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HomeMy WebLinkAboutCC Reso No 1985-77RESOLUTION N0. 85-77 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE HOUSING POLICY REPORT UNDER INTERNAL RE~ENUE CODE SECTION 103A AFTER LEGALLY NOTICED PUBLIC HEARING AND DIRECTING ITS PUBLICATION AND FILING WITH THE SECRETARY OF THE UNITED STATES DEPARTMENT OF THE TREASURY. WHEREAS, Section 103A(j) (5) of the Internal Revenue Code of 1954, as amended, as implemented by Section 6a.103A-2(1) of the temporary regulations of the Department of the Treasury, requires the applicable elected representative of an issuer of qualified mortgage bonds to publish, after public hearing, a housing policy report; and WHEREAS, this Council is the applicable elected representative of the City of Lake Elsinore, which City proposes to issue qualified mortgage bonds in 1986; and WHEREAS, this Council has received a proposed housing policy report entitled, "Policy Report Under Section 103A", a copy of which is on file in the Office of the City Clerk, and has reviewed said report and each and every part thereof; and WHEREAS, copies of the report have been made available to affected residents of the City in the Office of the City Clerk, and a public hearing on the housing, development and low-income housing assistance policies which the City is to follow in issuing qualified mortgage bonds has been duly held following published notice thereof; and WHEREAS, it is in the public interest and for the public benefit that said housing policy report be approved and published. NOW, THEREFORE, it is hereby ORDERED and DETERMINED as follows: 1. The report of the City entitled, "Policy Report Under Section 103A", is hereby approved. 2. This Council does hereby direct the publication of said report by authorizing and directing the City Clerk, and the City Clerk is hereby so authorized and directed, to make copies of said Report available within five (5) days of the date hereof in the Office of the - City Clerk for distribution to, and on request from, members of the public. 3. The City Clerk is hereby authorized and directed to file said report with the Secretary of the United States Department of the Treasury at the Internal Revenue Service Center, Philadelphia, Pennyslvania 19255. 4. This resolution shall become effective and be in full force and effect from and after its date of adoption. PASSED, APPROVED AND ADOPTED by the City Council of the City of Lake Elsinore, California this lOth day of December, 1985, by the following vote: AYES: COUNCILMEMBERS: KNIGHT, MATSON, STRIGOTTE, VERMILLION, VALENZUELA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE G~ ARTA VALENZUELA, MA R CITY OF LAKE ELSI E ATTEST: ~ A MONEY, CITY CLER CITY OF LpKE ELSINORE APPRO~ED AS TO FORM: STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) ~ I, Jo Ann Money City Clerk of the City of Lake Elsinore, _ DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council of the City of Lake Elsinore at a regular meeting of said Council on the lOth day of December, 1985 , and that it was so adopted by the following vote: AYES: COUNCILMEMBERS: KNIGHT, MATSON, STRIGOTTE, VERMILLION, VALENZUELA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE (SEAL) 0 ANN MONEY; C~ C~~} ITY OF LAKE ELSINOREU STATE OF CALIFORNIA ) ~ ° ) ss. COUNTY OF RIVERSIDE ) I Jo Ann Money, City Clerk of the City of Lake Elsinore, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. 85-7T , of said Council, and that the same has not been amended or repealed. DATED: December 11, 1985 (SEAL) ~ ~ J ANN MONEY, CI CLERK I Y OF LAKE ELSINORE CITY OF LAKE ELSINORE TAXPAYER ID N0. 95-6000707 POLICY REPORT UNDER SECTION 103A NOVEMBER 26~ 1985 ~ A. GENERAL Section 103A(j)(5) of the Internal Revenue Code of 1954, as amended (the "Code"), and Treasury Regulations Section 6a.103A-2(1) promulgated thereunder require that issuers which reasonably expect to issue qualified mortgage bonds during 1986 publish a report (after a public hearing following reasonable public notice) and submit such report to the Commissioner of Internal Revenue not later than December 31, 1985. The report must contain (1) a statement of the po.licies of the issuer with respect to housing, development, and low-income housing assistance which such issuer is to follow in issuing qualified mortgage bonds in 1986 and (2) an assessment of the compliance of such issuer during the one-year period preceding the date of the report with (a) the statement of policy on qualified mortgage bonds that was set forth in the previous report, if any, of the issuer and (b) the intent of Congress that State and local governments are expected to use their authority to issue qualified mortgage bonds and mortgage credit certificates to the greatest extent feasible (taking into account prevailing interest rates and conditions in the housing market) to assist lower income Pamilies to afford home ownership before assisting higher income families. The City of Lake Elsinore (the "City") plans to issue qualified mortgage bonds in 1986, and accordingly this report is being published now to comply with the a£oresaid federal tax law requirements. B. POLICIES WITH_RESPECT TO HOUSING DEVELOPMENT, AND LOW-INCOME HOUSING. In issuing qualified mortgage bonds, the City plans to follow the following policies with respect to housing, development, and low-income housing assistance. 1. Housincf Policies. ~ ~ a. Tvpe of Home Mortgaaes to be Financed. The proceeds of the qualified mortgage bonds will be used to provide financing for the acquisition of residences. b. Tvpe of Housinci. All of the proceeds will be targeted to new housing. Under state law and the program documents, proceeds could be reallocated to existing housing, but the City does not expect that proceeds will be so reallocated. Development Policies. a. Taraetina o£ proceeds to areas. Pursuant.to Section 103A(h) of the Code, 20~ of the proceeds of the Issue which are devoted to providing owner financing will be made available (with reasonable diligence) for owner financing for one year after the date on which owner financing is first made available with respect to targeted area residences for use in targeted areas as that term is defined in Treasury Regulations ' Section 6a.103A-2(b)(3) withim the geographical boundaries of the City. 3. Low-Income Housina Assistance Policies. a. Relevant state law reauirina taraetina to moderate income borrowers. The City plans to issue quali£ied mortgage bonds pursuant to the statutory authority contained in Sections 52000-52054 of the California Health and Safety Code. Section 52001 provides in relevant part: The Legislature finds and declares that there exists within the state [of California] a serious shortage of decent, safe, and sanitary housing which is affordable to many persons in the state. This shortage is exacerbated during periods of rising interest rates, particularly as high interest rates have the effect of diminishing the number of otherwise creditworthy buyers from qualifying for private sector mortgage capital sources. In order to remedy this adverse effect on potential home buyers on the lower end of the purchasing spectrum, it is necessary to implement a public program to reduce the cost of mortgage financing for single-family purchasers for those persons unable to compete for mortgage financing in the conventional mortgage market. Section 52002 further provides: The Legislature finds and declares that it is necessary and essential that counties and cities be authorized to directly or indirectly make long-term, low-interest loans to persons not presently eligible for financing through private sector lending institutions to finance construction, rehabilitation, and acquisition of homes in order to encourage investment and upgrade local areas. To ensure that qualified mortgage bonds assist lower income families to afford home ownership, California law provides that a city or county that administers a home financing program must establish criteria for quali£ication of persons and families for participation in such program. The criteria must include a maximum household income which does not exceed 150% of inedian household income (defined as the highest of (1) statewide median household income, (2) countywide median household income, or (3) median household family income for the area as determined by the United States Department of Housing and Urban Development) for mortgagors who will be the first occupant of a home, 120% of the median household income for mortgagors who will not be the first occupant of a home (except that the city or county must assure that no less than 20~ of such funds shall be for households whose income does not exceed 110~ of the median household income, provided that this limit may be increased to 120% if the legislative body of the city or county finds in accordance with the statute that there are insufficient numbers of creditworthy persons whose income does not exceed the median household income). California Health & Safety Code Section 52020(d). In addition, to obtain a supplementary allocation of qualified mortgage bonds or mortgage credit certificates from the California Mortgage Bond Allocation Committee, proceeds issued with such allocation must be used to provide mortgages to persons and families whose incomes do not exceed 120% of inedian household income for mortgagors who will be the first occupant of a home and median household income for mortgagors who will not be the first occupant (except that the issuer shall ensure that no less than half of such funds shall be for households whose income does not exceed 80~ of such median household income, provided that this limit may be increased to 90~ of inedian household income if the legislative body of the issuer finds that there are insufficient numbers of creditworthy persons whose income does not exceed 80% of inedian household income). California Health & Safety Code Section 50189(b). b. Method for ensurina compliance with such taraetina reauirement. In issuing qualified mortgage bonds, the City will adopt procedures which will be set forth in the program documents to ensure that the aforesaid state law requirements regarding targeting to specified income groups will be met. C. COMPLIANCE WITH PREVIOUS REPORT AND CONGRESSIONAL INTENT. The City has not previously published a policy report and has not previously issued qualified mortgage bonds. D. SUI~IARY OF PUBLIC HEARING. A public hearing on the proposed version of this report was duly noticed and held on December 10, 1985. The following comments were received: NO COMMENTS WERE RECEIVED. [Summarize comments received or indicated that no comments were received.] ,_ E. THIS REPORT IS SUBMITTED BY THE UNDERSIGNED ELECTED REPRESENTATIVE OF THE CITY. Mayor of the City of Lake Elsinore