The URL can be used to link to this page

Home My WebLink About2009-07-14 City Council Item No. 7 CITY OF LAKE LSINOI_ L DREAM EXTREME. REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: JULY 14, 2009 SUBJECT: APPROVAL TO RENEW PARTICIPATION IN THE RIVERSIDE COUNTY MORTGAGE CREDIT CERTIFICATE (MCC) PROGRAM Summary The Riverside County Economic Development Agency (EDA) plans to apply to the California Debt Limit Allocation Committee (CDLAC) for another allocation of Mortgage Credit Certificates. The City of Lake Elsinore is able to renew its participation in the County MCC Program for mortgage loans available for qualified first -time homebuyers in Lake Elsinore. In the past fiscal year, the EDA issued seven (7) Mortgage Credit Certificates to families purchasing homes in the City of Lake Elsinore. Adoption of a resolution is necessary for the City to continue participation in the program. According to the County of Riverside, other participating municipalities currently include Banning, Beaumont, Blythe, Calimesa, Canyon Lake, Cathedral City, Corona, Desert Hot Springs, Hemet, Indio, Moreno Valley, Murrieta, Norco, Perris, Riverside, San Jacinto, Temecula, Menifee, Palm Springs, Wildomar, and unincorporated Riverside County. Background A Mortgage Credit Certificate (MCC) entitles qualified homebuyers to reduce their amount of federal income tax liability by an amount equal to 15% of the interest paid on their mortgage loan during the year. Since the taxes paid by the borrower are being reduced, annual take -home pay is effectively increased. The borrower can still deduct the remaining 85% of interest paid as a standard deduction. When underwriting a loan, lenders take this increased net income into consideration to expand the pool of qualified borrowers. This program can be used with all types of homes, including foreclosures, new and resale single - family and /or manufactured homes, and may be the extra support future homebuyers need to purchase in the City of Lake Elsinore. Presently, homebuyers must meet the following income and purchase price limits to be eligible for the program: CC July 14, 2009 Item No. 7 Page 1 of 6 Riv. Co. MCC Program July 14, 2009 Page 2 Maximum Income* O utside Targ A rea Inside Target Area Household with 1 - 2 persons $70,400 $84,480 Household with 3 or more persons $80,960 $98,560 Maximum Home Purchase Price Outside Target Area Inside Target Area New & Existing Home $339,146 $414,512 Maximum income refers to the gross annual household income of the mortgagor(s) and all persons who will live in the residence. As referenced in the table above, the City of Lake Elsinore contains two target areas, Census Tract 430.01 and Census Tract 430.06 see ma. below : 1 i 042007 i ,,,"'". #.•'. . 042902 if .......................e.. r h �-.r Rb ` y 042901 ill VURE S 111710N cxors q i +, r .- � r ` 043005 4 . . .. :� t R p PJT URE S 7P171ON k MI 043004 . STATION #60 �, + ` . STATION #05 � Y �' s °A s� . , t 043006 : 1 s xarsr. 4 4 , N 4� G'' - � # , . .. 042715 0- 0 42714 '""..s....... b N . 4 1rr v NAa b 04300 a � �� 042713 ° h 4, / 'p STAID .1 ` 10 tt' Wcitsb STATION # - ..,_: 043001 ' -' .0. STATION #5i - --i ° I '° s , . C - MYONP STATION #1 ` ,. 046404 � ttr t I 2 046402 .,2,. `, 0 r .ry, .,... '` '4 046401 r 043208 �rrroxAD i 046403 Figure 1: Lake Elsinore Target Areas (areas outlined in green above) CC July 14, 2009 Item No. 7 2 Page 2 of 6 Riv. Co. MCC Program July 14, 2009 Page 3 The EDA will submit an application for approximately $13,721,101 million on or about either July 24, 2009 or October 16, 2009 for applicants acquiring homes within the County. Future Lake Elsinore first -time homebuyers who have not had an ownership interest in a principal residence for the previous three years, who also meet the income and purchase price limits above, as updated by the County, can qualify for the MCC through a participating lender (homebuyers within target areas do not need to meet the definition of first -time homebuyer). The County maintains a list of approved lenders for the program. So long as the home remains the principal residence of the qualified homebuyer, the nontransferable MCC benefits remain in effect for the life of the loan. The City of Lake Elsinore has participated in the MCC Program in past years. Staff recommends approval of the attached updated resolution, which will continue to provide another tool for qualified homebuyers to purchase a home in Lake Elsinore. Fiscal Impact No impact to the City or the Redevelopment Agency budget. Potential buyers qualify through a private lender to receive the MCC from the County —City and Redevelopment Agency staff only provide marketing support for the program. Recommendation Adopt a resolution approving continued participation with the County of Riverside Mortgage Credit Certificate (MCC) Program. Prepared by: Steven McCarty Redevelopment Project Manager Approved by: Robert A. Brady Or City Manager CC July 14, 2009 Item No. 7 3 Page 3 of 6 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING PARTICIPATION WITH THE COUNTY OF RIVERSIDE MORTGAGE CREDIT CERTIFICATE (MCC) PROGRAM WHEREAS, the Tax Reform Act of 1986 established the Mortgage Credit Certificate Program ( "MCC Program ") as a means of assisting qualified individuals with the acquisition of new and existing single family housing; and WHEREAS, pursuant to Division 31, Part 1, Chapter 3.5, Article 3.4 of the California Health and Safety Code Sections 50197 et seq, local issuers are authorized to issue Mortgage Credit Certificates ( "Certificates ") and administer MCC Program; and WHEREAS, the Board of Supervisors of the County of Riverside adopted Resolution No. 87 -564 on December 22, 1987, establishing a Mortgage Credit Certificate Program; and WHEREAS, the Board of Supervisors of the County of Riverside has authorized the Riverside County Economic Development Agency ( "EDA ") to administer the MCC Program pursuant to the applicable federal, state and local policies and procedures, and to enter into those agreements necessary for efficient administration of the MCC Program; and WHEREAS, the County of Riverside ( "County ") will be applying to the California Debt Limit Allocation Committee ( "CDLAC ") for a mortgage credit certificate allocation on July 24, 2009, or October 16, 2009, or thereabouts; and WHEREAS, the City of Lake Elsinore ( "City ") wishes to participate in the MCC Program administered by the EDA in connection with mortgage loans it will make available for the acquisition of new and existing single - family housing in Riverside County; and WHEREAS, the adoption of this resolution is necessary to include the City as a participating unit of general government under County's MCC Program; and WHEREAS, the City agrees to cooperate with the County of Riverside to undertake the MCC Program within City jurisdiction to provide specific marketing and advisory assistance to persons or households of limited income to purchase new and existing single family residences located in the City; and WHEREAS, the City by adopting this resolution, hereby gives notice of its election to participate in the Riverside County MCC Program. CC July 14, 2009 Item No. 7 1 Page 4 of 6 NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Lake Elsinore, California, as follows: The City of Lake Elsinore, California, agrees 1. To participate in the MCC Program administered by the EDA in connection with mortgage loans it will make available for the acquisition of new and existing single - family housing in Riverside County; and 2. To assist the County of Riverside to market the MCC Program within the city's jurisdictional boundary by publishing a general public notice in a local newspaper at least twice a year or otherwise advertising the MCC program by posting MCC program information on the City's official website. PASSED, APPROVED, and ADOPTED by the City Council of the City of Lake Elsinore, California, on the 14th day of July, 2009. ROBERT E. MAGEE, MAYOR CITY OF LAKE ELSINORE ATTEST: DEBORA THOMSEN CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY CC July 14, 2009 Item No. 7 2 Page 5 of 6