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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 -1- 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 - hp32 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