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HomeMy Public PortalAbout2015.213 (11-24-15)RESOLUTION NO. 2015.213 A RESOLUTION OF THE CITY OF LYNWOOD CITY COUNCIL APPROVING THE FIRST AMENDMENT TO THE HOME PROGRAM PARTICIPATION AGREEMENT BY AND BETWEEN THE CITY OF LYNWOOD AND PARTNERSHIP HOUSING, LLC. WHEREAS, the City of Lynwood receives an allocation of funds from the U.S. Department of Housing and Urban Development (HUD) pursuant to the HOME Investment Partnerships Program (HOME); and WHEREAS, in accordance with HUD requirements, the City of Lynwood is required to reserve and commit a minimum of 15% of the annual allocation of its HOME funds to a qualified and certified Community Housing Development Organization (CHDO); and WHEREAS, on June 18, 2014, the City of Lynwood entered into a HOME Program Participation Agreement (Agreement), committing CHDO reserve funds to Partnership Housing, Inc., a certified CHDO, to assist the City in carrying out the HOME requirements of providing affordable housing opportunities to low and very low income households; and WHEREAS, the City committed HOME FY 2010 CHDO funds of $237,205.60 and FY 2011 CHDO funds of $533,057.40 for a total of $770,263 to Partnership Housing, Inc.; and WHEREAS, the Agreement is for the development of four (4) affordable housing units located at 3303 Magnolia Avenue, Lynwood, and pursuant to the Agreement, the City provided CHDO funds went towards the development and affordability of the said four units; and WHEREAS, pursuant to the Agreement, section 2.1.5 "Repayment of the Grant," Partnership Housing will apply $51,978 of HOME CHDO funds per unit towards 2nd mortgages for the 4 units totaling $207,912 of the allocated funds; and WHEREAS, increasing the amount of City 2 "d Mortgages to $190,742.50 will ensure the City's investment of the $762,970.29 is secured through the 45 year affordability period and make the units more affordable for lower income families; and WHEREAS, due to the ever changing housing market conditions, the Agreement's language should be amended to be applicable to current housing values for the purpose of the sale of said units; and 1 WHEREAS, the Lynwood City Council finds the amendment of the Participation Agreement is in order to assist Partnership Housing in addressing the need to make said homes more affordable for lower income families and is authorized by Section 6.6 of said Agreement to make such amendment. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, DETERMINE, ORDER AND RESOLVE AS FOLLOWS: Section 1. That the Lynwood City Council approves a first amendment to the Participation Agreement by and between the City of Lynwood and Partnership Housing, Inc. to be finalized in a form approved by the City Attorney. Section 2. That the said amendment to the Participation Agreement with Partnership Housing, Inc. will include language that incorporates the following changes: 1. Increase the sales price of each affordable unit to the lesser of (i) the fair market value of the property, as determined by the appraisal on the property performed. by the third party lender of the first mortgage loan; or (ii) the maximum amount permitted under the HOME Program (currently $419,000).(ref. section 4 paragraph 2 of Agreement) 2. Increase the amount of City Second Mortgage Loan to $190,742.57 per unit. (ref. section 2.1.5 of Agreement) Section 3. That the City authorizes the Mayor, or appointed designee, to execute an amendment to the agreement with Partnership Housing, Inc., in a form approved by the City Attorney. Section 4. That the Mayor shall sign and the City Clerk shall attest to the adoption of this Resolution. Section 5. This Resolution becomes effective immediately upon adoption. Section 6. The City Clerk shall certify as to the adoption of this City Council Resolution. [THIS SPACE INTENTIONALLY LEFT BLANK] 2 PASSED, APPROVED and ADOPTED this 24th day of November, 2015. ATTEST: r aria -Quinonez, City Clerk, APPROVED AS TO FORM: David A. Garcia, City Attorney J. Arnoldo Beltran, City Manager APPROVED AS TO CONTENT: 3 Project Manager STATE OF CALIFORNIA COUNTY OF LOS ANGELES I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 24th day of November 2015, and passed by the following votes: AYES: COUNCIL MEMBERS ALATORRE, CASTRO, HERNANDEZ, SANTILLAN -BEGS AND SOLACHE NOES: NONE ABSTAIN: NONE ABSENT: NONE / Maria Quinonez, City Clerk STATE OF CALIFORNIA COUNTY OF LOS ANGELES I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. 2015.213 on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 24th day of November, 2015. Maria Quinonez, City Clerk LI IN WITNESS WHEREOF, City and Participant have entered into this Amended Agreement as of the Effective Date. Signature Date: ATTEST: City Clerk APPROVED AS TO FORM: TAFOYA & GARCIA, LLP David A. Garcia, City Attorney "CITY" CITY OF LYNWOOD, a California municipal corporation LIM Josh Luis Solache Its: Mayor "PARTICIPANT" PARTNERSHIP HOUSING, INC., a Califon •a nonprofit public benefit corporation Signature Date: B y rin Rank Its: Executive Director 2. Section 4 of the Agreement, entitled "USE OF THE SIGHT" shall be amended in its entirety so that it shall read as follows: 4. USE OF THE SITE. Participant and its successors and assigns shall develop the Site as owner- occupied affordable housing for low- and moderate income individuals and families in accordance with the provisions of this Agreement and the Regulatory Agreement, consistent with the HOME Requirements.. Pursuant to the Regulatory Agreement, the four (4) Home- Assisted Units on the Site shall be restricted to sale and occupancy by low- income households at an affordable monthly housing cost (as those terms are defined therein) for a period of twenty (20) years. Participant shall not impose or permit to be imposed any restrictions or regulations on the Project or take any other action that would cause the Project to be subject to voter authorization under Article 34 of the California Constitution. The sales price of each affordable unit shall be established by the lesser of (i) the fair market value of the property, as determined by the appraisal on the property performed by the third party lender of the first mortgage loan; or (ii) the maximum amount permitted under the HOME Program (currently $419,000). In accordance with the provisions of 24 CFR 92.254, if a ratified sales contract for the housing is not executed for acquisition by an eligible household at an affordable cost within nine (9) months of the date of completion of construction, the housing must be rented to an eligible tenant in accordance with the provisions of 24 CFR 92.252. 3. Full Force and Effect. The Parties further agree that, except as specifically provided in this Amendment, the terms of the Agreement shall remain unchanged and in full force and effect. [signatures on next page] WHEREAS, Increasing the amount of City 2ud Mortgages to $190,742.57 will ensure the City's investment of the $762,970.29 is secured through the 45 year affordability period and make the units more affordable for lower income families; and WHEREAS, Due to the ever changing housing market conditions, the Agreements language should be amended to be applicable to current housing values for the purpose of the sale of said units; and WHEREAS, The Lynwood City Council finds the amendment of the Participation Agreement is in order to assist Partnership Housing in addressing the need to make said homes more affordable for lower income families and is authorized pursuant to Section 6.6 of said Agreement to make such amendment. NOW, THEREFORE, based upon the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both parties, City and Participant hereby agree to amend this Participation Agreement as follows: 1. Section 2.1.5 of the Agreement, entitled "Repayment of City Grant" shall be amended in its entirety so that it shall read as follows: 2.1.5 Repayment of Ck Grant. The proceeds of the City Grant will fund construction of the Project, and will be repaid with the proceeds of one or more City Second Mortgage Loans made by the City to the purchasers of the HOME- Assisted Units, subject to the terms and conditions set forth herein. The repayment of City Grant funds not addressed by the issuance of City Second Mortgage Loans shall be repaid from escrow proceeds resulting from the sales of the Units to eligible approved Purchasers of the Units. "City Second Mortgage Loan" shall mean a [zero] interest deferred payment second mortgage loan from the City to a Purchaser of a Unit in an amount of $190,742.57. The City Second Mortgage Loan shall be evidenced by a promissory note and secured by, among other things, a deed of trust, that is subordinate to the Habitat First Mortgage Loan Deed of Trust (or deed of trust for the private loan, as applicable). The City Second Mortgage Loan shall further require the execution of Covenants, Conditions and Restrictions by the home buyer to be recorded against the property requiring and insuring compliance with the terms of this Agreement. All loan documents evidencing the City Second Mortgage Loan shall be subject to the approval of City and shall be in such a form as is customarily used for such transactions and comply with all applicable laws, including, without limitation, the HOME Investment Partnerships Program (42 U.S.C. Section 12741, et seq.) and HOME Regulations (24 CFR Part 92 et seq.). In connection with the sale of the unit to an eligible low- income household and immediately prior to the recordation of the City Second Mortgage Loan documents, the City shall reconvey the Deed of Trust and Regulatory Agreement, as such documents will be replaced with a deed of trust and restrictions executed by the low income buyer. d FIRST AMENDMENT TO THE HOME PROGRAM PARTICIPATION AGREEMENT This First Amendment to the HOME PROGRAM PARTICIPATION AGREEMENT ( "Agreement ") is entered into this 24th day of November , 2015, by and between the CITY OF LYNWOOD, a California municipal corporation ( "City"), and PARTNERSHIP HOUSING, INC., a California nonprofit public benefit corporation ( "Participant"). RECITALS WHEREAS, Participant is a California nonprofit public benefit corporation and its primary purpose is to provide decent, affordable housing to low- and moderate - income individuals and families; and WHEREAS, Participant is the owner in fee of that certain unimproved real property located in the City of Lynwood, County of Los Angeles, State of California, more particularly described in the legal description attached hereto as Attachment No. t ( "Site "). Participant desires to develop on the Site a 4 -unit residential condominium project for low- and moderate - income individuals and families, with landscaping, driveways, and related improvements ( "Project "); and WHEREAS, City has received funds from the United States Department of Housing and Urban Development ( "HUD ") pursuant to the federal government's HOME Investment Partnerships Program (42 U.S.C. Section 12741, et seq.) to be used for the purposes of this Agreement in accordance with the HOME Regulations (24 CFR Part 92 et seq.). City desires to assist in the development of the Project by providing financial assistance to Participant in the form of a grant for the costs to construct the Project. Participant has been designated as a certified CHDO by the City. City and Participant desire to impose affordability covenants on all four (4) units assisted with City's grant, which covenants will require the four (4) units be sold to eligible low- income households with affordability maintained for a period of twenty (20) years; and WHEREAS, The development of the Project on the Site pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of the City and the welfare of its residents, and in accordance with the public purposes and provisions of applicable federal, state, and local laws and requirements; and WHEREAS, The City committed HOME FY 2010 CHDO funds of $237,205.60 and FY 2011 CHDO funds of $533,057.40 for a total of $770,263 to Partnership Housing, Inc.; and WHEREAS, The Agreement is for the development of four (4) affordable housing units located at 3303 Magnolia Avenue, Lynwood, and pursuant to the Agreement, the City provided CHDO funds went towards the development and affordability of the said four units; and WHEREAS, Pursuant to the Agreement, section 2.1.5 "Repayment of the Grant," Partnership Housing will apply $51,978 of HOME CHDO funds per unit towards 2nd mortgages for the 4 units totaling $207,912 of the allocated funds; and WA RIM OWMANNNig