reject (R) _ PLANNING COMMISSION _ CIVIL SERVICE COMMISSION _ qH COMMITTEE _ _ STAFF _ _ DISTRICTCOURT �. SUPPORTS WHICH COUNCIL OBJECTIVE? PERSONAL SERYICE CONTRACTS MUST ANSWER TME FOLLaWING QUESTIONS: 1. Nas this personNirm ever worked under a contract for this tlepartment? YES NO 2. Has this pe�sonNirm ever been a city employee? YES NO 3. Does this person/firm possess a skill not normally possessed by any current city employee? YES NO Explatn a14 yes answers on separate sheet and attaeh to green sheet Phase I of the Middle Income Program is winding down and the conomics are favorable for Phase II. The program provides middle incotne families access for below-maxket rate mortgages to purchase, purchase and rehabilitate, or refinance ilitate a Saint Paul home. FE� O 1 1995 ADVANTAGES IF Incentive provided to middle income homebuyers to puychase homes in Saint Paul. �oT,,.. �. ��''�� �'���' y'� ��s.'�n ��� � �' i�e�� � � �pa� � 1 1995 �i�� ����Ri��� IFNOTAPPqOVED: No incentive for middle incoaie homebuyers to purchase homes in Saint Paul. Not to exceed TO7AL AMOUNT OP TRANSACTION $ 37 080. OOO COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO � FUNUING SOURCE MOYt$8gE revenue bonds ACTIVITY NUMBER NA FINANCIAL INFORMATION. (EXPLAIN) � �I� /7..�L- �_ �� �lul.e.u� M C.o[/C..LJ �•�- - ti r Eahibit A CITY OF SAINT PAUL, MINNESOTA 1995 SINGLE FAMILY PROGRAM (Middle Income Program, Phase II) The City of Saint Paui, Minnesota (the "City") proposes to issue revenue bonds under Section 103 of the Internal Revenue Code of 1954, as amended through December 31, 1986, and under the applicable provisions of the Internal Revenue Code of 1986, as amended (collectively, the "Code") in one or more series to finance its single family housing program described herein (the "Program") pursuant to authority conferred by Minnesota Laws 1975, Chapter 260 and Minnesota Statutes, Chapters 462C, 462A and 469, 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 by the City) (collectively, the "Act"). In creating this Program, the City has found and determined that the preservation of the quality of life in the City is dependent upon the maintenance and provision of adequate, decent, safe and sanitary housing stock; that accomplishing the provision of such housing stock is a public purpose and will benefit the residents of the City; that a need exists within the City to provide in a timeiy fashion additional affordable housing to be sold to persons of low and moderate income residing and expected to reside in the City. Pursuant to the Act, the City will delegate to the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA") the authority to implement and carry out the program described herein upon approval hereof by the City; such delegation shall specifically include the authority to issue single family mortgage revenue refunding bonds to refund or refinance bonds, previously issued by the HRA. Pursuant to the Act and the delegation from the City, the HRA intends to make or purchase mortgage loans (or securities representing pools of such loans) to finance the acquisition, construction, rehabilitation or improvement of single family housing in the City. In connection therewith, the HRA cvill issue singie family mortgage revenue refunding bonds (the "Bonds"). The Bonds will refund and refinance, in whole or part, certain prior single family mortgage revenue bonds issued by the HRA. The monies used to make or purchase the mortgage loans are funds derived from the proceeds of taxable bonds, or the sale of certain assets of the City, but all such mortgage loans will be pledged to the security for, and payment of, the Bonds. The aggregate initial principal amount of Bonds will not exceed $37,080,000. The mortgage loans financed pursuant to this Progam will be subject to the following terms: ourchaseprice -(a) up to one-third (333°fo) of the Mortgage Loans may be made with respect to Homes whose Purchase Price does not exceed one hundred seventy-five percent (175%) of Average Area Purchase Price; and (b) the remaining two-thirds (66.7%) of the Mortgage Loans may be made with respect to Homes whose Purchase Price does �s 259600 4 �S_��� not exceed one hundred thirty percent (130%) of Average Area Purchase Price; provided that one-third (1/3) of the funds available for Mortgage Loans will be reserved for the first six (6) months of the Program for Mortgage Loans made to finance Homes whose Purchase Price does not exceed one hundred ten percent (I10%) of Average Area Purchase Price; and provided further that the Purchase Price of Rehabilitation Loans wiil not be subject to the foregoing limitations, except that in no event may the Purchase Price of any Home exceed three times the income limits established for the Program, except that such Purchase Price limit will be four times Program income limits in targeted areas. income limits -(a) up to one-third (333%) of the Mortgage Loans may be made to Mortgagors whose Annual Income may be equal to, but does not exceed one hundred seventy-five percent (175%) of Median Income; and (b) the remaining two-thirds (66.7%) of the Mortgage Loans may be made to Mortgagors whose Annual Income may equal but does not exceed one hundred fift}� percent (150%) of Median Income; provided that for the first six months of the Program, not less than one-half (50%) of the funds available to make Mortgage Loans shall be used to make Mortgage Loans to Mortgagors whose Annual Income may equal but does not exceed one hundred thirty-five percent (li5%) of Median Income; the foregoing income limits are established pursuant to Minnesota Statutes, Section 462C.03, subd. 8 to further the City's policies of economic integration, stability and revitalization and the amount of Mortgage Loans to be made pursuant to the Program (when aggregated with the Mortgage Loans made pursuant to the Middle Income Program, Phase I) will not exceed twenty percent (20%) of the aggregate amount of Mortgage Loans made pursuant to al1 City housing programs included in the City's Housing Plan. tazgeted areas/mort�age loan types - the HRA may, but is not obligated to, reserve a portion of the funds available for Mortgage Loans to certain areas of the City or for certain types of Mortgage Loans. Thirty percent (30%) of the funds available for Mortgage Loans will be available for the first nine (9) months of the Program solely for Mortgage Loans which finance Rehabilitation. I�o mare than five percent (5%) of the funds available for Mortgage Loans may finance the non-owner-occupied portion of two, three or four-unit Homes. In connection with this Program: (i) any financial institutions described in Section 462C.03, Subd. 4, and other mortgage lenders with offices located in the City and which are FHA/VA approved sellers of mortgage loans as well as other financial institutions and mortgage lenders which aze FHA/VA, or FNMA/FHLMC approved sellers of mortgage loans, will be eligible for consideration for origination of the Mortgage Loans; the HRA witl not timit participation in the program to a single lender unless other lenders are not willing to participate for the consideration offered; the HRA shall be eligible far consideration for origination of loans; 259600 4 2 `Ts-i3� (ii) Mortgage Loans will not be made available or set aside for the exclusive use of developers or builders; (iii) to the extent required by the Act, during the first ten (10) months of the origination period, loans financed pursuant to the Program may be made for new housing only if one of the following conditions is met: (1) the new housing is located in a redevelopment area and is replacing a structurally substandard structure or structures; (2) the new housing is located on a pazcel purchased by the City or conveyed to the City under Minnesota Statutes, Section 282A1, subd. l; or (3) the new housing is pazt of a housing affordability initiative, other than those financed with the proceeds from the sale of bonds, in which federal, state ar local assistance is used to substantially improve the terms of the financing or to substantially write down the purchase price of the new housing. (iv) the HRA expects to act as, or to contract with, a program administrator to provide services to ensure that the Program will be consistent with the Housing Plans of the City, this Program, the Act and applicable federal law; the HRA further expects to contract with a servicer to provide services relating to the servicing of the mortgage loans during their term, and to assure coompliance with the requirements of private mortgage insurers, FHA, VA, FNMA, GNMA or FHLMC, as applicable; (v) no portion of the State volume cap will be used in the Program; (vi) the Program will meet the needs o£ moderate income families by providing below-market rate financing for the acquisition or rehabilitation of single family homes, thereby enabling such persons to qualify for mortgages which would be unavailable at market rates; (vii) the HRA will request a waiver by the Minnesota Housing Finattce Agency of the provisions of Section 462C.03, subd. 5; (viii) no homes which are located in previously unincorporated real property annexed by the City within one year prior to the date of adoption of this Program will be financed under this Program; (ix) prohibitions or limitations on assumption will be imposed to the extent required by providers of mortgage insurance or guaranties, the issuers of mortgage-backed securities securing the Bonds or by applicable federal law; except that the HRA may impose more stringent limitations on assumptions at its discretion; 259600 4 qs-1��1 (x) the estimated amount of Mortgage Loans to be made to finance rehabilitation is 30% of the aggregate principal amount of all Mortgage Loans; (xi) the estimated original aggregate principal amount of the Bonds will not exceed $37,080,000; (xii) the Bonds, if issued, may be issued in one or more series timed for sale consistent with the needs of the HRA in 1995; this amount includes the funding of appropriate reserves and payment of costs of issuance; (xiii) refinancing 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; (xiv) all mortgage loans will be secured by a first and senior lien mortgage on the property financed and all mortgage loans will provide for payment of the principal amount thereof and interest thereon in substantially equal monthly payments over a period of either fifteen (15) or thirty (30) years. zs9eoo a 4