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HomeMy WebLinkAbout02-95 Resolution No. 02-95 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. FOR A FIRST TIME HOME BUYER PROGRAM BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Olufemi Folarin, Interim City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute an agreement on behalf of the City of Elgin with Neighborhood Housing Services of Elgin, Inc . for a First Time Home Buyer Program, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: March 13 , 2002 Adopted: March 13 , 2002 Omnibus Vote : Yeas : 7 Nays : 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk PURCHASE OF SERVICE AGREEMENT BETWEEN NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. AND THE CITY OF ELGIN THIS AGREEMENT is made and entered into this ,2 ' day of PlQAe.G.., 2002 , by and between the City of Elgin, Illinois, a municipal corporation, (hereinafter referred to as "City" ) and Neighborhood Housing Services of Elgin, Inc. , an Illinois not-for- profit corporation (hereinafter referred to as "NHS" ) . WHEREAS, City has determined that it is in the best interests of City and its citizens to promote and facilitate a First Time Homebuyer Down-payment Assistance Program; and WHEREAS, NHS has successfully provided 1St Time Homebuyer assistance services and administration in the Elgin, Illinois area; and NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows : 1 . On or before March 8 , 2002 , City shall pay to NHS the sum of Seventy-five Thousand Dollars ($75, 000 . 00) . 2 . NHS shall directly and solely utilize the aforementioned $75, 000 to provide assistance to low and moderate income persons, whose income falls at or below 80% of the Median Family Income limits established by HUD, purchasing their first home, condominium, and/or townhome, located within the corporate boundaries of the City of Elgin, Illinois, pursuant to the terms and conditions provided herein (see exhibit A) . 3 . NHS shall follow the following program objectives and guidelines : a. Provide five year forgivable mortgage' s for one-half of the qualified applicant' s combined down-payment and closing costs, not to exceed 2% of the purchase price of the home, (a maximum of $4, 000) , shall be provided; b. Establish a Revolving Loan Fund account for the deposit of all applicant fees; c . Set-up and maintain all account records on an internal "Notesmith" loan accounting system; d. Market the program to Elgin residents through: (1) Press releases to all local media including the Courier News, Daily Herald, and the Neighborhood Voice. (2) Written program material for local lenders and real estate offices; e. Process homebuyer assistance applications using established NHS underwriting standards . Obtain a 1003 mortgage application from program applicants . Obtain a copy of all applicable lead-based paint disclosures if applicant is pursuing FHA financing or perform appropriate lead-based inspection if applicant is pursuing conventional financing; f . Conduct homebuyer education classes for applicants prior to fund distribution; g. NHS shall submit two activity reports to the City Council . These reports shall describe the number of applicants processed, lead paint inspections performed, and education classes conducted. Reports shall include client household size, income information, and grant allocation levels . Expenditure reports shall also be submitted to detail the costs incurred by NHS . These reports shall be provided to the City Council by May 31, 2002 , and December 31, 2002 , and shall include all program activity. These reports shall be submitted to the City Manager' s Office, City Hall, 150 Dexter Court, Elgin, IL, 60120 . h. Notify the City of any early re-payments . Deposit all re-payments in the Revolving Loan Fund account for distribution to additional qualified applicants . Report program activity. 4 . NHS shall establish a separate fund for the funds provided for herein. The fund is to be accounted for separately in the annual NHS audit . NHS shall not borrow from such fund for operations or otherwise obligate the fund for purposes other than for project completion. 5 . To the fullest extent permitted by law, NHS agrees to indemnify, defend, and hold harmless the City, its officers, employees, boards and commissions from and against any and all claims, suits, judgements, costs, attorney' s fees, damages or other relief arising out of any reckless or negligent acts or omissions of NHS' officers, employees or agents in the performance of this agreement . In the event of any action against the City, its officers, employees, agents, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless, such action shall be defended by legal counsel of the City' s choosing. 6 . This agreement shall be effective March 8, 2002 and shall terminate December 31, 2002 . 7 . This agreement may be terminated by City upon fifteen (15) days written notice to NHS for any reason. 8 . NHS shall provide the City with financial statements relative to the organization' s total operations. These statements shall be provided on or before July 31, 2002 and December 31, 2002 . 9 . The terms and provisions of this agreement shall be severable. In the event that any portion of this agreement is deemed to be void or otherwise unenforceable for any reason, the remainder of this agreement shall remain in full force and effect . 10 . This agreement shall be subject to and governed by the laws of the State of Illinois . 11 . This agreement represents the entire agreement between the parties hereto. No other oral or written agreements currently exist which shall modify or supersede the terms of this agreement . Venue for the resolution of any disputes or the enforcement of any rights pursuant to this agreement shall be in the Circuit Court of Kane County. 12 . This agreement shall not be deemed or construed to create an employment, joint venture, partnership or other agency relationship between the parties hereto. 13 . In the event the program for which the City funds provided herein are to be applied is discontinued or NHS ceases its operations prior to December 31, 2002, NHS shall refund to the City on a prorata basis the funds paid hereunder for the portion of the year remaining after any such termination or for the portion of the year such programs or NHS operations were not conducted. CITY OF ELGIN NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. By By Joyce A. Parker Jef Fs �•�OF Etc +r'� ,,, Agenda Item No. 9 )§ City of Elgin E- . , L 'may February 8, 2002 G TO: Mayor and Members of the City Council FROM: Olufemi Folarin, Acting City Manager QUALITY' HOUSING SUBJECT: 2002 Purchase of Service Agreement with Neighborhood Housing Services of Elgin for First Time Home Buyer Program PURPOSE The purpose of this memorandum is to provide information to the Mayor and members of the City Council to consider a Purchase of Service Agreement with Neighborhood Housing Services of Elgin, Inc . (NHS) , for a First Time Home Buyer Program. BACKGROUND NHS was created through a national, Congressionally-chartered organization, Neighborhood Reinvestment Corporation. The NHS partnership is a structure fostering involvement and cooperation from the community, bringing together citizens, financial institutions and City government . The cooperation is evident in the NHS budget, which supplements City support by leveraging contributions from local banks, grants and other fund raising. The 2002 Budget includes $75, 000 to Neighborhood Housing Services to provide closing costs and down payment assistance to first time home buyers. The program will be funded by the City of Elgin through available Riverboat funds . Through the years, the demand from potential first time home buyers for down-payment and closing cost assistance has greatly increased. It has increased to a point where it is not unusual for NHS to have persons on waiting lists. There is a great demand from low/moderate income households who qualify for home loans but can not afford the down-payment or closing costs to secure the home purchase . This demand can be shown in President Bush' s proposed budget for Fiscal Year 2003 . The President is proposing an increase in funding for five separate home ownership programs; Home Investment Partnership Program (HOME) , Renewing the Dream Tax Credit, Self-Help Home Ownership Opportunity Program (SHOP) , Housing Counseling Assistance Program, and Section 8 Hom Ownership few Program. r .. • PSA - Neighborhood Housing Services February 8 , 2002 Page 2 Fiscal Year 2002 is the first time the City of Elgin will provide Riverboat funds to Neighborhood Housing Service' s First Time Home Buyer Program. NHS has received Community Development Block Grant Funds, (CDBG) through the City of Elgin to administer the same program. The average amount awarded through CDBG funds is $75, 000 annually. CDBG funds are available in August for each CDBG funding year. NHS will no longer have to place potential home buyers on waiting lists. Funding will be provided at the beginning of the year through Riverboat funds and mid-way through that same year with CDBG funds . The program funded through City of Elgin' s Riverboat funds will be administered in accordance with the First Time Home Buyer Program funded with CDBG funds. Neighborhood Housing Services has the capacity to administer this program. The First Time Home Buyer Program administered through NHS provides down payment and closing cost assistance to income-qualified home buyers . NHS provides a Five Year Forgivable Mortgage for one-half of the qualified applicant' s combined down-payment and closing ' costs, not to exceed 2% of the purchase price of the home (a maximum of $4, 000) , shall be provided. The qualified home buyer will also have to be income-eligible to receive assistance . All eligible home owners will have to be at or below 80% of the Median Family Income as determined by HUD. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. (' - FINANCIAL IMPACT Sufficient funds are available to enter into this agreement . The First Time Home Buyer Program is funded with $75, 000 from the 2002 budget, Riverboat Fund account number 275-0000-791 . 78-99, project number 154695 . WLEGAL IMPACT None. PSA - Neighborhood Housing Services February 8, 2002 Page 3 ALTERNATIVES 1 . Approve the attached Purchase of Service Agreement . 2 . Do not proceed with the Purchase of Service Agreement at this time. RECOMMENDATION It is recommended that the City Council approve the Purchase of Service Agreement with NHS for The First Time Home Buyer Program. Respectfully submitted, Olufemi Fo arin Actin. Citi Manager w DKN/od Attachment