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Home My WebLink About1989 - 1990 r ,1 OCT ~ 91990 iWENI)A POk '1'Itlti I•Ik?I.'I' I NU UI' 1 'I'M l: IIUAUU Ulr IllUI-.t"YiUfl; I H~:E~I'PUPJ UNT'f IR)P3tiq(; bI14 APWI% +'UUI'UUA'I' I U Ii I UC'1'UBEIl J _I ~ P)o 11 :00 O'cL.lh:I( 1' Ii. C'UP1P11551Ur11';I(':; l.'llllii'P UUUI.1 LHAI I')F.N'S'OP) COUNTY I:UUk'I'NUU:*: (UII 'I'lik :;OUAUP:I I 1} APITI)VAI. 01-' PIII)I)Tb;:I Ul.' 'PIlk U111,Y 1.2, 1'/9i) f11SIs'I'flJc;, 1 Coll I; I IJI-:kAll, I ON OP' AtIpniuk' 1 VAT I ON TO '1'itnlJ ~1 b;l< :;1;k Vl I' I N(: { 1_'UIll 'I'UA+_"I':; TO S;I+;AU1; PI I) N'I'UAI:L; AND AMY 1WITOPR)ATIb A("1'IiIN. A. CO MMDNWb:A1,'PII SAVING!; A:;}ill( IATIUN-I'1i1U S*A?IIS:1 11. MURRAY :iAVCNUS AS5UCIA'I'lOIJ 1.9112 JJAsIIQ; CON:; I OkRA'I' i !ill ub' I11:;VQ I Tl ON PUlt Iils:;i,:I1V16 P'UNU;; I,'kUPI 'I HN 1'111; IS f1111,'I'I 1 A7111,'r 1;01: (TIN': UAK,I) AIiU ANY HI'I'I<uI IC!!t''Iti ACT I C)N , CON:iIOI'•kA'I'IUN U1-' il)t;l'U:;l'l'iUJJ FOR kl{SI-:UVR. P'UNI+:; 1''kAIM Till: 1')!111 FUJI.'!'] PANII,'i IX:;UI-: (r>U:;T UAk klil(;P:) AND ANY AI1PJtk 1'k E A'I'I.; AC"1' I UN . CuN:;II)EI?A'I'IUN UF' UI:Ji'U:;I'I (UIq Il'lll( kRGI:UVE i-'INJI+:; ANU APIY' A1)1'Il01'U f ItTi,: !1l'9' I U11 . } IlIlToP 1' ON R 'I' C i'UUIIVItTl ll;!J AND I-'1 NAh11' I Ill 1,; I'CIr;!.; l 1111.111' I F::; AVA11,AliW-: TO El1:N'I'UN COUNTY IIUU:;INIi I,'IPIANCI; +'Old). ' CUNt.i 1 Uba(A'1' I ON OF U'1'lIkk IILJ:; I NJ!:".; . I 1 I i 7.136s25'Z35 ?136515235 _ _ o~noo~nn,c « SENT W F & J - HOUSTON 9-25-90 3--14PM F & J HOUSTON TX,y 8173020845;# 2 MINUTES OF ME TING OF BOARD OF DIRECTORS JULY 12, 1990 THE STATE OF TEXAS COUNTY OF DMMN DENTON COUNTY HOUSING FIN CE CORPORATION § The Board of Di actors § H ousing Finance Corpora ion (the he"Co pora'tion°)D m toninouthe Csaioner's Texas at 4. Oa pCmurto~o j 1 Courthouse on the Hoard were presentr r. the Don H111 The follwing membersoof Mr. Mark Chew, Mr, Lloyd Harrell, County Judge Vic Burgess, and nd MLinnie MoAdams, Also a tending were~ MCharles ee. Pam Hopkins o Texas, Mr. Bob Peterso Jones, of NCNB Thomas of Fulbright 6 Jawo gki8outhwest Com,pany 1 Administrative Assistant or Don Hill and Ms, pink Mr' Neil y Jone s , 1. The meeting was called to order by the President of the Board, Mr, Don i11, The minutes of the meeting of February 8, 1990, were g approving vote, Lloyd Har approv abstaining, a motion, second, and 2, The Board n xt recognized Me, Barbara Ross 'of the city of Denton, who Ares nted to the Hoard a request from the City that the Corporatic act as the Local Homesteadin under Section 810 of the Housin g and g Agency of 1974, Me- Roes ravie ad the outlinesup£t the program, and presented to the Board a pyY of a propaged Deedo Dead Trust, oiag greamand, Agr fe t with the iaf whi Denton, 61 eoialomwarranty AExhibits A, Be C, and D, espeatively, to bare e used alnd connection with carrying out the pro ramp Ms, Ross explained to the Board that the program used aderal funds to housing from the United Cates Department ofpHousing and Urban Developmcnt, to be conve ad to renovate and homestead t e houses- Me. ed persons willing to Board that the City wa willing Me' Ross explained to the financing and to aarr to provide the necessary but was unable to actyas thehLocaldmiHomeateadinofAgency. Upon motion, duly seconded, program, approved entering into th agreement with Abstin theaCityg of Denton ato , the Bo act as the Looal Homestea ing Agency, subject to review of the program by counsel, and d rectod Fulbright & Jaworeki to review the documents presented by the City. f I•&vvJAJS. v.+ SENT OY;F & J - HOUSTON ; 9-25-90 ; 3115PM ;F & J * HOUSTON, TX,~ 01'1~u2uuao~~ a i 3. The Board next recognized Mr. Bob Peterson who presented to the Board a loan commitment report of the servicer dated June 25, 1990, a copy of which is attached hereto as Exhibit "E". Mr. peter on recommended to the Board that it direct the servioer for he Series 1989 Single Family program to contact lenders regardin the remaining money in the program, and allow the lenders o reallocate available money based on need without action 'by t e Board. Upon motion, duly seconded, the Board directed Mr Peterson to oonte,ot the servicer concerning the lender all cations, 4, President H 11 next presented to the Board letters , from Sears Mortgage Compa y, copies of which are attached hereto as Exhibits 'FI' and "L", respectively, requeeting that certain loans currently serviced under the 1980 and 1982 Single Family Mortgage krograms be tr sferred to Sears Mortgage Corporation. Prasident Hill explained that the reason for the transfer was the dissolution of Denton Savings Association and Brighton Mortgage Company, Upon motion, duly seconded, the Board voted unanimously to transfer such loans. 5. President H L11 again recognized Mr, Peterson, who recommended to the Board thst the Board apply for an allocation reservation for a 1990 inolle Family Mortgage Program. Mr. ~ Peterson explained that it ~,s unlikely that the District would receive <in allocation for 1990, but that an application would give the District priority for an allocation in 1991, Upon I motion duly made and soon ded, the District approved adoption of a Resolution Authorizing Application for an Allocation attached h hereto as Exhibit "H". } 61 President ill noted the Resolution ' Trust Corporation had partioipa ed in bond programs for purchase of Resolution Trust Corporation properties, Following a general discussion of participation in a Resolution Trust Corporation program, the Board directed Fulbright 5 Jaworski to report to the Board on what Reeol tion Trust Corporation programs were available, i 7, President Hill again recognized Mr, Peterson, who noted to the Board that t e United States Department of Housing and Urban Development ha come out with higher income levels which could affect Singl Family Mortgage Programs, President Hill noted that at its las meeting, the Board had increased its moderate income levels t $45,655 for its Multifamily Housing Programs. Mr. Peterson recommended that the level be similarly increased for the Single amily Mortgage Programs, Upon motion, duly made and seconded, t 1o Board voted unanimously to increase the moderate income level for Single Family Mortgage Programs to $45,655, -2- Ot~tY SENT QYtF & J - HOUSTON 9-25-90 ; 3:15PM ;F & J HOUSTON, TX.-# 6173020M4 4 8. preoident ill reported to the Hoard that the ourrent corporation bblan a was $555,000, There being no further business to come before the Board, the meeting was ad ourned, The above and foregoing minutes were passed and i approved by the Board of Directors of the Denton County Housing Finance Corporation on I Pros dent ATTEBTt (SEAL) e+~+V ~I I SEARS I MOIYI"GAGfi SECU1tI'f'i1:Sti A YI MI I A (I rHt :1N511tW 1: V.1 h(].qN , July 26, 1990----- , ~ Don Hill Denton County Housing Finance Corp, Courthouse on the Square 110 W. Hickory Denton TX 76201 RE: Denton County, TX Series 1982 Dear Mr. Hill; It is our desire, as Administrator, to transfer the three loans serviced by Murray Mortgage Company to Sears Mortgage Corporation, 2500 Lake Cook Road, Riverwoods, IL 60015. This servicing transfer is due to Murray savings Association (parent of Murray Mortgage company) being placed in receivership. In Article IX, Section 9,01 of the Sale, Servicing and Administration Agreement it states the Issuer, upon the recommendation of Administrator, may terminate this Agreement with respect to any participant upon the ha or more of the following events; (f) "consentnbygParticipant to the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt and liabilities or similar proceeding a£femarsin of as etinglParticipanteor f substantially all of its properties". Please acknowledge your approval by signing, dating and returning this letter to AY attention by August 10, 1990, sincerely, r)aAA-_ Karen R. Smith Assistant vice President Master Servicing Division I hereby approve the aforementioned transfer. Author zej tur`e Da t-' Q - 1 Sears Murlgage See umiles Cog)oralias, 2500 Lake Calk Road, kiver%,Mls, 11.60013 SEARS Mola( AGE`,, Sf;CLJ1k1 T 1ES- t Lk'r.WY h,X II X. 1[MSIUwuulM1 ivAX'A August 13, 1990 Don Hill Denton County Housing Finance Corp. Courthouse on the square 110 W. Hickory Denton TX 76201 r RE; Denton County, TX Series 1980 Dear Mr. Hill: desire, as Administrator, to transfer the three loans it is serviced our by commonwealth Mortgage Company to Sears Mortgage se Association rvicingo2500 Like dueCook to Comm nwealth SavinIli gs6 servicing transfer being placed in (parent of Commonwealth Mortgage Company) receivership. In Article IX, Section 11.02 of the, Sale, servici1980n~t states Administration Agreement dated as f November 1, that the "Issuer, upon the recommendation of Administr;,o.or, may, and if so directed by surety shall, terminate this Agreement with respect to any Participant upon the happening of any one ~ or more of the following events: (f) consent by Participant to the appointment of a conservator, receiver or liquidator id assets in any insolvency, readjustment of debt, marshalling of and liabilities or similar proceeding affecting Participant or substantially all of its properties." Please acknowledge your approval by signing, dating and returning this letter to my attention by August 230 1990. Sincerely, 0 CLu-~ Karen R. Smith Assistant Vice President I Master Servicing I hereby approve the aforementioned transfer. 'r~ Date r Aut~lzBad S 6 aturf - Seers Morisase S"utilles Corpora Iion, 2500 take Conk Road, kiverwuods, IL 60015 • 1 NCNB Toxaa .o Furl Worth Banking Confer rtwrele 'I ruyl l 500 West Sovanlh Slreol 1 P0. Box 2911 Fort Worth, Toxas 76113 (0171390.6951 Texas i ,auno 22, 1990 { Mr, Don Bill Denton County housing Finance Corporution I10 West hickory Denton, Texas 76201 I R14: $7,900,000 Denton County Housing Finance Corporation Multifamily Housing Revenue Bonds (Certificate of Deposit Progrum) 198213 Savers Federal Savings and Loan Association The Oaks Apartments I Dear Don: Enclosed plouse find Check #201471 in the amount of $150,431.07 which represents the finul balance of the Reserve Fund for the above referenced bond program which was redeemed in full on September 26, 1980. In it letter dated March 89 1990 (copy attached), Savers Federal Savings and Loan Association communicated a desire to the Housing Finance Corporation to receive the final reserve fund bulance. To dute, t have not received any further communication concerning this matter and no I will disperse these funds to the Issuer, so that these accounts may be closed. Should you have tiny questions or require additional information, plouse let me know. Sincerely, 61. 'umelu M. J on Assistant Vice President Enclosure I'Millviv 1 A1r. Don hill June 22, 1990 page Two 1 A cc: Nell Thomas Fulbright and Jaworski 1301 McKinney - 510 Floor llouston, Texas 77010 Ron L. Matlock llastie and Kirschner 3000 First Oklahoma Tower 210 West Park Avenue Oklahoma City, Oklahoma 73102 Ms. Carol liissong Saver's Federal. Savings and Goan Association P.O. Drawer 2999 Little Rock, Arkansas 72203 r--S- t W- - a T SENT 6YtF A J - NOUSSUN 3-16-90 I]U1UYH1d :r 6 J * twu~luN, ix.~ on oyu uaouu - 11 1 to a Developer which has defaulted under the Project Loan or lias otherwise violated the Regulatory Agreement, or any amount proportionate to the portion of the Bonds redeemed as a result of the failure to oriyinate Project Lomita, shall be payable to Issuer, at the option of Iusucc. Section 5 (1.9. ilea of Money in the Accumulation Reserve r ~ lnund. Moneys in the ~Aocumulation Reserve Fund shall be { used, first, to pay any reasonable and necessary expenses of Trustee and any registrar or paying agent, to the extent that moneys in the Revenue Fund era not available therefor, second, to satisfy any deficlancy in any other Fund (other than the Certificate Fund) under this indenture, and third, to pay reasonable expenses of Issuer) provided that any such expanses which are not directly related to the Bonda or the rights and duties of Issuer hereunder shall not exceed $10,000 annually. Amounts on deposi*, in the Accumulation Reserve Fund on the day following each interest payment date on the Bonds in excess of the Accumulation Reserve Fund Requirement, shall be transferred to the Revenue Fund. Earnings on amounts in the Accumulation Reserve Fund shall be f deposited, when earned, in the Revenue rued. Section 5.06. Use of Mone in the Revenue Fund, (a) Except to the extent otherwise prov ded in the Agreement or under this Indenture, Trustee shall deposit in the Revenue end all moneys received with respect to the Agreement and the Certificate, constituting regularly tnterest s and principal, principal payments (including p ePaYmant premiums, if any) of the certificate prior to November 15, 1994, interest earned on any of the funds hold under the Indenture consistent with the provisions of Article VI, and any and &IL other amounts received by Trustee subject to the lion of this Indenture, of any )prinmounts o t pal payments deosit in the it sany)rofuthe Certificate prior to November 15, 1994, shall be deposited in the Bond Fund on the business day following receipt. (a) Amounts on deposit in he Revenue Fund and available for such purpose shall be disbursed on the business day preceding each Bond interest payment date or, with respect =o (I)' (ii) and (iii) below, each date fixed for redemp purchase of Bonds, in the following order of prioritY1 (i) to the Bond Fund an amount which, together with the amounts already on the deposit payable on such dta;ent to pay -3S. I UNION 1 1 (ii) to the Bond Fund an amount which, together with amounts already on deposit therain, is sufficient to pay the principal, if ■ny, of any sonde maturing or to be redeemed or purchased on such datq; (iii) to the Bond E=d an amount which, together with amounts already on deposit therein, is sufficient tm poky the redemption premium on any Bonds to be redeemed on such redemption dates I' (iv) to Trustee and to any other registrar or paying j agent, an amount equal to their reasonable and necessary fees and oxpenees; y to the Reserve Fund an amount sufficient to maintain the Reserve Fund Requirementl (vi) to the Accumulation Reserve Fund an amount sufficient to establish and maintain the Accumulation Ste serve Fund Requirements and (vii) to the Lender any amounts rsmaining in the Revenue Fund on such date. Section 5.07. Use of Money in the Certifi to Nn,4. ya in the Certificate Fund shall be used immediately by I ■too to make the Deposit with the Lender in the amount Wad by Section 2,11 hereof. Vae Lender is required by Agreement upon receipt of the Deposit to (i) issue to *too, for the benefit of the separate beneficial Interests the s of the Sondso the "t equal to the Deposit (which tshall te also a principal equal the and incial of amount ounsel h to B the )Condo v ini)fo m deliver e substance opi tisfactory to Trustee that such Certificate is valid and tand `rms. Contemporaneously h with d the in with Lander cordaon the suance and receipt of the Certificate, the Trustee shall cute and deliver to the Lender an account signature catd the Lender, Trustee shall hold the Certificate fo!• the efit of the owners of the Bonds and subject to the terror conditions of the Agreement and the Certificate. Section 5.08. Use of Money in the Pro ram E erase Moneys in the Program Expanse Fund all be uaed to y all costs of issuing the Bonds, including, but not ossarily limited to, the fee to the underwriters of the s for structuring and marketing the Bonds, all printing -36- I 1 . SENT Hv:F ,S J - H0U91UN J^115-UO IIII104A-9 W Q J 4 HUULIUw IX. bill uuu uuuUlU Y ' the redemption of Bonds, notice of the redemption of which has been duly given, shall, while held by Trustee in trust, constitute part of the Trust Estate and be subject to the trust c:raated hereby and any security interest granted with ireapect to the Trust Estate. Trustee hereby covenants that all moneys held in any fund under this Indenture and any collateral securing such funds are a part of the Tnl.mt Estate, held in trust for the Owners of the Bonds, and that the rights and interests of the Owners of the Bonds in and to such moneys and collateral are and shall be superior to the claims of the creditors and depositors of Trustee and of any other financial institution in which such moneys. are deposited or which has provided or pledged such collateral. rustee shall not deposit moneys held hereunder with any ther financial institution without first receiving ollateral therefor, if required by Article VI hereof, and an inion of qualified legal counsel experienced in such Caters that Trustee possesses a valid end perfected first rity interest in such collateral, with only such options as do not materially alter the value thereof. Section 5.11. Amounts Remaining in Funds and Accounts. n payment in full of (i) thi Bonds (or provision for *yment thereof having been made in accordance with this enture), (ii) the fees, charges, and expenses of Trustee any paying agents In accordance with this 'indenture and j iii) all other amounts required to be paid under the eement, the Bonds and this Indenture, any auaounta in any the Funds created under the Indenture, except the amount, any, remaining in the Reserve Fund, which shn11 be payable provided in Section 5.04 hereof, shall be paid by Trustee the Lender. Section 5.12. Reports from Trustee. Trustee shall pare and file with Issuer (i)"monthly statements as to the unt of moneys Committed to or used to fund Project Loans, the extent such information has been provided to Trustee the Lender (ii) following each Bond interesit payment date, tementu of the amounts withdrawn from and deposited in fund, and assets held in each fund under the Indenture, 1) following each Bond interest payment data, a ription and valuation of all obligations held as stments in each fund under the Indenture, (iv) a copy of notice of redemption given with regard to Bonds being led for redemption and a statement of th9 amount applied the redemption of Bonds and a description of the Bonds or ions of Bonds so redeemed, and (v) any other information t Issuer may reasonably rs•quest or that Trustee may from I _S8_ a HOPKINS & SUTTER IA PARTNERS NIP WCLUOp4p P40FE99'UN4L CORPORATIONBI I 1717 MAIN ST 3700 "MENTUM PLACE BEET DALLAS, TEXAS 76201 (214) 9632100 TELECop(Ln 12141 863,2256 1 Fv1f" J. au7LfA CIIICAOU pFFICE TNREE FIART WA5111NOTON NATIONAL P IZIU 063.2,,2 • D•C, OFFICE IAZA CNICA00,W ILLIN BBB el%TEENTN 9iAEE T, OIO 4De0Z NS 00000 August 22, .1990 I Don Hill Co"Deptonsioner, Precinct 4 { Courthouse ntY Commissioners' 110 {a, on the Square Court Denton Hickory T 3rd door t Texas 76201 Re; $7,900 FOUO Denton Corporation Multi_ County 11ousin (Certificate of De family Housin g Finance Savers Federal Savin s Program} 1982pvenue Bonds The Oaks APartments 4s and Loan Association (Savers Savinc ` Dear Associati- °~N) h J 1)"'n: 83 09 i representssthewe discussed Savers resolution yesterday afternoon ur above- Savings 11, yesterday Corporation ' Our firm need matt Thriftrs~eee Association ("RTC-Savors ,I)' i~ Conservator for Savers p rvision ("OT3") On October 4 1989) trreard to the ` pursuant rer~ral Savings and appointed the RTC Office of appointment OTS Order No, Loan Association as e.i o ver for the rl ht,., the RTC succeeded 89-263. ( As a r Old Savers, ab,)ve., g titles and b 0!oration of c<1ult~oC' s t ~t ' DocumensNYenced Loan interest s law to ) related and all of Old Savers a1'1 of Oeto er 9, 1989, to The Oaks loan documents in th e authorized the pursuant Oaks band (the "Loan in connection incorporation Order financing, On therewith of Savers Savings 89-2641 the transferred substantial! the is Associa OP„ ImcludIn g Y all of as Receiver for tton, and part of Lhe its liquid Loan Documents, to ( Savers C, 00 setsy or Old Savers) ation of 01d r >aving pavers ,avers, oociation as :e specific objective afternoon the $150,g3j ~7ve in this mattee discussed that Denton unt (tl111 " Bo Reserve to PEfect the er ovavers, Co of Texas Y dousing i Wind nce Funds ) remit over National BankT Port 9lorthC0rpor-a emitter to June 22199 on ("Xssue I, the incurred in 0' net Of any reasonable the floc 10 T-- Tr)usrcyle NCNB Issuer's Cothis 1naYole~r by Issuer or Pulbr. unpaid expanses indicated that thtiPub & Jaworski, Denton County Don Hill ~ August 22, 1990 l Page 2 , Commissioners have not yet scheduled Issuer's next meeting, but that you anticipated scheduling a meeting for sometime next month. You also agreed that you would forward me a copy of the meeting agenda, when finalized, and allow a representative of our firm to address the Commissioners during the meeting to explain why RTC-Savers believes that the pertinent bond documents and equities in this matter require that the Bond } Reserve Funds be delivered to RTC-Savers. I understand that Neil is presently investigating whether any fees or expenses ll are due and owing to Issuer or Fulbright & Jaworski. Don, I look forward to meeting you at Issuer's meeting in Denton next month and resolving this matter to the mutual satisfaction of both parties. if there is any documentation which Issuer requires of our firm at or prior to the meeting, or any formal written presentation summarizing Savers Savings Association's interest in the Bond Reserve Funds, please contact me at your earliest convenience to discuss same. Very truly yours, Mike J. Butler MJB/db cot Neil Thomas Rebecca P, Bennett Kim Taylor Keller 2813b r HOPKINS & SUTTER IA PARTNEPSHIP INCLUDINO PROFESSIONAL CORPOn ATIONSI I 3700 MOMENTUM PLACE 1717 MAIN STREET DALLAS, TEXAS 76201 (2141 6692100 TEt ECO PIED 12141 660 2255 G141CAOG Grrpu TI,REE FIRST NATIONAL PLAZA CHICAGO, ILLINOIS 00002 MIKE J. OUTLER WASHINGTON, O.C. OPPICE 000 SIKPEENTH STREET, N.W. 20000 111.11 0z 2112 September 26, L990 Don Hill Commissioner., Precinct 4 Denton County Commissioners' Court Courthouse on the Squarer, 3rd 'loot 'h f 110 w. ICickory Denton, Texas 76201. Re: $7,900,000 Denton County Housing Finance Corporation Multi-Family Housing Revenue Bonds (Certificate of Deposit Program) 1913213 Savers Federal Savings and Loan Association The Oaks Apartments, Denton, Texas (Savers Savings A5,ociation,_g8309)~_V Dear Don: As a fol.lowuL l to our August 21, 1990 conversation and my August 22, 1990 letter to you regarding the above- r.efer,enced Project, T wanted to provide you with a very brief summary of the history oC the project and the pertinent bond document provisions relating to the proper disposition of the $150,431 In Bond Reserve ; Funds (the "Reserve Funds") recently r.emiLtcL9 to the Denton County housing FFinancc Corporation ("Issuer") by NCN13 Texu, National Bank, Fort Worth, Texas (the "Successor T1.11stee") , AS YOU will recall, our firm represents tile Repo utIon Trust Corporation, as Conservator for Savers Savings Association ("RTC'-Savers") in this matter, RTC-Savers is the successor in Interest -to Savers Federal Savings and Loan Association Old SaversRTC-Savers is attempting to recoup Lhe,e Reserve Funds, lief of any reasonable unpaid fees and expensr_, owed the Issuer or the Successor Truster:, pursuant to that certain Trust Indenture (the "Trust Indr.nLure") dated December 1, .1902 executed between issuer grid I'i1:yt Nettonal Bank of Fort Worth, as Trustee (the "0ri2inaI TrusLI-o ISSUVV issued its serifs 1982B $7,900,000 Multifamily Housing Revenue Bonds (the "Bonds"), In connection with the issuance of the Oonds, issuer, old Saverrq, and the Original Trustee executed a certain Deposit Agreement likewise dated December 1, 1982 pursuant to which the proceeds from the Don Hill 1990 ,eptember 26, page 2 Savers ted with Old Savers and Old it No. were de30, sale of the Doend original Trustee Certifica te of D e pos 30 dated December , issued to to secure the repayment 14-065851-6 (the "Certificate? 9 000 1,152 in the face amount ^ Of + 1, 1983 Old Savers funded a loan of the Bonds, in the about rebruary ,Developer") On or The oaks Associates (t-1irovide financing "Loan") to Th of $7,900,000 the "Prof eor (the "a riginal principal amount yaks Apartments { o The Loan was evidenced in the of The For the construction Texas, 983 the , Note") o~so $ated rebru aeXecut 1ed by located in Denton ry not(- the 000, 1 promisso principal amount savers, 900, orig able to Old sa Developer and pa ay established various of of the Trust indenture of Article V Article V A copy The Funds "Reserve Funforr your review. and to "rends including a is enclosed issue proceeds the Trust Indenturta account for Bond cash flown established y conduit, into which PC1Jeand principal were depositor which interest serve as adeposited and from The monies ne cessary to the would be would be made' in connection with payments on the Bonds respective Funds establish these a came from old 5a~rers' loan proceeds* Develope defaulted under the original Bona issuanc. r opted the In September 1967, the 19970 Old Savers p . sale in October °tjudicial Careclosur Note. Accord ingly , 1-7 non for a November 3, 19E er fil however, theinevelop of the proposed pn November 2, ad a Chapter Project 198"x, resulting staY lift. ned l I petition, ld Savers ultimately allowing for a bankruptcy 0 roceeclincJ• roceeding, the Project. foreclosure pin the bankruptcy p sale stay order nonjudicial foreclosure sale Of in January 3, 1989 successful bidder at Vthe,Ease successor was the 0,000. RTC-ua ect. Old Savers dit the Proj with a bid of $7$45 inow the owner of the interest to old Savers, through January 1989, From September 198o1,d savers diligentB°ndly hol Fduwhile erndils. the Loan ed e t was nonperforming, due the the Donds. payments Trustee redeemed the accrud interest the Successor Old Savers paid e 1989 this redemption, accrued interest September 7.i with full, with all ro ect, Of this P Ceroancate Of Deposit in history o a meet Cetificate througbout the al and interest p Y thereon. Accordingly rincip basis. bondholder received every p a timely each the Bond documents on called for under I Don Hill September 261 1990 t page 2 with Old Savers andD 016 s itavNo. sale of the Bonds were `'p deposited Certificate cf pecember 30 issued t0 rl1e original- pe~osit ) edaed re)a ment ICe rtificatP 7 9 of 00,000 secu re the E Y 14°065851-6 (the amount Qf-'r^ 1981, in the face 1°an of the Bonds. 1 1983 Old Savers funded in the about rebruary Associates ("D`vel°Per ) On or Oaks eov;de financing 1 "Loan 11) to The of $7,900,000 to p pr.c ect (the al amount s Apartments (the by a inal pri of The oaks AE was evidenced orig construction The Loan 1, 1983 in the for the in p ~nton, Texas. the I located e "Notealso dated Februa~Xecuted by th i mount of $"1,900,000, promissory rincipal a orlgina1T and payable to Old Savers, rious Develop cEtablished va f Article V of the Trust indenturCOpY of Art. IC o s a "Reserve Funfor your review, The rand to "rundsincluding is enclosed Bond issue proceeds sh and flows the Trust Yshed re account for into which projecat nd caprincipal were established conduit, which interest sary to h serve abe deposited and from the uld would be made. The connmoneicetsion nece wit in payments on the Bonds we tive Funds e loan proceeds. ' establish the issuance came from Old savers nder the original Bond er defaulted under the in September 1987, the De1947pOld Savers P sale. in October 1987°fnojudicial fled a Chapter 11 Note Accordingly, nDeveloper filed the proposed Project for a November 3, the stay of 1987, however, in a fa or bankruptcy November pa tition, Old Savcrs roreedi g~Y allowing Pr Jing, e the he bankruptcy p foreclosure pincee th order for a udicial foreclosure osure stay 1989 non) er at the forecl la sa a as successor in January 3' was the successful biddRTC-Savers, Old savers bid of $7,450,000• owner of the project. with a credit is now the the interest to old Savers, through January 1989, while 19871 diligently Rondholdfunded the he prom 5,3pCormin Old savers was nonperforming, due the ers•nonds. T,oan payments redeemed the the accrued lnte 1989 the Successor ti'nste old savers pinterest September ?.6, with this redemp ith all accrued ect, Ce7nrtificonnection sit in full, w history of this Proj 1 throughout the and interes the r t payment eon. According y every principal timely basis* each bondholder received called for under the »ond documents on a f r I Don Il i l l September 26, 1990 1 Page 2 sale of the Bonds were deposited with Old Savors and Old Savers issued to the original Trustee Certificate or Deposit No. ! 14-065851-6 (the "Certificate of Deposit") dated December. 30, 1982 in the face amount of. 70900,000 to secure the repayment of the Bonds. f On or about February 1, 1983 Old Savers funded a loan (the "Loan") to The Oaks Associates ("bevelcipcr") in the original principal amount of $7,900,000 to provide financing for the construction of The Oaks Apartments (the "Project") located in Denton, Texas, The Loan was evidenced by a 1 promissory note (the "Nate") also dated February 1, 1983 in the original principal amount of $7,900,000, executed by the Developer an,l payable to Old Savers. Article V of the Trust Indenture established various "Funds", including a "Reserve Fund". A copy of Article V of the Trust indenture is enclosed for your review. The Funds were established to account for Bond issue proceeds and to serve as a depository conduit, into which Project cash flows would be deposited and from which interest and principal payments on the Bonds would be made. The monies necessary to establish these respective Funds in connection with the original Bond issuance came from old Savers' loan proceeds. In September 1987, the Developer defaulted under the Note, Accordingly, in October of 1987, old Savers posted the Project for a November 3, 1987 nonjudicial foreclosure sale. On November 2, 1987, however, the Developer filed a Chapter. 11 bankruptcy petition, resulting in a stay of the proposed foreclosure proceeding. Old Savers ultimately obtained a lift stay order in the bankruptcy proceeding, allowing foe a January 3, 1989 nonjudicial foreclosure sale of the Project. Old Savers was the successful bidder at the foreclosure sale with a credit bid of $7,450,000. RTC-Savers, as successor in interest to old Savers, is now the owner of the Project. From September 1987, through January 1989, while the Loan was nonperforming, Old Savers diligently funded the accrued interest payments due the Bondholders. On September 26, 1989 the Successor Trustee redeemed the Bonds. in connection with this redemption, Old Savers paid the Certificate of Deposit in full, with all accrued interest thereon. Accordingly throughout the history of this Project, each bondholder received every principal and interest payment called for under the Bond documents on a timely basis. ' I Don li i ll September 26, 1990 page 3 Section 5,04 of the Trust indenture provides t""'t monies in the Reserve Fund can be used to retire the Bonds as follows: Moneys in, the e serve Fund interest lthe Bo d Solely for the payment of. provided, that money in the Reserve Fund may also be used, if necessary, to redeem any of the Bonds outstanding at the date of final maturity. Unfortunately, neither the issuer nor the Successor Trustee 1 required th tefunds be heusedn tothe wards a the Fredemption oftethe the Bond redemption 1e parties must now 1°°c thee to 0 Bonds, Consequently, the Trust Indenture to determine 01 sections of Article. V proper disposition of the Reserve Funds' provides that upon Section 5.11 Of the Taumentnotnalle outstanding Trustee exct redemption of the Bonds and p y in any of the Funds l p expenses, any as remaining the Trustee to Lender (i.e., Reserve Fund) shall be paid by RTC-Savers). Section 5604 of the Trust indenture provides the following post-redemption distribution of monies in the Reserve Fund: Any amount remaining in the Reserve Fund j u on payment of principal of, premium, it any, on p his Indenturella shall and interest on all of wthe ith Bond thereof in accordance w provided that any be paid to each Developers . ' to a amount which would have been payable i neveloper which has defaulted under the Projec. t be payable tot ROgUlatOtY to or has otherwise Issuer, at the Agreement. option of issuer. section 5,04 of the Trust indenture clearly was intended to protect the Issuer and alallw lot tho issuerincuFred over Bond any reasonable fees or out of p expees by belindves iss that Deoverltopheer Trustee default. related RTC-Savers Savteors the either r the Issuer m such tees or expenses are the only reimbbuurr6se eme e rent of any circumstances under whic issuer is constructiontof ArticleaiV ofY the the ri°nden Funds. supported by the fact that Paragraph 2 of eTruxhistbit ind " e A n " tur teo is the UCC-1 financing statements executes] by Isuerag-aebtor, in favor of the prigofathicubon~) transaction party, in connection with the closing v, 1 Don Hill September 2G, 1990 i~ Page 4 expressly excludes any monies or securities in the Reserve Fund from the scope of such financing statements. A copy of these OCC-1 financing statements are enclosed for your review. j C-Savers ' most recent appraisal of the Project, RT dated Auy-t 1990, indicates that RTC-Savers will y 13, at last $1 tede loss me elyOOef ecntsthtthes difference experiencea loss ipa project. This antic paid by RTC-Savers in between (A) the outstanding principal its obligations under the Certificate of Deposit in honoring connection with tvalue cofmthe oProject. This danticipated ) loss current appraise does not include oldntSavers' Bondholder i to est)loduring ~ and RTC-Savers' accrued interest (and nd payme ii) anticipated the period the Loan was nonperforming, ( disposition and closing costs to be Indur(ridi)in ]nenection with the future sale of the Project, costs Incurred by Old Savers and RTC-Savers s nnctothe date of clear the foreclosure sale. Therefore, Bond document provisions j autevidenced in the app requires disbursement of the i summarizeda abovbovee,, equity clearly which has sustained a Reserve Funds to RTC-Savers, the party significant economic loss in this transaction. I would be most appreciative if prior to issuer's meeting to resolve the Reserve Fund issues, you would distribute a copy of this letter (and the accompanying enclosures) to each of the other Denton countye Co lssio ers who will attend the meeting, in addition, pleas call me with any comments or questions relating to this letter or the attached enclosures. Thank you for your assistance in this matter, Very truly yours, Mike J, Butler MJB/db L;nclosures ccs Neil Thomas (w/encl,) Rebecca P. Bennett (w/encl.) Murray H, Hunt., Or. (w/encl.) Kim Taylor Keller (w/encl.) 2837b u t,l anY f: Itr n. woad •I( T-.• Y t r ttir V^ Cer ~o' 'I1P/ QIIiU~ tr• Il~tr, 4i W,n1 /vnv✓` dail l%Ti. on1 frlmr•. C. v Lunt ~;r r~"S of I Tras NY I11^r•n,rlr 'Sj <Vt•d • CING SYATEMF •nl rd ,•tiltt~ pj.rst tee i,l /1NAN Noin •~~r~iT lyg _ . v. terU Lar {mirth r a,r N o•b l)nt i' ~ om Ott ?IA7A 76102 ; : • r corvo rce street fbtt ydptol/ fiLEl1~L/ Y 401 4i t Nr?6201_ Olt 0, of Pra► d 11o'lt , y Ilamr ~ _ ~"ol Sec ru ~ Amin / rlnl fY! • r At to 1 Ali ntMtinA •l olernenl cevrt IF, SZE • ,t r i<h.<k Is <.1 • l ie In cell•lere6li ",to.M tail rlrN a It wet breoyhl Inw rat N ttt POHcu rity 1nIH°u rn•nl •Jr ►I rilhwt th• pbter . Qp a„ed.a tw',edi Ul r~ In <h tee ent•nt It f'I,l to ertu M In Nr•tl In nr1, Ne. •1 •Ihn•M1 ShNU 1 • 1 il I'll elrrdY roblrt ho ri 1Ine1 toile laral JetcriHJ+~bO I bL---'~~r Ott Shit r C3 .4 ~1. ".44 to luclr • - whleh H Protr•dr e~ . FOST _ ,,,,rap~_ tale tl ywtd rrt/ I•• 1. yyl pNltot Copy ^ 1dYnN1Nl I f !r , ;i h ' iA r 0 fp .A. ~ r s ' EXHIBIT A ( (1) All rights, title and interest which Debtor may now or hereafter have in and to (i) the amounts payable with respect amount the of Certificate of Deposit am (the "certificate") in the principal $21,165,000 issued Denton, Texas by Denton Savings Association, ("Denton") to Debtor pursuant to a Deposit Agreement dated as of December 1, 1982 (the "Deposit Agreement") by and between Debtor and Denton, including the proceeds of any Federal Savings and Loan Insurance Corporation insurance with respect thereto, (ii) the Certificate, including any extensions or renewals thereof, (iii) the Program Fee (as defined in the Deposit Agreement) paid by Denton upon delivery of the Denton County Housing Finance Corporation Multifamily Housing Revenue Bonds (Certificate of Deposit Program) 1982 series A,Denton savings Association in the aggregate principal amount of $21,165,000 (the "Bonds"), (iv) the Deposit Agreement (excepting the rights pro- vided to Debtor under Sections 5.6(b), 5.7 and 7.6 thereof), and (v) the separate but identical Regulatory Agreements, each dated as of December 1, 1982, (collectively, the "Regulatory Agreement") by and among Debtor, Secured Party, the Lender, and certain.. developers (excepting the rights provided to Debtor under Sec- tions 1.10 and 6.11 thereof) including all extensions and renewals thereof, if any, including with respect to each of the above, but without limiting the generality of the foregoing, the present, and continuing right to make claim for, collect, receive and receipt for any income, revenues, receipts, issues, profits and other sums of money payable to or receivable by Debtor under the De os.it Agreement (excepting the rights provided to Debtor under pSec•- j tion 5.6(b), 5.7 and 7.6 thereof) and the Certificate, whether payable pursuant to the Deposit A reement 1 of Debtor g (other than the rights provided in Sections 5,6(b), 5.7 and 7.6 thereof) or the• Certificate or otherwise, to bring actions and proceedings under t he Deposit Agreement, the Certificate or the Regulatory Agreement or for Debtor the eorormayenbe thereof, and to any and the things under all Deposit Agreement, the Certificate or the Regulatory Agreement. (2) All money and securities and interest earnings thereon from time to time delivered to and held by Secured Party under the terms of the Trust Indenture relating to the Bonds, dated as of December 1, 1982 (the "Indenture"), from Debtor to Secured Party other than the money and securities,held by Secured Party in the Reserve Fund created by the indenture and interest earnings thereon, and all other rights of every name and nature from time to time under the indenture by delivery or by writing of any kind pledged, assigned or transferred as and for additional security under the Indenture or under the Deposit Agreement to secured Party by Debtor or by anyone in its behalf, or with its written consent and to hold and apply the same, subject to the terms of the Indenture.' p 'WIN L EXI IBiT A (1) All rights, title and interes or hereafter t which Debtor may now have in and to (i) the amounts payable with respect to the Certificate of Deposit amount $21 (the ('Certificate"} in the principal Denton, Texas ,165,000 issued by Denton Savings Association, ("Denton") to Debtor pursuant to a Deposit Agreement dated as of December 1, 1982 (the "Deposit Agreement") by and between Debtor and Denton, including the proceeds of any Federal Savings and Loan Insurance Corporation insurance with respect thereto, (ii) the Certificate, including any extensions or ' renewals thereof, (iii) the Program Fee (as defined in the Deposit Agreement) paid by Denton upon delivery of the Denton County Housing Finance Corporation Multifamily Housing Revenue Bonds (Certificate of Deposit Program) 1982 Series A-Denton Savings Association in the aggregate princ.".pal amount of $21,165,000 (the "Bonds"), (iv) the Deposit Agreement vided vided to Debtor under Sections 5.6(b), 5.7 and 7 .6 e rights pro- ( e (v) the separate but identical Regulatory Agreements,each)dated as of December 1, 1982, (collectively, the "Regulatory Agreement" by and among Debtor, Secured Party, the Lender, and certain.. developers (excepting the rights provided to Debtor under sec- tions 1.10 and 6.11 thereof) including all extensions and renewalii thereof, if any, including with respect to each of the above, but; without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive and receipt; for any income, revenues, receipts, issues, profits and other sums of money payable to or receivable by Debtor under the Deposit Agreement (excepting the rights provided to Debtor under sec- f tion 5.6(b), 5.7 and 7.6 thereof) and the Certificate, whether i r payable pursuant to the Deposit Agreement (other than the rights t of Debtor provided in Sections 5.6(b), 5,7 and 7,6 thereof) or the Certificate or otherwise, to bring actions and proceedings under the Deposit Agreement, the Certificate or the Regulatory Agreement or for the enforcement thereof, and to do any and all things which Debtor is or may become entitled to do under the Deposit ' Agreement, the Certificate or the Regulatory Agreement. (2) All money and securities and interest earnings thereon from time to time delivered to and held by Secured Party u dated as nder the terms of the Trust Indenture relating to the bonds, secured Party Dother ethan the2mony e andnsecurities,held by Secured Party in the Reserve Fund created by the Indenture and interest earnings thereon, and all other rights of every name and nature from time to time under the Indenture by delivery or by writing of any kind pledged, assigned or transferred as and for additional security under the Indenture or under the Deposit Agreement to Secured Party by Debtor or by anyone in its behalf, or With its written consent and to hold and apply the same, subject to the terms of the Indenture.' • I yL taey . •;'S,~•, . i it , I , r r Slareml^~ i1 po"Ird Iw t IJvq 011wr 1W WN wlu Io Ik:Inm Cr.mwtvt Cede. 3. for frl ,r,p plliwr. saw t.+. Idry d a.l R.1 Inotvlp_ - Set urW tanYlreJ Homo Ord~Addnll', » m First t4 at.lrnal. Fat'k o f De6~o~(d Nam• end modiny AddraJ---Tl-' - 11 pl5tan CbtaSty }r~uitx3 brt 4'brth, as 7'ivst ti Finar i Corporation e i ~7 71ett plaza 401 1Je5t tiirJmry Street $.brth, Texas 7 6102 pentwo Toes 76201 ty y, Name rood u In-$ t~forty: fu.. w. .e.+ r er Iminn oll~~r ".oMl . MAkNIN6 N wlloprol L o/1 fU 1mba b«4,1 I 61x wAo p 8k1O r 'I r Humber d eddlllaal eheell yrewoMOd ~ roodde_ _ CMCtlr tHl o^h' 0 N oP011 Gf k*b" HlY I Y l0 5w Mod It, reared In Nr rod ""'Is ❑ tredutll of toUaloral ore e10 two(". e S.curr~erey Ineiwd .1 0 Ia to pe rl.ti a r.turyµ^t^ Cot Ws#.bs., wrrlr~ .r duy.w w++ 6,011 ~I ~J` jl Sbll IemM< II 0 M r..o+r F+wMw" v~.. k r~ Yee r fl 4"4 &po M . w.b w ~ o, A wI.4 r • h ersW .»'^""r to" M "M . .r.r+..lAda "*w" a ' Q .Ire y "e.e. J "W4 e.eelrer A..," ey++e Q M M.. ww MM Y+ fit' er ..Inert. d rlr e.eM. Ll .....o .M • e/wM .w rw. yl"x.v e. ear.ee TW A- as Trustee DETTICYI CIJQt-t SUN wl lci eure 111 spplk~l l/IMO H ' pnmuwUl S*tured ►erry(I" kt4 V - slgnolure{t W olf Atkrowledgmenltbett~, Y,>.tuw»to (2) F11n9 pHkar COPY - RORiA "C" (REV. 45113) weorw tr uctu,+r as non Of SSANCARO WW nw r I NMI j°'~e t rid. CIA S EXHIBIT respect iyhtc, title and interest which Debtor All rand to (i) the amounts P Y 1Pa1 avi the ngs PandrineLoan C hereafter have in osit (the ICertificate ) in Debt(Ir pursuant or to the Certificate000 Dis Aued byrkansSavers Federal Sal amount of 57,900, Savers ) 1962 (the "Deposit Association, Little ROCk, as ( the pro to a Deposit Agreement dated as of December 1, Corporation Agreement") by and between Deb; o andndLoanerlnsurance i icluding coeds ant") any Federal Saving the Certificate, respect thereto, (ii) iii) the Program Fee (as insurance with renewals thereo , (by Savers upon delivery of osit Agreement) paid pousing any extensions or defined in the DePliousing Finance Corporation Multlc)82 series B- the Denton County of Deposit Program) the aggregate Revenue bonds (Certificate Of in the Deposit Savers Federal Savings and l0- 'IBOnds"), (iv) 000 (the l principal amount ofe900 hts Provided to Debtor under se entica id, (rOl- ction rili Agreement (excepting and (v~ the a 1982 separate but .6(b), 5.7 and 7.6 thereof), Debtor, 5 ' }story Agreements, each dptreement'o') I'y J)y and lamong the Regulatory the "Regulatory and certain developers (excepting the lender, including i! Secured party, under lo 10 and 6.11 thereof s provided to Debtor and renewalsthereof, if any, the gen- right f including all extensions and f to each of the above, but without limitingh with respect resent and continu ncomeyrevenues, erality of the foregoing, the P t for any a able to or e claim for, collect, receive and receipt (excepting receipts, issues, Profits and other s+.uns of money P5 and 7.6 receivable by Debtor under tunderp Se ti n r5 le pursuant to the rights provided to Debtor whether payable pursuant the. certificate, of Debtor provided in thereof) and than the rights or the D Certificate or reement (other 7 6 thereof) eposit A9 5.7 and s under the Deposit Sections 5.6(b), actions and proceeding A reement or for the otherwise, to bring and all things which t or the Agreement, the Certifandtto do any and ~ enforcement thereof, to do under. the Deposit Agreement, latory Agreement. ar may become one geyu Certificate or th securities and interest earnings (2) All money and secured Party to the Bonds, from of the Trust indenture relating from Debtor to thereon the to rms a to time delivered "Indenture"), Y Secured to and held of December 1, 1982 (the under the and securities heldbY dated as other than the money the Indenture and and nature secured Party Fund created hts o£ every name and na party in the Reserve d all other rigg delivery or by writing of earnings thereon, Indenture by assigned or transferred as aositoAgreementnto I, from time to time under the or under the Dep or with its any kind pledged, security under the indenture anyone in its behals~ject to the Debtor or by the same, Secured Party by and to hold and apply written consent terms of the Indenture. I ' hiS. 1~a' ~F~y ; d tIlk I a. h, ; _ 1. 1 1 use of any amounts received by Issuer or Trustee with respect to the Project Loans in any manner, and shall not take or permit to be taken any other action or actions, which would cause any Bored to be an "arbitrage bond" within the meaning of section 103(x,) of the Code, or the applicable Treasury Regulations promulgated thereunder or which would otherwise cause interest on the Bonds to become subject to federA1 a income tax. 1 Issuer covenants that at least 90% of all the amounts received by Issuer pursuant to its Certificate of Deposit Program will be used for one or more of the following purposes: to pay the principal of, premium, if any, or interest on the Bonds; to reimburse Issuer, or to pay, for administrative costs of issuing the Bonds; to reimburse , Issuer, or to pay for administrative and other costs and anticipated future losses directly related to the Certificate of Deposit Program; to make additional loans for the same general purposes specified in the Certificate of Deposit Program; or to redeem and retire the Bonds at the next possible date of redemption. Issuer shall at all times do and perform all acts and things permitted by law and necessary or desirable in order to assure that interest paid by Issuer on the Bonds shall, for the purposes of federal income tax, be exempt from all income taxation under any valid provision of law. ARTICLE V i REVENUES AND FUNDS 4 Section 5.01. Source of Payment of Bonds. The Bonds, together with interest thereon, are not general or moral obligations of Issuer but are limited obligations payable solely and only from Bond proceeds, revenues and other amounts derived by Issuer from the Certificate issued by the ' Lender and the Program Fee paid by the Lender pursuant to the Agreement, including the Reserve Fund established in connection with the Bonds, and all other rights and interests constituting a part of the Trust Estate. The Trust Estate is hereby pledged, assigned and deliverd to Trustee, in trust, as security for the equal and ratable payment of the Bonds, except as otherwise provided in Sections 8.05 and 8.06 hereof, and shall be used for no other purpose than to nay the principal of, premium, if any, and interest on the Bonds, except as may be otherwise expressly authorized in this Indenture or the Agreement, »33- i i ~ w-+ef~--••--• _ T r -1 ` rte. - ~ T 1 Section 5,02, Creation of are hereby created and es t-" ablished s and Accounts. There tru enturn the following funds and accounts to be he2dib IT st,: (i) the Bond Fund) (ii) the Revenue Fund; (III) in Reserve Fund; (iv) the Accumulation Reserve Fund; andiiv the Certificate Fund and (vi) the Program Expense Fund. ( ) the Section 5.03. Use of Mone Trustee shall deposit in the no d undiam unto transfer red from the Revenue Fund in accordance with section 5.06 hereof, ,i representin Ppiyments of amounts under the Certificate, including a pYepayment premiums, if any, and other amounts as may be required to be deposid thereinh pursuant to the Agreement or under this Indenture. Money in the Bond Fund shall be applied by the Trustee solely to pay the principal of, premium, if any, and interest on the Bonds, E for the redemption of Bonds when required and for purchase of Bonds when permitted by this Indenture. Issuer hereby covenants and agrees that so long as any of the Bonds issued hereunder are Outstanding, it will deposit, or cause to be paid to Trustee, in trust, for deposit in the Bond Fund, sufficient sums from the Trust Estate and pay the principal of, premium, if an y' and promptly int nt to meet the Bonds as the same become due and payable erest on pursuant to mandatory redemption. Nothing h reins shall be construed as requiring Issuer to use for such purpose any funds or revenues from any source other than the Trust Estate. Section 5.04. Use of Mone Moneys in the Reserve-Fund shall be lusedhsolelys for the extelnttthat iothnteeresmot on n ystareBno spa abut vailable ythwhen erefor dpurto the suant to this Indenture or the Agreement from other sources; provided that money in the Reserve Fund may also be used, if 1 necessary, to redeem any of the Bonds outstanding at the date of final maturity. Earnings on amounts in the Reserve Fund shall be paid by Trustee immediately to each Developer (as defined in the Agreement) in the same ortion Developer's Project Loan bears to the roriginal which each principal amount of the Bonds, treatin ggreqata g a Developer for the purpose of such payment the Lender as a principal amount of the Deposit not edtoioriginate Project Loans, Any amount remaining in the Reserve Fund upon payment of principal of, premium, if any, and interest on all of the Bonds and cancellation thereof in accordance with this Indenture, shall be paid to each Developer in the proportion which the original principal amount of such Developer's Project Loan bore to the original principal amount of the Bonds; provided that any amount which would have been payable -34- 1 • 1 1 to a Developer which has defaulted or an under t has otherwise viol, pd the he Project Loin or amounestultpropf oortitheonate re to to the P originate ,y Agreement, any failu a r Project as payable to Issuer, at the option of Issuer. B Loaondsns, r shall be Section !c n.%. lynk- of Mon,e M Fund. Moneys in y in the Accumulati°n Reserve us I ed, first, to the ccumulation Reserve Fund shall ba Trustee and an pay any reasonable and nec %sar expenses Y in the Revenue registrar or paying agent, to the extent that more s Fund are second, to satisfy any deficient not available therefor, than the Certificate Fund y in any other Fond h to pay reasonable ex e ) under this Indenture (Other expenses which are not ses of Issuer; provided thatnd third, such rights rights and duties directly related to tho Bonds nor the pop of Issuer hereunder $ onus 1 Reserve y, Amounts on de osit in hall not exceed Fund on the day following p the Accumulation 1 I on the Sonde in excess of theg each interest Requirement, shell Accumulation Reserve ayment date Earnings on amounts in transferred to the Revenue Fund Fun. deposited, when earned, in the cumulatFUndReserye Fund sha ll be Section 5,06. Use of Mone Except to the extent otherwise in the Reven~_ ue Fune! under this Indenture Trustee provided in the ~ (a) Fund all moneys received shall deposit in theR Revenuer the Certificate, received espect to the A and principal; principal constituting regularly scheduledemintere t premiums, if any) o£ the Cert ificate (including Pre a 1994, interest earned on prior to November e15, Indenture consistent with the Of the funds held under any and all other amounts race p o is ions of Article VI the ived lien of this Indenture. Y Trustee subject to the and (b) Amounts on deposit in the Revenue Fund as a result of any principal payments (includinremium Certificate prior to November 15, 1994 shall s' if an the Bond Fund on the business da shall be depo$ite@ the y following receipt,' for (c) Aluounts on deposit in the Revenue Fund and available such purpose shall be disbursed on the business day preceding each Bond Interest Payment (1), (ii) and (iii) below, each dat e fixed date or, with respect to purchase of Bonds, in the following order of prioritydemption or the amounts )alre dy on depos it therein, Is together with the interest on the Bonds payable on such date; to pay -35- , i 1 ~ . r.1 (ii) to the Bond Fund an amount which, together with amounts already on deposit therein, is sufficient to pay the principal, if any, of any Bonds maturing or to be redeemed or purchased on such date; (iii) to the Bond Fund an amount which, together with amounts already on deposit therein, is su£firiPnt. tn ray the redemption premium on any Bonds to be redeemed on _ such redemption date; (iv) to Trustee and to any other registrar or paying agent, an amount equal to their reasonable and necessary fees and expenses; (v) to the Reserve Fund an amount sufficient to maintain the Reserve Fund Requirement; (vi) to the Accumulation Reserve Fund an amount sufficient to establish and maintain the Accumulation Reserve Fund Requirement; and (vii) to the Lender any amounts remaining in the Revenue Fund on such date, ' Section 5.07. Use of Money in the Certificate Fund. Moneys in the Certificate Fund shall be Ts d immediately by Trustee to make the Deposit with the Lender in the amount provided by Section 2.11 hereof. The Lender is required by the Agreement upon receipt of the Deposit to (i) issue to Trustee, for the benefit of the separate Beneficial Interests DBonds, eposit t (which Certificate also a equal princip thel the the of the equal s to of amount principal amount of the Bonds), and (ii) deliver to Trustee an opinion of counsel to the Lander in form and substance satisfactory to Trustee that such Certificate is valid and binding on the Lender and enforceable against the Lender in accordance with its terms. Contemporaneously with the issuance and receipt of the Certificate, the Trustee shall execute and deliver to the Lender an account signature card of the Lander. Trustee shall hold the Certificate for the benefit of the Owners of the Bonds and Subject to the terms and conditions of the Agreement and the Certificate. Section 5.081 Use of Money in the Pro ram Expense Fund. Moneys in the Program Expense Fund shall, be used to pay all costs of issuing the Bonds, including, but not necessarily limited to, the fee to the underwriters of the Bonds for structuring and marketing the Bonds, all printing -36- i rE .I expenses in connection with the Indenture, the Agreement, 'the L Certificate, the Official Statement and the Bonds, all legal rr fees and expenses of counsel to Issuer, bond counsel and underwriters' counsel, rating agency fees, fiscal agency fees, any accounting expenses incurred in connection with determining that the Bonds are not arbitrage bonds, Trustee's initial fees, the cost of the feasibility studies, if any, . required in connection with the establishment of the Program and a fee payable to Issuer in connection with the issuance of the Bonds, upon the submission of requisitions by the President or Secretary of Issuer stating that the amount therein is justly due and owing, has not been the subject of another requisition that was paid and is a proper expense of j issuing the Bonds. Any funds remaining in the Program Expense Fund six months after the delivery of the Bonds and not otherwise committed to the payment of such costs shall be transferred to the Revenue Fund. i Section 5.09. Nonpresentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity or at the date fixed for redemption thereof, or otherwise, if funds sufficient to pay such Bond shall have been made available to Trustee for the benefit of the Owner thereof, all liability of Issuer to the owner thereof for the payment of such Bond shall forthwith cease, terminate. and be completely discharged, and thereupon it shall be the duty of Trustee to continue to hold such furds in trust, without liability for interest thereon, for the benefit of the Owner of such Bond, who shall thereafter be restricted exclusively to such funds, for any claim of whatever nature on his part under this Indenture or on, or with respect to, such Bond. In the event th4t any such funds are not claimed by an Owner or Owners of Bonds within three years of the date the principal of such- Bonds became due (or such earlier date as immediately precedes the date on which such funds would be required to escheat to the State or any other governmental unit under any laws governing unclaimed funds), Trustee shall transfer such unclaimed funds to Issuer, which may, from any available funds, pay any Bond or Bonds thereafter presented with premium, if any, and interest thereon only to the date of maturity or the date fixed for redemption thereof, Section 5,10. Money to be Field in Trust. All money required to be deposited with or paid to Trustee for account of any fund established under any provisions of this Indenture or the Agreement shall be held by Trustee in trust, and, except for money deposited with or paid to Trustee for -37- i redemption of Bonds, notice of the TeTrustee. in of which the trust has been duly given, shall, while held by the constitute part of the Trust Estate and bo int reatb granted with trust created hereby and any security respect to the Trust Estate. Trustee hereby covenants that all moneys held in an hfunfunds d under ndentu a and any collateral securing Estate, held in trust for the Owners of the Bonds, and that the raandinterests collateralfa eeandnshallf be esuperiornton the such moneys claims of the creditor:: and depositors of Trustee and of any other financial instituion has rovidedn or whilch cg ch acollateral. deposited or which h haas p ceiving Trustee financial depositmoneys hefirster rewith any collateral therefor if required by Article VI he ec:fn e'dhon opinion of qualified legal counsel experienced matters that Trustee possesses a valid and perfectec'. sfirs t security interest in such collater the value th only exceptions as do not materially alter I 1 Section 5.11. Amounts is then8ondsn (orbprovision afore ~ Upon payment in full of (i) payment thereof having been made in corda ce with this expenses of Trustee Indenture), (ii) the fees, charges, and and any paying agents in accordance with this l under r the d (iii) all other amounts required to be paid in any Agreement, the bonds and this Indenture, any amounts a able of the Funds created under the Indenture, except the amount, i if any, remaining in the Reserve Fund, which shall by Trustee t n Section 5.04 hereof, shall be paid as provided i to the Lender. Section 5.12. Reports fro__ from TrusteestatTrusteeassh ll prepare and file with Issuer (i) monthly amount of moneys Committed to or used to fund Project Loans, stee to the extent such information has e einprovidepayment d ate, by the Lender (ii) following each Bond terest hold in each furdaunder{ theplndenture, statements and tosets amounts each fund, (iii) following each Bond interest payment date, a description and valuation of all obligatio`Sav) ha lc pY WE investments in each fund ut with dregard to Bonds being any notice of redemption given called for redemption and a statement of the amount applied thb Bonds to the redemption of Bonds and a descripti other inf rmation portions of Bonds so redeemed, and (v) any that Issuer may reasonably request or that Trustee may from -38- 1 rl appropriate. copies of any such reports time to time deem shall be mailed or delivered to any owner of the Bonds upon the written request of such Owner, at a cost Trustee'a actual costs of duplication and delivery of to exceed Section 5, 13. Books. Records ~ d-Acc aCC , Th inT which agrees to keep proper books; complete and correct entries shall b t madisbursemel ting transactions allrela to the ocati n and application p of the proceeds investment, received from the sale of the Bonds, the revenues received from the Agreement and the Certificate, the funds created , pursuant to this Indenture and all other moneys held by Trustee hereunder. The Trustee shall make such bI ks, the records and accounts Bondld ring ores onable ctiohoun and under or the owner of any reasonable conditions. ARTICLE VI INVESTMENT OF MONEY Any moneys held by Trustee in trust pursuant to this Indenture as part of any fund under this Indenture shall be invested or reinvested by Trustee president nce or Secretarytof directions given to Trustee by 1 Issuer, or in the absence of such written direction, by II Trustee in its discretion, in Investment certificates or (except with respect to the Bond Fund) insured bank or deposit or time deposits of arv `feedeally a Lender, with surplus or reserves )f more than capital savings and uloan ndivided association, provided that such certificates of deposit are a perfected security interest as evidenced by an b by y secured opinion of counsel as described in section 5,10 ter of) aturiit governmental Obligations having a remaining term my of not greater than two (2) years and a market value qua of 110%, valued by Trustee not less often than quarterly, event such certificates of deposit; provided that, in no sliall the amount of investment in certificates of depoofi o of the any bank or oavings and loan association exceed reserves of amount of the capital and undivided surplus such bank or savings and loan an association. In the event such ravide such depository institution fails to main tai within five (5) additional collateral as Trustee requires business Trustee collat ral. at the earliest possibledat all sell and convert .39- W- QP 1 6:NT BY:F d J - HOUSTON 3-}6-9P ;10:00AM ;F 6 J * 11OU5 fON, TX.~ 017 390 6960:# 2 S IIASTrE ANT) KTR9(,'HNER A MK 8410NA1 C0 "T10N A'r T(J"X 6 ANU COUN"xwxfs AT LAW t00o t'iKKr C4lNU TOw1K 210 W"T PAeK AVENu( OKUHOMA Wy. OKL HOMA 73102 „F.l~ ~ •••r^'iLIW.:~//C.C /•P~'".J L- Tu~KNtr.el4Jbl~l3#.69D4 'K~4.1. - ,~.p ~ tCa Tr,rce.r,l4oal a~P.e4oa ` / Murrh A, 1990 VIA FEDERAL EXPRFSS Denton County Housing Finance corporiatlon c/o Nell Thomas, Esquire Fulbrigbt k daworski 1301 McKinney Street Houston, Texas 77010 loato Re t 117,900,000 Denton Cuuaty Housing mmnm i Corporatim (Temas) Multi-Pamily, Hanx%g Revs=" Bands (CortMosta of Depoat:t Program) 1983 Series B - Savers yedeaat Savings and Loan Assoulstla 4- Tbmk Oala Apaxtmsmts, De>ztoa 3Cmutyp 1035=-5, Oar Nile No. 000 J Gentlemen: I I am writing to you on behalf or our client, Havers Federal Savings arid. Loan Association, Little Rolm, Arkansas ("Savers"), the Unitior in the above- captioned Mond lsaua. As you are aware, based upon the default by the Developer on the underlying Project Loan, the Certificate of Deposit of Savers matured on September 11, 1889, and was paid in full with all accrued Interest on such date, The Trustee acknowledges that after redemption of the bowls and payment of all expenme of such redemption, there are moneys remalning In the Reserve Fund and the other Bond Fund accounts under the Trust Indonture. We respirtfully submit that SavortL is the proper recilxient of the f1wneys remalning in the Bond Funds based an the following atudysta. Savers advanced the inltlsl. dollars at the time of the original issuance of the bonds to pity the oxpevses of the issuance and establish the fund accounts. :lavers, as discussed above, fully performed its obligations as Londer and paid the CortWicate of Deposit In full with all accrued interest, when due. During the term of the Certificate of Deposit, Savers paid all interest punctually In spite of the fact that for a substantial period of time prior to the ultimate foreclosure, it was not r w%dving payments from the Developer. It is important to nota that. Savers. will suffer a prtncipal loss of approximately $10350,000 based upon the curet, market value of the Project. Pursuant to the strijeture of Article V of the indenture, moneys tealslning lit the Bond Funds (except. for the Reserve Fund), after the redemption of the Bonds and payment of all expensra generally fns into the Revenue Fund. Sectlon 5.06(c)(vil) of the Indenture then clearly provides that anT, such mono" retaining in the Revenue Fund are payable to Savers as the ' Lender". In S U17 39U 89687M 3 SENT UY:F 6 J - 110U8I UN ! J-i tl-UU l1U iU1AM .I' b J * HVU9ION, IM,~ } r 1 llonton County Housing l"lnanco Corporation ' March S, 1440 Page 2 addl ten section Lender, Copiceof Soctiene B N wid Sylltare attached shall km payasWe to hereto for your convenience. In connection with the Reserve i:und, Section 5.04 of tho Indenture ~ provides as follows 1 "...honeys In the Reserve Fund shall be used solely for the payment of Interest on the Bonds, but, only when and to the extent that other moneys ark nut available therefore pursuant to this indenture or the Agreement from other sources; Erovid_ed. that Inonev in the Rosurvv Fund tna also he used if nocwssarv, to gem azzo t e o~n_ crutstann . at the date Of final etslurl • • . Savers helirves that any Funds remaining in the Reserve Fund r could have been "netted" from the amounts submitted for payraont by the Trustee when making its call on the Certltlmte of Deposit becautse the Hesorve vund was i available to be used to redeew the bonds outstanding at the date of final meturity. Sertion 5.04 of the Indenture Rs provides as follows for the distribution of any remaining ft Any amount remaining in the Reserve Fund upon payment of prinnipal of, pread=, if any and Werest on all of the Bonds kind cancxliation thereof in accordance with this Indenture, shall. be to each Devei in a pnaportion wh[dR U e o rtaT principal amount of such Developer's Pro}eat TAan bare to the originul. prinelpaal am wnt of the Bonds; ruvidoad that On r tuunount which v.,auld haven been jw bw O to a lievoiopor w r ' has anted ex the Project lase or has othorwiwT vialaded the Regulatory AKreearerttI or any amour i pmportlanats to the portion of Bonds redeemed as a result of the failure to onaie Project I.An s, shall. be Pa- ' to the Issuer at the o tion of the Issuer... Temp ad It is Savers' posittan that It has performed both to the letter and the spirit of the Deposit Agreement sad Uw Trusk Indenture In fully pruteathtg bry, protecting the interests of the the interests of the Dominanca e corporation. upatr this performisaee by Savers Denton , C.aSav verer s is Housing F`i tle . after the payment of aft 11: il ntitled to any funds reall~ninK other expenses whether iReverme Fund, the Reserre~l or u~t behalf of formed under the Indenture. Therefore, we respectfully re5 I y Denton County Housing Vinuuc'n Corporation March 8, 1990 Pago 2 authorize Severe that tbLe Dent the Trustee under Fbmnce the ebovc-ref d I"UNCNB to Texas National l Banks rdwabiluK fugidn lu Sav.urs. dL~lribute u11 After you have had an opportunity to review the above, we would appreciate as opportunhy to discuss this molter with you. V t yonrs~ Ronald L. Nadock For the Firm Rmllaw ec* Mr. Jim L. Hurley Mr. David Coohoroft Kim Taylor Kellen Uquire Mr. J.W. Devine. Thad G. Fenton, Esquire rw.r.r+\epor\aeht. m*fry- i y .1 1 1 i ALAMO FEDERAL SAvinG5 ASSOCIA on OF TEXAS' 901 N.E, Loop 410 Post Office Box 17527 (Area Code 512) 8287171 i SAN ANTONIO, TEXAS 78217 i 1 August 28, 1990 Mr. Dan Hill 110 W. Hickory Denton, Texas 76201 RC: Denton County Housing Finance Corporation $6,225,000 Multifamily Housing Revenue Refunding Bonds FSLIC Insured Certificate of Deposit Program (Alamo Savings Association of Texas - Post Oak Ridge) Dear Mr. Hill: Please accept this letter as a Formal request for the Reserve Funds received by Denton County Housing Finance Corporation per the above referenced Issue. I have talked to Pam Jones of the NCNB Trust Department Fort Worth. In our discussion she referenced your willingness to release those funds once a i'urther understanding`of the economic deterioration of the property was Illustrated to you. The original loan amount on this property was $12,5_00,000. Alamo Federal has written off approximately $2,010,921 to date. Currently the property is cash flowing approximately $42,892 average per month. Alamo Federal's basis in the property is 110,489,079. At a cost of funds rate of 6.5%, the cost to hold this property Is approximately $74127 per month ' leaving Alamo with a negative ADI,405 per month or ,376,867 annualized. I hope this Information will update you on the cash poor position this property maintains as well as the negative capital erosion of Alamo Federal. If I may be of any further service In this or any other regard please do riot hesitate to Call. SI erely Robert 0. Chidge~ Vice President Capital Markets ROC/tfp i CWV of OE'NtON Community Developffiont Off/co 1 to West oak sulie a Denton, Texas 76201 ~r (617) 686.8480 , August 22, 1990 Don Hill, President Denton County Housing Finance Corporation lio W. Hickory Denton, Texas 76201 Dear Mr. Hill: Enclosed is a copy of the application including the agreement between the City and Denton County Housing Finance Corporation (bCHFC). I have been in contact with DCHFC's attorney, Neil Thomas, concerning some changes to the Warranty Deed that will be executed by the homesteader and DCHFC. Mr. Thomas and I have agreed that further discussions regarding these changes will take place after the Department of Housing and Urban Development approves Denton's participation in the program, It has also been brought to my attention that DCHFC is concerned about new property owners residing in units which do not meet City of Denton building, electrical and plumbing codes. Section 40 paragraph a, of the $itl esteader Agreement, stipulates that any defect posing a "substantial danger to health and safety" including those repairs necessary to bring the structure up to City of Denton Building Codes "must be completed before the property may he occupied". j The Community Development staff, through communication with the prospective homesteader, will develop a detailed set of work 1 specifications. The specifications will include designation of those repairs which must be completed prior to occupancy. All such designated repairs must be completed within one year from the date of the Homesteader Agreement. Monitoring of the rehabilitation process including loan financing, contractor selection and construction will be carried out by Community Development staff. A certificate or release for occupancy will be issued to the homesteader as an indication that all code repairs have been completed and they may occupy the structure. \..I Don Hi1I Urban Homesteading Memo page 2 Thank you for your willingness to participate with the City , worthwhile program . we will inform you of HUD's action on in this information, the applicati 69 soon as iowe e nsaor need notified. Please at 383 1235 if YOU have Quest Sincerely, r Barbara Ross Community Development Coordinator BR:pb 1 xc: Lloyd Harrell, city Manager Frank Robbins, Executive Director for planning d Development ; i f i e• i _ I URBAN HOMESTEADING PROGRAM APPLICATION r i w "MORON urban Homesteading Program page 2 6 1. Proppsed Ur ar7 NorlLes~LB Ne! lam! h~~ Two neighborhoods have been selected as the targeted neighborhoods for the Urban Homesteading program. 1) East Denton 2) Paisley Addition !1. Neiohborhood Goa1~ 1) East Denton - To continue to stabilize the area and remove vacant housing which may begin to deteriorate and detract from neighborhood revitalization efforts. homeownership strengthen current neighborhood revitalization 2) Paisle s and Addition lncrease To effort i W. Reauest for section &10 Urban 11Mecteadl1v Fundlns The City of Denton is requesting $125o000 25,000 in r unit o est Local um number of each funds. This amount Is based on the minim on an annual basis. acquire Urban Homesteading Agency Is required to Because of the !ow incidence of Fedora! Housing and other repossessions Dent costs er unit that expected occurring within the CTh Ci y haon, It Is allocated $100,000 In 990 Community will average e $40,000. Development Block Grant funds as a supplement to the section 810 funds, w properties during the The will enable the purchase of five (5) along eight O e program's Initial year. 1 Urban Homesteading Program Page 3 IV. Loco! Urban Homesteading Agency The Denton County Housing Finance Corporation (DCHFC) will act as the Local Urban Homesteading Agency. The DCHFC Board will receive title to properties from the Department of Housing and Urban Development, Veterans Administration and Resolution Trust Corporation (if applicable). These ' properties will then be conveyed to selected homesteaders. V. Local Administrative Department The Urban Homesteading Program will be administered by the City's Community Development Office. VI. ffflxbficatlons (See Attached) VII. Men of Proposed tirhan Nomaste~dln.a kelahbQl hoods j (See Attached) 1 VIII. Property Selection and Management A. Procedure 1. LUHA will request suspension of sale on eligible properties within the Urban Homesteading Neighborhoods. i During the suspension period Community Development Staff will do the following: 2. C. D. Inspector and a representative from the Building Inspections Division will inspect each unit. 3. An information and rating sheet will be developed for each unit. 4. Appropriate units will be recommended for selection to the L UNA. 4 Urban Homesteading Program Page 4 8. The property Information sheet will Include the following: i, property address 2. total square footage 3. number of bedrooms and bathrooms 4. approximate age of structure I 5. type of structure e. g. brick, frame, modular { 6. current value%stlmated post-rehab, value 7 condition of structure (attach inspection report) 8. estimated cost of correcting code violations I 9. condition of adjacent properties to. proximity to commercial and industrial activities It. proximity to retail activities 12. encroaching incompatible activities 13. Acquisition cost from HUD, VA, RTC C. Property ranking Each property will be ranked based on the following criteria. Units will be ranked 1 to 5 on each Item. A ranking of 5 denotes the most desirable properties. 1. Two or more bedrooms 2. Room sizes and total square footage i 3. Square footage 1,200 or greater facilitate and encourage family activities 4. Lot size 50 x 100 square feet or greater 5. Proposed rehabilitation costs estimated between $5,000 (preferred) and $20,000 (maximum) 6. Adjacent properties in good condition 7. Adjacent properties owner-occupied 8. Commercial and Industrial activities are an appropriate distance from property 9. Retell centers available but not in close proximity to property. 10. Acquisition cost less than $45.000 It. Post-rehab loan-to-value Is less than 80% ' Maximum point total passible Is 55. only properties with a rating of 30 or more will be considered for selection. Properties with the highest number of points will be selected firot. Selection by the DCHFC will continue until the total $125,000 has been utilized. After each selection DCHFC will sign the conveyance agreement with the appropriate federal agency and take title to the property. 4 Urban Homesteading Program Page 5 D. Property management The Community Development Office will be responsible for meintenance and management while the properties are in the possession of OCHFC. Community Development staff will be responsible for securing all entrances. Coordination with the Code Enforcement Olvlsion, in order to obtain mowing and clean-up services, will also be initiated by Community Development staff. LK Homesteader Sel .tlo The Urban Homesteading Program will be advertlzed In the Denton Record Chronicle in both English and Spanish. Ilrochures will also be available at varlous locations throughout the City Including: City Hall Public Obraty Denton Housing Authorlty Area Churches Local Non-Profit Organizations A bl-lingual member of the City staff will be available to work with non-englisii speaking persons. f No Indlvidual/famlly who Is currently a homeowner occupant or who owns any residential property is ellgible for participation in.# Denton 's Urban Homesteading Program. Eligibility Criteria Each potential homesteader will be required to provide the f{ following verifiable Information: 1) annual gross Income - based on Information from current employer and previous year Income tax return 2) proof of U. S. citizenship - all applicants must provide a copy of birth certificate or other proof of citizenship 3) household size - family size must be compatible with the number of rooms and square footage in the available homesteading units. d) Information regarding outstanding loans or other debts including auto loans, credit card payments, medical bllls, otc. A credit check on each applicant will be conducted or requested by Community Development staff. 5) amount of savings or available cash for unexpected emergencies . t Urban Homesteading Program Page S r 6) record of monthly expenses - food, clothing, daycare costs, etc. The Community Development Staff Oil verify all Information on submitted applications. Ineligible applicants will receive a letter explaining the reasons for their Ineligibility. / The applications of famllles deemed eligible will be reviewed by a staff panel. The panel will rate each eligible applicant accord- Ing to the following criteria: 1) Income level - low Income priority, income cannot exceed 80X of area median income. 2) Financial capacity - total existing debt plus rehabilitation debt should not constitute more than 36X of family's gross income. 3) credit rating 4) ability to afford housing expenses and maintenance (utilities, taxes, Insurance, etc.) 5) available cash - for unexpected emergencies 6) ability to provide "sweat equity" for rehabilitation 7) family size as It relates to unit size J Criteria Items 1 -4 will be considered highest priorities. Items 5 and 6 are low priority but desireable. Item 7 will be applicable only as specific units become available. As units become available staff will provide eligible applicants with information and an opportunity to view each unit. Potential home- steaders will inform staff of any units they may be Interested In acquiring. (Units must match family size). The names of the families who have expressed an interest In the unit(s) will be placed In a pool. A drawing will be held by DCHFC to determine which eligible family is awarded the unit Those families whose names were not drawn will be listed as eligible alternates for the properties. In the event that any selected homesteading family does not meet its obligations under the "Homesteader Agreement", any alternates may again be placed in a pool to be selected for the property after It reverts to the DCHFC. 1 Urban Homesteading Program Page 7 ` X. Rehablll !on -inanclna 1 Each homesteader will be reaulred to obtain private financing for all rehabilitation cosrs. Community Development staff will contact local lending I Institutions to explain program guidelines and request participation. Attached are Commitments from First S j Ban and Bank D both of Denton. Each Institution has agreed to work with homesteaders who qualify for home impro- vement loans. Community Development staff will pre-qualify all applicants who are deemed eligible for program participation. After selection staff will assist the homesteader In preparing the application for a home Improvement loan to the lending lnstltutlon of choice. The lending Institution will be contacted by staff to Inform appropriate personnel regarding the homesteader's application for loan and offer any assistance necessary. XL A. Monitoring Guidelines Within the Homesteader Agreement and the Conveyance Documents signed by each homesteader, specific requirements for program compliance are outlined. These requirements include: 1. that the conditions designated as "code repairs" be corrected In I year from the signing of the conveyance documen ts. j 2. that the remaining substandarc, ^ondltlons noted In the I original set of work specifications be corrected within 3 years. 3. that the family occupy the unit by the date noted in the ' Homesteader Agreement. 4. that the family occupy the unit as their principal residence for not less than five years. 5. that the homesteader, during the five year period, provide hazard and liability Insurance and pay all property taxes. 6. that the property be used for residential purposes only. Each of the above requirements will be monitored by the Housing ,Staff. Urban Homesteading Program Page a A. ~1e#114 of Monltorln4 Nvm dQs 1. The Community Development Inspector will setup a schedule with each family to allow for the rehabilitation work necessary for occupancy within the one year required time frame. The inspector will be responsible for working with the homesteader in all aspects of rehabilitation and noting any delays and reasons for the delays. If these delays will cause the pre- occupancy rehabilitation to extend beyond the date specified In the Homeowner Agreement, the Inspector will present such in- formation to the Staff Review Panel for consideration. The Staff E Review Panel will consider the reasonableness of the delays and If warranted, grant additional time for the rehabilitation. 2. The Community Development Inspector will set up an Inspection schedule for each famlly/unit. Al! other repairs listed on the set of work specifications prepared prior to conveyance must be completed within a three year period. a. There will be frequent Inspections during the pre- , occupancy period. After the pre-occupancy rehabilitation has.-been completed, an inspection will be done perlodl- cally until all work Included In original set of work specifications Is completed. b. After the completion of the rehabilitation work, continued occupancy verification will be: !)done through periodic inspections and, 2) the requirement that the homesteaders complete and return an Affidavit of Residency. c. During the five year period, the homesteader will be required to show annual proof of homeowners Insurance and payment of property taxes. Any violations of the requirements will be noted and presented to a staff review panel to determine whether the family has violated the homesteader agreement and conveyance documents. Each family will be given the right to present evidence on their behalf. All reason- able effort will be given to allow the family to retain the unit. X11. /mime t r Aareement and Conveyance Diocuments (See Attached) i Urban Homesteading Neighborhood Improvement Plan Nel4hborhaod Descry The East Denton Neighborhood Is bounded by Bell Avenue on the west, McKinney Avenue on the north, Woodrow Lane on the east and Dallas Drive/Shady Oaks Drive on the south. The neighborhood Is made up of Block Groups 2, 3 and 4 In Census Tract 212. East Denton is primarily a single-famlly residential neighborhood with some vacant substandard structures, some housing deterioration and neighborhood decline. The population is predominately African-American. The Income level generally meets the low to moderate income criteria for Denton. k The area has a large recreation center, built within the last two years. Residents also have access to a neighborhood park. shopping and service areas for the Neighborhood are found along McKinney Avenue. The neighborhood Is less then five miles from a major shopping mall. The City of Denton has supported the development of a neighborhood organization for the area and Is working through that group to continue I neighborhood Improvement efforts. Hour- -=ng RebJD14t&n The following assistance Is available to East Denton residents: f) CDBG Rehabilitation Loans to low and n;oderate income families. Loans are available In one of three forms - a) f00% forgivable loan (over a five-year term) b) 50% forgivable loan, 50% loan at 3% interest rate (ten year term) 3( 100% Loan at 3% Interest 2) 1 thgr/nation A,s s c is provided by Community Services Incorporated to low Income persons. I Urban Homesteading NIP 3) Den ton L H tal ousln ahousing is ald r, ~hn I f owIncome renso avProvides Section 8 ailable in the East Denton neighborhood In the Phoenix Apartments. This complex, Is managed by the Denton Housing Authority. 4 Properties for ) ants/ Reha 111 1 program provides loans to private owners of rental units. j of thu This neighborhood residentsi In safe, decent and affordable housing, allows housing 5) bode- Enforcament services are provided from the city to res/dentabas ondof the j area. Owners of properties where there may be weeds, rubbish, brush'for removal vehicles and vacant substandard structures are inform ned and citations are Issued if conditions do not Improve. ed of the need _Public Lmorovemet2 The following Is a list of proposed public improvements on the neighborhood and the expected project Initiation year. f Alexander &treAt Drainage improvements - 1990 $90,000 2) Pecan Creek Drainage Project, Bradshaw to Ruddell - 1992-93 $250,000 ' 3) Continuation of Alexander Drainage - 1992-93 $128,000 4) Pecan Creek Drainage near Robertson - 1993-94 $SX, 000 5) Pecan Creek: Kerley to Woodrow, Phase r - f994 - 1995 Through the use of CDBO funds, the City has, In the past five years, repaved four (4) neighborhood streets and Installed sidewalks along the street which borders the public housing site. 1 Services i) Martin Luther King Jr. Recreation renter was completed in February f989. The center provided recreational activities a branch library and as an activity center for neighborhood organizations. This fall, the Center will have an After- School Action site for low to moderate Income children. 2) Day care is provided for nel;hbarhood residents at the Fred Moore Child Care Center. Fred Moore provides day care to low income working families. 3) Elderly Assistance Including transportation and hot meals is provided throughout the neighborhood by ~F Program.-for Ac(na Need.~(SPAN). Hest meals are sent form the MLK Recreation Center to elderly citizens who might f otherwise have none. Transportation Is provided by SPAN vehicles. 4) Public Transportation is provided by SPAN Is public trolleys which have a specific route running through the East Denton Neighborhood. 5) Health Care Is provided to low Income citizens of the neighborhood through the Texas Women's Unlvers/tY CARE Clinic. Services are available to anyor.- based on first-oome, first-served. 6) Crime Prevention during the past eighteen months the City has Initiated a new program in the East Denton Neighborhood. Community Oriented Pollcing or COPS Is characterized by a team of police officers who patrol In the neighborhood. city's n commitment community to police crime fpreeVes prevention In the h area has been strengthened by The the addition of the COPS program, ~I P/1~GE N$ G~6OOOOD : EAST, DENTON V 61 ON14CR91 Y DR. 1 / I ~I OAK _ l1ls Census Tract L.~ [ OL DR 212 N as P~ w J M H t Urban Homesteading NIP Nelah`lothood D@scrlatlon Tht Paisley Addition Neighborhood Is bounded by Bell and Railroad Avonues on the west McKinney Avenue on the south, the Texas and Pacific Railroad tracks on the north and Mozingo/Mulkey on the east. The neighborhood Is made up of Block Groups 4, 5, 6, and 1, Census Tract 206.02. ~I The neighborhood 1s primarily asingle-family residential area with some housing deterioration. Residents In the area are a mix of caucasian, hispanic and black with a plurality of caucasians. Income levels generally fall In the low to moderate range. Shopping and services areas for tho neighborhood are found along McKinney Avenue, Recreation Including tennis courts, municipal pool, Civic Center, Senior Center and a playground are located less than three (3) miles from all i neighborhood residents at Civic Center Park. I The City of Denton ha.s designated the area as a single-family residential preservation zone. Efforts to retain the existing single-family housing will continue along with an emphasis on neighborhood improvement. Housing Reba llitatlon The following assistance Is available to Palslsy Addition residents: 1) CDBG RehabllltAt&n Loans to tow and moderate income families. Loans are avallablo In one of three forms- a) 1010% forgivable loan (over a five-year term) b) ON forgivable loan, 50% at 3N Interest rate (ten year term) c) f00X Loan at 39 Interest 2) Wee herization 4ssisterzg Is provided by Community Services Incorporated to low income persons. ' 3) Denton Houslno Authorlty provides Section 8 certificates and vouchers. 4) Rental Rehabilitation roaram provides loans to private owners of rental properties for rehabilitation of the units. This program allows housing neighborhood residents In safe, decent and affordable housing. 6) Code Enforcement services are provided from the City to residents of the area. owner of properties where there may be weeds, rubbish, brush, abandoned vehicles and vacant substandard structures are Informed of the need for removal and citations are Issued if conditions do not Improve. I 1 i Urban Homesteading NIP Social services 1) Civic center Park Includes the Civic Center, Senior center, municipal pool as well as tennis courts and playground equipment q 2) Elderly assistance Including transportation and hot meals Is provided throughout the neighborhood by Services Program for Aging Needs (SPAN). Activities and meals for senior citizens are also provided In the Senior Center which Is adjacent to the neighborhood. 3) Public transportation Is provided by SPAN In public trolleys which have a specific route running through the Paisley Addition Neighborhood, 4) Crime Prevention - During the past eighteen months the City has Initiated a new program in the Paisley Addition Neighborhood, Community oriented Policing or COPS Is characterized by a team of police officer who patrol the neighborhood. The city's commitment to crime prevention In the area has been strengthened by the addition of the COPS program. i i i !I if { 1 : I RAISLY ADRf I t F. I ell, % ~.o I VNIYE081 Y DA. ~ j nsus'Tr t 6.02 ' OAk E OL DN W r . ,'111 CERTIFICATION The City of Denton has duly adopted a resolution authorizing the filing of an Urban Homesteading Application, including all understandings and assurances ` contained in the cartificatione below. II 1. The LUHA possesses the legal authority to and will carry out the local Urban Homesteading Program described in this approved application in + accordance with this part, including the specific program requirements described in 590.'t(B). 2. The LUHA haa: A. An adequate administrative organization capable of carrying out the program in a timely and cost-effective manner; B. Procedures for selecting and accepting property suitable for homesteading and rehabilitation as required by 590.7(B)(1); 0. Procedures to asaint in arranging, or for itself to undertake, rehabilitation financing for property conveyed to honest aders, as required by 590.7(B)(4); D. Procedures for monitoring the homesteader agreement and for revoking a conditional conveyance upon material breach of the s agreement, and for selecting a successor homesteader as required by 590.7(B)(6); and E. Procedures for conveying fee simple titlo to the residential property received from HUD or VA without substantial consideration to the homesteader upon his or her full compliance with the agreement required in 590.7(B)(7). ` 3. The applicant or the LUHA has, before submission of the application: A. Developed a plan for a coordinated approach toward neighborhood improvement as required by 590.7(A); and B. Provided the citizens an adequate opportunity to express prefereaoes about the proposed location of urban homesteading neighborhood or neighborhoods, and to comment on the plan for a coordinated approach toward neighborhood improvement. 4. The applicant and the LUHA will: A. Assure nondiscrimination in the selection of homesteaders and that no eligible person is denied equal opportunity for housing, or excluded from equal participation in the Homestead Program, on the basis of race, creed, color, national origin, age, sex, or handicapping condition, and that it will comply with all the requirements of Title VI of the Civil Rights Act of 1964; Rxaoutive 4Qr VP I~ Certification page 2 i Order 11063; Title VIII of the Civil Rights Act of 1968, se amended; Section 504 of the Rehabilitation Act of 1973; the Age Discrimination Ant of 1975, Section 562 of the Housing and , Community Development Act of 1987 and all applicable regulations issued under these authorities, in any activity in its local Urban ` Homestead Program; and B, Employ affirmative marketing procedures in the advertising of f homesteading properties, 5, The LUHA will comply with the lead-based paint procedure set forth in I 2$ CPR Part 35 for properties constructed or substantially rehabilitated prior to 1978. 6, A. The LUHA will submit any information which HUD requests for the ; purpose of assisting HUD in meeting its environmental reeponaibilitiec under 24 CPR Part 50 and the Coastal Barrier Resourcos Act of 1982. B. The use of any funds provided under this part shall be subject to Sections 102 (A) and 202 (A) of the Flood Disaster Protection Act / of 1973 which respectively requires owners of assisted flood-prone property to purchase flood insurance and requires participation by the community in the National Flood Insurance Program, 7, The applicant and its designated LUHA will give HUD and the Comptroller 1 General, through their authorized repraseCtsatiovest aoenta to relatedand the right to examine all records, books, pape the local Urban Homesteading Program. information its 8, aThe LUKA wtll a in writing and on pproved localmUrbaniHome tcading Programffor$public description review. Lloyd V. Harrell City Manager 296ua r i l r RESOLUTION NO A RESOLUTION OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE SUBMISSION OF AN URBAN HOMESTEADING PROGRAM APPLICATION TO THE f DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; APPROVING AN AGREE- MENT WITH THE DENTON COUNTY HOUSING FINANCE CORPORATION TO ACT AS THE LOCAL URBAN HOMESTEADING AGENCY TO IMPLEMENT THE PROGRAM IF FUNDED; AUTHORIZING THE CITY MANAGER TO ACT AS THE CITY'S AUTHO- RIZED REPRESENTATIVE IN ALL MATTERS PERTAINING TO THE CITY'S PARTICIPATION IN THE URBAN HOMESTEAD PROGRAMt AND DECLARING AN ! EFFECTIVE DATE. WHEREAS, the federal Urban Homestead Program was created to use existing housing stock to provide homeownership opportunities, j primarily for lower income families, thereby encouraging public and privata investment in selected neighborhoods and assisting in their preservation and revitalization; and WHEREAS, the program provides for the transfer without payment to a local urban homesteading agency of federally owned properties for use in a HUD-approved local urban homesteading program; and WHEREAS, it is necessary and in the best interest of the City of Denton to apply for funding under the Urban Homesteading Program to meet the objectives and needs set forth above; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: €i f SECTION I. That a Urban Homesteading Grants Program applica- tion is hereby authorized to be filed on behalf of the City with the Department of Housing and Urban Development. SECTION-11 . That as part of the application process, and to provide for implementation of the Local Urban Homesteading Program if funding becomes available, the City approves the attached Agreement between the City of Denton and the Denton Housing Finance Corporation. SECTION III4 That the City Council designates the City Manager as the City's authorized representative to act in all matters in connection with this application and implementation of the City's participation in the Local Urban Homesteading Program. SECTION IV. That this resolution shall become effective immediately upon its passage and approval. y i' I kltday of , 1990. PASSED AND APPROVED this the BOB CASTLEBERRY, MAY A ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: DEBRA A. DRAYOVITCH, CITY ATTORNEY I BY: urban es } I P i AGREEMENT BY AND BETWEEN THE CITY OF DENTON AND THE DENTON COUNTY HOUSING FINANCE CORPORATION This Agreement is entered into by and between the Denton County Housing Finance Corporation (the "Corporation"), acting by and through its duly authorized president and the city of Denton, a home rule municipality of Denton County, Texas, (the "City"); For and in consideration of the mutual covenants and agree- i ments of each, the parties agree as follows: I. The parties agree to cooperate in the implementation of a Local Urban Homesteading Program (the "Program") under which eligible individuals will receive single family residences which must be rehabilitated and used as residences, pursuant to the Housing and community Development Act of 1979 and regulations of 1 I the United States Department of Housing and Urban Development ("HUD"). II. The parties agree to perform in compliance with the terms of the Urban Homesteading Agreement. ~ III. The Corporation agrees to accept title to properties eligible I to be conveyed under the Program and to convey these properties to eligible individuals who qualify as "homesteaders" under the Program. 'I IV. The City shall protect and indemnify the Corporation, its directors, officers, agents and employees from and against all liability, losses, damages, costs, expenses (including attorneys' fees), taxes, causes of action, suits, claims, demands and judgments of any nature of, from, by or on behalf of any person arising in any manner from this Agreement or in connection with the Program or the financing of the Program, including those arising from (i) any work done in connection with the Program (ii) any breach or default on the part of the City in the performance of any of its obligations under this Agreement, (iii) any violation of a contract or restriction by the City relating to the Program or this Agreement, and (iv) any violation of a law, ordinance, or regula- tion affecting the Program or any part thereof or the ownership or oecurancy or use or any property provided under the Program. y 1 1 V. The City agrees to perform all administrative functions and to carry out all Program activities on behalf of the Corporation in accordance with the Urban Homesteading Agreement and the Program I Guidelines. The activities are more particularly described below: r (1) Perform all activities related to the selec- tion of eligible properties, including review of property lists, preparation of rehabilita- tion cost estimates anJ all communications and documents necessary to accept conveyances of selected properties to the Corporation; (2) Provide security and maintenance of units conveyed to the Corporation; (3) Advertise the Program; (4) Per£or" all activities necessary for selection of homesteaders, including vhe application process, verifying information on applications and rejection and acceptance of homesteader candidates based on the appl:;.cations; (5) Perform all activities necessary to match homesteaders with selected :nits; (6) Assist homesteaders in seeking property reha- bilitation financing; (7) Prepare all documents and participate in all activities necessary for conveyance of proper- ty to homesteaders, including the closing of the transactions; (8) Monitor rehabilitation activities on each unit and perform periodic inspections; (9) Monitor homesteader compliance with the Pro- gram guidelines and conveyance documents and conditions; (10) Perform activities necessary to the closeout of the Program. The City agrees to bear all costs incurred by the corporation in connection with this Agreement and nothing shall require the Corporation to expend any of its funds in connection with the PAGE 2 a ~ ' 1 M I 'AL41 h performance by the corporation of its duties under the Program or any Urban Homesteading Agreement, IN WITNESS WHEREOF the es hereto ve made and entered day of , 1990, in into this agreement this Denton, Texas. DENTON COUNTY HOUSING FINANCE CORPORATION ' BY. PRESIDEN ATTEST: .r BY" J ET RY CITY 01' DENTON BY. BOB CASTLEBERRYp MAYO ATTEST: CITY SECRETARY JENNIFER WALTERS, BY: APPR VED AS TO LEGAL FOATTORNEY DEBRA ADAMI DRAYOVITCH, CITY AT BY: ^ PAGE 3 4 ' f , FIRST ST'AT'E BANK F1 ! ■NT 10 t SOUTH LOCUOT DENTON, TEXAS 76201 rr July 24, 1990 f Barbara Ross City of Denton Community Development Office 110 W. Oek~ Suite B Denton$ Tx, 76201 Dear Ms. Roses Th6 First State Bank of Denton will participate with you in the Urban Homesteading Program. As 1 understand it, the program will assist eligible homesteaders in obtaining homes from certain government entities. The First State Bank of Denton will make home improvement loans to eligible' buyers under out existing credit underwriting criteria. We have set aside $200^0 for home improvement loans and would ask that each loan have a maximum advance of $5,000 so that we could serve more homeowners. Should you have any questionsp please donlt hesitate to contact me here at the bank. Thank you. Very truly yours, _ /~<J `rye ' / • I' I'`6 Bill McClellan Senior Vice Provident BMC.nbw 1 r 1 BANK?ONE. J4m L. sunyerd BANK ONE, TEXAS, NA Senior Vlee Preefdent 215 Woil Hlcko Chlet Credll Offloor Donlon, TexAs 7201 (617 381-7425 i 1 July 20, L990 I Ma. Barbara Rose Community Development Coordinator Cicy of Denton Community Development Office I 110 West Oak, Suite B Denton, Texas 75201 Dear Barbaral Thank you for tba nice visit Wednesday, Wag at Bank One, are very interested in participating in the Urban Homesteading Program, Please allow this latter to serve as our committment to designate, at minimun $50,000 in Noma; improvement loans provided that the program allows the bank to most and follow all guidelines and policies of BANK ONE Corporation and the office of the comptroller of the Currency. Beat of luck in this worth while endeavor, Sincerely, I _ (9im L, Bunyar Senior Vice Pr nt I Chief Credit Officer JLB/dh .l 1 I 0 THE STATE OF TEXAS § SPECIAL WARRANTY D13ED WITH PENDORIS LIEN COUNTY OF DENTON § Dates / Grantors Grantorls Mailing Address (including county)s Grantees Gr;^nteels Mailing Address (including county)s i Considerations one dollar and a note of even date that is in the k principal sum of ten dollars ($10.00) and is axe- cuted by Grantee, payable to the order of Grantor, secured by a vendorts lien retained in this dead and by a deed of trust of even date from Grantee to As further consideration Grantee ,Truwhsea, and perform all the covenants androbligations in the deed of trust. Property (including any improvements)s Reservations from and Exceptions to conveyance and Warrantys The Grantee, his or her heirs and assigns are p.rohibited from disoriminating upon the basis of race, creed, religion, color, sex, national origin, age or handicap, in the sale, lease or rental or in the use of occupancy of the above described property, including the land and any improvements now or in the future erected on said property, All valid and subsisting restrictions, reservations, covenants, conditions, easements and any other rights-of-way and prescriptive rights, whether or not of record, and other instruments that affect the property. Grantor, for the consideration and subject to the reservations from and exceptions to conveyance and warranty, grants, sells, and conveys to Grantee the property horein described, together with all and singular the rights and appurtenances thureto in any wise belonging, to have and hold it to Grantee, Grantee's heirs, execu- i i i 3 ;tors, administrators, successors and assigns forever, Grantor i ::,hereby binds itself and its heirs, executors, administrators, successors, and assigns to warrant and forever defend 411 and singular the property to Grantee and Grantee's heirs, executors, administrators, successors, and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, except as to the reservations Prom anc! exceptions to warranty when the claim is by, through, or under Grantor, but not otherwise, i i The vendor's lien against and superior title to the property are retained until each note described is fully paid according to its terms, at which time this dead shall become absolute, If Grantee defaults in payment of the note or in observance of Grany covenant i shall hive the right to foreclosure according tosthayterms of the deed of trust. When the context requires, singular nouns and pronouns include the plural, WITNESS MY HAND this day of THE DENTON COUNTY HOUSING FINANCE CORPORATION BOARD OF DIRECTORO 1 BYs President THE STATE OF TEXAS § COUNTY OF DENTON I This instrument was acknowledged before me on this the day of , 19_0 by , President of the Denton County Housing Finance Corporation Board of Directors, Notary Public, State of Texas my commission Expirebss warranty.ded SPECIAL WARRANTY DEED/PAGE 2 1 l " ti THE STATE OF TEXAS g COUNTY OF DEWTON HOMESTEADER AGREEMENT g This Homesteader Agreement (the "Agreement1+) is entered into on the i day of , 19,,,,_1 between the Denton County Housing Finance Corporation Board of Directors (DCHFC) and ("Homesteader"), neigh- borhood stabilization and furtherance of its objectives of bligh~d land deteriorating areas within the City of Denton has approved an Urban Homesteading Program (the ''Program") and Program Guidelines! and WHEREAS, the DCHFC will use grunt funds from the United Statea Department of Housing and Urban Development ("HUD") under Section + 810 of the Housing and Community Davelopment Act of 1974 (the "Act") to carry out the Program, and HUD has conveyed to the DCHFC certain real properties in'exchange for the grant, to be used under the Programs and WHEREAS, the DCHFC has agreed to act as the Local Homesteading Agency, to acquire and manage the properties obtained from "HUD until conveyance of the title to Homesteaders and to monitor the Programs and WHEREAS, HUD regulations, codified at 24 Code of Federal Regulations IICFR") Part 590, require the execution of a Homesteader Agreements and WHEREAS, thi DCHFC has offered to convey, and the Homesteader ' is willing to accept the Property which is described below and the Homesteader is further willing to occupy the property as his or her principal residence and to rehabilitate the Property or eauss the Property to be rehabilitated in accordance with the requirements of and uses specified in the Program guidelines and in this Agreements NOW THEREFORE, in consideration of the premiaes and the mutual obligations of the parties hereto, each hereby promises and agrees as followsi BECTTON 1, DRYINITIONB. 1, The Denton County Housing Finance Corporation Board of Directors ("DCHFC"). The public agency designated to perform the Urban Homesteading Program within the City of Denton, Texas, and the legal entity which will hold and convey title to property, 44 I 1 2, special Warranty Deed or Deed. The Deed which conveys property to the Homesteader, 39 Dead of Trust, The instrument security cunditions by Homesteader, g performance of 4. City, The city of Denton, Texas, which will act as { administrator of the Urban Homesteading Program on DCHFC, behalf of the Date of Initial Occupancy, The date, as determined by the City, that Homesteader begins to occupy the property as his or tier principal residence, 6, Building Code. The building, electric { mechanical and minimum housing codes of the City of Denton,r~ing, 7, Material Default, The fa_Elure to perform arsy obligation j { within the time limits specified in thia Agreement or the Deed of Trusty or any falaifioation or misrepresentation made by the Homesteader in the application for the Program or this Agreement, 8. Property. The property known as: (address): and more fully described as (legal description); 9, Rehabilitation Contractor, The selected by the Homesteader to perform the work inrthe WorkrWrite- Up that is not designated as self-help, whic10,liWtrk allte- pairs he a Work Write-Up, b prepared by the City, Rehabilitation Contractor, and all self-help items to bedcomb the by the Homesteader. The Work Write-Up is attached as Exhibit A and pleted is incorporated into this Agreement. fizza N 2 , R11PAMBNXTATION84 to The Homesteader represents that he or she does not now own other residential property and did not own other residential property at the time of application for the Program, 2. The Homesteader represents that he or she is capable of undertaking the rehabilitation under the Work Write-up, i.,e „ the Homesteader is able to do the work designated as self-help, to HOMESTEADER AGREEMENT/PAGE 2 1 . AWN QP -"loop" j I 7 Manage the subcontraotoreork of j the Rehabilitation Contractor and/or to obtain rehabilitation as iAnd his st nce,°r her The Homesteader represents that all information contained in the Homesteaders application for the Program is correct, 49 The Homesteader promi this Agreement, the Deed of ses provisions of Tseatto complyDWith the and the , !The Homesteader agrees and represents that acceptance of the property, and his or her undertakih s went are and will be used for the g pursuant to this Agree Property as his or purpose of n in land holding. her principal residence, and d not ot for 9 tors on of the Peculation i DONl000 DUTIE6, or before the 1• The DCHFC shall convey the Property to the Homesteader on monetary conside ationyand other good and valuablee oonsiderationl a, The DCHFC through the City shall monitor the Homesteader's q°mplianoe with the Agreement, The DCHFC shall foreclose upon occurrence of any Material Breach by the Homesteader to the extent necessary and the Homesteaders for the Property, practicable, one or more nsuccessor l THIS HOMBSTRADBRO8 DUT128, 1• The Homesteader shall make the following repairwi As Within one year from the date of the Dead, repair or cause to be repaired defeots that do not meet the building Code and that pose a substantial danger to health and safety, These repairs include those items designated in the Work Write-up as not meeting City of Denton Building Codes and they must be completed before the pro.. perty may be occupied ("Pre-ocoupanuyii), b, Within three years from the date of the Deed, comply with any energy conservation measures designated by the DCHFC as necessary, and make or cause to be made the additional repairs and improvements included in the original set of work specifications approved by the city of Denton, HOMESTEADER AGREEMENT/PAGE 3 i i P i 2, The Homesteader shall maintain the property in accordance with the Building Code. The Homesteader shall nit be in violation of this provision if a Building code violation,is cited in the Work i Write-Up and the Homesteader is in compliance with the schedule of a work agreed upon under Section 5 of this Agreement, 3. The, Homesteader shall comply with the Building Code in making all repairs and improvements to the Property, 4, !The Homesteader shall occupy the Property as his or her principal residence on or before the day of 19_._,, The Homesteader may occupy the Property any time after the peed has been executed provided that any repairs that are designated in the Work Write-Up as "Pre-Occupancy" have been completed. 5. The Homesteader shall occupy the Property as his or her principal residence for not less than five consecutive years fvom ' tb•i Data of Initial occupancy. HUD may approve an exception in writing when emergency conditions make compliance with this requirement infeasible. No other exceptions will be permittodr I b, The Homesteader shall permit reasonable inspections at reasonable hours by employees or designated agents of the City, 74 The Homesteader shall surrender possossion of, and any interest in, the Property upon Material Breach err determined by"the City. S. The Homesteader shall promptly pay all taxes or asoessmanto on the Property, 90 The Homesteader shall not encumber or transfer his or her interest in this Agreement or the Property within the five-year period following the Date of Initial occupancy, except as necessary to provide rehabilitation financing. 10, The Homesteader shall use the Property for residential purposes only, 11, The Homesteader shall pay all utility costs pertaining to the property, 12. The Homesteader shall pay the costs of recording all documents necessary for conveyance of the property, 134 Prior to the date of Initial Occupancy, the Homesteader shall procure and maintain for not less than five consecutive years after said Date, fire and extended coverage insurance on the Property in the amount of sot of the replacement value, Toss shall HOMESTEADER AGREEMENT/PAGE 4 t I W_ I i ke made payable to the DCHFC and the Homesteader, The insurance policy will contain a provision that the insurance carrier, will notify the DCHFC at least 10 days prior to suspension or cancellation of the policy. i 14. The Homesteader shall notify City within 72 hours of any loss or damage to the Property, The proceeds of any available insurance shall be applied to the repair or replacement of the Property if the city determines that the Property can be repaired or replaced with available insurance and loan proceeds, otherwise, the insurance proceeds may be applied against any outstanding loan used to finance the repairs under this Agreement; and any remaining balance shall be paid first to the DCHFC in the amount of the fair market value of the Property, and then to the Homesteader, For purposes of this paragraph, the fair market value of the Property shall be HUD's estimated as-is fair market value at the time HUD conveyed the Property to the DCHFC, 18. The Homesteader shall obtain rehabilitation financing i within days of the conveyance of the Property to Homesteader, otherwise the Property will be subject to foreclosure under the terms of the Deed of Trust. BZCTION S. R RUXLiTATIOH 0000DULE FIND CONTRACTOR ASLICTXON► 1. Schedule of Work. The Homesteader and the City shall agree upon a work schedule for the work listed in the Work Write-Up, The work schedule shall be consistent with Section A, Subsection 1, above, The work schedule shall bo in writ.ing and shall be incorporated into this Agreement. The Homesteader and the Citei from time to time, may amend the work schedule, 2, Selection of Contractor. Within days of this Agreement, the Homesteader shall select a Rehabilitation ContrhOtar to perform the work which is not designated as "self.-help" and which is designated in the Work Write-Up as "Pra-Ocoupanoy" or "Serious Substandard Conditions," The Homesteader shall select a Rehabilitation contractor to do the remaining work, other than self-help work, within the time spr:uified in the work schedule that has been agreed upon by the Homesteader and the City, 3. Approval of Rehabilitation Contract. The Homesteader may select a Rehabilitation Contractor of his or her own choicel however, the Homesteader sht'l submit the contract with the Rehabilitation Contractor to the City for approval in accordance with the Program Guidralines. HOMESTEADER AGREEMENT/PAGE 5 r A \ 11 I' 1 jV1/ 1 i IlECTION RELEASE OF LIEN, 1, Release of Lien, DCHFC shall issue a Release of Lien to the Homesteader after five years of the date of the deed if the Homesteader is not in default, and if the Homesteader has otherwise complied with the terms and conditions of the Homesteader Agreement and the Deed of Trust, which documents shall be filed by the Homesteader in the Deed Records of Denton County, Texas, SECTION 1, NOTICES. 1, Notice and Opportunity to Cure, The aggrieved party shall give the other party written notice of a Material Default arising under this Agreement, which notice shall specify the actions 1 necessary to cure the default. The defaulting party shall have 30 days from the date such notice is mailed or otherwise delivered to cure the default. The aggrieved party may extend the period to cure if the default is not curable within 30 days, and the defaulting party diligently proceeds to cure the default within the ' j 30 day period, 2. Waiver. DCHFC shall have the right to institute any actions or proceedings ao it may deem desirable to achieve the i purpose of this Agreement. Any delay by DCHFC or any failure to assert its rights, or institute or prosecute any actions or proceedings under this Agreement shall not constitute a waiver of such rights, 3, Delays. Neither DCHFC nor the Homesteader nor any successor in intersuL shall be considered to be in breach of their obligations under this Agreement or the Deed of Trust in the event that unforeseeable circumstances beyond their control cause delays, In such case, the time for performance of the obligation of DCHF'U with respect to the preparation of the Property for rehabilitation and for conveyance, or of the Homesteader with respect to the rehabilitation and initial occupancy of the Property, may be extended for a reasonable period by mutual agreement ut the parties. SECTION 0, TERMINATION. Either party may terminate this Agreement for any reason at any time prior to the execution of conveyance documents, and in the event of termination, both parties will be released from any and all obligations under this agreement, ACTION 9, NOTIONS. Any notice by one party to the other shall be in writing, and may be delivered by United States Mail, certified, return receipt HOMESTEADER AGREEMENT/PAGE 6 s f er- r 1 I requested, Notice shall be deemed delivered on the date delivered, or if mailed three days after deposit in the U,S, mail, Notice shall be delivered to the following addressest TO DCHFCI Denton County Housing Finance Corporation 1 Board of Directors u Don Hill, President 110 West Hickory Denton, Texas 76201 i TO HOMESTEADERS SECTIQN 10, SURVIVAL OF TIRKS. The terms of this Agreement shall survive the execution of the Deed, This Agreement has been executed in multiple originals, each having full force and effeotive on this , day of , DENTON COUNTY HOUSING FINANCE CORPORAT70N BOARD OF DIRECTORS J BYt President i ATTESTt BY$ Secretary HOMESTEADER BY t homestead,agr HOMESTEADER AGREEMENT/PAGE 7 f THE STATE OF TEXAS g COUNTY OF DENTON § DRID OF TRUST E Dates + Grantors Grantors Mailing Address (including county): Trustees Trustees Mailing Address (including county): i r Beneficiary: The Denton County Housing Finance Corporation Hoard ' of Directors Beneficiary's Mailing Address (including county)s The Denton County Housing Finance corporation c/o Don Hill 110 We Hickory Denton, Texas 76201 ROTS Dates Amoants Maker: Payees Final Maturity Dates t s 1 i Terms of Payment) E 4 Property (including any improvements); k I Prior Lien(s) (including recording information)i None i For value received and to secure payment of the above note, Grantor conveys the property to Trustee in trust. Grantor warrants and agrees to defend the title to the property, If Grantor performs all the covenants and pays the note according to its terms, this deed of trust shall have no further effect, and Beneficiary shall release it at Grantor's expense. gR&VTOR1 a OSLIGATIOUR Grantor :agrees to: it Within one year of the date of this dared of trust, repair or cause to be repaired all items which do not. meet City of Denton Building Code standards and that pose a substantial danger to health and safety, as agreed by Grantor in the Homesteader Agreement, executed on the day of 19 by and between Grantor and Banefioiaryl 2, Within three years of the date oS' this deed of trust, comply with any energy conservation mensures designated by Beneficiary as necessaryy and repair or cause to be repaired all 01substanl dard conditiano" in the property, as agreed by Grantor in the Homesteader Agreement, executed on the day of 4 , 19 by and betwetan grantor and Bensfic,tary; 9, Occupy the propurty as Grantor's principal place of residence for not less than five (6) consecutive years from the date of DEED OF TRUST/PAGE 2 -w~'-,-..-r-- r 1 this deed of trust, and not sell or otherwise transfer title during that timer 4. Allow inspections of the property by Beneficiary! 6. Abide by all other terms of the Homesteader Agreementl 6. Keep the property in good repair and condition) 7, Pay all taxes and assessments on the property when duel 8. Preserve the lien's priority as it is established in this deed of trust) g, Procure and maintain, in a form acceptable to Beneficiary, insurance that: a, covers all improvements for their full insurable value as determined when the policy is issued and renewed, unlgss Beneficiary approves a smaller amount of coverage in writings b. Contains an 80% coinsurance coverage) j as Provides fire and extended coverage, including windstorm coveragel F d. Proteots Beneficiary with a standard mortgage olausel C e. Provides flood insurance if the property is in a flood hazard areal and f, contains such other coverage as Beneficiary may reasonably requirel 10. Comply at all times with the requirements of the 80% coinsurance clausal 11, Deliver the insurance policy to beneficiary and deliver renewals to Beneficiary at least tsn days before expiration) 12, Keep any building occupied as required by the insurance policy, DEED OF TRUST/PAag 3 BRUNVZOIARYOs RIMT8 r 1. Beneficiary may appoint in writing a substitute or successor r f trustee, who shall succeed,to all;rights,and:reeponsibiZtties of Trustee. 2. If tho proceeds of the note are used to pay any debt seourad by prior liens, Beneficiary is subrogated to all of the rights and , liena:of the holders of any debt. so paid,,. 3, Beneficiary'may apply any proceeds received under the insurance pol icy, either to reduce the note or,to.repair. or. replace damaged or destroyed improvements covered by the policy, 4, If Grantor rfails.to perform,any of Grantor Ia obligations described in the documents executed by Grantor and which per- tain to the property herein described, Beneficiary may perform o"4 those obligations and be reimbursed by Grantor on demand at the place where the note is payable for any sums so paid, including t, attorneys fees,,plus interest,,on those sums:from ahe dates.,or payment at the rate stated in,,ths. nata for:; matured,, unpaid amounts,. The sums to be reimbursed shall bs,sooured by.thia deed of trust. 5, If Grantor defaults on the note or fails to perform any of the above said obligations or if default occurs on a prior lien note or other instrument, Beneficiary mays as Doclare the unpaid principal balance ;and,,, earned + interest on the note immediately dual b. Request Trustee to foreclose this lien, in which case .Beneficiary or Beneficiary! a. agent shall give notice of the foraclosuro sale,as provided by the Texas Property Cods as then amended;, and co Purchase thsiproperty at:any!forsolosure sale by.offoring the highest bid and then.have,ths bid credited on the note, TRUSTDR40 QUTXVO „ A If requested by Beneficiary to foreolose this lien,,Trustes.i~ha4lt 1, Either psrsonally.or by agent give notice of, the Iforsolosµrs sale as required,by the Texas Property Coda,as then amondeds . t, It , , . -1, 1 2. Soli and convey all or part of the, property t,.to:.~ the,highest bidder for cash, with a general warranty banding Grantor, DEED OF TRUST/PAGE 4 - - : t r i 7, interest on the debt secured by this deed of trust ahall not exceed the maximum amount of nonusurious interest that may be c lawl any ontracted for, taken, reserved, charged, or. received under credited interest in the principal of the debt or, if the cunt shall be principal has ~ been paid, refunded, on any acceleration or required or permitted prepayment, any" such excess shall be canceled r automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded, This provision overrides other provisions in this and all other instruments I concerning the debt. 8, When the context requires, singular nouns and pronouns included the plural, 9, The term note includes all sums secured by this deed of trust, I 10, This dead of trust shall bind, inure to the benefit of, and be exercised by successors in interest of all parties, 11, If Grantor and Maker are not the same person, the term Grantor ohall include Maker, I 12, Grantor represents that this deed of trust and the note are given for the following purposes3 The debt evidenced by the note is in part payment of the purchase price of the property; debt is secured both by this deed of trust and by a vandorts lien on the property, which is expressly retained in a dead to Grantor of even date, This deed of trust does not waive the vendor's .lion, and the two liens and the rights created by this instrument shall be cumulative, Beneficiary may elect to foreclose under either of the liens, without waiving the other or may foreclose under both, The deed is incorporated into this deed of trust, Grantor DEED OF TRUST/PAGE 6 ,y I " THE STATE OF COUNTY OF TEXAS g DENTON S ' This iratru of meet Was aokncwledged before me on this the t9_ _ by day Notary Public, State o! Texas my Commission Expire, I DEED OF TRUST/PAaE 7 Southeast Texas Housing Finance Corporation BILL ELAND 4620 Fairmont Parkway EXECUTIVE DIRECTOR Suite #201 Pasadena, Texas 77504 713.487.8772 Fax #713.487.9574 TEXAS ASSOCIATION OF FOCAL HOUSING FINANCE AGENCIES To: Attendees and Their Guests TAL1[FA Educational Conference April 6 & 7, 1989 J I would like to express my appreciation to each of you who are taking time out of your busy schedule to attend this first seminar to be sponsored by TALHFA. r Every effort has been made to make this a very informative conference regarding the role of housing finance corporations today and in the future. The TALHFA organization is now a reality, As of the date of this memo, we have over 70 members and many more will be joining at this seminar and in the days ahead. If your HFC or company has not already joined, please do so immediately. If I can do an thing to help make your short stay with us in Dallas more enMable, please contact me. Bill Eiland President-TALHFA r TAL'HFA Educational Conference April 6 & 7, 1989 Radisson Hotel 2330 west Northwest Highway Dallas, Texas April 6, 1989 4:00 - 7:00 Registration 4:00 *TALHFA Board of Directors Meeting *open to all Interested Parsons 7:00 - 10:00 Dinner & opening Session (Casual Dress) Panel: On Going Responsibilities Of Housing i Finance Corporations Issuers Viewpoint Bill Eiland - Southeast Texas HFC Paul Campo - Harris County HFC Houston HFC Bill Hoops - Butler & Binion Panel: Innovative Tax Exempt Housing Program A. Jim Hahn - Capital Markets - Denver, Colorado How to Gain Access to Residual Values B. Steve Harris - Capital Markets - Denver, Colorado Mortgage Refinancing Program single Family Mortgage Rollover Refunding Program Panel: State & Federal Legislations Affecting Housing Finance Corporations in Texas Allan Raynor - McCall, Parkhurst & Horton - Dallas Bob Dransfield Fulbright & J&worski - Dallas Mike ording - Jones, Day, Reavis & Pogue - Dallas John McCafferty - Jones, Day, Reavis & Pogue - Dallas t . 4 April 7, 1989 8:00 - 9:00 Continental Breakfast Registration v 9:00 - 10:15 Resources and Opportunities for HFC To Consider for Translating Into 1 Tangible Housing Programs Panel: Lubbock Housing Finance Corporation A. Local Urban Homestead Authority Tony Reyes - Rehabilitation & Redevelopment Coordinator City of Lubbock B. Affordable Housing Agreement 1 George Jackson 1 Panel: Corpus Christi Housing Finance Corporation A. Mortgage Credit Certificate Program Thomas Utter - City of, Corpus Christi 10:15 - 10:30 Break 10:30 - 12:00 on Going Responsibilities of Housing Finance Corporations - Trustee Viewpoint Bill Cocper - NCNB Texas - Houston John Stc:hlman - NCNB Texas - Fort Worth Gerald Mitchell - Texas American Bank - Fort Worth Greg Hasty - MTrust - Dallas Steve Katz - Smith, Murdaugh, Little & Crawford 12:00 - 1:30 Luncheon Session (Casual Dress) Edwina Carrington - Program Managers - Texas Housing Agency Mortgage Credit Certificate Program Earlene Jewitt - Consultant - Multi Family Compliance to Regulatory Agreement Requirements 1130 - 2:00 Break 2:00 - 3:00 Board Participation and Responsibilities in Bond Transactions Panel: June Baumoel W Meuse, Rinker., Chapman, Endres, & Brooks - Dallas Chris Baker - M. E, Allison & Company - San Antonio Neil Thomas - Fulbright & Jaworski - Houston l ~t w ' J i Panel: Conflicts of Interests Considerations Scott Harvel - Jones, Day, Reavis & Pogue - Austin, Texas 3:00 - 4:00 Targeting Revenue [fonds to Affordable Housing Effectively ti Panel: 1 Christine Chiles - Dallas Housing Finance corporation Rick Loessberg - Dallas County Housing Finance Corporation Carolyn Truesdell - Vinson & Elkins - Houston, Texas fk I 1 I i s CORPUS CHRISTI HOUSING FINANCE CORPORATION MORTGAGE CREDIT CERTIFICATE PROGRAM, SERIES 1989 MCC INFO T TI N GUIDE The Corpus Christi Housing Finance Corporation recently created the Mortgage Credit Certificate Program, Series 1989, to help make ownership of, and improvements to, homes located in Corpus Christi more affordable for low to moderate income households, especially first-time buyers. + A Mortgage Credit Certificate (MCC) increases a family's disposable income by reducing its federal income tax obligations. This tax savings provides a family with more available income to qualify for a loan and meet mortgage payment requirements, in order to participate in the Program, home buyers must meet certain eligibility requirements, purchase a home or complete home improvements which qualify under the Program, and obtain a mortgage loan through a participating Lender. (Refer to the "MCC - Money in Your Pocketll" Worksheet to see if you meet the general requirements for participation in the Program.) ELIGIBLE BORROWERS First-time flmycr Reau rement: in general, borrowers seeking financing for the purchase of a residence must be first-time buyers or not have owned a principal residence in the past three years. As discussed further in this Guide, the first-time home buyer requirement does not apply to borrowers purchasing homes in Targeted Areas or to borrowers seeking Qualified Home improvement or Rehabilitation Loa. a. Maximum lnncomL_ ItU : A borrower's current gross annual household income must not exceed $38,065 (family size of 3 or more) If the home Is In a Non-Targeted Area and $46,340 (family size of 3 or more) if the home is in a Targeted Area. If your family size Is less than 3 persons, the maximum household income Ilinit for Non-Targeted Area homes Is $33,100 and for Target Area 1 homes is $39,720. Additionally, your adjusted gross annual household income for last year must be $43,000 or less, HOME PURCHASE PRICE LIMITATIONS (Not Applicable in the case of Qualified Home Improvement Loans) Existing Housing $74,610 (NON-TARGETED AREAS) $ 91,190 (TARGETED AREAS) New Housing $112,050 (NON-TARGETED AREAS) $136,950 (TARGETED AREAS) ELIGIBLE PROPERTY General Informatlon: New or existing owner-occupied, single family houses, townhouses, condominiums and manufactured housing are eligible, The cost of the residence must not exceed the maximum purchase price limits outlined In this Guide, except in the case of Qualified Home Improvement Loans, k Mufactured Hornet: Manufactured homes must have at least 400 square feet of living space, a minimum width of 102 Inches, and be of a type which is customarily used at a fixed location, Recreational vehicles, campers and other such vehicles are ineligible, EInancing Terms; The mortgage loan must be financed from sources other than tax-exempt mortgage bonds or veteran's tax-exempt revenue bonds, The mortgage may be a conventional, FHA or VA loan and will be at prevailing market rates. The Interest payable under the loan must not be paid to a person who Is related to the borrower, PROGRAM DESCRIPTION Genera Information, An MCC is a tax credit that will reduce the federal income taxes of qualified buyers purchasing a qualified Residence or homeowners completing qualified home improvements or a qualified rehabilitation As a result, the MCC has the effect of reducing your mortgage payments, Applications must be made to the CCHFC prior to closing the Loan, The MCC may not be used In connection with the refinancing of an existing loan, Bcnefli Amount; The size of your annual tax credit will be 25 percent of the annual Interest paid on your mortgage loan or $2,000, whichever Is less, The credit cannot be larger than your annual foderal Income tax liability, after all other credits and deductions have been taken into account, MCC credits In excess of your current year tax liability may, however, be carried forward for use in the subsequent three years, For an example of how MCCs work, see the "MCC - Money In Your Pocketll" Worksheet, "mability; The MCC can be transferred only upon Issuance of a new certificate by the CCHFC, The person assuming your loan will have to qualify In the same manner as a new borrower would be required to qualify under the Program. Neither the NCHFC nor the CCHFC can make any assurances that MCCs will be transferable after December 31, 1990, TAL_C dit Versus_Tax Deduction: A mortgage Interest deduction differs from a mortgage tax credit lit a number of ways, For example, all home buyers, regardless of income, may take a mortgage interest deduction, whereas mortgage tax credits are available only to holders of Mortgage Credit Certificates. The dollar value of a mortgage Interest deduction depends upon your tax bracket, If you are in the 15 percent tax bracket, you wilt save 15 cents In taxes for each dollar of mortgage Interest paid, With the Mortgage Credit Certificate, you will save $l for each $1 of credit received. Using an MCC and itemizing your deductions on Schedule A of Form 1040 will require you to reduce your mortgage Interest deduction by an amount equal to your mortgage tax credit claimed, o T Leneth of Deneffi: Each year, your mortgage tax credit will be calculated on the basis of 25 percent of the total interest you paid on your mortgage loan that year. The MCC will be in effect for the life of your mortgage loan, so long as the residence remains your principal residence and you meet all Program requ cements. TARGETED AREAS Reservation of NI ' : Twenty percent of the MCC funds must be reserved for one year for borrowers purchasing re: _ances in Targeted Areas in order to improve housing and economic conditions in lower-income neighborhoods, Areas Servtd: A Targeted Area is a census tract in which at least 70 percent of the families have incomes no higher than 80 percent of the statewide median or a census tract plagued by chronic economic problem::, "fhe Targeted Areas in Corpus Christi are census tracts 2, 4, 10 and I1 which are located in the Port area and the near West side, The CCHFC will furnish census tract maps to borrowers interested in shopping for a home in a Targeted Area. Able Borrowers: Borrowers purchasing homes in Targeted Areas do not have to meet the requirement of being a "first-time home buyer." QUALIFIED REHABILITATIONS AND /TOME IMPROYEMENTS MCCs may also be used in connection with Qualified Home Improvement loans not exceeding $15,000 or Qualified Rehabilitation Loans, The first-time buyer requirement does not apply for either a Qualified Home Improvement Loan or a Qualified Rehabilitation Loan, The purchase price limitations do not apply in the case of Qualified Home Improvement Loans. . . . . Qualified HZne Improvement Loan: Horne Improvement loans cannot exceed $15,000 for alterations, repairs and Improvements to an existing residence by its owner designed to substantially protect or improve the basic liveability or energy efficiency of the residence, v f Ouallfled Rehahllllatlon Long; Rehabilitation financing is allowed for improvements to an existing residence by its owner when the following conditions have been met: the residence must be at least 20 years old; 50 percent or more of the existing external walls of the residence must be retained in place as external walls; 7546 or more of the existing external walls of the residence must be retained as either Internal or external walls; at least 75% of the existing internal structural framework must be retained In place; and the expenditures incurred in the rehabilitation must be I N equal to at least 25% of the borrower's adjusted basis in the residence. APPLICATION INFORMATION Where to Apply: You may apply for an MCC in person at any participating lender. You may apply for an MCC through only one lending office. Any lender who has completed and filed a Lender Participation Agreement with the CCHFC may participate In the Program, If your lender Is not a participating Lender, have them contact the CCHFC for a copy of the Lender Participation I Agreement Lenders are not required to participate in this Program, k How to Anply: At the time of MCC application, you will need to supply the Lender with general credit information such av account numbers for loans, credit cards, and bank avcounts and a check for $50,00 for the MCC Commitment Fee. This fee Is non-refundable. After you have made application, the Lender will forward your application to the Trustee, Upon receipt of' a qualifying J application, the Trustee will issue an MCC Commitment Letter which will reserve an MCC for three months for a loan for Existing Housing and six months for a loan for New Housing or a Qualified Rehabilitation Loan, At loan closing and upon submission of the required Program documents in compliance with the guidelines and an MCC Issuance Fee of $75,00, the MCC will be Issued directly to you, The application process is simplified for Qualified Home Improvement Loans by submission of all of the required Program documento at one time with the Application and the payment of a r single $75,00 MCC Home Improvement Loan Fee, Extensions of MCC Commitments are allowed upon request and the submission of a $25,00 MCC Extension Fee. MCC's cannot be transferred from one lender to another, In the event you desire to change lenders, the MCC application and commitment will be revoked and the application process must start over with the new lender, FOR FURTHER INFORMATION ~eJgyhone Numberi If possible, please direct any Inquiries you may have about our Program to one of the participating Lenders, If you are not able to obtain sufficient Information in this manner, you may telephone the CCHFC's office at 880-3232, Information Guides are available through the Lenders and the Corpus Christi Housing Finance Corporation, This Guide is a general summary of an extremely complex and technical program. Although we have attempted to ensure the accuracy of this Guide, It is subject to federal regulations, the Program documents, and to change without notice. PARTICIPATING LENDERS t Urban Homesteading BULLETIN AW&~& February 1989 Volume 2 Number 2 HOMESTEADING IN HOUSTON The national news media have carried numerous $Ince Its entry Into the program, the City has acquired stories about economic distress In Texas, and the 109 properties for a total of over $2 million. Section resulting abandonment of hornes by residents no 810 lunds were used 1o acquire 49 properties, and longer able to afford their mortgage payments. (FHA's CDBG funds for the remaining 60, Because of the glut Houston olfico currently has over 3,000 properties In of houses in the FHA Inventory, HUD's Property inventory.) The City of Houston was particularly hard Disposition branch has been willing to discount prices hit by the collapse of the oil business. Several glitter by 10 to 15 percent, thereby increasing the City's Ing high-rise office buildings downtown sit empty, purchasing power. In addition, the United Savings never having welcomed a single tenant, Association of Texac Sf3) has Indlealnd its willing- ness to donate properties to the City's homesteading On the outskirts of downtown, older residential neigh- program on occasion. Such properties would be ac• borhoods are Interspersed with enclaves of commer• quired through mortgage loan defaults from the bank. cial development, A little farther out, the newer housing developments begin, many built since the Houston's homesteading properties are dispersed 19 Driving through thaw newer d fairly equally among four eligible neighborhoods that tha`ma magnitude of the abandonment Is almost lmost over- - have experienced significant levels of property aban• shhowwing ing ,signs of Boarded deferred house after maintenance, boarded line the , mas! donment, The Ifrst neighborhood chosen in 1986, s known as South Park, has a population of Just over curving streets and cul-de-sacs. 10,000, and a median income of $14,491. The Ironically, ic tragedy and the average price of housing In South Park is $25,800. Houston's economic corresponding drop In property values have allowed the City's low-income residents to become homeown• Three other neighborhoods were added as the City's ers. Councilman Rodney Ellis had seen urban home- program grew; the Easl End, where homesteading Is sloading at work In Philadelphia, and advocated the concentrated In Woodridge and Pecan Park; Mal. implementation of the program In Houston neighbor- bournelSettegast, concentrated In Wood Glen and hoods. In 1986, the City of Houston decided to ender Kenishlroi and NorthlinelLittle York, concentrated in the Urban Homesteading Program. Little York, In all of these areas the median income is less than $20,000, and the avorage price of housing Is { + below $32,000. Houston's homesteaders are selected twice a year Iloatlans are dislrlb• h r ;;r~tr,;ih a two•ataga lottery. App ul~ !,hrough a network of Citizens' Assistance Offices throughout the community. Applicants' incomes must " z~, riot exceed 80 percent, nor be less than 50 percent, of the median income adjusted for family size. Appllca~ bons are pro•scrosnod for completeness and eligibility belore boing entered in a semi•finallst drawing. In this drawing, approximately live tines the numher of , homesteader names needed are drawn to allow for dropouts resulting from the verlllcallon process. 0000 Those selected become the pool of finalists, A bcardedhomesreading propertyin Jlourron's Bart Smineighbahoal. This bulletin G produced uruler connool wish the U.S. Department of !lousing and Urban Development. 1 lis contents do not necessarily ryreer Nie views or potf6es of the I) eporiffumorthe US, e9overnmens. F The final drawing, in City Council chambers, is held loan program to the ¢ after the finalists' applications have been reviewed in h 1~ Section 312 } detail to ensure creditworthiness, ability to c. rry a re- Rehabilitation Loan habilitation loan, and verifications have been obtained, program, But with For the most recent lottery 3,500 applications were 1 the recent cut pack received, 2,500 of which passed the pre-screening, in 312 funding, it Is and 250 names were pulled during the semi-final likely that for the drawing. short term, the City will revert to the block grant funded HHIP Loan pro- gram. Homeslead!ng has received broad " support within the } community. In y 1,'gpig 1r~ ~ v Avirlanl impENM A. C, Peres Nandr n!# r0 )j" 'tr a heal pump inlayed in a security cage. addrtlon to the -11 r!; a possible donation of houses by local lenders, the U.S. Department of Energy, through the Urban Consorilum Energy Task Force, provided a grant for the purchase of heat pumps for live homesteading properties. The City is "flaurleadcrA}n_Har!lrne iljiad~ebynLtauchrej(nrpe2rar interested in assessing the relative efficiency of heat A, e).Pepsi dndAeagramCeordtndwrCate Quer;add., pu,rps, in comparison to traditional methods of healing Mrs, Lane is one Af the many Houston resldente and cooling homes in south Texas. who has turned to urbanihomesteading as an alternative to renting, 7110 Lanes have a13 year Several support services are available to Houston's old daughter and an 11 year old son who provi. homesteaders. Following selection, they are offered ously shared a'bedroorn In fh0 house They rented. the option of attending a 90 minute orientation on their Now; In the homesteaded house.in the South park new neighborhoods, and the legal and financial community of Houston, tho children have their responsibilities of home ownership. Also, housing i own bedrooms. counseling agencies are providing counseling services to homesteaders who are delinquent in their mortgage ror the Lanes, the opportunity of owning their own payments. home has been a "total blessing. Thoy;&0 excited about the property and the fact that they will 'actually. own the house In five years, A NEW SECRETARY FOR HUD I J Cale Quasada, who works in the Department of Former Republican Presidential candidate Jack Planning and Development, Is the urban homesteading French Kemp was confirmed by the Senate on Febru. Program Coordinator for the City of Houston. As ary 3rd, and sworn In as Secretary of Housing and such, his responsibllties include the selection of Urban Development by Justice Sandra Day O'Conriv properties, prescreening homesteader applicatlons, al HUD on February 131h, President Bush was In and reporting program activities to HUD. Mr, Ouesada atlendanco and made remarks supportive of enterprise works closely wilh the Department of Public Works zones and urban homesteading, With him, Mr. Kemp whose staff Interviews the semi-finalists, conducts the brings 18 years of Congressional service and a verifications, prepares the loan applications, inspects commitment to „wage war on poverty...not on pro- the properties, prepares the work writo•ups, and grams that can work." manages the rehabilitation, Mr. Kemp was born on July 13, 1935, attended All of the City's proporlfes with the program have been Occidental College, and received a masters degree In homesteaded, although a number of homes await Education and Political Science at Wesln•n University, conditional conveyance to the homesteadors and He played professional football for 13 years, eight of rehabilitation, Recently, Houston switched from which were with the Buffalo Bills, in 1970, he won providing rehabilitation financing through its CDBG election to Congress from a suburban Buffalo district, 2 While on the Hill, Mr. Kemp served on the House Appropriations Committee and the Select Committee on Children, Youth and Families. He also chaired the FY 1988 HOMESTEADING ACTIVITY House Republican Conference for six years. Top Ten Users Mr. Kemp has stated that as Secretary of HUD, he will PROPERTIES pursue joint public and private initiatives to combat homelessness and joblessness. Two of his principal Localities Nurnberof Froperfres interests are Enterprise Zones, areas in which tax incentives and other forms of public assistance are 1, ` Mliwaukei3; Wl ~g given to businesses to promote private development 2 Omaha. NE' 25 within the inner city; and homeownership opportunity 3 Chicago, L 24 through the sale of public housing units to low-income . 22 tenants at reduced prices, a concept often confused 4. Porllantl, QR with urban homesteading by the press. Mr. Kemp Is a Sr "!Cfncinnall, OH 21 proponent of "incentive-oriented ideas" which create 6, Houstor Rockford 3d;.1 19 hope in distressed inner cities and for those who live L in poverty. His goal Is to give the people who live in 'Spokane, NA 19 such communit€os the power to make their own FL Worth, TX housing choices, 7. 'IndianapoII IN, i8 8 Canton>;OH 14 ' ShelbyCounty;,Ttl is URBAN HOMESTEADING IN FY'88 k Wyoming, State of 14 9, ;Bolso, ID 13 Chester,<PA' 13 In Fiscal Year 1988, 818 urban homesteading proper- Jacksonvllle, FL, 13 lies, containing 842 dwelling units, were purchased for Camden; NJ _ 13 $14,758,689 In Section 810 funds, Of the properties 40.'C8lumbu$, OH :12 acquired, 646 were from FHA, 155 were from the Tampa, I 12 " Veterans Administration, and 17 were from the Farm- Harvey; IL 12 ers Home Administration, Sixty tour new LUHAs have DeS Moines, IA 12 boon approved during Fiscal Years 1985 through Decati r; IL 12 1988. There are currently 104 active LUHAs, Includ Lake County, IN 12. ing ion now approvals in FY 1088. Forty-three LUHAs Phifadelphfa, PA 12 wore inactive, and twenty were closed out after ac- Duluth, MN 12 quiring no properties for two years and completing Denver, conditional conveyance of [hose properties previously C 0 12 - J acquired. DOLLARS FHA APPROVES DISCOUNT ON 810 Localities Funds Expended PROPERTIES 1, r Milwaukee; WI $ 678,505 2. , Chleago; IL 465,400 In late December, FHA announced that a standard 10 3. ! gmaha NE 4610850 percent discount from the as-is market value will be 4 Portland; OR d-15,624 offered to all LUHAs purchasing properties with 5, $ pokane, WA .145,413 Section 810 funds, A major factor behind FHA's 6, Uenver;:CQ- " 333,352 decision is the rapid time frame in which urban home- 7 ' Houston; TX 328,900 steading properties are dosed-•60 days from the time 8. ' FL Worth, 7X 3`191600 a proporty is first offered to a LUHA, When the new 9, Wyoming, Stal9 of 316,696 Urban Homesteading Regulations take effect that time 10, ..Clntlnnatl, OH 315,039 frame will be even shorter, requiring closings to occur within 51 days of initial oiforing. This will be advanta• geous to LUHAs and homesteaders because h helps prevent property deterioration, and is cost-effective for HUD in that it will reduce property holding costs. 3 1 lEors a similar discount their own offices. Based on the information we were The Vetorans Administration o able to obtain, homer repl, of prices. from $9t991o $1005 . deter- The amout of discount is come in a wide rang 01 to 20 king into consideration several factors the mined by y t market; the LUHAs that would like additional information can local amount ollnt~me the prop list price of the property; the he condition of the property; consult CB ~pawd ,ujbl~Neitner, ed., Gaie Rl esearrch, available arty has been on trice gkmade by the VA officer of which should Ilains all be eent cash sale s already lne„ Detroit, MI, 1988j, at This boon Ides a brief con provides LUHAs with questions should roues contact of their local considering VA a most otapes public libraries. in release release, process office. The FmHA is in the tlhe produn©rnand distributor~nrcal information, and lists similar discount 50URC6S OF RE}lABtLITATlOtd 1'INANCINRNk` /I VIDEOTAPES AVAILABLE ON HOME REPAIR t?ollar Arrtounf %s?'grn x Widespread Interest in homesteader training exists Source v among LUHA staff nationwide. Several Individuals 445'306 <'T;~~°' $6 have inquired about the existence of videotapes on Section 312 ~6 eo home maintenance that could be used to train home, Other $424684 '190; steaders in lieu of a lormal class. Altar researching pr}vats $1'278,32b a k ~ {VA the availability of commercial videotapes on home `970 6$6 ,100` t. repair and home maintenance, a number of packaged total; presentations on simple home repair and improvement vera y/~ge coat per unit; $23893 w „3~ were found, A l u Sl y 1 ~~,y ~or41r i Two tapes were previewed; the "Reader's Digest ~.4ate datiV~ iroht 1ncoMp4ots.yHpµ13 rip > y colrti E° ; AIM Vldeomanual of Home Repair;" and "Electrical Made sa~entaan active LE1HA's not rape, Easy" which is part of a live-tape "Made Easy" series Both tapes were well walk the viiewerrth~roughre Ishe ( STATUS 312 PROGRAM follow as the narrators OF THE slap In the repair Process. The Read `umbingrand tap ram provides ti which covers a range of topics from walls, comes eloclrical work to repairing and painting The Section 312 Rehabilitation Loan tog with a 48 page reference booklet which reviews the direct Federal financial assistance to Iower.ineome same 1,18teriel. homeowners in the form of lilatlon lyears, Loans with treims ms U upto 20 Y ` percent Interest rata, st Both tapes are well produced and can prove useful are also made at higher Intere rates to moderate ainin homesieadars to handlo afnePlancerPairs. income individual property owners to rehabilitate single aids in tr 9 family propert as c addressfis routine PleGher, however, furnace fillers or cleaning for the I, to lia ce as Chang g {here have been no new appropriations Irancos, ased on the written that any 01 them shat ram since 1982. The Congress has, aPP section 312 Proy ear the conlinued use of tapes f. the 0 ics , it Is unlikely that any however, authorized each y rover lheso topics either, monies from the Rehabilitation Loan Fund, which Is tapes can be borrowed made up of repayments of prevrously.made Section everal of the more popular err available 312 loans, Usage of these funds has risen dramatl- S irom a local public library, and many tally from $40 million in Fiscal Year 198810 $102 distributor or through resell outlets. F direct from the or million in Fiscal Year 1988, For Fiscal year 1989, example, in ithe s a alable at Erol s and otheer video sates rental tap hen CommuntyD velopmentllBlockiGlranllCDBGi to stores; and the 35"tape common home Ties repayments collected this year will be and h addresses topics and vinyl program, Loan which ad such as common ho to existing funds to achlevo he $200 million repairs weathorizalion, insulation. gi I ireehinger's, a added will leave a and hardwood Ifooring i available a blevel. alanoeiot $19.5 milliothat n available for transfer Seclion 312 fiome improvement supermarket;' loans baginning in August of 1989, r{UD Field Offices LUHAs Interested in videotapes as „Ih training local tool can , will bo notffied at that time as to the amount which may library within be available 1o make now loans. either arrange to obtain them triroug library, or set up a training andlor lending I - .f- -~I , Urban Homesteading BULLETIN Awl&+& February 1989 Volume 2 Number 2 i i { U.D.OEPARYMHNT OF HOUSING AND URBAN DEVELOPMENT OFFICE OP THE ASSISTANT SECREYARY FOR COMMUNFFY PLANNINOAND DEVELOPMENT WASHINGTON, D BUSINESS 0JOOD OFPCIAL SIN PENALTY FOR OR PRIVATPRIYAT EUS E LL4E, UW V~S'.M1Ul Pa1p~ r+d F~ Pud U *m ' and an Op UIHUOMoin 00Nb~frlw~nl HU0401 'F 1 NEW FINANCING WORKSHOP TO Oregon, through education classes, encourages BE DELIVERED IN FOUR CITIES saving for emergencies and maintenance problems. Other LUHAs offer some form of counseling to help to inform homesteaders of the benelits of saving for unexpected contingencies, A new one-day workshop on rehabilitation financing will be offered in the following cities: While homesteading program regulations In no way LUHAs in HUD require a maintenance reserve from any applicant, we Cify Date Hegions Invited recommend that homesteaders have some savings to pay for unforeseen expenses not included In the reha- Denver, CO February 16, 1989 VIII, IX, X bilitation loan. Fort Worth, TX March 21, 1989 VI, VII Chicago, IL April 13, 1989 V Atlanta, GA May 4, 1989 ll, Ill, IV TEN NEW LUHAs IN '{N Letters of invilation will be mailed to all local urban homesteading staff currently on HUD's mailing list who r are located in the regions designated above. In addition, interested staff from cities considering We wouldlike to take this opportunity to welcome starting a homesteading program are welcome to new LUHAs that began; HUD,approved.Urban register. The workshop will feature panel prosenta- Homesteading Programs In Fiscal Year 4968 Ten lions by program officials and lenders on financing communtles in five of the tort HUD tegbMsubmda ` alternatives. II may be especially valuable to those fed applications and ware approved to partiorpate fro Y.x ~ f who have relied on the Section 312 Rehabilitation the program,; They are, Loan Program In the past. The agenda Includes, I 8slslon l!1 . > r ~ ❑ The Need for Rehab Financing Alternatives Allegheny County, i E a Local Official Presentations ❑ Possible Laveraging Strategies 'RAnjoh IV a 7N ❑ A Look at The Community Reinvestment Act: g What II Is, How to Use It 'tt ❑ An Overview of the Regional Regulatory A) County, IN Environment for Private Lenders k y, U Rehab Financing from the Lender's Perspectivo ❑ Lender Presentations Sa~A~nlo lo,.TX Call Ramona Burks at ICF, Incorporated, telephone New Orleans, LA (703) 934.3033, for further information. Shrevaport, LA Oklahoma City, OK Shawnee, OK I THE USE OF MAINTENANCE aeglonVill RESERVES State of Wyoming SaltL.ake County, UT Maintenance reserves are those funds sot aside by a homesteader to cover unexpected costs riot included in their rehabilitation loan. Although not in any way a requirement for parlicipation in the Urban Homestead- Ing Program some LUHAs have incorporated into their programs methods of encouraging homesteaders to set aside money in case unanticipaled expenditures arise, For example, the Milwaukee program recom- mends that each homesteader put a^ide $30.00 each month to cover unforeseen future expenses. Portland, 5 1 N 1 ~VL u•h ll~ ~ ~l 1 ~s ti, "7 , 5,1 IV { '~^lt~ rte-'. i, ;f4 ;~~~il 't ~""dl• 1V .r;A 'l yy• YJ s ,111 l • r Vl+ 1 l~ i C Rehabilitation/Home Improvement/ Energy Conservation i I men' Finance Authority Develo p Arkansas Energy Loan Program (HELP) equi~phomeowners, Low interest loans a : In "t, as recommended fallowing an NAME OF PROGRAM Home GRAM: To tower the utility ~avingf repaasr andlor income PURPOSE OF PRO provided for energy energy audit, 1985 DATE BEGUN: grant to ADFA from the AMOUNT OF FUNDING $3.25 million revenue bonds and a onetime 5375,000 gra SOURCE OF FUNDING: Sate of mortgage state energy office. roved. 6 102 loans, totaling $358,000, have been app ACTIVITY TO DATE acing utility companies originate the loans, which are sold to ADFA, Partlcip ADDITIONAL INFO: t Colorado Housing Finance Authority { to homeowners with COHELP a e loans (max. 915,000 each) PROGRAM: NAME OF ible Incomes (rural-100% °f area median. urban•80ho of area median) fort he Pu PURPOSE OF PROGRAM: To provide 1st, 2nd, or 3rd mortg 9 CeFC01iEGpsioansnds to local eligible dbr enemy Improvements. pose of home repair an government and non Profit sponsors who originate 1986 DATE BEGUN: $900,000 , AMOUNT OF FUNDING: reed to participate SOURCE OF FUNDING: Authority reserves governmental sponsors and one nan,proflt sponsor have agreed TO DA-E: In the program thus for, participating first loan with an interest ra e principal may be deferred but interest should be paid or )bird loan toan °r a Three CNFA provides n second ADDITIONAL iNFO'• no lower than 6%. Repayment at least annually, 35 on Conservail fiehab4uation7Nome Improvemenlltinergy r Delaware State Housing Authority NAME OF PROGRAMr Housing Rehabilitation Loan Program PURPOSE. OF PROGRAM: Pilot program to provide 3% loons to low and moderate Income owner occupants or Investors who rent to low and moderate Income farnliles. Purpose is to bring proper ties up to local building or housing codes, and handicapped accessibility standards. DATE BEGUN: April 1985 AMOUNT OF FUNDING: $2 million SOURCE OF FUNDING: Housing Development Fund (created through state appropriation) ACTIVITY TO DATE: 217 unlts have been assisted. The program closed on Sept. 30, 1986, and an early 1987 restart Is planned after evaluation of the first 13 months. ADDITIONAL INFO: Maximum loan Is $15,000 per housing unit and must be repaid within 10 years, I District of Columbia Housing Finance Agency ` NAME OF PROGRAM: Distressed Properties Improvement Program f PURPOSE OF PROGRAM: Provides for tax moratorium andbr deferral or forgiveness of any Indebtedness owed to the Dlorict of Columbia, including deferral or forgiveness of tax liens and water and.o.wer fe ~s, and loans for distressed occupied rental properties. Program also pro• vides technlcet assistance to property owners in developing distressed pruperty plans. DATE BEGUN: To be initially Implemented In 1987 AMOUNT OF FUNDING: For the moratorium on debts owed to the District no funding Is required since It represents a reduction In District revenues, The amount of funds to be used for loans has not yet been finalized, SOURCE OF FUNDING: District of Columbia Revenues and DC Housing Finance Agency ACTIVITY TO DATE: ADDITIONAL INFO: This Is a program of the District of Columbia Department of Housing and Commu- nlty Development with technical assistance to property owners provided by the DC Apartment Improvement Program which Is administered by the DC Housing Finance Agency. 36 ' OSHA F Georgia Residential Finance Authority NAME OF PROGRAM: Rental Rehabilitation Program or PURPOSE OF PROGRAM; To assist in the rehabilitation of rental projects. GRFA Provides a "forgivable loan" i~ up to $5,000 to owners of rental property to cover half the cost, of home repairs DATE BEGUN: 1984 AMOUNT OF FUNDING; $2,5 million through 1965 SOURCE OF FUNDING: Dept, of Housing S Urban Development (HUD) and GRFA ACTIVITY TO DATE: Through the first 18 months of the program, GRFA has approved over 170 projec ly Involving over 330 housing units. Currently, 16 title:[ are participating In this progra ADDITIONAL INFO: r I i I Georgia Residential Finance Authority NAME OF PROGRAM: Residential Energy Savings Program (RESP) d PURPOSE OF PROGRAM: To provide grants and Interest free loans to Income eligible households for the Ins[ r lation of energy conservation measures, DATE BEGUN: July 1985 AMOUNT OF FUNDING: Over $2 million t SOURCE OF FUNDING: GRFA, Federal Solar Energy & Energy Conservation Bank funds; Appalachian Regio[ s Commission, Tennessee Valley Authority, Small Cities CDBG, Comprehensive Impro~ ment Assistance Program ACTIVITY TO DATE: 1,181 households have received RESP assistance, ADDITIONAL INFO, Families must have incomes at or below 80% of county median Income, I, RehablBtatlonlHome Improvemenlllinergy Conservation ~ lip S Maine State Housing Authority NAME OF PROGRAM: Fuel Oil Conservation Loan Program Igo, PURPOSE OF PROGRAM: To provide 3% loans for energy related improvements to homeowners and apartmc owners. Homeowners can borrow up to $5,000 and apartment owners up to $4501 DATE BEGUN: 1986 aty AMOUNT OF FUNDING: $1.75 milllon SOURCE OF FUNDING: Oil overcharge funds (settlement of Federal suit) ACTIVITY TO DATE: Expect to loan $9 milllon serving 4,000 people. ax. ~ ADDITIONAL INFO: Eligible borrowers; homeowners or apartment owners who heat their housing or i water with heating oil, or who used heating oil for either purpose anytime during 1 period 1973.80. Repayment schedule will depend upon amount borrowed and rep ment term selected. I Maine State Housing Authority or NAME OF PROGRAM: Nome Preservation Grant Program f PURPOSE OF PROGRAM: To provide grants for home Improvements to very low income homeowners in selec counties. i r, DATE BEGUN, 1986 AMOUNT OF FUNDING; $510,000 s' SOURCE OF FUNDING: HOME Fund (MSHA trust fund) t; FmHA on a match basis ilACTIVITY TO DATE: Expect to serve approxlmately 100 households, ADDITIONAL INFO: Ellglble applicants: households at or below 50% of medlan Income, j RehabllllatlonlHome ImprovemenuEnergy Conservation - r Maryland Community Development Administration NAME OF PROGRAM; Indoor Plumbing Program PURPOSE OF PROGRAM: To provide loans and deferred payment loans with Interest rates from 0 to 7.5 percent to finance water supply and sewage disposal systems in owner-occupied and one to 20,unit rental properties. DATE BEGUN; 1986 j J~ AMOUNT OF FUNDING; $700000 SOURCE OF FUNDING: State appropriations ACTIVITY TO DATE; 31 applications totaling $300,000. i, ADDITIONAL INFO: Unused funds may be transferred to any of four other rehabilitation programs. i Maryland Community Development Administration NAME OF PROGRAM: Livability Code Rehabilitation Program PURPOSE OF PROGRAM: To provide low interest, no Interest and deferred payment loans to owner-occupants and landlords to finance Improvements needed to bring properties Into compliance with local housing and livability codes DATE BEGUN: 1986 AMOUNT OF FUNDING: $1 million SOURCE OF FUNDING; State appropriations I, ACTIVITY TO DATE; 100 applications for $900.000. ADDITIONAL INFO; Unused funds may be transferred to any of four other rehabilltatlon programs. I I 40 OSHA v e Maryland Community Development Administration NAME OF PROGRAM; indoor Plumbing Program PURPOSE OF PROGRAM: To provide loans and deferred payment loans with Interest rates from 0 to 7.5 percent to finance water supply and sewage disposal systems in ownerroccupfed and one to 20-unit rental properties, DATE BEGUN; 1986 AMOUNT OF FUNDING; $700,000 f SOURCE OF FUNDING: Stale appropriations ACTIVITY TO DATE: 31 applications totaling $300,000. ADDITIONAL INFO: Unused funds may be transferred to any of four other rehabilitation programs. t i i i Maryland Community Development Administration i NAME OF PROGRAM: Llvablllty Code Rehabilitation Program PURPOSE OF PROGRAM; To provide low interest no Interest and deferred payment loans to owner-occupants and landlords to finance Improvements needed to bring properties Into compliance with local housing and livability codes DATE BEGUN: 1986 AMOUNT OF FUNDING: $1 million SOURCE OF FUNDING: State appropriations ACTIVITY TO DATE; 100 applications for $900,000, I ADDITIONAL INFO: Unused funds may be transferred to any of four other rehabilitation programs. 40 OSHA I 1 Maryland Community Development Administration NAME OF PROGRAM; Residential Lead Paint Abatement Program and ied ins to finnce t rental properties, t Loans have abatement 20 year terms,lnterost rates of0 to 7 g per one PURPOSE OF PROGRAM: roc provide cent and deferred payments. DPTE BEGUN: 1986 AMOUNT OF FUNDING: $1 million SOURCE OF FUNDING: State appropriations ACTIVITY TO DATE: ~ : Unused funds may be transf.;rred to any of four other rehabilitation programs, ADDITIONAL INFO 1 Massachusetts Housing Finance Agency NAME OF PROGRAM: neighborhood Rehabilitation Set-Aside Program mun fit agen- -pro and elopment ty de PURPOSE OF PROGRAM: To make loan funds will be loalned tooellorb a borrlowers want ng to purchase and rehab elec. The money I to 4 family homes in designated urban areas, DATE BEGUN: 1984 AMOUNT OF FUNDING: Varies, depending on size of bond dIssue SOURCE OF FUNDING: Set.aside of Agency bond t ACTIVITY TO DATE: 824 loans, totaling $48 miillon ADDITIONAL INFO; Amount of funding varies based on need, and the Interact rate is the came as for slm es provide gle family mortgage revenue aeon of hab specs andtcontractorr selection.counsel Inrr and ! RehabilllallonlKOme Improvomentlirnergy Consorvatlon - .I . \11 Minnesota Housing Finance Agency NAME OF PROGRAM, Accessibility Deferred Loan Program PURPOSE OF PROGRAM: To provide loan funds for Installing permanent, essential home modifications for per. ' sons who have a long-term disability. DATE BEGUN; May 1986 AMOUNT OF FUNDING, $1 million SOURCE OF FUNDING: State appropriations and Agency funds through repayments from another state-assisted MHFA program, ACTIVITY TO DATE; It is expected that approximately 125 households can be assisted with Initial funds, ADDITIONAL INFO: i ' Minnesota Housing Finance Agency NAME OF PROGRAM: Energy Improvement Loan Insurance Program PURPOSE OF PROGRAM; To provide up to 90% Insurance for market rate energy conservation loans obtained by rental property owners through participating lenders DATE BEGUN; 1984 AMOUNT OF FUNDING; $1,5 million SOURCE OF FUNDING: State appropriations ACTIVITY TO DATE: Nearly 500 loans totaling more than $1.8 million have been Insured, ADDITIONAL INFO: Borrowers must have at least a one-third Interest In the property, and Insured loan proceeds must be used to bring the property closer to code compliance. AehabllilallonlHome improvementlEnergy Conservation 43 a ~r - T t I 1 Minnesota Housing Finance Agency NAME OF PROGRAM: Rehabllltatlon Loan program PURPOSE OF PROGRAM: To provide deferred loans to homeowners with adjusted Incomes of $7,000 per year or less for basic home repairs, i DATE BEGUN; September 1982 1 AMOUNT OF FUNDING: $16.5 million SOURCE OF FUNDING: State appropriations, earnings plus $10 million from deferred loan repayments and Interest ~ ACTIVITY TO DATE; By the end of 1986, nearly $25 million In loans had been made, { ADDITIONAL INFO: Maximum loan amount is $7,500. No Interest Is charged or periodic payment required. I Loan must be fully repaid If property is sold or ceases to be household's primary resl• Bence within 10 years of the loan date. i I Minnesota Housing Finance Agency NAME OF PROGRAM; Rental Rehabilitation Loan Program t PURPOSE OF PROGRAM: To provide below-market Interest rate Improvement loans to owners occupied primarily by low and moderate income tenants, of rents! housing DATE BEGUN: 1983 AMOUNT OF FUNDING: $1 million became available in Fall 1986 J SOURCE OF FUNDING: MRB proceeds ACTIVITY TO DATE: 140 loans have been purchased, totaling $1,8 million. ADDITIONAL INFO: Funds are available at 7,45% Interest for d maximum of 15 years. Maximum loan amount is $8,000 per unit or $40,000 per multifamily structure, whichever is less, Single family rental property owners may borrow up to $15,000, 44 CSHA , r l i Missouri Housing Development Commission NAME OF PROGRAM: Weatherfzatfon Loan Program PURPOSE OF PROGRAM; To provide low-Interest loans designed to assist qualified low and moderate Income homeowners in accomplishing a variety of home Improvements that will Increase the energy efficiency of their homes. DATE BEGUN; 1986 AMOUNT OF FUNDING: $4 million 1 SOURCE OF FUNDING: Commission fund balances I ! ACTIVITY TO DATE: 285 loans, $671,000 total loan amounts, ' ADDITIONAL. INFO: Rapid changes in market Interest rates and other local factors have resulted In a late start for this program, However, new lenders have recently training sessions for participating lenders are now proceeing joined the program and ! j Nebraska Investment Finance Authority NAME OF PROGRAM: Horne Improvement Loan Program P(IRPOSE OF PROGRAM: To make available low interest loans to homeowners throughout Nebraska to make needed home Improvements. ke DATE BEGUN; 1984 AMOUNT OF FUNDING: $6 million SOURCE OF FUNDING: MRS proceeds ACTIVITY TO DATE; $3,597,869, representing 364 loans. ADDITIONAL INFO; Communities with targeted reinvestment neighborhoods have contributed bl funds to write down interest rates to 3%, 6%, and 9%a. ock grant RehabilliallonlHome ImprovemenVEneryy Conservation 4b s, 1. W - New k New Jersey Housing and Mortgage Finance Agency NAME OF PROGRAM, Boarding House Life Safety Improvement Loan Program PURPOSE OF PROGRAM: To provide loans for comprehensive rehabilitation of life and fire safety features in board. Ing homes around the state. DATE BEGUN: 1982 AMOUNT OF FUNDING: $14.4 million in loans have been committed since the programs inception SOURCE OF FUNDING: Agency reserves and mortgage revenue bond proceeds ACTIVITY TO DATE: Since 1982, essential fire safety Improvements benefiting 5,000 low Income boarding home residents have been provided. ADDITIONAL INFO: Repayments on the loans are made to the agency through state appropriated fund mechanisms, l New Jersey Housing 6 Mortgage Finance Agency i NAME OF PROGRAM: The Repair Loan Program PURPOSE OF PROGRAM: finance the defects as leaky roofs, peeling walls, and occupied Inadequate heat; help i preserve New Jersey's existing rental housing and to prevent the further loss of much-needed hous• Ing in the state, f DATE BEGUN: 1986 $30 million AMOUNT OF FUNDING: SOURCE OF FUNDING: Agency bonding authority ACTIVITY TO DATE: A total of 2,000 housing units in the cities of Newark and Delran have been repaired ADDITIONAL INFO: This program utilizes FHA Title I Insurance. CSHA 46 , South Dakota Housing Development Authority NAME OF PROGRAM: Energy Efficiency Program • Existing Housing PURPOSE OF PROGRAM: To lower the utility costs of SDHDAdinanced homes by ensuring that all existing houses y financed meet minimum retrofit standards. DATE BEGUN: April 1985 AMOUNT OF FUNDING: $146.7 million has been committed SOURCE OF FUNDING: SDHDA ACTIVITY TO DATE: 3,303 existing homes financed. ADDITIONAL INFO: In 1987, the South Dakota Legislature abrogated the Energy Efficiency Program, Co. pies of the publication "Energy Savings and Cost. Effect I ve ness in the South Dakota Housing Development Authority Energy. Efficiency Program" are available upon re- quest from SDHDA. South Dakota Housing Development Authority NAME OF PROGRAM; Energy Efficiency Program • New Construction PURPOSE OF PROGRAM: To lower the utility costs of SDHDA financed homes by ensuring that all new construc• tlon homes meet minimum supdr•insulation standards. Funding from oil overcharges (the Warner Funds) were used to further write down Interest rates on homes comply- ing with the program, DATE BEGUN: 1985 AMOUNT OF FUNDING: $9,6 million • total mortgage loans: $142,000 write down/buy down SOURCE OF FUNDING: SDHDA and Warner funds (oil overcharge funds) ACTIVITY TO DATE: 156 new construction loans have been committed, 71 of which participated In the write down/buy down program, ADDITIONAL INFO: In June of 1986. the Interim Appropriations Committee denied SDHDA the use of additional Warner Funds for an Interest rate write downlbuy down. In 1987, the South Dakota Legislature abrogated the Energy Efficiency Program. Copies of the publlca• lion "Energy Savings and Cost. Effectiveness in the South Dakota Housing Develop. ment Authorlty Energy-Efficiency Program- are available upon request from SDHDA. RehablBtationlHOms ImprovemenllEnergy Conservation 47 4 \.J NAME OF Vermont Housing Finance Agency PROGRAM; Energy Rated Ho PURPOSE OF PROGRAM; Homes of Vermont Afort a e To Increase the energy g 9 Program homeowners' monthl , ll efficiency of the Vermont housin of sale. an additional amount expenditures by 9 stock and reduce ! the time a home u money to beuseduforn et ofhtemn3sures rtgage, ai which bring DATE NBEQUN~ T OF P to an energy efficient level, ? AMOUNT OF FU January 1987 of FUNDING: $150,000 to date, SOURCE OF FUNDING; $350,000 upon legislative action Exxon oil overcharge funds are provided for the program development Interest rate buydowns for participants, VHFA bond proceeds and r.onventtonal fund. Ing sources will be used (or the mort a costs and for ' ACTIVITY TO DATE: ' Program develo g ge loans. ~ pment is underway, with the first ener ADDITIONAL INFO; summer of 1987, 9Y mortgage expected in the f A home energy rating system Is being mine what cr sbeffectlve measures are ecesd brlnis g energy Pro ram !n order to deter or efficient level, Housing debt•to•Income sary to ratios can be Increased o 4% for an energy efficient house, and the mortgage g home up to an and the secondary market will still be by uP to 2 to purchase by the ViIFA , I Washington State NAME OF PROGRAM; Housing Finance Commission PHA TItIe I Insured Home PURPOSE Improvement OF PROGRAM: Program ' To make home Improvement loan's available In the City of Seattle, The Seatlie DATE BEGUN; Ing Authority administers the Home Improvement Program, AMOUNT OF FUNDlNG 1987 Hous• ' r SOURCE OF FUNDING. $1.875,000 bond issue; * million lendable proceeds ACTIVITY TO DATE; MRB pror,eds and city of Seattle ADDITIONAL INFO; Co n the 01i~ by the Clay of Seattle to help fund costs of issuance, write down the e Interest 'Ole e on the loans, and pLy the first year's mort le gage Insurance, 48 CSHA , Wisconsin Housing and Economic Development Authority NAME OF PROGRAM: (DEER) Demonstration of Energy Efficient Rehabilitation PURPOSE OF PROGRAM; To provide short-term loans to nonprofit sponsors who acquire, rehabilitate and resell i- to low income homeowners, older, deteriorated houses with a special emphasis on r energy saving improvements, DATE BEGUN: 1984 AMOUNT OF FUNDING; $2 mlllion revolving fund SOURCE OF FUNDING: Authority reserves i ACTIVITY TO DATE; Approximately 30 projects containing roughly 40 units either completed, In process or under review. $72,000 In loans have been committed. ADDITIONAL INFO: Maximum loan amounts are $48,000 for a single family two-family property and up to proportlonally higher amounts for mull unit or mutt]. site projects, Once the house Is rehabilitated, the sponsor must attempt to sell the home to a low or moderate Income purchaser eligible for WHEDA's single family HOME purchase program, If a gain is realized by the sponsor, WHEDA receives, in addition to principal, the lesser of Interest on the loan equal to 75% of the prime rate, plus a 1% loan administration fee; or 50% of the sponsors .s gain, WHFDA holds a first mortgage position on the property and 5% of the loan amount in escrow as collateral until the property is sold. kk f 1 AshabllltatlonlHome ImprovamenuEnargy Conservation C 49 14:0351 RENAf31L11'ATION AND CONSGR.VATION HDR RF.259 r 1-9-84 r URBAN HOMUSTEADING LAW I 4• 1 public Law 93-383 g~ ± 93rd congress, S. 3066 F•' August ZZ, 1974 As amended by sec, 20 of Public Law 94375; sec. 203 of Public Law 95.128; sec, 102 of Public Law 95.557; sec. 106 of Public Sec. 312 of Public Law Law 96. 153, Sec, 11 of of Public Low Law 96 zn 21(C and To establish a pro6rn+n of cmamuoltp det'ewpaiem I,Imk QrnatS, to 111"1111 extend tan's refinnig [u housing sad urban deeelopmeni, uud for ul ter Pur- poses. flullse. e iE etMded by llt0 b'enata" atnd a-4s of llepreaenMlive.r t the I3 alit' Unifed Sladna of ioterl(a ill Cortpr. u. entLled.'Ie n tnt t ahict is of act 19N be cited its the "Ilousing dud Corlnalnttlt}' Ucrelo)m 88 STAT, 731 tMBAS uoD[e8Tr1ADIN0 12 use 1.7060, targao'fAl;otisinqq\and1L'irhandD e'eI ony other rovision of Pment p(hereinafior lreferred to as tile'rSecvetary") i$ authorized to transfer without payment o a un of general local gorernmeo ernment oor or a. a S tate, an ygreat x'Operty- by aunit of ggeneral local got y (1) n Rich is i mproved b}' a one. to four•fumiiy resl~encel (2) to n'h;chtheScereta`eyho bldgtitl son legally entitled to (3) which is not Occup by pe reside there; (4) which is requested by Buell unit, Slate, or agency for U60 in an turban homestead program; and (6) which rho Secre tory deterrnines is suitable for use in an urban homesteau Fog ti ~Illvl nin~wtthe suitability ofgBuch propertytfor 6ection (b), g use in a .k urban e ditilcultl Islattfdela+ysiwl i ltewvoul d be l involved in (ho sale of tine prollercy ; 7il) the vuhte, of any repairs and iniproverncltts require by'the, program: (C) the, beucftts to tile, Coll nnuulity. and the reduced admntistrative costs tot tile Fedm'nl Government, which would lid iir from the oBts tot it oceeral of the unoccupied prop* Lj cerqediecl flllc~' l s to the Federal Covermnent mssible flnnncini los vl W; i(l f whiell uu+y result from [lie transfer of the property witholtt payulai+l• the $acreH,r}'shall (b) teor tho purposes of subsections (n) and (c), i approve an urblm homestead program eni rigid out by a Unit of general bent government a' n Stntr or n_ public n ,,racy dedtunnlyd by n unit of general talcni govel•mmeut.or a State. which providLIS fm•- (1) the conditional eollvevitnen of unoccupied reyidenkial )t•op• eltytby the responsible administrat;vc entity' to nn unlividun or it fnuuly withonl m1,V'substnnlinl consideration; (2) tun equitable prneedurr for gelliegthe recipients of the unoccalileal rrsidcntwi property, giving fe; Ibe rceipicuts' need for housing and cnpactty to rnnke or cause to bu mule the le11Milil and improvements reginred under pnra• glilph (ti)((:) of thissnbsectionl ?,3 Put."°h Bd by THE BUREAU OF NA716'IAL AFFAIRS. INC., WnSh111gt0n, D.C. 20037 t HOUS[NO & DEV IrL.Op\1ENT REPORTER p352 ~ to whom an nt;reentout w•kcreky tine 'uuliridual or Inmily i n uvcyed nrrrces to- uccapv such property as n principal res uch idence for emergency such pt"Ile i 1 is co ) ears, except under s u period of not less than fesear "d by the Secretary; standards as may h p. that pose a substantial danger to re pa all defects in line property nne" (Q) pt within I year of the date of such initial convey health and safety uroItarty it) nuul;a such repairs and improreje loc w the I ' as may be rtecessary' to meet nppl1g' %vieithin in 3 3 y sears afterf the decent, safe, and sanitary housing w ce; and date of initial conveyan eriodlc inspections at reasonable (p) permit. Iensonnbl° 1 ncrnl local government , em ! tlmcs by ernployeen of the unit of }e eenl tloc, Or there, nmrnt ftye~tuCS, tel for rt)re +purl'ohe ofudetcrinin• ! !ng compilunce w•itit the ngrecrnen6: Material d the rerocntiawf such cunvcyance upon ally iteriul breach all star. X35 ~ of the. agreement. ucferred to in paragraph (3} i ,oi'crnnreut , oneral local ) general (6) the conveyance iromnop dlin esig!ated g nit by the It of 6 or State or the pubhc at,' . tee simple title to such IiroPerty local government or State liance with the agreeme it, 1 mroveniont, without consideration upon comp (A) a coordinated approach toward neighlwrlIluo(l of conumu- through rho homestead program and rho ul g s ro sties pity services and facilities; and (1) an equitable procedure for selecting the recipients of such p Pe that-- special prlority to ing all appicants-- dards (p) gives a fails to meet stan of health nod (i) whose current hous t of their income for safety, including overcrowding; in e xcess of 30 percen (11) who currently Pay shelter; and act of obtaining improved housing within (yi) who have little p osP ccable future through means other ihhomcuwa rs" Iod the fonts who arc currently licant to contribute a (g) rs excludes applica takes into account the capacity of the aPP rocess, or to obtain substantial amount of labor io the rebabilitaliun atip rivate sources, community organisons, or other sources. as ho detorintnes to assistance from p such otlur programs The Secretary mai' all enter into agreeutmtts with tmlls rcnsoiy fulfill t)tesecrltcria, ruhilc agencies designated by nnb (o) ~emctnry is uuat for reed t rovkle teolutical I%-,silt' ofhenciullocall!oeernmenStnio s or t rtrmstehlc)umeet unris of ueneral local governnucrut or State to p line refquinine(isiuofisubse~ionf(b)}olrt(h)tandemt(lndviduals and families lI, who are )+arlicipants In such prugroms, ndat loll s ry to nut iorv,etl to issuo such rules not rob, (ri) 'l too Ser.rctn under this section, 1 n Continuind Via rally be uoeeS~ ary to carry out his funrtlnns evaiuattan. (e) 11110 Secretnry'shall conducts contlnu!"g lout -fill tile Br'it';rvrne ae o tr tr+ms• rr mtEtal to carried oat pursuant to tluv of en an meat, a g g eaniomssr t s°tf+hisrm~nhun` p fatale eoutluct o line lkeinkF afterthrnintl report coniukihffig)ars 8 umn ftary t ti of suck programs and his rccnnunciit{nrSul' or of such programs. 24 pubh5hod by frlE nunrnu OF t,&TIO14AL nrrnins. INC., wasnington, D.C. 20031 l i. 1 :0.354 HOUSING & DEVELOPMENT REPORTER (i) to occupy the property as a principal residence for a period of not less than 5 years, except under such emergency standards as may be prescribed by the Secretary; to repair all defects in the property that pose a substa dial danger to health or safety within I year of the date of the initial conveyancer and (Ili) to make such repairs and improvements to the property as may be necessary to meet applicable local standards for decent, safe, and sanitary within 3 years after the date of the Initial conveyance (2) The Secretary shall give a preference to demonstrations under this subsection involving the acquisition of properties that become available in satisfaction of public liens such as tax liens. 0) The Secretary shall conduct a continuing evaluation of the aemonstra• r lion programs carried out under subsections (h) and and shall transmit to the Coneress a report not later than December 31, 1985, containing a summary of this evaluation of all such programs and his recommendations for the future conduct of such programs. (k) To reimburse the housing loan funds for properties transferred pursuant to this section, and to carry out the provisions of subsections (c), (g), (h), and (i) there are authorized to be appropriated not to exceed $12,000,000 for fiscal year 1984, and such sums as may be necessary for fiscal year 1985.Any amountsso appropriated shall remain untilexpended. 1. . Published by THE IMEAU OF NATIONAL AFFAIRS, INC., WaShingtan, DA. 20037 26 i v, _ W- .r 14:0353' REI-InMU'rATION AND CONSf?RVATION 1ipR Rr.259 1-9-84 , (11 in order to facilitate plauning for purposes of this section, the Secretary, the Secretary of Agrieulture, and the Administrator of Veterans' wOr a hich State the regeneral s'identialcpiroperties govoinment ed of provide shall. a listitng upon request all sunoccupi unit Secretary, the Secretary or Agriculture, or the Administrator holds tide and which are located within the geographic jurisdiction of such unit, State, or agency, Such listing shall be accessible to tti^ public during ordinary business hours at the offices of such unit of general local gove.•nment or public agency. Ig1(1) The Secretary is authorized to reimburse -the 'Administrator of Veterans Af!airs,In an amount to he agreed upon by the Secretary and the Administrator, for property which it,,) Administrator conveys to a unit of general local government, Slate, or a tene for use In connec- tion with an urban homesteading program approvrd by he Secretary. 121 The Secretary Is authorized to reimburse the Secretary of Agriculture, In an r.mount (0 be agreed upon by the Secretary and the Secretar; of Agriculture, for property which the Secretary of Agricul, by the use in c nneci to unit on with an general ihomelstteading State, or agency Secretary. (h)(1) 'Tilt Secretary may, on a demonstration basis during fiscal years I 1984 and 1985, convey to any unit or general local government or public agency designated by such unit or general local government any real pro:,_rty- t (A) to which the Secretary holds title; and ' fi that the Secretary determines to be suitable for a multifamily homesteading program that complies with the requirements of paragraph (2); for such consideration, if any, as may be agreed upon between the 3cr Clary and such unit of general local governme t or public iagency by any unit of (2) Any multifamily homesteading program general local government or public agency designated by any such unit of general local government shall be considered a multifamily homesteading program that complies with the requirements of this subsection if the Secretary determines that such program contains adequate assurances that- (A) the primary use of all homestead properties following conversion or rehabi[W011 shall be residential; and (l3) not less than 75 percent of the residential occupants of homestead properties following conversion or rehabilitation shall be lower Income families, sectio e term '10 (3) As used the this g ye n such terbm in sectionh3(b)(2) ofstheiUn ed States s' has he^ct of i 1n931. Slates }lousing (i)(I) The Secretary shall use not more than 51,000.000 of the utnounls appropriated under this section for each of the rkcal year,, 19L ! anti 1985 to undartahc a program to demonstrate the feasibility of providing assis• tunce to State or local governments or their agencies rot dtc purchase of any real property that- (A) is not occupied by person legally entitled too reside there; ale Y a p pe (11) is not (C) is designgnated by n Swlc or general unit of focal government for use in a single family homestead program; and o(D) %i ull that ev such family income families under such program upon condition f. ,j Pub{IEnea bt WE BUREAU OF NATIONAL AFFAIRS, ItX., Wavhingtoa. D,C20037 t f' 1 FannieMae w ow- and Moderate Income : I-lousing November 1988 Fsulaie Mae is ion>`ing for partners to help meet the housing needs of low. . ---1:~ and moderate.invome Americana, i~ationa, leading inett• y t• :r Working in partnership with states, localities, nonprofit Organizations, a Hum g rations, Fannie Mae is developing and imp ' her ofa, and other targeted to low- and moderate-income home buyers an renters. . ,-roximate ` sDuring g1887gs and 1 S, Fannie Mae has committed to invest households. Th se of torts are ongoing ' " billion in pmgreme to assist more thaw 41,000 M.. in 40 states and the District of Columbia. product+t Fannie Mae, s shareholder-owned ~rPaz'tzer aproviding with feaderal wide ch variety arter, of has as ~ mission to act as the nation's housing p housing for low-, and services that increase the availability and affordability of of ho the nation 's .moderate-, and middle-income Amen~ ability M e's keY Position is housing opportunities in th for housing finance system gives it a uniq tY to support Sower income families and individuals. 1 r? We look forward to expanding efforts like those listed below. yam, W In oome Households • Targeted to Low- and Moderate-In Programs Public Finance P.ograms purchase tax-exempt mortgage In 1987, Fannie Mae initiated a program as. By purchasing these bonds, revenue bonds issued by state and local ageH - * Fannie Mae reduces the agencies' borrowing costs. This, in turn, ma tress Thus gages available at lower interest rates than would otherwise be po s bThus : `'y far, Fannie Mae has purchased 11.666 billion in state and 1 " sg ;m helping to make homeownership affordable for more than 33,000 low- and moderate-income families. Fannie Mae also provides credit enhancementforsingle-family ang~pie Mae tax-exempt housing revenue bonds. Under these programs ies backed by mortgages funded with the pro. sbeabes Mortgage•Backends. s, Alto Alteraetiveiy Fannie Mae pledgee collateral from • eds of tax-exempt bon, its own portfolio to back the bonds issued by housing finance apn This anni llows them to funenhances at lower costs. r, 1• 4 J IL Community Lending Programa Fannie Mae offers specially designed loan-purchase programs intended to help finance either the purchase of homes by low- and moderate-income house- holds, or the development of rental housing affordable to these families, In its single-family community lending programs, Fannie Mae works with public agencies, nonprofit organizations, and private lenders to purchase mortgages for low- and moderate-income home buyers who would otherwise be priced out of the market. Generally, Fannie Mae purchases market-rate first mortgagee that are associated with subsidized second mortgagee, The second mortgages are provided by a state or local government or by a nonprofit organization. Nonprofit groups often play a role in identifying potential buy- ers and in providing prepurchase counseling. Many of these programs empha- size the rehabilitation of vacant and abandoned houses in target neighbor- hoods, and they often involve local community development corporations. Through October 1989, Fannie Mae bad made commitments to purchase $176 million in mortgages under 20 single-family community lending programs serving nearly 4,300 households throughout the country. In addition, on a case-by-case basis, Fannie Mae purchases multifamily loans j on rental housing projects that serve lower income tenants. As with our single-family community lending programs, ourmultifamily community lend- ing programs generally involve public subsidies, These programs may also include the participation of nonprofit organizations, 11L Low-Income Rental Housing Equity Investments Since 1986, when the Congress a'sthorized a program of tax credits for invast- ments in qualified low-income rental housing projects, Fannie Mae has under- taken a program of seiected investments in such projects to help promote the development of affordable rental housing. Through October 1988, Fannie Mae had made commitments to invest more than $60 million in qualifying projects. These projects - located in numerous J communities throughout the country - will help finance the development of almost 3,000 badly needed units of rental housing. The projects in which Fannie Mae bas invested will provide affordable housing for families, for the elderly, and for formerly homeless individuals and families, l Fannie Mae is especially interested in helping to finance projects identified by localities as serving particularly pressing housing needs. In addition, we are making an effort to encourage other corporations to join us in tax credit investments. a IV. Other Affordability Programs 1 Fannie Mae also supports a number of other 'Initiatives designed to increase the access of lower income people to decent, affordable housing. Efforts currently under way include: • A partnership with the National Community Development Association and CD Financial to explore developing a aeoondarf market forresidential mortgages that are written and currently held by local governments. • A demonstration project to create models for the development of employer- assisted housing in high-cost markets where workers find it difficult to afford housing near their places of employment. • A program that offe,a EnergyEfficlent Mortgage (EEM) loan options to increase affordability for energy-saving measures, Fannie Mae invitee creative suggestions from government officials and from representatives of the private and nonprofit sectors regarding other ways in which wa can work together to help address the country's unmet housing needs. Fannie Mae's Office of Low- and Moderate-Income Housing To help promote further efforts on behalf of lower income households, Fannie Mae recently created au Office of Low- and Moderate-Income Housing. This office is responsible for managing Fannie Mae's current programs and for creating additional programs to exps:id the housing opportunities of low- and moderate-income families and individuals. The staff of this office - and staff of Fannie Mae's Rve regional offices - are available to work with mortgage lenders, state and lug housing agencies, nonprofit organizations, and other private corporations to help develnp 9.7ective f programs designed to meet local housing needs in communities throughout the coun- try, i 1 r Where to Get More Information r7 n" For additional information concomingF'annie Mae's low• and MO&Mte-income ou8- 1 ing programs, contact: Msrtin D. Levine Vice President for Low- and Moderate-Income Housing tea'. Fannie Mae -r r 3900 Wisconsin Avenue, NW I Washington, DC 20016-2899 (202) 752.6030 In our regional offices, contact: arm;' Robert Hunter ,14 John Delaney Assistant Regional-Vice President Assistant Regional Vice President Western Regional Office Southeastern Regional Office PO Box 24019 950 East Paces Ferry Road ' r•' a 30326.1161 10920 Wilshire Boulevard Atlanta, (,104) 366-6046 Suite 1800 Los Angeles, California 90024.8519 ;t:• , t (213) 209.6341 a Gerry Nanos Suzanne Parker t~vr.9:t Assistant Regional Vice President Low- and Moderate-Income Northeastern Regional Office Housing Coordinator f=t 610 Walnut Street • 16th Floor Southwestern Regional Office Philadelphia, Pennsylvania 19106.3697 Two Galleria Tower (2I6) 574.1442 13458 Noel Road - Suits 600 PO Box 650043 Dallas, Tam 76266.0043 Bill Tierney (214) 770.7693 Low- and Moderate-Income Housing Coordinator - Midwestern Regional Office fi • Onr. South Wacker Drive, Suite 3100 Chicago, Illinois 60606-4667 r (312) 368-6261 fR IJ f~ ' 1 I I i , Single-Family Community Lending Guidelines / What is Fannie Mae's role? In our single-family community lending activities, Fannie Mae assists low- and moderate-income households by purchasing first mortgages in a public, pri Nate, and nonprofit partnership. The four cornerstones of the program are: (1) local governments, which often provide b iize ps and grou, mortgages or other types of financial assistance; mortgage which identif and counsel aspiring homeowners; (3) private lende:s, which process, underwrite, and service the loans; and (4) Fannie € lender o igineted firs pt m mortgages on mutuallyragrgeeable terms. f the Fannie Mae offers single-family loan products to finance affordable homeownership targeted to low- and moderate-income households. Eligible families are generally those earning 80 percent or less of the area median income. This product helps lenders who have community reinvestment goals and borrowers who have few, if any, other means of homeov mership. New, existing, or rehabilitated properties are financed through this program. The properties may be located in neighborhoods or urban renewal areas targeted for revitalization. Fannie Mae encourages and facilitates the use of Fannie Mae and other sources of foreclosed properties as housing supply for this program. Fannie Mae also participates in short-term lease-purchase activities where nonprofit organizations or public agencies purchase and rehabilitate properties, frequently using Community Doveiopment Block Grant (CDBG) funds. The nonprofit or public agency selects and oounsele tenants during amount sat'aside monthly a yshort-ertn m i (usually 'yiand an period. payme ents s cover all carrying costs a down payment. After rehabilitation is complete, Fannie Mae purchases first mortgages originated by mortgage lenders on mutually agreeable terms. The nonprofit or public agency is the borrower and property owner. These first mortgages are assumable by the tenant at the end of the lease-purchase period. Subsidized second mortgages are sometimes used to complete the financing and provide a lower motto the tenant purcbasers. When dace Fannie Mae become involved? Fannie Mae's participation begins when lenders engage in local public- private partneranips and contact the appropriate Fannie Mae regional 23 t 1 office contact listed at the end of this section. When the program details have been worked out between the Zander, the local government, and a nonprofit participant, a low• and moderate income housing coordinator at the lender's Fannie Mae regional office is contacted to negotiate a standby commitment at no cost to the lender. Under the commitment, thin a time As loans close, lenders deli sped ulnder terms of the standbyfied commitment. 1 i I How does it work? o Finoncing Components i ' A typical financing package for first mortgages to low- and moderate. Income borrowers has three components: d Down payment. I First is a down payment from the borrower-usually between five and ten percent of the purchase price. First Mortgage. The next component is the issuance of a first mortgage, originated -to ` and serviced by a Fannie Mae-approved lender, ratios vary with the type of financial assistance provided in each community lending program. Fannie Mae will purchase loans up ; to 95 percent loan-to-value ratio with private mortgage absent mortgage insurance, acceptable loan•to•volue ratios below 80 percent will be negotiated to fit specific community needs in combination with subsidized second mortgages described xed below. These first mortgages nre conventional, 30-year, level-payment, market-rate loans--in short, standardized and easy to originate, Subsidized Second Mortgages and Other Financial Assistance. Another component is the issuance of a second mortgage, normally from a state or local housing agency, to fill the gap between the down payment plus the first mortgage and the total purchase price. Because Fannie Mae provides financing through its purchase of the first mortgage, the limited public funds that are earmarked for homeownership programs can be spread as cost effectively as possible to aid the greatest number of home buyers. The subsidized or "soft" seconds are often completely deferred and carry no or very low interest rates, and portions of the debt may be forgiven for each year the lower income family remains intbo house, In addition, a portion of the second mortgage unsecured and In the form of a note or grant to cover closing costs or rehabilitation coats not covered in the sale price, or to ` 24 finance the difference between a small down payment and the required equity. Although city and state agencies frequently use federal Community Development Mock Grant funds as the source of these mortgages, the funds may also be provided by lenders, builders, foundations, or nonprofit corporations. Another type of subsidized second mortgage is a non-interest ' bearing, non-amortizing subordinate mortgage loan to writedown the price of homes to eligible low. and moderate-income purchasers. First mortgages, with or without mortgage insurance, are made from the "reduced" price but appraisals must fully support the market sales price. Fannie Mae will structure other options with lenders, --ities, and j nonprofit organizations to fit particular community needs and to share risks of default if there is no mortgage i; .urnnce coverage in the transaction. One such option would be the proviaion of pool insurance for a volume of community lending loans by a consortium of lenders in a particular program or by a city providing subsidized second mortgages to such a program. o Debt Ratio The Fannie Mae ratios for housing expense and total debt obligations- to-income vary with the loan-to-value ratio, as under our standard programs. The ratios may be exceeded when borrowers have consis• tently and successfully devoted greater portions of their income to rent and have shown an ability to accumulate savings. In many cities where rents are high, homeownership actually decreases a lower income family's monthly housing expense, even before tax benefits are taken into consideration. o Creditworthiness Lower income borrowers--like all borrowers whose mortgages are sold to Fannie Mae--must demonstrate a consistent willingness and ability to handle debt. More often than not, however, their creditworthiness is not immediately apparent from a credit report, Instead, lenders must make an extra effurt to satisfy themselves.-by obtaining letters from landlords, utility companies, or former creditors-that the borrower is a good credit risk. In some canes, the nonprofit housing groups can assist lenders with credit checks, o Prepumhase Counseling Borrowers are normally required to participate in some form of prepurchase counseling or homeownership training, both of which appear to be highly correlated with successful homeownership and low delinquency ratios. 25 i Where can I get more information? _ At Fannie Mae's Washington, DC Low and Moderate -Income 1 office, contact; Housing Coordinator Julie Gould Assistant Director of Low- Southweb>ern Regional Office , and Moderate-Income Housing Two Galleria Tower 3900 Wisconsin Avenue, NW 13455 Noel Road • Suite 600 Washington, DC 20016.2899 P Dallas, 6600476265.0043 (202) 762-7473 (214) 770.7593 At Fannie Mae's regional gill Tierney offices, contact: John Carlisi Low- and Moderate-Income Low• and Moderate-Income Housing Coordinator Housing Coordinator Midwestern Regional Office , Northeastern Regional Office One South Wacker Drive M 510 Walnut Street. 16th Floor Suite 3100 { PhiladelQhis, Pennsylvania Chicago, Illinois 60600.4667 19106.3697 (312)3$8.8268 (215) 574.8580 Scott Van Dellen Robert Hunter Uw• and Moderate-Income Assistant Regional Vice President Housing Coordinator Southeastern Regional Office Western Regional Office 950 East Paces Ferry Road p0 Box 24018 Atlanta, Georgia 30326.1161 10920 Wilshire Boulevard (404) 365.6046 Suite 1800 Los Angeles, California 90024.6519 (213) 208.6234 26 li I Capital Opportunities for Community Development Where is the initiative operating? i Nationwide. How does the initiative work? Fannie Mae is working with the National Community Development Association (NCDA) and the Community Development Financial Corpora- tiou (CL Financial) to establish a demonstration program to help local governments finance community development needs. Fannie Mae will I purchase first and second mortgages currently held by local governments. The proceeds from the sale will permit the governments to fund additional f affordable houoing in their communities. Local governments across the nation hold substantial sums of outstanding mortgage loans, most of which were made with federal funds including Community Development Block Grants, Rental Rehabilitation funds, and Housing Development Grants. NCDA and CD Financial are working to identify participants for a one-year demonstration program. NCDA and CD Financial will also provide technical assistance to local government officials In analyzing their housing assets to determine whether sale of those assets is appropriate to help meet their housing development objectives. What is Fansiie Mae's role? Fannie Mae will purchase first and second mortgage loans that have been originated by participating cities. The prices paid for -mortgages will depend on the interest rates en the loans and their remaining terms, among other factors. Other conditions for the sales will depend on the past performance of the pools of loans. Who are the other participants? o National Community Development Association. o Community Development Financial Corporation o Participating local governments. 117 Where can T get more information? At Fannie Mae's Washington, DC office, contact: ~ Julie Gould 1 (202) 752-7473 1 At NCDA, contact: Diana Meyer (301)696.5468 Reginald Todd (202)293.7587 At CD Financial, contact; Craig Nickerson (800) 331.6955 or (202) 669.6330 r I 118 National Association of Housing !~1 and Redevelopment Officials Initiative I i Where is the initiative operating? + Colorado and Texas, How do" the initiative work? Fannie Mae and the National Association of Housing and Redevelopment Officials (NAHRC) have embarked on a joint initiative to assist low. and moderate-income households, to own their own homes or rent affordable housing through the sale of Fannie Mae real estate owned (REO) to the national network of NAHRO local agency members, including public housing authorities, community development agencies, and nonprofit I organizations, In certain demonstration cities, Fannie Mae will simultaneously notffy NAHRO and the appropriate local agency of the availability and sales price of the property as soon as possible after the acquisitk)n of the REC property by Fannie Mae. Fannie Mae will sell the REO property to NAHRO local agenrv members at r. reduced price to reflect Fannie Mae's savings resulting h om foregoing broksrs' fees and holding coats,. NAHRO will provide substantial technical services to fia members to ensure that the purchase process works in a timely manner so that its members can realize purchase price discounts for tho benefit of low- and moderate-income households. The initiative wall begin with a demonstration phase with NAHRO members planned for four cities; Austin, Houston, and San Antonio, Texas; and PT ever, Colorado. NAHRO and Fannie Mae will jointly participate In orientatfoa, counseling, and pre-implementation sessions with the d~~ onstration participants. What is Fannie Mae's role? Fannie Mae will sell REO to NAHRO local agency members at a discount for the benefit of low- and moderate income homeowners and tenants. I 43 s who are the other participants? ~ o The National Association of Housing . and Redevelopment Officials, o Local housing agencies, y Where can I get more information? At Fannie Mae's Southwestern Regional Office, contact: Suzanne Parker (214) 770-7693 At Fannie Mae's Washington, DC office, coi tact: Julie Gould (202) 752.7473 At the National Association of Housing and Redevelopment Officials, contact; Michael Nail (202) 429.2960 i ' I i 44 1 Pannie Has Office of Law- and Moderate-Income Housing Guidelines for gin4, fazily L&A21-Pur9hase PrOQS= Roy MMS-KnAou A sponsoring nonprofit acquires and/or rehabilitates properties and obtains first mortgages from a Fannie Mae lender for 80% of the value of the properties. Fannie Mae purchases the loans from the lender. The nonprofit selects low- to moderate-income families to rent the families. two to three homes fears,, oared signseformalaagreements with suallyefor During the lease-purchase period the families make rent payments that cover PITT on the mortgage, accumulate maleast intains stabl00 savings (over and above rent paym employment and credit patterns. When they have successfully completed te i tohme tees nonprofit, period, the families assume the mortgages having locked in their homeownership costs up front. =22g_1j 9. New or rehabilitatedt may be located in stable neighborhoods or in neighborhoods targeted for revitalization. Appraisal comps should not include other properties that use subordinate financing, appraised value should not be more than l0t below sales price. We encourage the use of HUD, VA, and Fannie Mae foreclosed properties as housing supply for the program. =wexp Must be a nonprofit organization (either private or public) whose purpose is the support or production of + i affordable housing. The nonprofit must have a good track record in working with lower-income ffamili s,it stable s) financial local public nagencies. support lander( a jean tvves_ 30-year fixed-rate level-payment conventional first mortgages only. Interrest rate: Market (Fannie Masts actual/actual posted yield). a~ F or first mortgages, 8o% or less. If there is secondary financing, must be at least greater 5%. ' Value" a is sales equity must be no or as-repaired appraised value, whichever is less. Subordinate f~.nancina: Usually "soft seconds" from public or private sources with no or low interests amortizing or non-amortizing; deferred or not deforredt forgiven or not forgivent with shared appreciation/depreciation. These seconds usu some closing costs. and toacoverleast canabeyusedtotal , r Fannie Mae Office of Law-- and Moderate-Incase Housing Guidelines for S,twle- ily H eownershin Progress p=poe ies: New, existing, or rehabilitated; may be located in stable neighborhoods- or in neighborhoods targeted for revitalization. Appraisal comps should not include other properties that use subordinate financing, and appraised value should not be more than 10% below sales price. We encourage the use of HUD, VA, and Fannie Mae foreclosed properties as housing supply for these programs. ~gov„er Should have incomes no higher than 80% of area median oownoavment: 58 of price for borrowers with incomes between 50% and , So% of area median income; can be less for borrowers with incomes below 50% of area median. roan type: 30-year fixed-rate level-payment conventional first mortgages; no ARMS, VRMs, GEMs, or GPMs. f ~ Interest rate:. Market (Fannie Mne's LASER posted yield) Dredi&wgrthiness: Standard guidelines apply; prepurchase counseling„ is normally required. Debt ratios: 28/36, but with the flexibility specified in the Fannie Mae selling Guide. ;subordinate financing: with "Soft seconds" eor low interest; public may be amortizing co non-amortizing, deferred or not deferred forgiven or not forgiven, with share I appreciation or shared depreciation. Thes seconds should cover the gap between th' downpyment and the first mortgage and may b' used to cover closing costs. 7aan-to-value ratiost For first mortgages, 80% or less. Combine ! secured LTVs should be no greater than 951 "Value" is sales price or appraised value whichever is less. Servicing by jeGder: Aggressive. If default is inevitable transfer to another qualified lower-incur buyer through assumption is preferable t foreclosure. THE URRAN HOMESTEADING PROGRAM CONCEPT; Publicly mdnPd, abandoned property Is transferred to lower income families in Pxchenge for their crnrenitments to repair, occupy and maintain the property, 1. OVERVIEW Section 810 of the Housing and Community Development Act of 1974, aS amended, authoriz,2s the Department to transfer title of HUD owned unoccupied, unrepair,,~d, sing?e family houses at no cost to States or local governments for use in HUD approved urhan homesteading programs. ' Farmers Home Administration WmrHA) and Veterans Administration (VA) maned properties may also he transferred to localities for this purpose. Tn addition, Local Urban Homesteading Agencies (LUHAs) may use their own funds to acquire locally owned properties for inclusion in their homesteading programs. Homesteading is carried out in designated neighborhoods and rmist Include the upgrading of community services and facilities. Homesteaders apply to and ,re selected by the participating LUHAs. The law requires that selection procedures he equitable, and that the locality give special consideration to the applicant's need for housing and ability to make repairs or pay for them to be made. Special priority is given to applicants whose income is at or below 80 percent of the median for their area. Further consideration is given to applicants who contribute a substantial amount of self-help. Current homeowners are excluded. ;'he unoccupied, unrepaired properties are conveyed to the homesteaders for a nominal price. Homesteaders agree to repair, maintain and occupy these homes for at least five consecutive years. The property must meet health and safety standards for decent, safe and sanitary housing within 3 years. When all requirements are met, homesteaders receive full and clear title to the property. 2. STATUS I In the 13 years of the program through September 30, 1988, 11,297 Federal rroperties have been homesteaded amounting to $128,260,782. Federal funding was also used to acquire 129 tax delinquent properties r amounting to $1,488,477 under the Local Property Demonstration which concluded in 1987, in FY 1988, there were 104 localities that purchased 818 Federal properties for homesteading, The average acquisition cost for these properties was $18,043, Over half of the active homesteading programs have heen approved in the last three years. Congress appropriated $13.2 million for the program in FY 1989. January 3, 1989 1qr....~-- r Department of Housing r The Ui ~ Homesteading Program provides for the Irai and Urban Development of federally-owned one- to four-lamily residences to com- Ollice of Community Planning munities with homesteading plans approved by HUD. Homes- and Development tending communities, in turn, transfer these properties for a 1 nominal fee, to qualified families or individuals. In quafflying 1 homesteaders, communities must take into consideration the 1 applicant's need for housing and ability to accomplish the necessary repairs, Special priority is given to applicants whose housing fails to meal local health and safely standards, including overcrowd- Urban * ing; who currently pay over 30 percent of their Income for shelte r, and who have hula prospect of obtaining improved G + h housi ousing. Current homeowners are excluded. Homesteading The homesteader agrees to repair, maintain and occupy the property for a minimum of live consecutive years. The prop- eity must meet health and safety standards within one year and must be brought up to local standards for decent, safe and sanitary housing within three years. When all require- merits are met, the homesteader receives lull and clear title to the property. Homesteading communities are required to target the program to locally designated neighborhoods and to provide needed Improvements of neighborhood services and facilities, Included In this brochure are a directory of Urban Homes- tending Sites and a list of HUD Field Offices, For Information on operating programs, please contact the appropriate ` agency In the Sites Directory. For general Information on Urban Homesteading, or to determine If a city not ilsted In the Directory proposes to start an Urban Homesteading Program, please contact the appropriate HIM Office, U.S. Department of Housing and Urban Development Regional and Field ONlces Alabama California Birmingham 35233 Los Angeles 90015 _ Daniel Building 1615 W. Olymplc Blvd. 15 South 201h Street (213) 251.7261 (205)254.1672 California Alaska San Francisco 94102 'y Anchorage 99513 450 Golden Gale Ave 710 C Street (415) 556.3317 Box 64 (Serves Arizona and Nevada) (901)271.4183 Colorado, Denver 80202 Arizona, Executive Tower Phoenix 85004 1405 Curtis Street I One North First Slreol, 3rd Floor (303) 844.512f r P.O. Box 1346B (Serves Utah, Wyoming, Monlana, (602) 261.4754 North Dakota and South Dakota) Arkansas Connectlcul Little Rock 72201 Harllord 06106 320 West Capital Ono Hartford Square West Suite 700 (203) 722.2445 1601)378.6375 I -14 =///44& Z42-- Win e,5,epo9dqe-&- LILL-- 80fo ila&-~tllk;7xelfv?x lwge?Z=X - ...art /1~~r' C-~~~a~, .~eu=~~~~✓ ~ ~ 1dGle loe `tom ~ A wee 04 Axt, 1110, 61 a-A e,!:T I-6c, P~(/~1ucIIJ~GIJr''K-~ D UW r eo'~,- ems; 14to Cad Ot r,a,4e, ~'i Fe s (7 ` 7 lee 704 j/ 0, -eL or-tT+'~-~.Q o i ~ f `i . 1 i 1 I qr W- b W''y;' 3 , p f W 'L OC fi n. C' O pp~y.11 y to sTi M ^ N '6 cY O T7 .1 v U n W 0 N O t• n .'T'+ , G ql nw] N f] G o f7 (h ~p C. (T 11 'i7 O Ow3 C.; O O a . W is s u' y a Of"J. p O r' S Y O C 'U a L d O to C: `,-3 • w a ci w o ° O N •w N rv G j, o ,t w r O i. p.~ J p el C W d to n ] r> t. y \ O N to O d IY O C CL L'] I. 7 w.yy o r o o O o ~r : :3 v i `o W o'. c (j a r1. C u 'N• ti ;y N y r a n G , N Pi D • '.b ~q H n N v Nog w a'4'u oww gw~7'o 0~0 G ! 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C M N o m' Cl o C1-0 m Y11 o a~ C. N 3 00w3 v00 mN OOp N 03 CL M O C `l m. N a A ^ a° a m 0 O CI K 3 m m (D Q m Cr m m n p rr~^O Q m w w 0 0 m G h d a YTS Iq M O 47 1 O m N C11 V7 a 7 O ° a1 v W Ctt ° m N O 3 m 7 C N m 7 a w v C L P a V p.NIND N c o m _ ° pia C7.~i m1° m0 N N Ov hiO N I 'LAI M♦ V/ ~ M ~a d N I I SJ # . \ to a D rri O 0 c!1 r0~p M 0 - z rD 777 'D r A W ~ rn t ~ r - r^' f f' Q Y r ~ LSb6L Sexal rXhoggn-I OOOL xoe '0'd Moomil do Ally jUOWdol9na0 AljUnwwo0 Urban - Homestead Program {Espanol) I s w .per 9 ~..1 ` ^ r ,l FULBRIGHT & JAWORSKI 1341 McKINNEY HOUSTON HOUSTON,TEXAS 77010 WASHINGTON, O.C, AUSTIN SAN ANTONIO DALLAS TELEPHONE: 713/651-5151 LONDON TELEX; 16-2029 ZURICH TELECOPIER:713/651.5240 FULORIOHT JAWORSHI 6 REAVI5 MCGRATH NEW YORK LOS ANGELES March 1, 1989 Denton . Gurplll,, Funds of the corporation Re-------------------------------------- f county Housing Finance Corporation Denton County Courthouse Denton County, Texas i Ladies and Gentlemen, At the meeting of January 12, 1989, you had requested that we review generally your power and authority to spend surplus funds of the Denton County Housing Finance corporation (the "Corporation"), We have reviewed the Articles of Incorporation dated January 14, 1980 (the "Articles") of the corporation, its Bylaws (the "Bylaws"), and the Texas Housing Finance Corporations Act, Texas Local Government Code chapter 394 (the "Act"), under which the Corporation was incorporated, This letter does not address fluids of the Corporation which may be subject to liens, contract provisions, or otherwise encumbered, The Articles state that the Corporation is a public instrumentality and non-profit corporation organized solely to carry out the purposes of the Texas Housing Finance Corpor.atiens Act, and that the affairs of them Corporation shat l be manag ed by a Hoard of Directors to po appointed by the governing body of Denton County, Texas, The Articles further state that no dividends shall be paid by the e:srv 1 March 1, 1989 Page 2 Corporation, and no part of its net earnings (beyond that necessary for retirement of the indebtedness of the Corporation or to implement the public purpose of the County for which the Corporation has been created) shall be distributed to or inure to the benefit of its directors or officers or any private person, firm, corporation, or association except in reasonable amounts for services rendered, No substantial part of the Corporation's activities shall be carrying on propaganda or / otherwise attempting to influence legislation, and it shall not participate in, or intervene in (including the publishing or distributing statoments), any political campaign on behalf of or in opposition to any candidate for public office. The Bylaws state that the Corporation shall have all the powers conferred by the Articlas and the Act, and the i exercise of any or all powers granted thereunder may be made by resolution of the Board of Directors of the Corporation. The i i Bylaws state the Directors may be reimbursed for actual expenses incurred in the performance of their duties, The Bylaws repeat that no dividends shall be paid and no part of , the net earnings of the Corporation shall ever be paid to any private person except in reasonable amounts for services rendered. The Bylaws further state that if the Board of Directors of the Corporation determines that sufficient provision has been made for full payment of its expense's, bonds, and other obligations, then its net earnings thereafter accruing are to be paid to Denton County, Texas, provided that nothing in the Bylaws shall prevent the Board of Directors of the Corporation from transferring all or any part of its property in accordance with the terms of any contract or agreement, The Bylaws state that upon dissolution of the Corporation, title to all its funds and property shall vest in Denton County, Texas, The Act provides that the Corporation may not pay dividends, and that its net earnings may not be distributed to or benefit the directors or officers of the Corporation or any person except as reasonable compensation for services rendered. Upon provision being made for a full payment of the Corporation's expenses, bonds, and other obligations, any net corporate earnings accruing after such provision shall be paid to the sponsoring governmental body (1.e., Denton County, Texas), The corporation may transfer corporate property as provided by a eont~,act made by the Corporation, The Act further states that the Corporation may exercise any powers incidental to or necessary for the performance of its powers under the Act, and may exercise other powers necessary or appropriate to carry out the purposes for which the Corporation is organized, Among the Corporation's ~L93V I i I March 1, 1989 Page 3 general powers, the Corporation may make contracts as necessary or convenient to exercise its powers; incur liabilities, borrow money, issue notes, bonds, and other obli.gaIions; sec,ire obligations by mortgage] or pledges oc its property, f franchises, and income; plan, research, study, develop, and promote the establishment of residential development; and make donations for the public welfare or for charitable, scientific, or educational purposes, Generally, we note the following concerning your } surplus funds; 1, Under the terms of the Act, to the extent you intend to plan, research, study, develop, and promote the establishment of residential development, there is a necessary incidental power to carry out those purposes to expend net income of the Corporation, 2. You may expend that income of the Corporation for making donations for the public welfare or for charitable, scientific, or educational purposes, 3. You may expend funds of the Corporation to the extent such expenditure is incidental to or necessary for the performance Texas Local o Government powers Code chapter 39 oration granted under 4 Under Articles, distr distribute the Bylaws, and earnings ic of the may not pay dividends Corporation to benefit ther direitors opersoniceerXCe~ tas Corporation or any P reasonable compensation for services rendered. 5. Upon sufficient provision for full payment of expenses, bonds, and other obligations of the Corporation, net earnings of the Corporation ration been after to the provision determination that such paid to Denton County, Texas. 6, You may pay money to carry out provisions of a contract made by the Corporation, it is within your general powers to make contracts if a contract is necessary or convenient to exercise powers granted to you under the Act. All matters discussed in this letter are general and are intended to provide the Hoard of Directors with guidance for consideration of specific expenditures, Please call if you ~~s~v t March 1, 1989 Page 4 have further questions concerning your powers with respect to surplus funds, Very truly yours, Neil Thomas TNT/res For the Firm 1 s i it V $ally I { V' CITY of DENTON, TEXAS 215 E. MCKINNEY / DENTON, TEXAS 76201 /TELEPHONE (817) 666.8200 1 MEMORANDUM :I I DATE: February 15. 1989 TO: Lloyd V. Harrell, City Manager FROM: Frank H. Robbins, Executive DLrector for Planning and Development 1 SUBJECT: HOMELESS AND THE COUNTY Reference my memo, Subject: Spending Housing Finance Corporation Money for Housing, dated January 20, 1989. Enclosed is 11B335, proposed legislation to enable Texas counties to work on the homeless problem. In summary it proposes the following., 1. enables a commission appointed by the court; 2, establishes the commission's duties as: a) research and education b) recommend to court c) plan and manage programs d) maximize direct services to county's homeless e) monitor expenditure of funds and programs 3. allows for commission grant and gift acceptance commission 4. enables collection of a 41 real estate document fee to be placed in a special homeless account. 5. requires court to approve expenditures. If enacted, "excess" Housing Finance Corporation funds could support this commission. I ,r I Lloyd V. Harrell i February 15, 1989 page 2 In our recent conversations with Counci.lmember McAdams concerning City of Denton housing programs, she indicated a general lack of interest in Denton becoming heavily involved in homelessness. Given an existing and appropriate source of funds at this county level, this proposed legislation, the regior_nl nature of the problem, and Councilmember McAdams' moat recent thinking, it would appear from funding, organizational, and political standpoints, the homeless problem should best be solved by Denton County. It could begin to work on the problem quickly and efficiently. You may want to mention this to the Finance Corporation. rank H. obbins, AICp Attachment xc: Barbara Roos, Community Development Coordinator r 1578k I I { a 1 CITY of DENTON, TEXAS 215 E, McKINNEYI DENTON, TEXAS 76201 /TELEPHONE (817) 5668200 MEMORANDUM ' i I~ I)ATG: January 200 198. T0; [,loyd V. Harrell, City Manager Frank 11. Robbins, Lxecutive Director for Planning and FROM: Development J r SUB3EC'I': SPI:NllING HOUSING FINANCE CORPORATION MONEY FOR HOUSING 1 I ' 'rho Denton County Housing Finance Corporation has identified $500000 of their money which might be spent on non-housing public benefits within the County. We should recommend to the hoard of the Corporation that the money continue to be used for housing. TIM NEED rho City's Housing Task Force has identified at least 600 households which are without adequate housing in the City of number alone. This rsons doHousingtsurveysaconductedihere by number homeless pee state legislative committees have determined that for low- and moderate-income families there Is acquire adequate !rousing. r express concern about the inability of many families to afford home ownership. The City of. Denton alone now spends from rehabilitation. 'rho $350,000 to $900,000 annually on housing, following quote from the November 198x' edition of Urban Land accurately portrays not only a national, but local problem: 14A report by the National Housing Task Force on America's housing crisis, A Decent Place to hive, released this spring, amplified the findings of several other studies when it reported these troubling facts: Throughout the 1980s, rents and housing costs for low- and moderate-income families have been increasing while real Income has been decreasing; tite national rate of home ownership has steadily declined, reversing a 40-• ear trend; and funding for crew housing by the department of (lousing and Urban Development has decreased by 80 percent.,' 1 1 r Lloyd V. Ilarrell January 20, 1989 Page 2 The $500,000 shonl.d continue to be spent for its original. purposes, the need for which is increasing, rather than diminishing. A CONCEPTUAL PROPOSAL The $500,000 should be distributed to County jurisdictions, agr,ircies, non-profit corporations, or financial institutions. Distribution would be made based on the proposals made within a ; time frame and criteria developed by the Corporation for two programs as follows; 1. A revolving loan fund (RLF) program of $300,000. This fund would provide, over a long term, funding to enable more persons to acquire adequate housing and affordable home ownership. 'there are numerous purposes and designs for housing RIA" s. One system which may be popular Is to provide a "soft second" mortgage loan of, say, 200 of the value of an affordable house. An RLF can help maintain affordable housing and help break the poverty cycle with innovative quallfi.cation criteria, such as employment status or job program enrollment. The RLF's can help leverage private dollars and fill the affordability gap. 2. An emergency shelter grant program of $200,000. The most critical housing problem in the County may be that of the homeless. The homeless problem has far reaching implica- tions beyond housing, particularly with respect to homeless children. Current federal and state grant programs provide a very little amount of funding. 'T'hose funds may be used for rehabilitation of existing structures. This grant program could be used for new construction (probably only it portion of the full construction costs) as well as for rehabilitation. A portion of these funds might be used for administrative snd/or counseling of the homeless. Alloca- tion would also be made based on proposals whose funding criteria would be established by the Corporation. 44ran *.0411 s,-A1' am 1627x 14 y