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HomeMy WebLinkAboutR07-136 EHOP AdoptionCommissioner ,~ w.. moved for adoption of the following Resolution: BOARD OF COUNTY COMMISSIONERS COUNTY OF EAGLE, STATE OF COLORADO RESOLUTION N0.2007-~1.0 RESOLUTION ADOPTING EAGLE COUNTY EMPLOYER ASSISTED HOUSING BENEFIT EMPLOYEE HOME OWNERSHIP PROGRAM (SHOP) WHEREAS, Eagle County, Colorado is a political subdivision of the State of Colorado, duly organized and existing pursuant to the laws and the Constitution of the State; and WHEREAS, median housing prices in Eagle County have risen dramatically in the last several years, with a marked increase from 2005-2006; and WHEREAS, this increase has made purchasing a home in Eagle County materially less affordable to Eagle County employees; and WHEREAS, making housing affordable to Eagle County employees is important to recruiting and retaining them; and WHEREAS, the Board of County Commissioners of the County of Eagle, State of Colorado (hereinafter "the Board") wishes to promote home ownership among its employees in order to foster community and longevity among its employees; and WHEREAS, to effect homeownership, the County wishes to provide financial assistance to its employees in the form of down-payment assistance through a pilot program. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF EAGLE, STATE OF COLORADO: THAT, the County adopt the Employer Assisted Housing Benefit Employee Home Ownership Program as a pilot program subject to annual review and appropriation of funds by the Board. THAT, the terms of the Employer Assisted Housing Benefit Employee Home Ownership Program be governed by Exhibit "A" hereto. THAT, to the extent that any inconsistencies exist between the Term Sheet attached to Exhibit "A" and the text of Exhibit "A" itself, Exhibit "A" shall control. THAT, the Board may amend or modify this Resolution or Exhibit "A" or provision contained herein at its discretion through a public hearing and resolution. THAT, the Board of County Commissioners finds, determines, and declazes that this Resolution is necessazy for the public health, safety, and welfaze of the citizens of the County of Eagle, State of Colorado. MOVED, READ AND ADOPTED by the Board of County Commissioners of the County of Eagle, State of Colorado, at its regulaz meeting held this Pp ~~ day of December, 2007. `u °'' Clerk to the Bo![rd of County "''~ Commissioners ~ • ~ D~l.p~i ti COUNTY OF EAGLE, STATE OF COLORADO By and Through its BOARD OF COUNTY COMMISSIONED By: Saza J. Fisher is ' Peter F. Runvon. Comm Arn M. s Commissioner ~ S~L seconded adoption of the foregoing Resolution. The roll having been called, the vote was as follows: Commissioner Menconi y Commissioner Fisher y Commissioner Runyon This Resolution passed by ~~~ vote of the Board of County Commissioners of the County of Eagle, State of Colorado. EAGLE COUNTY EMPLOYER ASSISTED HOUSING BENEFIT EMPLOYEE HOME OWNERSHIP PROGRAM (EHOP) Revised and Adopted by the Eagle County Commissioners 2007 EXHIBIT "A" TO RESOLUTION APPROVING EAGLE COUNTY EMPLOYER ASSISTED HOUSING BENEFIT EMPLOYEE HOME OWNERSHIP PROGRAM (EHOP) I. PURPOSE The purpose of the Eagle County Employee Home Ownership Program (hereinafter the "Eagle County EHOP") is to provide down-payment assistance to full-time, yeaz-round employees of Eagle County for the purchase of the employee's primary residence in Eagle County. II. DEFINITIONS A. "Eligible Borrowers" mean, and are limited to, natural persons employed year-round by Eagle County for at least 30 hours per week who own no other residential property anywhere at the time of closing on the Eligible Property. B. "Eligible Property" means condominiums, town homes, duplexes, single family homes, mobile homes on a permanent foundation taxed as real property or other code-compliant, habitable residences located within Eagle County. C. "Net ProtSts" mean the sales price of the Eligible Property less any broker's commission up to three percent of the sales price and any applicable transfer assessment. With the exception of transfer assessments, net profits do not include any applicable taxes or fees on the sale proceeds. Loan losing costs may not be deducted from the sales price in calculating Net Profits. D. "Sham Transactions" means sale of an Eligible Property at less than mazket value, as determined through an appraisal performed by aCounty-approved appraiser. E. "Default" means any delinquency or default on any loan that uses the Eligible Property as collateral. III. STAFF ADMINISTRATION AND DISCRETION All loan determinations shall be made by afive-member loan committee composed of the County Manager, one County Commissioner, the Housing Director, the Finance Director, and the Human Resources Director (the "Loan Committee"). A representative from the County Attorney's office shall attend Loan Committee meetings. All discretionary decisions, including, but not limited to all eligibility decisions, shall be made by the Loan Committee. IV. ELIGIBLE BORROWERS Eligible Borrowers must be currently employed at least 30 hours per week by Eagle County. Eligible Borrowers may be given priority for length of service as employees of Eagle County or based on the County's recruiting or retention needs at the Loan Committee's sole discretion. V. ELIGIBLE PROPERTY Eligible Property must be located within Eagle County. At the sole discretion of the Loan Committee, priority may be given to employees within 3 miles of their place of employment; secondary priority may be given to employees within 10 miles of their place of employment. For the 2007 calendaz year, the maximum purchase price of an Eligible Property shall be no greater than $549,000. The Eagle County Housing Department shall adjust this amount annually based on median sales prices for the previous calendaz year, as contained in the Eagle County Assessor's database. VI. INCOME LIMITATIONS The Eagle County EHOP imposes no income restrictions on Eligible Borrowers. VII. LOAN AMOUNT AND APPLICATION OF FUNDS The amount of Eagle County's loan assistance through EHOP shall not exceed 10 percent of the purchase price of the Eligible Property or $50,000, whichever is less. Loan funds may be used only for down payments, closing costs, and pre-paid items related to the primary loan. VIII. EMPLOYEE CONTRIBUTION 2 Eligible Borrowers must contribute 1 percent of the purchase price of the Eligible Property to be qualified for the Eagle County EHOP. Preference shall be given to Eligible Borrowers who agree to contribute the greater of $5,000 or 2 percent as total down payment. IX. EQUITY SHARE REPAYMENT Loan will be a maximum fifteen year term. Loans may be repaid at any time. Repayments include loan principal plus a pro rata share of recognized appreciation (if any) based upon the percentage of the EHOP loan to the original purchase price. (If EHOP loan represents 10% of original purchase price, the borrower would repay the original principal balance plus IO% of the equity gain at the time of loan repayment.) At time of the pay off request, the appreciation of the home shall be established by an appraisal, sales.price, or satisfactory comparative market analysis. Sham Transactions are prohibited. X. RECORDATION The County shall record a deed of trust on the Eligible Property for the amount of the initial loan and any accrued interest pursuant to the terms herein. XI. PRIORTTY AND LOAN TO VALUE The County loan shall be subordinate only to one primary loan on the Eligible Property. At the Loan Committee's discretion, no loan shall be issued subordinate to two or more loans. The value of all loans on the Eligible Property shall not exceed 105 percent of the purchase price of the home at the time of purchase. XII. ANNUAL APPROPRIATION Funds available for the Eagle County EHOP shall be subject to annual appropriation. XIII. COUNTY'S RIGHT OF FI12ST REFUSAL Eagle County shall have the right of first refusal to purchase an Eligible Property from an Eligible Borrower at Eligible Borrower's asking price for the property or upon default. This right shall be recorded in a deed of trust. The price and sales terms shall be set exclusively by the Eligible Borrower (or by default seller), but must be the same as offered to the general public and set in good faith. Eagle County shall have 30 days to exercise this option after being notified in writing of the pending sale. Notice shall be provided to the following address: Eagle County Attorney Eagle County Building Box 850 Eagle, CO 8 1 63 1-0850. Five days shall be added for notice provided by fax or mail. The Eligible Borrower may offer the Eligible Property to the Eagle County prior to listing the Eligible Property for sale to the general public. XIV. HOMEBUYER TRAINING Homebuyer training is required on all loans, as evidenced by a Fannie Mae, Freddie Mac, HUD or a CHFA-approved provider. XV. ORIGINATION PROCEDURES 1. Funding Partners, Inc., anon-profit corporation, shall administer the Eagle County EHOP. 2. Loan Application: Eligible Borrower's loan officer must submit the Funding Partners Loan File Checklist to Funding Partners, complete with all documentation shown on the form and any additional documentation required by Funding Partners. 3. Loan Processing: Funding Partners will order the title commitment and evidence of hazard insurance. Final loan documents will be delivered electronically to the borrower's loan representative. The Eligible Borrower must comply with any informational and document requests from Funding Partners or Eagle County prior to loan funding. 4. Loan Closing: Funding Partners will deliver closing instructions and loan proceeds directly to the applicable escrow company. Funds transferred by wire should be sent 24 hours prior to the scheduled closing date, so the loan officer must advise of any schedule changes as soon as possible. 5. Fees Collected: Funding Partners will collect an application fee, approved by Eagle County staff, at closing, in addition to the public recording fee for the deed of trust. This information will appear on the applicable HUD t Settlement Statement. All settlement figures should appeaz on a single statement. Funding Partners will review and approve the final statement prior to funding. 6. Requirements: The Eligible Borrower's loan officer is required to present all required documents at, or prior to, closing. The Eligible Borrower and his or her loan officer must execute the Lender Certification form, acknowledging disclosure of all loan terms and contact information. 7. Settlement: No changes to loan documents or loan amount shown on the HUD1 are permitted. 8. Post Closing: The original deed will be recorded by title with all other original Eagle County EHOP loan documents returned to FP via overnight courier. 4 Eagle County Employer Assisted Housing Benefit Employee Home Ownership (EHOP) Product Guideline Eligible Bon owers: Full time year round employees of Eagle County and be an employee in good standing, subject to review of the Human Resources Department. Employees must be a full time employee and do not own other real estate property. Employees who own other real estate must have a contract to sell prior to closing on the EHOP loan. Eligible Properties: Single Family homes within the jurisdictional boundaries of Eagle County. Max. Purchase Price: The maximum purchase price is the annual median house sale price as calculated using the Assessor's data base, i.e. $549,000 in 2007. Income Threshold: No income limitations. Loan Amount: Assistance from Eagle County EHOP will not exceed 10% of the purchase price or $50,000, which ever is less. Compatible Mortgages: EHOP may be used in conjunction with Fannie Mae/Freddie Mac eligible loan that allows for down payment or closing costs to be paid with a secured loan. Loan to Value: Maximum Combined Loan to Value is 105% of purchase price. Debt Ratio: Recommended back ratio of 41%, with a maximum of 50% supported by verified compensating factors. Minimum Investment: Borrower must contribute at least 1% of the purchase price towards the transaction from a source acceptable to the primary lender. In no case may the Seller satisfy the minimum requirement. Repayment: Periodic payments are not required. Payments for less than the full amount of principal, accrued interest and public recording fees are not accepted. Subsequent subordination requests are not permitted. Right of Refusal: Language in the Deed of Trust will include a right of first refusal to purchase the property in the case of sale or default. Use of Funds: Down payment, closing costs and pre-paid items related to the primary loan. Homebuyer Training: Required on all loans, as evidenced by a Fannie Mae, Freddie Mac, HUD or CHFA-approved provider. Term: Loan term is 15 years. Loan Fees: $350 Application Fee shall be charged only at the time of loan closing and reflected on the HUD 1 Settlement Statement. Collateral: Subordinate lien priority on subject real property. Equity Share: Repayments shall include loan principal plus a pro rata share of recognized appreciation (if any) based upon the percentage of the EHOP loan to the original purchase price. (If EHOP loan represents 10% of original purchase price, the borrower would repay the original principal balance plus 10% of the equity gain at the time of loan repayment.) At time of pay off request the appreciation of the home is established by appraisal, sales price, or satisfactory comparative market analysis. Rate Caps: Not Applicable. 5 Exceptions Policy: All aspects of the Eagle County EHOP eligibility and underwriting criteria are subject to Staff-level exception authority. Loan terms and pricing must be approved by the Eagle County Loan Committee. Origination Procedures Application: Mortgage loan officer submits Loan File Checklist to Funding Partners, complete with all documentation shown on the form. A loan commitment is usually issued within 48 hours, or less. Any remaining documentation requirements will be detailed. Processing: Funding Partners will order title commitment and evidence of hazazd insurance. Final loan documents aze delivered electronically to loan officer for presentation to borrower. All outstanding items must be cleazed prior to funding. Closing: FP will deliver closing instructions and loan proceeds direct to title. Wires are sent 24 hours prior to scheduled closing date, so the loan officer must advise of any schedule changes as soon as possible. Fees Collected: The Application Fee of $350 is collected at closing, in addition to the public recording fee for the deed of trust (4 pages), and will appear on the HUD 1 Settlement Statement. All settlement figures should appear on a single statement. FP will review and approve the final statement prior to funding . Title insurance is not required for Eagle County SHOP loans. Requirements: LOAN OFFICER'S ARE REQUIRED TO PRESENT ALL EHOP DOCUMENTS AT, OR PRIOR TO, CLOSING. Both the borrower and loan officer must execute the Lender Certification form, acknowledging disclosure of all loan terms and contact information. Settlement: No changes to the Eagle County SHOP loan documents or loan amount shown on the HUD 1 are permitted. Post Closing: The original deed will be recorded by title with all other original Eagle County EHOP loan documents returned to FP via overnight courier. 6