BY COUNCILOR GILBERT:
RESOLVED, that the proper city officials are hereby authorized to apply to the Minnesota housing finance agency for an allocation pursuant to the Minnesota city participation program in the maximum allowable amount permitted, said funds to be loaned to low- and moderate-income first-time home buyers at below market interest rates.
FURTHER RESOLVED, that the proper city officials are hereby authorized to enter into the Minnesota city participation program application-commitment agreement with the Minnesota housing finance agency related to the allocation and sale of qualified mortgage bonds for the benefit of low- and moderate-income home buyers in the city, which agreement is substantially in the form of that on file in the office of the city clerk as Public Document No. ____.
FURTHER RESOLVED, that said officials are authorized to issue a check to the Minnesota housing finance agency in the amount of one percent of the city's bond allocation not to exceed $30,000, which will be refunded upon sale of the bonds and a check for a nonrefundable processing fee in the amount of $20 per each $100,000 in allocation not to exceed $600, both of said amounts to be payable from General Fund 100, Agency 015, Organization 2020, Object 5441.
STATEMENT OF PURPOSE: The purpose of this resolution is to authorize an application to the Minnesota housing finance agency (MHFA) for up to $3,000,000 in Minnesota city participation program (MCPP) funding. Duluth has been a participant in the program since its inception in 1990. For the year 2003, Duluth received an allocation of $1,472,683, and has utilized an additional commitment of $76,301 during the supplemental statewide pool, making a total of $1,548,984, which was made available to all income-eligible first-time home buyers in Duluth through current local lenders (National Bank of Commerce, North American Mortgage, North Shore Mortgage, US Bank, Wells Fargo).
The resolution further authorizes the city to enter into a MCPP application-commitment agreement with MHFA. Under the program, MHFA is authorized by the federal government to issue a quantity of mortgage bonds, the proceeds of which are used to buy qualifying mortgages which have been extended to low- and moderate-income persons by participating communities throughout the state. The city's share of the bond allocation eligible to purchase such mortgages issued in the city of Duluth will not be known until such time as the application process is complete. City staff estimates that this year's allocation will be similar to those in the last two years (between $1,000,000-$2,000,000).
As in the past, in order to secure its participation in the program, the city is required to deposit a fee equal to one percent of its bond allocation amount, which will be refunded upon sale of the bonds, and is also required to pay a nonrefundable processing fee in the amount of $20 per each $100,000 in allocation to the MHFA.