HomeMy WebLinkAboutR-1991-D6032 Housing / Security Pacific Bank•
RESOLUTION NM 60 3 2
A RESOLUTION authorizing the Director of the Department of
Community and Economic Development to sign an
Agreement with Security Pacific Bank Housing
Rehabilitation Center to provide inspection
services for fees to determine housing conditions
of primarily low/moderate income families se-
curing federal loans.
WHEREAS, Security Pacific Bank Housing Rehabilitation
Center for over fifteen years has offered rehabilitation loan
programs in Western Washington and now desires to do so in
Yakima;. and
WHEREAS, the City of Yakima Comprehensive Housing Afford-
ability Stra.��gy Plan recognizes the need for housing rehabil-
itation of the type facilitated by Security Pacific Bank; and
WHEREAS, the City of Yakima is able to provide an inspec-
tion service required for approval of particular structures
for rehabilitation through Security Pacific Bank, for which
service Security Pacific Bank will make payment; and
WHEREAS, the City Council of the City. of Yakima deems it
to be in the best interest of the City that this Agreement be
signed for such purpose mentioned above, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The Director of Community and Economic Development and
Block Grant Manager are hereby authorized and directed to
execute the Security Pacific Bank Agreement,.a copy of which
is attached and incorporated herein by this reference, and the
Block Grant Manager is designated as the official representa-
tive cf the City to act in connection with that Agreement and
to provide such additional information as may be required.
ADOPTED BY THE CITY COUNCIL this /0 day of
1991.
ATTEST:
• XXche-
City Clerk
(res/nspctn.sc)
geLt-
( cerZIe/'
Mayor
HOME INSPECTION SERVICES AGREEMENT
(Initial Rehabilitation Report and Draw Request Inspections)
Date: , 19_
Loan Type:
FNMA Conventional
_ FHA 203(k)
_ Other
THIS HOME INSPECTION SERVICES AGREEMENT ("Agreement") is made by and between
SECURITY PACIFIC BANK WASHINGTON, N.A., Housing Rehabilitation Center (480), whose address is 2301
South Jackson Street, Suite 100, Seattle, WA 98144 (herein "Bank") and
, whose address is
RECITALS:
, Washington, 98 (herein "Inspector").
A. Bank makes loans ("Rehab Loans") for the purpose of acquiring, improving and rehabilitating
residential real property;
B. As part of its Rehab Loan underwriting process, Bank requires each residential property to be
thoroughly inspected by a property inspector and to obtain from such inspector a written report detailing the
property's condition and rehabilitation requirements. During the course of property rehabilitation Bank will require
the rehabilitation work to be inspected by the inspector and the draw requests to be reviewed and approved by the
inspector;
C. Bank and Inspector desire to set forth the agreed upon conditions and standards under which
Inspector will perform property inspections and provide inspection reports and draw request approvals to Bank.
NOW, THEREFORE, IT IS AGREED:
1. INSPECTIONS. Bank may, from time to time, request Inspector to inspect and issue reports on
residential real property which is proposed to be rehabilitated with a Rehab Loan from Bank. Bank shall have no
obligation to request Inspector to perform inspections and Inspector is under no obligation to accept any inspection
request from Bank. However, any inspection request by Bank that is accepted by Inspector shall be made and
performed subject to and in conformance with the terms, conditions and requirements of this Agreement.
2. PROPERTY LOCATION. The residential properties to be inspected will be located in
County of Washington State and such other and additional geographic areas as may
be hereafter agreed to by Bank and Inspector.
3. INSPECTION STANDARD. Whether or not the individual performing the inspection is a licensed
engineer, all inspections, reports and draw request approvals shall be performed in accordance with the standards
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of ordinary care applicable to a thorough and comprehensive inspection report of residential real property by a
professional inspecting and licensed engineer and, without limitation, shall comply with the Bank's standards and
requirements for inspections set forth in Schedule A (initial inspection and report) and Schedule B (draw request
inspections), as applicable, attached to this Agreement and incorporated herein by this reference as though fully set
forth. Bank may from time to time amend, delete or add to the standards and requirements in Schedule A and
Schedule B and such changes shall become applicable to inspection requests accepted by Inspector after receiving
notice of the changes from Bank.
4. INITIAL INSPECTION. Inspector shall, by not later than ten (10) days from the date Inspector
receives and accepts an inspection request from Bank, perform the initial inspection of the property and deliver the
inspection report to Bank at its address set forth above. The fee for the initial inspection is $ , including
any applicable sales tax, payable not later than thirty (30) days following delivery of the inspection report to Bank
and receipt by Bank of Inspector's written bill for the report. No additional charges will be paid except: (if none,
type NONE)
5. FHA REHAB CONSULTANT. If the request for an inspection report is in connection with an
FHA 203(k) loan, shall act as the HUD Consultant with the approval of FHA. For the
purpose of this Agreement the Consultant fee is $
6. DRAW REOUEST INSPECTIONS. Draw request inspections will be made as rehabilitation work
on the property progresses in accordance with the requirements of Schedule B hereto only after the rehabilitation
loan has been approved and closed, and rehabilitation loan funds deposited into a control account at Bank. The fee
for each draw request inspection is $ . If the rehabilitation loan for the property is an FHA 203(k) loan,
Inspector represents that Inspector has and will have at the time of each inspection all necessary approvals and
authorities from FHA to perform FHA 203(k) rehabilitation inspections and approve FHA 203(k) draw requests.
7. INDEPENDENT CONTRACTOR. Nothing in this Agreement or in the relationshipbetween Bank
and Inspector shall be deemed or construed to create an agency, partnership or joint venture. In performing
inspections pursuant to this Agreement Inspector is acting as an independent contractor, and shall not have the power
to act as, or be deemed or construed to be an agent of Bank.
8. INDEMNIFICATION. Inspector agrees to indemnify and hold Bank harmless from and against
any and all claims, demands, losses, liabilities and expenses (including reasonable attorneys' fees in the defense or
settlement thereof) arising out of or related to the making of property and draw request inspections by Inspector,
provided, that Inspector shall have no obligation to indemnify Bank to the extent the loss or damage arises from
Bank's own negligence or wrongdoing.
ACCEPTED AND AGREED TO as of the day and year first set forth above.
BANK: INSPECTOR:
SECURITY PACIFIC BANK WASHINGTON, N.A.
By:
Title:
dgd/ms
dgdv,ameinp.aga,
1028/91
-2-
CITY coiintaCi nu.
lll -G0_32—
By:
Title:
SCHEDULE A
This Schedule A is attached to and made a part of that certain Home Inspection Services Agreement
between Security Pacific Bank Washington, N.A. ("Bank") and ("Inspector").
MINIMUM STANDARDS AND REQUIREMENTS
FOR INITIAL RESIDENTIAL REAL PROPERTY INSPECTION AND REPORT
The purpose of the inspection and report is to inform the Bank of what must be done to the inspected house
to fully rehabilitate it. That is, upon completion of the rehabilitation work, the house should have a minimum
30 -year life expectancy, during which only normal maintenance is required. Further, there should be nothing more
than minor maintenance required for at least five years following completion of rehabilitation. Cosmetic items, such
as paint and floor coverings, must be included in the rehabilitation requirements. Some specific examples of the
goals of rehabilitation are as follows:
• A roof covering, or any other component, with less than five years remaining life must
be replaced.
• Loose plaster on walls must be repaired so that all plaster is sound.
• Windows must be in sound condition with tight glazing, and they must operate well.
• Doors must be in good condition and have good locks and/or passage sets.
• Floors and floor coverings must not be worn.
• Pipes, wiring, and ducting should have at least a 30 -year remaining life.
• Furnaces, heaters, appliances, water heaters, plumbing fixtures, etc. should have a life
expectancy of at least five years, and they should be of reasonably modern, efficient
design.
• The structure must have a life expectancy of at least 30 years. There must be no
condition present which will threaten that life expectancy.
® There should be no major stability, drainage, access, or other problems on the site.
• Safety hazards must be eliminated.
• Nothing should need painting, inside or out.
The following constitute additional criteria for the preparation of the inspection report:
• Reports may be broken down into sections, but the work order items are to be numbered
consecutively from the beginning to the end of the report. The report must state whether
a building or other permit is required for the work.
o Work order iiems shall be clear statements directing a certain action.
"Recommendations" or "suggestions" are not appropriate in determining what must be
done, but they are sometimes appropriate relative to reasonable alternatives in methods
of repair.
1
o Not every defect will require corrective action. For example if a little water gets into
the basement, but it is an older unfinished basement and no harm is done, and if
correcting the problem would be extremely expensive, just note these facts rather than
making the correction a work order item.
• Fairly broad statements, such as, "Repair the walls and ceilings such that all surfaces are
sound and sanitary," are acceptable. It is not necessary to point out every individual
detail, such as each crack or piece of loose plaster.
• The inspector will use good judgment about the adequacy of the structure and systems.
Observed deficiencies from standards of the local housing code will be noted.
• Whenever the house is served by a septic system and/or a well, the report will require
that the adequacy and purity of the well be tested and/or that the proper function of the
septic system be tested. If the inspector doesn't know if there is a well or a septic
system, there will be an appropriate comment in the report.
A The report will note whether there are any construction materials stored on site and
whether there is any work in progress at the time of the inspection.
• If in the Inspector's opinion a pest inspection report to assess structural or other damage is
necessary, then obtaining a pest inspection report shall be made a requirement in the inspection
report.
® Any disclaimer or other words in the report attempting or purporting to limit or exempt
the inspector from the exercise of ordinary care in inspecting the property and issuing the
report shall be void and of no effect or consequence.
In addition to the above, for an inspection involving an FHA 203(k) loan the Inspector will review the loan
applicant's 203(k) application package, any architectural exhibits, and the required pest inspection, assist the loan
applicant in preparing the Specification of Repairs (HUD form 9746), and all HUD -required reports including any
revisions, and complete the Consultant Notice.
BANK:
SECURITY PACIFIC BANK WASHINGTON, N.A.
By:
Title:
DGD:ms
Hane•Sch.met
1025/91
-2-
INSPECTOR:
By:
Title:
SCHEDULE B
This Schedule B is attached to and made a part of that certain Home Inspection Services Agreement
between Security Pacific Bank Washington, N.A. ("Bank") and ("Inspector").
DRAW REQUEST INSPECTIONS
During the course of rehabilitation work on the Property the owner and the owner's contractor(s) will
request Bank to disburse funds to owner for payment of work and materials. Each request for funds will require,
among other things, that the work for which payment is requested be inspected by Inspector and that the Inspector
certify to Bank that such work is in place and has been performed in a good and workmanlike manner or, if
deficiencies in the work exist, noting those specific deficiencies which must be corrected before the Inspector can
certify the work as ready for payment.
Each time the Bank wants the work inspected Bank shall notify Inspector and provide Inspector with the
draw request submitted for payment by the owner and any related materials. The Inspector shall then inspect the
work and certify on the draw request that the draw amounts are acceptable except as noted or modified by the
Inspector. For FHA 203(k) loans Inspector shall complete and attach to the draw request (HUD form 9746-A) a
Compliance Inspection Report (HUD form 92051).
BANK: INSPECTOR:
SECURITY PACIFIC BANK WASHINGTON, N.A.
By: By:
Title: Title:
dgd\Ixcrimp..b
1028/91
YAKIMA, WASHINGTON
AGENDA STATEMENT
ITEM NO.
t3
FOR MEETING OF : December 10. 1991
ITEM TITLE: Resolution for FHA Inspection Services
SUBMITTED BY: Glenn K. Rice, Director of Community & Economic
Development
CONTACT PERSON/TELEPHONE: Dixie • ra h,j31ock Grant Manager
(575- 101J
SUMMARY EXPLANATION:
The attached Resolution will authorize the Office of Housing and Neighborhood
Conservation to enter into contract with Security Pacific Bank to offer housing
inspections for a fee.
This opportunity reflects public and private partnerships to the commitment of
improving housing conditions in our community.
The fees received from this contract will assist in the salary costs of the newly
approved Housing Rehabilitation Specialist I scheduled in the 1992 Community
Development Block Grant Budget.
EXHIBITS
X Resolution Ordinance Contract Minutes Plan/Map
Notification List X Other (Specify Agreement
Approval for Submittal
CITY MANAGER
STAFF RECOMMENDATION:
Approve the Resolution authorizing the Director of Community and Economic
Development to enter into contract with Security Pacific Bank in behalf of the Office of
Housing and. Neighborhood Conservation.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution No. 6032
CITY CONTRACT NO. (71-12., o
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SECURITY
PACIFIC
BANK
Hous.ng Rehabilitation Center
2301 South Jackson Street, Suite 100
480 c/o Promenade 23, Seattle, WA 98144
Telephone 206 585-5274
November 12, 1991
Dixie Kracht
Block Grant Manager
Office of Housing & Neighborhood Conservation
112 South 8th Street
Yakima, Washington 98901
Re: Inspection Services Agreement
Dear Ms. Kracht:
Security Pacific Bank Housing Rehabilitation Center has for
over fifteen years been involved in rehabilitation financing.
Our programs have been limited to the Western part of
Washington State and centered around the greater Puget Sound
area.
We are prepared to offer our programs in your city and
surrounding areas through a partnership with you and recognize
that your organization has those qualifications we seek in
housing rehabilitation . financing, construction draw
inspections, local code requirements, and writing work order
specifications.
This partnership creates an•income generating opportunity for
you that could be applied to low income housing projects. It
will create an ability for Security Pacific Bank to offer our
rehab loan programs outside of the greater Puget Sound area.
The fee income per loan on our conventional program
would be $230.00 for the initial inspection which
sets the scope of work. and between $50.00 and
$75.00 for each construction draw inspection. Your
involvement in the process would be as an
independent contractor. You are not required to do
any cost evaluation and there would be no borrower
contact or involvement in the loan process by you.
Security Pacific Bank Housing Rehab Center staff is
responsible to assist the borrower through the loan
and bid process, and will approve all bids.
The fee income per loan on the FHA 203K loan
program would be $230.00 per initial inspection and
write up, $100.00 for acting as the FHA consultant
and $45.00 to $55.00 per draw inspection. FHA has
the authority to restrict fees charged by their
inspectors, so it will be necessary to contact your
regional office for their schedule. Unlike the
conventional loan, there would be some contact with
the borrower in this program as the consultant, and
Dixie Kracht
November 12, 1991
Page - 2
you will approve the bid for FHA, but you will not
be required to do a cost breakdown.
Security pacific Bank will agree to assist in the training of
your staff in our requirements and will coordinate any
necessary training as required by FHA for your approval to act
as their consultant and fee inspector. It is important to
understand that you need not act as the FHA consultant or fee
inspector for the purpose of our partnership agreement, but
that our primary objective is to obtain a code inspection from
you on both loan programs and at a minimum rely upon you to
perform construction draw inspections for us in your area.
We have intentionally chosen your organization to act in this
capacity because of the level of expertise in this field and
your experience in rehabilitation lending. our programs, as
we have discussed, are targeted to specific zip codes in your
community or for areas outside of the target zip codes to
individuals whose income does not exceed 115% of the area
median.
Our target date to begin advertising in your locality is
January 1992, if possible, or at least within the first
quarter of the new year. Promotion will be through Security
Pacific Bank Branches only, at least until we can judge demand
and volume.
We have attached the Home Inspection Services Agreement for
your review and signature. If you have any addendum you wish
to add, do so as a separate document to this agreement.
Please complete the agreement by filling in all of the lined
spaces and return to Security Pacific Bank in the enclosed
envelope.
We are available to discuss any concerns or questions you may
have and look forward to a continuing relationship, in
partnership, for rehabilitation lending.
Sincerely,
Lonnie Wheeler
Vice President/Manager
LW: to C:\WP51\LONNIE\KRACHT.LIR