The URL can be used to link to this page

Home My WebLink About55A - MORTGAGE CREDIT CERT PROGRAMREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 1, 2009 TITLE: MORTGAGE CREDIT CERTIFICATE PROGRAM f ,l ./%~. ~' L CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 151 Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For_ CONTINUED TO FILE NUMBER Adopt a resolution making the finding that the Merged Redevelopment Project Area of the Community Redevelopment Agency will benefit by the operation of the Mortgage Credit Certificate Program both within and outside the project area, but within the boundaries of the City of Santa Ana. DISCUSSION The County of Orange and participating cities have proposed to resume offering the Mortgage Credit Certificate (MCC) Program, which has not been offered since 2004 because of the increasing disparity between the cost of homes and applicable income restrictions. The MCC Program is limited to participants with annual household incomes of 100 percent of the area median for one and two person households, and 115 percent of the area median for three or more person households. The current maximum purchase prices are $643,322 for newly constructed homes and $694,905 for resale homes. The MCC Program assists eligible households to purchase a home by enabling them to take as much as fifteen percent of their annual mortgage interest payment as a dollar-for-dollar credit against their federal income tax. This credit enables them to reduce their federal income tax withholding, therefore making more of their monthly income available for mortgage payments. Participating mortgage lenders will take the value of the MCC into consideration when underwriting loans. The MCC can be applied throughout the life of the mortgage, provided the original first- time homebuyers remain the legal owners and continue to use the home as their principal residence. 55A-1 Mortgage Credit Certificate Program June 1, 2009 Page 2 In order for the Agency to participate, the City must adopt a resolution making a finding that operation of the Program both within and outside of the Merged Redevelopment Project Area will benefit the project area. The Agency must adopt a resolution making the same finding, adopting the Program, and authorizing execution of a Cooperative Agreement with the County of Orange. Under the terms of the Agreement, the Agency will be required to pay a proportionate share of the administrative cost of the Program. Its share will be based on the number of MCCs issued for homes located within the City of Santa Ana. The County estimates that the cost to the Agency will not exceed $15,000 and may be much lower. FISCAL IMPACT There is no fiscal impact to the City of Santa Ana associated with this action. C Cynthia J. lson Deputy City Manager for Development Services Community Development Agency CJN/SLB/TG/kg 55A-2 RESOLUTION 2009- 5!20109 les A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE OPERATION OF A MORTGAGE CREDIT CERTIFICATE PROGRAM BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA OUTSIDE THE MERGED REDEVELOPMENT PROJECT AREA OF THE AGENCY, BUT WITHIN CITY BOUNDARIES BE IT RESOLVED BY THE MEMBERS OF THE CITY COUNCIL, AS FOLLOWS: Section 1. The City Council for the City of Santa Ana finds, determines and declares as follows: A. The City of Santa Ana ("City") and the Community Redevelopment Agency of the City of Santa Ana (the "Agency") have determined the importance of participation in a Mortgage Credit Certificate Program (the "Program") for the benefit of first- time homebuyers to be administered by the County of Orange (the "County") pursuant to the provisions of Part 5 of Division 31 of the Health and Safety Code of the state of California (the "Act") and the Internal Revenue Code of 1986 (the "Code"). B. The Program will be operated both within the merged redevelopment project area of the Agency and outside such area, but within the boundaries of the City of Santa Ana. C. The Agency and the County will enter into a Cooperative Agreement ("Agreement") for the County to administer the Program. Under the terms of the Agreement, the Agency will be required to pay a proportionate share of the administrative costs of the Program. D. The City finds and declares that such expenditures will be of benefit to the entire merged redevelopment project area, and to all residents of the City. This finding is made pursuant to Health & Safety Code § 33334.2(g)(1). E. The County of Orange will apply for an allocation from the California Debt Limit Allocation Committee ("CDLAC") for authority to issue mortgage credit certificates, which allocation, when and if received, will be made available to the Agency and other participating cities; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 2. The City Council finds that each of the foregoing recitals is true and correct. 55A-3 5/20109 les Section 3. The City hereby approves the filing of an application with CDLAC on behalf of the Agency for an allocation of authority to issue mortgage credit certificates by the County of Orange, for the operation of the Program by the County. Section 4. The City hereby finds and determines that the merged redevelopment project area of the Agency will benefit by the operation of the Program both within and outside the merged redevelopment project area, but within the boundaries of the City. Section 5. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this Resolution. Adopted this day of 2009. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney By: Lisa E. Storck Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers: Councilmembers: Councilmembers: Councilmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of Council, do hereby attest to and certify the attached Resolution No. to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of Council City of Santa Ana 55A-4 5/20/09 les 55A-5 DRAFT COUNTY OF ORANGE MORTGAGE CREDIT CERTIFICATE PROGRAM COOPERATIVE AGREEMENT BETWEEN THE COUNTY OF ORANGE AND THE COMMUNITY REDEVELOPMENT AGENCY FOR THE CITY OF SANTA ANA THIS COOPERATIVE AGREEMENT (the "Cooperative Agreement") is hereby made and entered into as of this day of 2009, by and between the County of Orange, California, (the "County") and the Community Redevelopment Agency for the City of Santa Ana (the "Agency"). WITNESSETH WHEREAS, the County has determined to engage in a mortgage credit certificate program (the "Program") pursuant to Part 5 of Division 31 of the Health and Safety Code of the State of California (the "Act") in connection with the construction and acquisition of homes in the County, all as provided for in said Act; and WHEREAS, the County has determined to finance the Program by the issuance of mortgage credit certificates as authorized by the Internal Revenue Code of 1986 (the "Code"); and WHEREAS, the County, pursuant to the Act, has established the Program, and has determined to cooperate with the Agency pursuant to the Act and in the exercise of its powers under the Act for purposes of the Program; and WHEREAS, the Agency has adopted the Program and determined to cooperate with the County pursuant to the Act in the exercise of their powers under the Act for the purposes of the Program; NOW, THEREFORE, in consideration of the mutual covenants hereinafter provided, the parties hereto agree as follows: SECTION 1. The words and phrases of this Cooperative Agreement shall, for all purposes hereof unless otherwise defined herein, have the same meanings assigned to such words and phrases in the Act. SECTION 2. The County agrees to use its best efforts to undertake the Program and to issue mortgage credit certificates therefore pursuant to the Act and the Code from time to time to the extent that the County receives allocations from the California Debt Limit Allocation Committee ("CDLAC"). 1 55A-6 DRAFT SECTION 3. The Agency represents and warrants to the County that: (i) the City of Santa Ana has heretofore adopted a general plan for the City in conformance with the provisions of the Planning Zoning Law of the State of California (Government Code Sections 65000 et sue.), (ii) said general plan includes a land use element and a housing element as required by Government Code Section 65302, and (iii) the Program complies with said land use element and housing element. SECTION 4. The Agency agrees that the County may issue mortgage credit certificates under the Program, as specifically set forth in the Act and the Code, with respect to property located within the geographic boundaries of the Agency and further agrees that the County may exercise any or all of the Agency's powers for the purpose of issuing mortgage credit certificates pursuant to the Act and the Code with respect to property located within the geographic boundaries of the Agency. SECTION 5. The Agency agrees to make any deposit required by CDLAC for an application for a mortgage credit certificate allocation. The Agency further agrees to pay within 45 days after invoiced by the County its proportionate share (based upon the number of participants in the Program) of administration costs applicable to each allocation received from CDLAC, which share is estimated not to exceed $15,000. SECTION 6. The Agency agrees to undertake such further proceedings or actions as maybe necessary in order to carry out the terms and the intent of this Cooperative Agreement. SECTION 7. Nothing in this Cooperative Agreement shall prevent the County from entering into one or more agreements with other public bodies and political subdivisions within the County, if deemed necessary and advisable to do so by the County. SECTION 8. This Cooperative Agreement maybe amended by one or more supplemental agreements executed by the County and the Agency at any time, except that no such amendment or supplement shall be made which shall adversely affect the rights of the owners of any mortgage credit certificates issued by the County in connection with the Program. SECTION 9. This Cooperative Agreement shall expire and be of no further force and effect upon the written agreement of the parties hereto, provided that termination of this Cooperative Agreement shall not adversely affect the rights of the owners of any mortgage credit certificates issued by the County in connection with the Program. 2 55A-7 DRAFT IN WITNESSS WHEREOF, the parties hereto have caused this Cooperative Agreement to be executed and attested by their proper officers duly authorized, and their official seals to be hereto affixed, all as of the date first above written. COUNTY OF ORANGE By: Public Finance Manager APPROVED AS TO FORM: BENJAMIN P. DE MAYO COUNTY COUNSEL By: Deputy County Counsel Dated: ATTEST: Patricia E. Healy Recording Secretary APPROVED AS TO FORM: Joseph W. Fletcher Agency General Counsel By: Lisa E. Storck Assistant Counsel COMMUNITY REDEVELOPMENT AGENCY CITY OF SANTA ANA By: Cynthia J. Nelson, Executive Director 3 55A-8