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Resolution 10467OR'*GINA RESOLUTION NO. 10467 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALAMEDA APPROVING RULES AND REGULATIONS RELATING TO ITS HOME MORTGAGE FINANCING PROGRAM WHEREAS, Chapters 1 -5 of Part 5 of Division 31 of the Health and Safety Code of the State of California (herein called the "Act ") authorize cities and counties to issue revenue bonds for the purpose of financing home mortgages authorized by the Act; and WHEREAS, the City of Alameda (the "City ") has undertaken a Home Mortgage Financing Program under the Act; and WHEREAS, the provisions of applicable law require the City to adopt Rules and Regulations in implementation of the City's Home Mortgage Financing Program. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Alameda as follows: Section 1. The Rules and Regulations attached hereto as Exhibit "A" are hereby adopted and approved as the Rules and Regulations of the City of Alameda relating to its Home Mortgage Financing Program. Section 2. The City Clerk shall certify to the adoption of this resolution. Section 3. This resolution shall take effect from and after its adoption. I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly adopted and passed by the Council of the City of Alameda in adjourned regular meeting assembled on the 25th of October,1984, by the following vote to wit: AYES: Councilmembers Gorman, Lucas, Monsef and President Diament - 4. NOES: None. ABSENT: Councilmember Hanna - 1. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said City this 25th day of October, 1984. Deputy City Clerk EXHIBIT A CITY OF ALAMEDA HOME MORTGAGE FINANCING PROGRAM RULES AND REGULATIONS ESTABLISHING ELIGIBILITY CRITERIA FOR MORTGAGORS AND FOR HOME MORTGAGES These Rules and Regulations are made pursuant to Chapters 1 -5 of Part 5 of Division 31 of the Health and Safety Code of the State of California and Section 103A of the Internal Revenue Code of 1954, as amended, and relate to the City's Home Mortgage Financing Program of purchasing Home Mortgages, made to qualified persons and families, from Lenders, as hereinafter defined. These Rules and Regulations establish criteria for the origination, servicing and administration of Home Mortgages under the Program. In developing the criteria, the City has considered factors such as the amount of personal or family income available for housing needs, household size, costs and condition of available housing, and eligibility of potential mortgagors for federal housing assistance. Section 1. DEFINITIONS. Unless the context otherwise requires, the terms defined in this section shall for all purposes of these Rules and Regulations have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise defined, all terms used in these Rules and Regulations shall have the meanings assigned to such terms in the Act, the Tax Act or the Indenture. ACT. "Act" means Chapters 1 -5 of Part 5 of Division 31 of the Health and Safety Code of the State of California, as now in effect. ADMINISTRATOR. The term "Administrator'' shall mean the Department of Housing and Community Development of the City of Alameda, and any duly authorized successor thereto. BONDS. "Bonds" means the City of Alameda Single Family Residential Mortgage Revenue Bonds, 1984 Series A, authorized by the Indenture and at any time outstanding pursuant to the Indenture. COMMITMENT CONTRACT. "Commitment Contract" means a Commitment Contract (and Reservation of Funds) between the City and a developer or a lender whereby the City commits funds to purchase and the developer or lender, as the case may be, agrees to provide Home Mortgages for purchase by the Trustee on behalf of the City. HOME. "Home" shall mean real property improved with a residential structure and located in one of the Projects (as defined in the Commitement Contracts), or, with respect to homes which have been previously occupied, located within the boundaries of the City, the financing of which is or may hereafter be permitted under the Act and the Indenture. Home includes single - family attached or detached residential units, townhouse residential units and condominium residential units. HOME MORTGAGE. "Home Mortgage" means a loan made and executed for the purpose of financing residential construction or for the purpose of financing a Home which as been previously occupied, and secured by a Mortgage, the payment of which is insured by Private Mortgage Insurance, all as provided in the Act and the Tax Act. HOME MORTGAGE APPLICATION. The term "Home Mortgage Application" shall mean a Mortgagor's application for a Home Mortgage under the Program. HOME MORTGAGE PURCHASE AGREEMENT AND SERVICING AGREEMENT. "Home Mortgage Purchase Agreement" shall mean an agreement by and among the City, the Trustee and a Lender providing for the origination by the Lender and purchase of Home Mortgages by the Trustee on behalf of the City. "Servicing Agreement" shall mean a contactual agreement by and among the City, the Trustee and a Servicer for the servicing of Home Mortgages by the Servicer. HOUSEHOLD INCOME. The term "Household Income" means the current gross income as calculated by the Lender for purposes of qualifying a Mortgagor for a Home Mortgage together with the gross income of all persons 21 years of age or older who intend to reside permanently with such Mortgagor in the Home being financed under the Program, regardless of whether such persons resided with such Mortgagor at any time in the past. INDENTURE. "Indenture" means the trust indenture pursuant to which the City of Alameda Single Family Residential Mortgage Revenue Bonds, 1984 Series A are issued by the City under the Act, and as it may from time to time be supplemented, modified or amended. LENDER. The term "Lender" or "Lenders" shall mean any state or national bank or trust company, savings and loan association, or mortgage banker authorized to acquire, hold and deal in mortgages and is a FMNA or FHLMC approved seller /servicer. Such Lender shall have a place of business in the State, shall be authorized to do business in the State, shall be authorized by the City to do business with the City and to aid in Financing pursuant to the Act on behalf of the City including any or all, as the case may be, of the qualified mortgage lenders who execute a Home Mortgage Purchase Agreement or a Servicing Agreement and their successors duly qualified under such Agreements. MEDIAN HOUSEHOLD INCOME. "Median Household Income" shall mean the highest of (1) statewide median household income, (ii) countywide median household income, or (iii) median family income for the area as determined by the United States Department of Housing and Urban Development, as such median household income is established and adjusted from time to time by the City. EXHIBIT A -2- MORTGAGE. The term "Mortgage" shall mean a deed of trust or other instrument which constitutes a first lien (subject to Permitted Encumbrances) on real property and improvements thereon, together with a promissory note or similar interest bearing obligation made by a Mortgagor, the repayment of which is secured by such a lien on real property located within the City and improved by a Home financed with the proceeds of the Bonds. MORTGAGOR. The term "Mortgagor" shall mean the maker of, and any other Person obligated on, a Note in connection with the acquisition of a Home through the borrowing of money pursuant to a Home Mortgage and who (i) meets the income limitations of the Indenture and the Act, (ii) had a present ownership in a principal residence of such Person at no time during the 3 -year period ending on the Closing Date except as provided in the Indenture and the Tax Act, and (iii) otherwise meets the requirements of the Act, the Tax Act, the Indenture and the Program. The term "Mortgagor" shall also include, where appropriate, a subsequent purchaser of a Home who purchased such Home by assumption of the related Home Mortgage and who meets the requirements of the Act, the Tax Act and the Program . The term "Mortgagor" does not include any person who signs a Note and who executed and files with the Lender a statement under penalty of perjury or an affidavit that (i) he is executing the Note solely for purposes of additional security to the Lender, (ii) he has no other financial interest in the property subject to the Home Mortgage, and (iii) he has no intention to and will not occupy the premises subject to the Home Mortgage at any time. NOTE. "Note" shall mean the promissory note or other document or documents evidencing the obligation to repay a Home Mortgage which shall provide for acceleration of the indebtedness upon sale of the Home to a Person ineligible to be a Mortgagor under the Program. PERSON. The term "Person" shall mean any individual, partnership, co- partnership, firm, company, corporation, lending institution, association, joint stock company, trust, estate, political subdivision, state agency or any other legal entity, or its legal representatives, agents, or assigns. PROGRAM. The term "Program" shall mean the City's Home Mortgage Financing Program of purchasing Home Mortgages pursuant to the Indenture, the Act, the Tax Act and the ordinance of the City establishing the Program, as such documents may be supplemented or amended from time to time. Section 2. ELIGIBILITY CRITERIA FOR MORTGAGORS. A Person that complies with the criteria hereinafter set forth in this Section is deemed by the City to be a person or family of low or moderate income and unable to pay the amounts at which unassisted private enterprise is providing suitable, decent, safe and sanitary housing and shall be eligible to become a Mortgagor under the Program. To be eligible as a Mortgagor, a Person must (i) qualify as a Mortgagor under the requirements set forth in the Indenture, (ii) execute the Mortgagor's Affidavit in form set forth as an Exhibit to the Home Mortgage EXHIBIT A -3- Purchase Agreement, (iii) meet the income limitations set forth in the Indenture, and (iv) meet the underwriting requirements of the Lender and the provider of the Private Mortgage Insurance. No Mortgagor under the Program may be an elected official or employee of the City who has voted on matters related to the Bonds or has had direct involvement in the structuring and /or administration of the Program. Section 3. ADMINISTRATION, ORIGINATION AND SERVICING GUIDELINES. The administration, origination and servicing guidelines set forth in the Indenture, the Commitment Contracts, the Home Mortgage Purchase Agreement and the Servicing Agreement, respectively, and by this reference each such agreement is made a part hereof, shall be adhered to by the City, the Trustee and the Lenders in performing their obligations in connection with the Program. Section 4. SPECIAL HAZARD INSURANCE POLICY. In order to maintain the rating on the Bonds issued in connection with the Program, the Trustee will keep and maintain a Special Hazard Insurance policy issued by an insurer to be selected under the Program, or a replacement policy as provided in the Indenture. Section 5. QUALIFIED HAZARD INSURERS. In order to maintain the rating on the Bonds issued in connection with the Program, the City will designate from time to time those insurers that are approved for the purpose of providing the Standard Hazard Insurance required for Home Mortgages originated and serviced under the Program. Such insurers are initially designated and until otherwise provided shall be those companies (i) qualified to provide such insurance in the State and (ii) approved by either FMNA or FHLMC. Section 6. MEDIAN HOUSEHOLD INCOME. For purposes of the Program, Median Household Income is $34,454. The City reserves the right to adjust the Median Household Income from time to time in accordance with the authorization therefor contained in the Act. Section 7. ACQUISITION COST. "Acquisition Cost" means the cost of acquiring a Home from the developer or other seller as a completed residential unit. "Acquisition Cost" includes all amounts paid, either in cash or in kind, by the Mortgagor (or a related party for the benefit of the Mortgagor) to the developer or other seller (or a related party for the benefit of the developer or other seller) as consideration for the Home. If the Home is purchased subject to a ground lease then the term "Acquisition Cost" includes the capitalized value of any ground rent payable with respect thereto. The term "Acquisition Cost" does not include usual and reasonable settlement or financing costs. "Settlement costs" include titling and transfer costs, title insurance, survey fees and other similar costs. "Financing costs" include credit reference fees, legal fees, appraisal expenses, "points" which are paid by the buyer (but not the seller even though borne by the buyer through a higher purchase price) or other costs of financing the Home. However, settlement costs and financing costs are excluded in determining Acquisition Cost only to the extent that such amounts EXHIBIT A -4- do not exceed the usual and reasonable costs which would be paid by the buyer where financing is not provided through the Bonds. For example, if the taxes, such excess shall be treated as part of Acquisition Cost of a Home. In addition, if the purchaser agrees to pay to the seller an amount sufficient to pay outstanding assessment liens, such payment shall be treated as a part of Acquisition Cost of a Home. Section 8. MAXIMUM PURCHASE PRICE. For purposes of the Program, the maximum Acquisition Cost of a Home subject to purchase under the Program is $168,410 for newly - constructed Homes, i.e. Homes that have not been previously occupied ($183,720 for such Homes if they are located within a Targeted Area) and $164,120 for existing Homes, i.e. Homes that have been previously occupied ($179,040 for such Homes if they are located within a Targeted Area), subject, in each case, to adjustment from time to time, in accordance with the Indenture and the Tax Act. Section 9. PROGRAM IMPLEMENTATION. Decisions concerning the Program will be made for the City by the Administrator in accordance with direction and guidelines to be established by the City upon request of the Administrator. It will be the policy of the City and the Administrator to investigate the facts and circumstances surrounding any requests for actions or approvals by the City in connection with the Program and to discuss the requested actions or approvals with the person or persons making such requests and, if the Administrator deems it desirable or it is required by the Indenture, with the Trustee. In all instances, the City and Administrator will act with due regard for the security of the Bonds issued in connection with the Program, the City's goals for the Program and the terms and conditions of the Indenture and these Rules and Regulations. Section 10. AMENDMENTS. These Rules and Regulations may be modified or amended in accordance with the provisions hereof. Copies of all such modifications of amendments shall be transmitted to each of the Lenders and the Trustee. Section 11. MISCELLANEOUS. (A) WAIVER. To the extent permitted by the Act and the Tax Act, the City shall have the right to waive any rule or regulation herein contained, and any failure on the part of the City to enforce any rule or regulation herein shall not affect the validity of any contract entered into pursuant to the Program. (B) GOVERNING LAW. All questions with respect to the construction of these Rules and Regulations shall be governed by the laws of the State. (C) SECTION HEADINGS. The headings of the several sections of these Rules and Regulations shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. EXHIBIT A -5- (D) SEVERABILITY. If any one or more of the provisions contained in these Rules and Regulations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions hereof, and these Rules and Regulations shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. EXHIBIT A -6-