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HomeMy WebLinkAbout1980-077 CRA '--'-- ~ . ~ I . . / I RE SOLUTION NO. 80- 77 A RESOLUTION OF THE COMMUNITY REDEVE LOPMENT AGE NCY OF THE CITY OF SANTA ANA APPROVING RULES AND RE GULATIONS RELATING TO ITS RESIDENTIAL MORTGAGE FINANCING PROGRAM RESOLVED, by the Community Redevelopment Agency of the City of Santa Ana, Orange County, California, that WHEREAS, the legislature of the State of California has authorized redevelopment agencies to purchase long-tern, low-interest rate loans made to provide financing for new residential construction in redevelopment project areas in order to encourage i nves tment with in and to upgrade such areas and has authorized redevelopment agencies to issue bonds to finance the purchase of such loans; WHEREAS, the Agency has heretofore determined to undertake a Residential Mortgage Financing Program and, to that end, has provided for the issuance of Res identi a 1 Mortgage Revenue Bonds for the purpose of purchas ing Mortgage Loans to provide financing for residential construction within the ADeney's City of Santa Ana Community Redevelopment Project in order to encourage investment within and to upgrade such Area; and WHEREAS, the provisions of applicable law require the Agency to adopt Rules and Regulations in implementation of the Agency's Residential Mortgage Financing Program; NOW THEREFORE, IT IS HEREBY ORDERED that the Rules and Regulations attached hereto as Exhibit "A" are hereby adopted and approved as the Rules and Regulations of the Community Redevelopment Agency of the City of Santa Ana relating to its Residential Mortgage Financing Program. * * * * * * -8 . , . . The foregoing resolution was passed and adopted by the Community Redevelopment Agency of the City of Santa Ana, at a special meeting thereof held on the 1st day of July, 1980, by the following vote, to wit: James E. Ward, Gordon 8ricken, Robert W. Luxembourger, Al Serrato, Daniel E. Griset, Harry K. Yamamoto AYES: Members: NOES: Members: ABSENT: Members: AT~ - ~ ecre ary J. Ogden Markel None APPROVED: ~ ~alÇ:!~Á 2 . . , . . RULES AND REGULATIONS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ~NA RELATING TO ITS RESIDENTIAL MORTGAGE FINANCING PROGRAM Dated: As of July 1, 1980 CHAPTER 1 GENERAL PROVIS IONS 1.01 Scope. These Rules and Regulations are made and published pursuant to Chapter'8, commencing with Section 33750, of Part 1 of Division 24 of the Health and Safety Code of the State of California and particularly Section 33767 thereof, as amended, and relate to the providing of technical assistance and long-term roortgage loans at low interest rates through qualified mortgage lenders to participating parties to finance construction of residential housing in the Agency's City of Santa Ana Community Redevelopment Project Area in order to encourage investment and upgrade such Area. Such mortgage loans may be purchased by the Agency from qualified mortgage lenders. Such purchase may be accomplished by a bank or trust company or national banking association acting as Trustee on behalf of the Agency and its bondholders. All such mortgage loans shall be originated, executed and purchased according to the terms and conditions set forth in a prior written commitment from the Agency to purchase such mortgage loans. 1.02 Definitions. The terms defined in the Act and the Resolution have the same meaning when used in these Rules and Regulations as are ascribed to them in the Act and the Resolution. ߣi means Chapter 8, commencing with Section 33750, of Part 1 of Division 24 of the Health and Safety Code of the State, as nOlI enacted and as hereafter amended. Agency means the Commun ity Redevelopment Agency of the City of Santa Ana, Bond or Bonds means Bonds of the Agency authorized and issued under the Resolut"iõñ. - City means the City of Santa Ana. . . 8 . . of Funds) and each purch ase Mortgage Commitment Contract means the Commitment Contract (and Reservation by and among the Agency, the Trustee, the Qualified Mortgage Lender developer of each Project whereby the Agency commits funds to and the developer and Qual ified Mortgage Lender agree to provide Loans for purchase by the Trustee on behalf of the Agency. Condominium Project means the entire parcel of real property divided, or to be divided, pursuant to Section 1350, et seq., of the Civil Code of the State into condominium Residences (as a condominium is defined in Section 783 of the Civil Code óf the State), including all structures thereon. Construction Standards means the applicable standards Residential Construction adopted by the Agency as part of its Program. .f.!J!:!1£ means the Federal Home Loan Mortgage Corporation or other agency or instrumental ity of the United States to which the powers of the Federal Home Loan Mortgage Corporation have been transferred. for Financinq means the lending of moneys or any other th ing of value for the purpose of facil itating Residential Construction pursuant to the Act and inc 1 udes the mak ing of Mortgage Loans to purch asers of newly constructed Residences and the purchase, servicing and selling of Mortgage Loans. ~ means the Federal National Mortgage Association. Instructions, rules of practice and guidelines mean all handbooks, guides, rules, manuals or other materials of whatever nature adopted by the Agency with respect to the Program, and includes, but is not limited to, the Mortgage Loan Purchase Agreement, the Sellers' Guide, the Servicing Agreement and the Servicers' Guide. Law means the Community Redevelopment Law (Part 1, conmencing with Section 33000, of Division 24 of the Health and Safety Code of the State), as now enacted and as hereafter amended. Mortqaqe means a deed of trust or other instrument wh ich constitutes a lien in the State on real property and improvements thereon, together with a promissory note or similar interest bearing obligation made by a Mortgagor and secured by such alien on real property located within the Projects and improved or to be improved by a Residence. Mortqaqe I nsurer means any person 1 i censed to insure Mortgages in the State. Mortgage Loan means a Mortgage made and executed for the purpose of Financing Residential Construction, the payment of which is insured by Mortgage Insurance. Mortgage Loan Purchase Agreement means an agreement by and alOOng the Agency, the Trustee, and a Qualified Mortgage Lender for the purchase of 2 ----.J . . 8 . . Mortgage Loans pursuant to subsection (C) of Section 505 of the Resolution, and includes the Sellers' Guide. Mortgagor means the obligor under a tIortgage Loan who qualifies as a Participating Party under the Act. Participating Party means any person, corporation, partnership, firm or other entity or group of entities requiring Financing for Residential Construction pursuant to the provisions of the Act. No elective officer of the State or any of its political subdivisions or employee of any redevelopment agency shall be eligible to be a Participating Party. Private Mortqaqe Insurance means insurance issued by a Mortgage Insurer insuring or guaranteeing, respectively, principal and interest payments on a Mortgage Loan, in whole or in part. Program means the Residential tIortgage Financing Program. Project means the Res i dences being financed directly or indirectly with the proceeds of the Bonds, namely the Santa Ana Intown Housing One Condominiums, involving the development of a 14-acre site between First and Third, and Ross and Flower Streets as a Condominium Project. Qualified Mortqage Lender means any state or national bank or trust company, savings and loan assoclation, or roortgage banker authorized to acquire, hold and deal in mortgages and approved by the FNMA or FHLMC as a seller/servicer of mortgages. Such Mortgage Lender shall have a principal office and place of business in the State, shall be authorized to do business in the State, shall be authorized by the Agency to do business with the Agency and to aid in Financing pursuant to the act on behalf of the Agency. Redevelopment Project Area means the City of Santa Ana Collmmity Redevelopment Project Area, the Redevelopment Plan for which was approved by the City Council pursuant to Ordinance No. 1173, adopted on July 2, 1973, as amended. Residence means real property improved with a residential structure and located in the Project, the financing of which is or may hereafter be permitted under the Act. Residence includes both condominium dwelling units within a Condominium Project and real property improved with single-family residential structures. Residential Construction means the construction of new Residences meeting the requirements of the Agency's redevelopment plan for the Redevelopment Project Area and of applicable local, State and Federal standards for residential construction, including any higher standards adopted by the Agency for a Redevelopment Project Area or as part of the redevelopment program . 3 . . 8 . . Residential Mortgage Financing Program means and includes any act or thing done by the Agency,. the Trustee, and any Qual ified Mortgage Lender and Servicer under the Resolution for the purposes of encouraging investment within and upgrading of a Redevelopment Project Area in accordance with the redevelopment plan for the Redevelopment Project Area by providing permanent Financing for Residential Construction through the purchase of Mortgage Loans with the proceeds of Bonds. Resolution means this Resolution, as from time to time amended or supplemented by any Supplemental Resolution in accordance with the terms hereof. Rules and Regulations means these Rules and Regulations adopted by the Agency in connection with its Residential Mortgage Financing Program. Sellers' Guide means the Sellers' Guide dated as of July 1, 1980, 1980, as now or hereafter amended supplemental to the Mortgage Loan Purchase Agreement and containing further criteria for the purchase of Mortgage Loans by the Trus tee on behalf of the Agency. Servicer means any Qualified Mortgage Lender who shall, pursuant to a Servicing Agreement with the Agency and the Trustee, agree to service Mortgage Loan s. Servicers' Guide means the Servicers' Guide dated as of July 1, 1980, as now or hereafter amended supplemental to the Servicing Agreement and containing further criteria for the servicing of Mortgage Loans by a Servicer. Servicing Agreement means a contractual agreement by and among the Agency, the Trustee and a Servicer for the servicing of Mortgage Loans by the Servicer, and includes the Servicers' Guide. ~ means Security Pacific National Bank appointed to act as Trustee under the Resolution, and its successor or successors and any other bank or trust company or national banking association at any time substituted in its place pursuant to the Resolution. 1.03 Rules of Practice and Procedure. Instructions, rules of practice and guidelines for the receipt and processing of applications for Mortgage Loans, the issuance of Mortgage Loan purchase commitments, the purchase of Mortgage Loans, the undertaking of Mortgage Loan closings, the servicing of Mortgage Loans, the establishment of a program to assist persons within a Redevelopment Project Area who, without financial assistance would be unable to undertake construction of their Residences, and the taking of other internal actions as may be necessary and desirable for the implementation and administration of all aspects of the Program may be established and IOOdified from time to time by the Agency, at all times consistent with the provisions of the Act, the Resolution and these Rules and Regulations. 4 . . e . . 1.04 Inter-Agency Cooperat ion. Whenever poss ib le and appropr iate, the Agency will cooperate with Federal, State and local agencies to util ize all existing and available resources to promote the production and increased availability of low-interest loans to finance Residential Construction within a Redevelopment Project Area of the City. the Tr~~Ot~e ,~sepu~~~ a~ i ~~~~~~Og~ ~foa:rtm~~~ti J~;a~gnegnc~~r:ih;sou6~ Qualified Mortgage Lenders without premium, if the Mortgage Loans are of the character and on the terms es tab 1 i shed by the Agency for the Program. 1.06 Holding, Pledge and Assiqnment. The Agency, through the Trustee, may hold Mortgage Loans as security for Financing Residential Construction and may pledge or assign the same as security for repayment of Bonds issued pursuant to the Resolution. Such Mortgage Loans may be assigned to, and held on behalf of the Agency by, the Trustee. 1.07 Forms. Forms to be employed for the mak ing and processing of applications for Mortgage Loans, for the purchase of Mortgage Loans and for the administration of all matters related thereto shall be either approved or prepared, revised and amended from time to time by the Agency staff and consultants, and shall specify the information to be included therein and the supporting materials tQ be submitted therewith. The forms now and hereafter used in connection with the purchase of loans by FHLMC shall be deemed acceptable for use in the Program. 5 . . e . . CHAPTER 2 RESIDENTIAL MORTGAGE FINANCING PROGRAM 2.01 General. These Rules and Regulations prescribe the policies, procedures anëïãü1'fiorization for committing to purchase and for purchasing Mortgage Loans from Qualified Mortgage Lenders. 2.02 Objective. The basic objective of the Agency in implementing the Program is to make available long-term, low-interest loans to finance Residential Construction in the City of Santa Ana Community Redevelopment Project Area of the Agency in order to encourage investment and to upgrade such Area and to encourage persons of all social and economic positions to reinhabit such Area, thereby rendering such Area roore socially balanced and economically self-sufficient. 2,03 Eligible Mortgaqe Lenders. The Agency, on its ONn initiative or upon request, shall distribute to mortgage lenders information concerning the Program and any interested mortgage lender may submit material sufficient for the Agency to determine its qualifications to act as a Qualified Mortgage Lender and Servicer under the Program. Having submitted appropriate documentation for review and approval to the staff of the Agency, Wells Fargo Mortgage Company shall be a Qual ified Mortgage Lenders and Servicers for purposes of the Program. 2.04 Eligible Mortgagors. In addition to the further requirements of the Mortgage Loan Purch ase Agreement and the Sellers I Guide, Mortgagors applying for a Mortgage Loan under the Program must meet all of the following requirements: (l) Be, and continue to be, the owner-occupant of the Residence securing repayment of the Mortgage Loan; (2) Mortgage Loan; Possess the legal capacity to incur the obligations of the (3) Have a general credit standing acceptable to the Mortgage Insurer; (4) Be able to pay all obligations as they become due, including the principal, interest and escrON payments, if any, on the Mortgage Loan applied for; (5) Agree, as a Participating Party, to comply with requirements established by the Agency and with the terms of the Mortgage Loán; and (6) Not be an elective officer of the State of California, the Agency nor of any political subdivision of the State, nor an employee of any redevelopment agency. 6 . . 8 . . 2.05 Eligible Properties. In addition to the further requirements of the Mortgage Loan Purchase Agreement and the Sellers' Guide, in order to be subject to a Mortgage Loan under the Program, a Res i dence must meet the following requirements: Be located in City of Santa Ana COfII11unity Redevelopment (1) Project Area; (2) Architectural and engineering design rust meet Construction Standards and the work of Residential Construction must be subject to Agency supervision in accordance with an applicable agreement with a developer or owner; (3) Be open, upon sale or rental of any portion thereof, to all regardless of race, color, religion, national origin, or ancestry; (4) Be real property on which a Residence is located and held at the time of closing by the Mortgagor in fee simple. 2.06 Contractors and Contracts. All contractors and subcontractors engaged in Residential Construction shall provide equal opportunity for employment, without discrimination as to race, sex, marital status, color, religion, national origin or ancestry. All contracts and subcontracts for Residential Construction shall be let without discrimination as to race, sex, marital status, color, religion, national origin or ancestry. It is the policy of the Agency to encourage participation by minority contractors. All publicity authorized or undertaken by the Agency in connection with the Program shall include provisions encouraging participation by minority contractors particularly, in common with all contractors. 2.07 Mortgages. (A) The Mortgage shall be a lien on the property, be consistent with California law, and conform with the standards prescribed by the Agency, the Qualified Mortgage Lender and the Mortgage Insurer. (8) The approved Mortgage Loan shall include provisions necessary to protect the interest of the Agency, such provisions being stipulated by the Mortgage Loan Purch ase Agreement and the Sellers' Gui de, Serv icing Agreement and the Servicers' Guide and Program instructions, rules of practice and gui del ines approved and adopted from time to time by the Agency or its staff. (C) With respect to Mortgage Loans financed by the Agency, the maximum loan as a percentage of the property's appraised value or sales price shall be determined according to the applicable regulations and procedures of the Qualified Mortgage Lender and the Mortgage Insurer, and within the 1 imitations and requirements of the Act and the Program, the Conmitment Contract (and Reservation of Funds) and the Mortgage Loan Purchase Agreement. 7 . . . . . 2.08 Mortgage Loan Terms. (A) The interest rate to be paid on all Mortgage Loans shall be a rate that is establ ished by the Agency in the Mortgage Loan Purchase Agreement which interest rate is consistent with its costs of borrowing, expenses of operation and reserves against losses due to default, (B) Each Mortgage Loan shall be scheduled for repayment within the shortest period consistent with the ability of the Mortgagor to pay the required principal and interest on the Mortgage and other attendant expenses, but in no case shall it have a, maturity which is greater than 30 years, or eighty percent of the estimated economic life of the property, whichever is less. (C) The Mortgage Loan shall provide that payments will be due on the first of each month. Payments to principal shall commence on the first day of the second month following the date of settlement of the Mortgage Loan. (0) The Mortgage Loan shall comply in all respects with the requirements and limitations of the Act, the Program and applicable rules and regulations of the Mortgage Insurer. (E) The Agency sh all es tab 1 ish a Mortgage Loan prepaymen t penalty which it deems satisfactory to protect its financial obligations to the purchasers and holders of the Agency's notes or Bonds; provided, however, that any such prepayment penalty shall not be greater than the maximum amount, if any, provided therefor in the Mortgage Loan Purchase Agreement and the Sellers' Guide and as permitted under the rules and regulations of the Mortgage I nsurer and State 1 aw. 2.09 Default Under Mortgage. Mortgages held as security for Mortgage Loans made under the Program which are in default may be foreclosed by the Servicer according to the terms of the security deed of trust by advertisement and p,ublic sale under power contained therein. 2.10 Mortgage Servicing, In the case of Mortgage Loans submitted by a Qualified Mortgage Lender and approved for purchase according to the provisions of the Mortgage Loan Purchase Agreement, the Agency will offer a Servicing Agreement to such Qualified Mortgage Lender. Should the Qualified Mortgage Lender decl ine to enter into such Servicing Agreement, the Agency may provide for the servicing of the Mortgage Loan by entering into a Servicing Agreement with another Qualified Mortgage Lender. Servicing of all Mortgage Loans sh all be accomp 1 i shed pursuant to and in compliance wi th the Servi cing Agreement and the Servicers' Guide. 8 . CHAPTER 3 MISCELLANEOUS . 3.01 Waiver. The Agency by resolution may waive or vary particular provisions oftiiëSe Rules and Regulations: (1) to conform to the requirements of the Federal Government in connection with any housing with respect to which Federal assistance is sought; or (2) due to exceptional circumstances if, in the determination of the Agency, the application thereof to a specific case or under an emergency situation may result in undue hardship. 3.02 Separability. If any clause, sentence, paragraph, section or part of these Rules and Regulations shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered. 8 3.03 Certain Arrangements Prohibited. No person from whom the Agency may acquire or to whom the Agency may make Mortgage Loans shall, pursuant to any arrangement, formal or informal, purchase Bonds in an amount related to the amount of Mortgage Loans to be acqu ired from such person by the Agency. 3.04 Amendment. These Rules and Regulations may be amended or supplemented by the Agency at such times and in such manner as it may determine, to the extent that these Rules and Regulations are inconsistent with the Act, the Resolution or with other applicable provisions of law. 3.05 ~orms or A~ements. The forms of Commitment Contract (and Reservation 0 Funds, Mortgage Loan Purchase Agreement, Servicing Agreement and Investment Agreement attached hereto as exhibits "A" "B" "C" and "0" respectively, are hereby approved for use in the Pr~gram' in the for~ substantially as so attached and said contract and agreements shall be executed on behalf of the Agency by an Authorized Officer. 3.06 Sellers' Guide and Servicers' Guide. A Sellers' Guide and a Servicers' Guide, both dated as of the date of these Rules and Regulations, have been prepared by the Agency staff and consultants in accordance with the requirements of the Act, the Resolution and these Rules and Regulations and such Guides are hereby approved for use in the Program, provided that such Guides may be hereafter amended to reflect appropriate industry standards and FHLMC guidelines. * * * * * . [Exh ib its to be attached to executed original.] . 9 . . , . . I hereby certify that the foregoing Rules and Regulations were duly approved and adopted by Resolution No. 80-77, which Resolution was duly passed and adopted by the Community Redevelopment Agency of the City of Santa Ana, at a special meeting of the Agency held on the 1st day of July, 1980, by the following vote, to wit: AYES: Members: NOES: Members: A8SENT: Members: James E. Ward, Gordon Bricken, Robert W. Luxembourger, Al Serrato, Daniel E. Griset, Harry K. Yamamoto J. Ogden Markel None a~~ [S E A L] 10