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HomeMy WebLinkAboutR-97-0519J-97-481 7/15i97 9'� - 519 RESOLUTION NO. ° A RESOLUTION, WITH ATTACHMENTS, APPROVING THE CITY OF MIAMI'S POLICE HOMEOWNERSHIP PROGRAM, FOR THE PURPOSE OF PROVIDING FINANCIAL ASSISTANCE TO POLICE OFFICERS DESIROUS OF PURCHASING A SINGLE-FAMILY RESIDENTIAL UNIT IN THE CITY OF MIAMI; FURTHER APPROVING THE POLICE HOMEOWNERSHIP PROGRAM GUIDELINES ATTACHED HERETO AND INCORPORATED HEREIN; FURTHER, AUTHORIZING THE CITY MANAGER TO ALLOCATE $100,000.00 IN UNEXPENDED PROGRAM INCOME FROM THE CDBG MULTI -FAMILY REHABILITATION LOAN PROGRAM, PROJECT ACCOUNT CODE 045720-502-799201, FOR THE PURPOSE OF IMPLEMENTING THE PROGRAM IN ACCORDANCE HEREWITH. WHEREAS, in April of 1997, Vice -Mayor Tomas Regalado made a request to the City Administration to explore the possibility of implementing a housing assistance program whereby sworn police officers of the City of Miami may be assisted with a grant of no more than $5,000.00, for the purpose of assisting in the purchase of a home within the corporate limits of the City; and WHEREAS, the implementation of such a program is designed to encourage City of Miami police officers to purchase a home within the inner city neighborhoods which they serve; and WHEREAS, it is also anticipated that the implementation of the program would reduce the cost of fleet management for the Police Department and increase the visibility of police officers in the neighborhoods; and CITY COMMISSION MEETING OF J U L 2 4 1997 Resolution No. 97- 519 9 • WHEREAS, in an effort to provide financial inducements which would encourage police officers to purchase a home in the City, the City Administration recommends the adoption and implementation of the City of Miami Police Homeownership Program, and WHEREAS, it is anticipated that a number of police officers may be eligible and qualify under the City's HOME Program's Home Buyers Financing Program, SHIP Program's Home Buyers Financing Program and the CDBG-assisted Single -Family Rehabilitation Loan Program, which are designed to assist individuals whose incomes are at eighty percent (80%) or less of the median income for Metropolitan Dade County; and WHEREAS, it is recommended that approximately $100,000.00 be identified and allocated for start-up funding to implement the Program; and WHEREAS, it is recommended. that the City Commission allocate $100,000.00 from unexpended program income from the CDBG-assisted Multi -Family Rehabilitation Loan Program; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. Section 2. The City Commission hereby approves the City of Miami Police Homeownership Program, for the purpose of providing financial assistance to police officers desirous of purchasing a single-family residential unit in the City of Miami. Section 3. The City Commission hereby approves the Police Homeownership Program guidelines attached hereto and incorporated. 2 97- 519 • • Section 4. The City Manager is hereby directed to allocate $100,000.00 from unexpended program income from the CDBG-assisted Multi -Family Rehabilitation Loan Program (Project Account Code 045720-502-799201) for the purpose of providing financial assistance in the amount of $5,000.00 for down payment/closing costs assistance to police officers desirous of purchasing a single-family residential unit in the City of Miami. Section 5. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 2 4 th ATTEST: "J., TY CLERK day of July , 1997. DEPARTMENT OF COMMUNITY DEVELOPMENT REVIEW AND APPROVAL: DIRECTORFLBFRTL WATERS, INTERIM --— DEPARTMENT OF FINANCE REVIEW: _01 P11"ES REYEYCOMPTROLLER 3 97- 519 • • OFFICE OF BUDGET AND MANAGEMENT ANALYSIS REWEW: AK M. PAREKH, DIRECTOR APPROVED AS TO FORM AND CORRECTNESS QV*N JOXO,'IIf, CITY ATTORNEY <shared- 4 97- 519 City of Miami _ Department of Community DevelopmentfRousuig Division 444 S.W. 2nd Ave. 2nd floor Miami, Florida 33131 (305) 416-2090 9 0 - 519. City of Miami Police Homeownership Program I. Introduction: The City of Miami's Police Homeownership Program (PUP), is designed to address two concerns that plague many inner city communities across the country, i.e. Increasing crime and deteriorating housing. The Police Homeownership Loan Program's primary objective is to encourage City of Miami Police Officers to buy homes within the inner city neighborhoods they serve. In an effort to motivate police officers to consider living in these neighborhoods, the City of Miami offers deferred payment loans for downpayment/closing cost assistance in connection with the purchase of a home. The Police Homeownership Program gives many police officers the opportunity to own a home much earlier in their careers that normal circumstances would not permit. Becoming a member of the neighborhood gives the officers additional incentive to invest their time and energy in community concerns and a chance to interact on a more personal level with the people who live there. II. Type of Financing: The City of Miami will utilize Community Development Block Grant funds to provide police officers with a five thousand ($5,000) dollar deferred payment loan to assist with the cost of downpayment and/or closing cost associated with the purchase of an eligible home within the City. of Miami III. Eligible Properties: Any single family dwelling located within the City of Miami. The maximum purchase price/appraised value of the home being purchased shall not exceed $115,000 All properties assisted must have good and marketable title. IV. Eligible Applicants: Police Officers who's total annual family income does not exceed eighty (80%) percent of the area's median income. Police Officers must occupy the property as their principal residence. The prospective homebuyer (Officer) must obtain approved for a first mortgage from a licensed mortgage lender. Proposed first mortgage financing arrangements must be found acceptable to the City. The City of Miami reserves the right to evaluate and deny any mortgage financing terms not found acceptable and/or beneficial to the purchaser. The estimated first and second mortgage payments including escrow, shall not exceed thirty (30%) percent of the officers total family gross monthly income. All mortgage financing provided to a police officer will be subject to the qualification guidelines as defined in paragraph VII below. 1 97- 519 • • V. Income Limitations: The Police Homeownership Program, is designed to benefit both low and moderate income police officers. Current (low and moderate) income limits in Dade County are listed below. These limits shall be adjusted automatically whenever the federal government re -determines the median income for Dade County. Family Maximum Income Size Limits (80% 1 $24,100 2 27,500 3 30,950 4 34,400 5 37,150 6 39,900 7 42,650 8 45,400 VI. Down payment/Closing Cost Assistance: - A) Police Officers earning up to eighty (80%) of the area median income who are purchasing a home within the City of Miami, would be eligible for: $5,000 deferred payment loan to be utilized for downpayment/closing costs. This loan will require no monthly payments. The loan will be recorded as a junior mortgage on the subject property. The loans maturity shall be equal to that of the first mortgage lender or thirty (30) years from the date of closing, whichever is less. The loan will be due and payable to the City of Miami in the event that the purchaser sells, leases or moves from the subject property. The loan will carry an interest rate of three (3%) percent. In the event that the homebuyer sells or leases the subject property prior to the City's loan maturity, the City's loan shall be due and payable inclusive of all principal and interest. VII. Qualification Requirements: In determining the qualification of a household/applicant for Police Homeownership Program assistance, the City utilizes the following qualification ratios: 1) the housing expense to income ratio and 2) the total debt to income ratio. The housing expense to income ratio, takes into consideration the total monthly expense of the home being purchased, which includes, principal, interest (on all financing), taxes, insurance and condominium association or homeowners association fees (if any) and dividing the total by the household's gross monthly income. The result cannot exceed thirty (30%) percent. 2 97- 519 The total debt to income ratio consists of the addition of the total housing expenses plus all other monthly expenses such as credit card payments, personal loans, student loans, and auto loans, alimony or child support payments and any other fixed monthly expenses that will take more than twelve (12) months to pay off. The total of these expenses is divided by the household's total gross income. The result can not exceed forty five (45%) percent. VIII. Restrictions/Additional Conditions: • Any home assisted with proceeds from the Police Homeownership Program.may be sold by its owner. However all financing provided to the Police Officer assisted will become due and payable at the closing of the sale. • Any residences purchased with assistance of the Police Homeownership Program must remain as the purchasers principal residence for the entire term of the loan. • Applications under the Police Homeownership Program will beconsidered on a first come, first served basis. Submitted applications will be processed in the order in which they are received. • The City of Miami will provide Police Homeownership Program assistance in the form of unforgivable loans. All loans shall be deferred at a rate determined by the City of Miami and at a maximum term of thirty (30) years. • All loans shall be secured by a note and mortgage on the property, which shall be recorded either in a second or third lien position. • All properties assisted under the Police Homeownership Program must have good and marketable title. • The City of Miami, will conduct yearly homestead verifications or all properties assisted under the Police Homeownership Program. • All rules and regulations pertaining to the CDBG Program are in full force and effect. All funding will be subject to the availability of funds. 3 9 7 - 5.1.9 • CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO: Honorable Mayor and Members of the City Commission �F" *ue FROM: Edward MCity Mana RECOMMENDATION: • 26 DATE: 7 FILE SUBJECT: Resolution Approving City of Miami Police Officer Homeownership Program REFERENCES: ENCLOSURES: City Commission Agenda Item July 24, 1997 It is respectfully recommended that the City Commission approve the attached resolution, approving the City of Miami's Police Homeownership Program, for the purpose of providing financial assistance to sworned police officers desirous of purchasing a single-family residential unit in the City of Miami. The resolution further authorizes the City Manager to allocate $100,000.00 in unexpended program income from the CDBG-Assisted Multi -Family Rehabilitation Loan Program for start-up funding for the Program. BACKGROUND: In April of 1997, Vice -Mayor Tomas Regalado made a request to the City Administration to explore the possibility of implementing a housing assistance program, whereby, sworn police officers may be assisted with a grant of no more than $5,000.00, for the purpose of assisting in the purchase of a home within the corporate limits of the City. In an effort to provide financial incentives which would encourage sworn police officers to purchase a home located in the City, the City Administration recommends the adoption and implementation of the City of Miami Police Homeownership Program. With the approval of the City's Police Homeownership Program, the City will be able to make available financial assistance to sworn police officers of up to $5,000.00 for down payment/closing cost expenses, for the purchase of a home which would be his/her principal residence for the entire term of the loan. The $5,000.00 deferred payment loan to be utilized for down payment/closing cost assistance by police officers for the purchase of a home will require no monthly payments. The loan will mature and be forgivable thirty (30) years from the date of closing or for the term of the other financing obtained by the police officer. The loan will be due and payable with interest to the City of Miami in the event that the purchaser sells, leases or moves from the subject property. 1 97- 519 U Honorable Mayor and Members of the City Commission Page 2 It is anticipated that a number of police officers may be eligible and qualify under several of the City's existing federal and State. of, Florida -funded housing programs, which are designed to assist individuals and families whose incomes are at eighty (80%) percent or less of the median income for Metropolitan Dade County. In an effort to commence the implementation of the City of Miami Police Homeownership Program, the City Administration recommends that approximately $100,000.00 be allocated for start-up funding for the Program. The attached resolution allocates $100,000.00 from unexpended program income from the CDBG-assisted Multi -Family Rehabilitation Loan Program. <shared-memosvh>mayorcc 16 2 97- 519