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HomeMy WebLinkAboutAgenda - 10-20-1998 - 8e~. SUBJECT: HOME Program -Community Revitalization Loan Fund Action Agenda Item No. ~_ DEPARTMENT: Housing and Community Development PUBLIC HEARING: (Y/1~ BUDGET AMENDMENT: (Y/l~ ATTACHMENT(S): Development Agreements ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 20, 1998 INFORMATION CONTACT: Tara L. Fikes TELEPHONE NUMBERS: - -eat. 2490 Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 PURPOSE: To approve a Development Agreement with two local non-profit housing agencies, EmPOWERment, Inc. and Orange Community Housing Corporation, for HOME funding available under the Community Revitalization Loan Fund. BACKGROUND: A Community Revitalization Loan Fund was created in the 1998-99 Orange County HOME Consortium program design to provide funds to assist low/moderate income families purchase existing housing. Funds can be requested by EmPOWERment, Inc. and Orange Community Housing Corporation for acquiring property, rehabilitating the property, and/or second mortgage assistance. A total of $210,000 has been allocated for this program in the 1998-99 fiscal year with priority funding granted for activities in the Northside community in Chapel Hill. Operational guidelines for this program were approved on August 20, 1997. Under this program, local non-profit housing agencies will acquire, rehabilitate, if necessary, and resell houses located in Orange County to eligible first-time homebuyers. In some cases, houses will not need to be repaired, thus, the non-profit organization will serve as an sponsor for prospective homebuyers who need second mortgage assistance. This mortgage assistance enables the first time homebuyer to obtain a first mortgage for a lesser amount, thereby increasing the availability of first-time homeownership opportunities. The non-profit organization would be responsible for certifying the eligibility of the prospective homebuyer, as well as ensuring that the subject property is in standard condition. An estimated ten (10) low/moderate income families will benefit from this program. In the first year of this program, 1997-98, approximately six (6) low/moderate income families benefited from this program. RECOMMENDATION(S): The Manager recommends approving the Development Agreement with two local non-profit housing agencies, EmPOWERment, Inc. and Orange Community Housing Corporation, for HOME funding available under the Community Revitalization Loan Fund and authorizing the Chair to execute the Development Agreement on behalf of the Orange County HOME Consortium upon the County Attorney's review and approval. 3 NORTH CAROLINA ORANGE COUNTY DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the "County") and EmPOWERment, Inc., a North Carolina nonprofit corporation (hereinafter referred to as "EmPOWERment"). The effective date of this Agreement is October 20, 1998. WITNESSETH WHEREAS, the Orange County HOME Consortium has designated approximately $210,000 in FY 1998 HOME funds for the purpose of supporting the purchase, rehabilitation, and/or new construction of housing in Orange County with priority given to activities in the Northside Community in Chapel Hill; and WHEREAS, the County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated August 27, 1992, and amended January 26, 1993, and July 28, 1993, and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d.) et. seg.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, the Orange County Board of County Commissioners approved the Community Revitalization Loan Fund Program Guidelines on August 20, 1997 which is hereby incorporated into this agnrement as Exhibit A; and WHEREAS, EmPOWERment, Inc., is a local non-profit housing corporation interested in serving as the sponsor, developer, and/or advocate for potential first-time homebuyers; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto do agree as follows: 1. EmPOWERment agrees to acquire; rehabilitate, if necessary; and resell available property in the form of single family dwellings; condominiums, and/or townhouses located in Orange County to eligible first-time homebuyers; and/or act as an agent for persons wishing to receive second mortgage assistance under this program. 2. EmPOWERment agrees to abide by the Community Revitalization Loan Fund Program Guidelines dated August 1997 in the implementation of this program. 3. Upon receipt of a request for HOME funds under this program, the County shall review all submitted documentation within ten (10) working days and provide in writing a preliminary response to the request. If the response is favorable and no 3 4 further documentation is necessary, the County will notify EmPOWERment in writing of the date funds will be available. If additional information is requested by the County, the request for information must be satisfied in full before the written notification of funding availability. Any new submission of material will trigger the ten (10) working days response timeframe outlined above. 4. HOME funds used for acquisition and rehabilitation of available property shall be secured by a note from EmPOWERment to the County and a deed of trust constituting a first lien on the Property which deed of trust shall designate the County as the secured party/beneficiary. The note and deed of trust shall be in the form of the documents that are attached to and a part of this Agreement. The County agrees to subordinate its lien on the Property to a first mortgage securing private financing obtained by EmPOWERment in order to complete the project: In the event that EmPOWERment is acting as a sponsor of a first-time homebuyer in need of second mortgage funding, HOME funds used for this purpose shall be secured by a note from the homebuyer to the County and a deed of trust constituting a first lien on the Property which deed of trust shall designate the County as the secured party/beneficiary. The note and deed of trust shall be in the form of the documents that are attached to and a part of this Agreement. The County agrees to subordinate its lien to a first lien securing private permanent financing acquired by the homebuyer. 5. EmPOWERment agrees to sell homes to qualified first-time homebuyers whose income does not exceed 70% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as amended from time to time. At the closing of the sale to a homebuyer, EmPOWERment shall repay the County the total HOME investment in the form of a credit to the homebuyer. The credit to the homebuyer shall be documented by a promissory note from the homebuyer to the County which note shall be secured by a deed of trust on the Property naming the County as beneficiary. The County agrees to subordinate its lien on each lot to a first lien securing private permanent financing acquired by the homebuyer. The period of affordability for HOME funds in accordance with the Act, its regulations and State Program Requirements shall be 20 years from the date of execution of this Agreement. The default interest rate shall be 7% per annum. EmPOWERment shall provide to the County, prior to closing the sale of the Property to the homebuyer, documentation satisfactory to the County verifying the income of the homebuyer. 6. In the event property is acquired for rehabilitation and resale without identifying a prospective homebuyer, EmPOWERment agrees to identify a qualified buyer and complete the sell of the property to the homebuyer within one hundred twenty days (120) days of the date of acquisition of the property by EmPOWERment. Failure to abide by this provision will constitute an Event of Default as defined in Paragraph 8b. of this agreement. 4 5 7. The County and EmPOWERment agree to comply with the Act, its regulations and Federal Program Requirements in the purchase and sale of the Property. The County and EmPOWERment further agree to comply with the provisions of the funding agreement, dated August 13, 1998, attached hereto and made a part of this Agreement (Exhibit B). 8. Miscellaneous Provisions. a. Termination of Agreement The obligations of the parties hereunder and the specific obligation of EmPOWERment to acquire; rehabilitate, if necessary; and resell available property in the form of single family dwellings; condominiums, and/or townhouse located in Orange County to eligible Orange County residents shall terminate upon the completion of the sale of the Property to a homebuyer. Continuing obligations of the homebuyer shall be contained in the note and deed of trust to be recorded at the time of closing of the sale of the Property. Notwithstanding the foregoing, the parties hereto may terminate this Agreement at any time by a mutual agreement to that effect in writing. b. Default, Remedies. This Agreement may be terminated by a non- defaulting party upon an event of default hereunder, after written notice thereof is given giving the defaulting party thirty (30) days in which to cure the default. As used herein, the term "an event of default" shall mean and refer to a breach of any of the terms of this Agreement including a failure to meet the time limitations contained in this Agreement and a failure to act as required by this Agreement by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement which the defaulting party has not cured. With respect to any event of default, the non-defaulting party may exercise any right available to it at law or in equity with respect to such default. c. Books and Records. Each party shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of grant funds and the fulfillment of this Agreement. Each party agrees that any authorized representative of the County, the State, the U.S. Department of Housing and Urban Development and Comptroller General of the United States shall, at all reasonable times, have access to and the right to inspect, copy, audit and examine all of the books, records and other documents relating to the grant and the fulfillment of this Agreement for a period of three (3) years following the completion of the Project. d. Conflict with HOME Agreement Notwithstanding anything herein to the contrary, the parties hereto acknowledge the due execution of a HOME Program Agreement between the County and the U.S. Department of Housing and Urban Development and agree that any conflict between the provisions, requirements, duties or obligations of this Agreement and the HOME Agreement shall be resolved in favor of the HOME Agreement. 5 18 Orange Community Housing Corporation. (SEAL) Board of Directors ATTEST: Secretary Board of Directors NORTH CAROLINA ORANGE COUNTY President I' ,Notary Public in and for the above named County and State, do hereby certify that on this day personally appeared before me ,with whom I am personally acquainted, who, being by me duly sworn, says that he is Secretary and that is President of Orange Community Housing Corporation., a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate seal and attested to by its Secretary. Witness my hand and notarial seal, this the day of 1998. Notary Public My commission expires: