HomeMy WebLinkAboutR-1991-D6005 Housing / Security Pacific Bank•
RESOLUTION NO.
A RESOLUTION authorizing the. Director of 'Community and Econom-
H.Hic._ Development to enterinto an agreement with
Security Pacific Bank Washington for implementa-
tion of a Multi -Family Loan Program.
. .
WHEREAS,. the City currently administers United States
Department of. Housing and Urban Development (HUD) funds for
redevelopment ofsubstandard housing, including multi -family
landlord -owned units; and
WHEREAS, the City'contracts with various banks within -the
City.for processing housing rehabilitation loansvand
WHEREAS, the.Security Pacific Bank Washington desires to
process such loans; and
WHEREAS, the. City Council deems it to be in the best
interest of the City of Yakima to enter into. such agreement,
now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
. • The Director. of Community andEconomic Development and
the City Clerk.are hereby authorized -and directed. to execute
the attached agreement with Security Pacific Bank Washington
entitled "Agreement" which is attached and incorporated into
this resolution as -if fully written out.
ADOPTED BY THE CITY COUNCIL this day of ,
1991.
ATTEST:
City Clerk
(res/mltyfmly.jv) •
)
Mayor
AGREEMENT
I. PARTIES
1.1 OFFICE OF HOUSING AND NEIGHBORHOOD CONSERVATION, a division
of the Department of Community and Economic Development of
the City of Yakima, a municipal corporation of the State of
Washington ("OHNC" herein).
1.2 The undersigned bank (Security Pacific Bank Washington )
("Bank" herein)
II. RECITALS
2.1 OHNC receives funds from the United States Department of
Housing and Urban Development (HUD), and other sources,
which it will use for building improvement loans and for
loan subsidies to various qualified owners of multi -family
rental units.
2.2 OHNC desires to refer qualified borrowers to the Bank in
order to have a loan written and funded by the Bank.
2.3 OHNC desires to have Bank administer and handle the details
with regard to the writing and repayment of the loans,
recognizing that the Bank is qualified and experienced in
such administration.
2.4 Bank agrees to handle such administration without charging
OHNC a fee therefore, provided, that such administration
shall be subject to the terms and condition of this
agreement.
2.5 Both parties understand that OHNC intends to enter into
similar agreements with other bank(s), as well as the Bank
herein.
• 2.6 Both parties understand that this agreement will be used in
conjunction with the multi -family program policy and
procedures dated September 20, 1983, amended August 1988,
hereinafter called policy and procedures, a copy of which is
attached hereto and incorporated herein.
III. AGREEMENT
3.1 Applications: OHNC shall take applications from investors
for loans to fund the rehabilitation of multi -family rental
units. Application shall include a credit report,
preliminary title report, a profit and loss statement of the
subject property and applicant's employment verification and
last two years of federal tax returns. All costs incurred by
this application shall be assumed by OHNC.
3.2 Inspections: OHNC shall inspect the property applying the
HUD Minimum Property Standard for One and Two Dwellings, and
make a deficiency list for the owner. The Owner shall be
required to accept bids from the licensed and bonded
contractors and submit them to the OHNC office for review
and cost verification.
3.3 Loan Referral: OHNC shall prepare the following documents
and submit them to the Bank for loan acceptance:
a. Preliminary title report,
b. Subsidy amount,
c. OHNC note and deed of trust,
d. Credit report of owner,
e. Profit and loss statement of property,
f. Deficiency list,
g. Bids for rehabilitation of project,
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h. Formal appraisal indicating fair market value
prior to rehabilitation, with an estimate value
after rehabilitation,
i. Existing loan(s) and balances on property,
j. Owner's financial statement.
k. Owner's employment verification and/or two years
of IRS statements.
3.4 Loan Term: The banks loan to the owner shall be a minimum of
$2,000.00 and be a maximum fixed term of 180 months, as
listed below:
$2,000 - $5,000
5,001 - 10,000
10,001 - over
60 months
120 months
180 months
3.5 Interest Rate: The percentage rate of interest for loans
less than five years shall be determined on the day of
closing at 1.5% over the quoted prime interest rate as
printed in the Wall Street Journal for that day, and 2% over
the quoted prime interest rate on loans over a five year
term.
3.6 Loan Position: All bank loans shall be afforded a first or
second priority. All OHNC loans shall be in second or third
priority, immediately junior to bank loans.
3.7 Maximum Loan: Total indebtedness shall not exceed 80% of the
appraised value of the subject property after rehabilitation
unless funds equal to the amount over 80% are deposited by
OHNC with the bank as a loan guarantee. In such event total
indebtedness shall not exceed 95% of the appraised value of
subject property after rehabilitation. The loan guarantee
funds shall be released back to OHNC by the bank when the
principal of the total indebtedness reaches a level of 75%
of appraised value of subject property excluding the City
subsidy. The date of this release shall be predetermined at
date of loan closing. The bank shall place loan guarantee
funds in market interest bearing accounts and shall pay all
accrued interest by OHNC upon date of release of the
guarantee.
3.8 Bank Loan: The bank shall write the loan and obtain the
borrower's signature on the note and deed of trust to OHNC.
All title documents shall be recorded with OHNC being placed
in a junior position. All loans shall have title insurance
for coverage of the entire encumbered amount. A copy of the
Bank loan closing statement will be forwarded to OHNC after
closing, as authorized by the applicant in writing.
All loans requested in the amount of $50,000.00 or less must
be reviewed within ten working days from receipt of a
complete loan package and 20 working days for all loans
exceeding $50,000.00. Any loan application that is not
approved by the Bank shall be returned to OHNC's office at
112 South 8th Street, Yakima, Washington 98901 stating the
reason for the disapproval.
3.9 Completion: OHNC shall be responsible for doing progress and
final inspections, as requested by the Bank, with a report
of the rehabilitation work given to the Bank.
3.10 Payment: It shall be the Owner's responsibility to request
OHNC for construction inspection for payment certification.
This certification is approved by the Bank and a check made
to the owner and contractor with a copy sent to OHNC. Upon
request and receipt of final payment, all lien releases must
be submitted.
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3.11 Indemnity: It is understood that the Bank shall retain sole
and exclusive control and responsibility for determining
such matters as eligibility of its borrowers, the actual
loans to be made and the terms, conditions and closing
thereof, the actual improvements to be made and the extent
and quality thereof and the right of the suppliers and
laborers to be paid. It is the intent hereof that the normal
responsibilities and obligations of the Bank shall not in
any manner be enlarged or extended by reason of the fact
that OHNC is and will be making subsidized loans from
government -derived funds.
3.12 Termination: This agreement shall remain in effect from date
hereof until either party gives at least 90 days written
notice of termination to the other.
DATED this
18th day of September
, 1991
OFFICE OF HOUSING AND
NEIGHBOR OOD CONSERVATI,DT Security Pacific Bank Washington
By:
irector unity &
Economic Development
Dated: /a/%/O//
CITY CONTRACT N0. 9/- 9lc/ /� 6003 --
ATTEST: 005ATTEST:
City Clerk
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BANK)
By:
Title:Vice President
By:
Title:
nd Manager