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Home My WebLink AboutR-87-0631J-87-588 6/8/87 RESOLUTION NO. A RESOLUTION APPROVING A TWO-TIER MORTGAGE HOME PURCHASING FINANCING PROGRAM IN CONNECTION WITH THE CITY OF MIAMI SCATTERED SITE HOUSING DEVELOPMENT AND AFFORDABLE HOMEOWNERSHIP OPPORTUNITY PROGRAM; FURTHER ALLOCATING FROM PROJECT NO. 321024, "AFFORDABLE RENTAL HOUSING PROGRAM", FUNDS IN THE AMOUNT OF $275,000 FROM 1976 GENERAL OBLIGATION BONDS -INTEREST INCOME TO PROVIDE SECOND POSITION HOME PURCHASER MORTGAGE FINANCING TO THE PROSPECTIVE PURCHASERS OF THE SEVEN HOMES PROPOSED ON THE CARVER BRANCH -YMCA SITE. WHEREAS, in October of 1986, the City Commission took a major step toward the resolution of the existing housing affordability gap in approving implementation of the Scattered Site Housing Development and Affordable Homeownership Opportunity Program, which has as its major objective the development of owner -occupied residential housing units at cost on an infill basis in the City's Community Development Target Areas; and WHEREAS, it is possible to deliver new single family homes to low and moderate income families at affordable monthly mortgage payments through the application of a two-tier mortgage financing plan; and WHEREAS, Barnett Bank has agreed to provide first position homebuyer mortgage financing commitments for the seven homes planned under the demonstration project; and WHEREAS, the provision of second position mortgage financing to the homebuyers by the City will further insure that low and moderate income families with annual incomes ranging from $15,150 to $35,625 will be able to qualify for the purchase of such a home; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The City Commission hereby approves the two-tier mortgage financing program in connection with the aforementioned program, which involves the provision of first mortgage buyer CITY COMMISSION MEETING OF JUL 9 1987 ON No. 87-6 31 financing by ,a private filldIl(_ial institution and ecut;d norta:iqe financing by the City of mi ami co 't)ie prospect iv:� home b-Ayers. Section 2. Funding in the amount of $275,000 in 1976 General Obligation Housing Bond interest income is hereby allocated to provide second position mortgage home Purchase financing to the purchasers of the seven homes planw,:i. PASSED AND ADOPTED this 9th day of J ATTES . RATTY HIRAI, CITY CLERK FINANCE REVIEW: CAR OS GARCIA,b IRECTOR FINANCE DEPARTMENT PLANNING REVIEW: ODRIGUEZ, DIRECTO MR O LANNING DEPARTMENT LEGAL REVIEW: ROBERT F. CLARK CHIEF DEPUTY CITY ATTORNEY APPROVE CORRECT ZUCIA A. DO CITY ATTORN TO FROM AND - 2 - u e_, 1987 AVIER L. SUAREZ, ,4AYOR BUDGETARY REVIEW: MMAO HAR SUPJW, DIRECTOR MANAGEMENTAND BUDGET 8': -633 : CITY OF MIAMI, PL011110A 53 INirElt•OPPICE MEM001ANCIUM r0: Honorable Mayor and Members of the City Commission FROM: Cesar H. Odio City Manager RECOMMENDATION: rArt J U N 171987 "Lit: susitcT: Resolution Approving Two - Tier Mortgage Financing Program aEFERENcts: Scattered Site Affordable Housing Development ENcLosuRts: program Demonstration Project It is respectfully recommended that the City Commission adopt the attached resolution approving a two-tier mortgage financing program for the purpose of providing permanent homebuyer mortgage financing to the purchasers of the seven single family homes planned for development under the Scattered Site Housing Development and Affordable Homeownership Opportunity Program Demonstration Project. It is further recommended that the City Commission allocaLi $'75,000 in 1976 General Obligation Housing Bond interest in_%,me for the purpose of providing second mortgage home purchase financing to the purchasers of the proposed housing development. BACKGROUND: In October of 1986, the City Commission took a major step toward addressing the critical shortage of housing affordable to low and moderate income families in the City by approving the City's Scattered Site Housing Development and Affordable Homeownership Opportunity Program. With the City of Miami serving as developer, it will be possible to deliver owner -occupied residential dwelling units planned under the Program at sales prices affordable to low and moderate income buyers. This objective will be achieved through the City's ability to reduce the basic cost of the housing product and the monthly mortgage related carrying costs associated with homeownership. The two-tier mortgage financing program which is being recommended, is an integral part of the Cit-y's Scattered Site Housing Development and Affordable Homeownership Opportunity Program. Through the tandem mortgage financing plan which is being proposed, the homebuyer will finance the purchase of the home with two mortgages. The first mortgage will be provided by a private financial institution. The prospective homebuyer would obtain the maximum possible first mortgage which the purchaser's income would support based on the sales price of the home. 53 - 1 S'; -63:1 W Resolution Approving Two -Tier Mortgage Financing Program Page - 2 - The balance of the mortgage loan amount which is required to consummate the purchase of the home would be provided by the City of Miami. The net result of the application of this tandem mortgage financing plan would be a sufficient reduction in the monthly related carry costs associated with the purchase of a home. This would enable a low and moderate income family the opportunity to purchase a home when otherwise they would not qualify for such a purchase. The exhibit accompanying the attached resolution provides an affordability analysis of several home purchase financing options on the monthly mortgage related costs associated with the purchase of a home. City Commission approval of the attached resolution'will provide for the establishment of a two-tier home purchasing financing program in connection with the Scattered Site Housing Development and Affordable Hombownership Opportunity Frocram. Barnett Bank has agreed to pro%,:de first mortgage home purchasing financing in the amount of ,c?30,000 for the buyers of the first seven homes proposed on the Carver Branch -YMCA site. An additional $275•,000 in 1976 General Obligation Housing Bond interest income is being recommended to be allocated by the City to provide second position mortgage home purchase financing for the purchasers. City Commission ratification of the attached resolution is recommended. Z 87-6 3 "j. t We of Atau Scattered Site Kaustag Oovelsoust t iffordablt Nana Orgrship Opportuutg 0tagestraltom Program Alternate Fiaunng flags - pilot Progrg tamer - Oraech Y.A C.01 S1tn fiscal fear 1961 - 1930 Foot- alurgI a Alternate o Altoreatt C Octet Costs Tarpt I.Cget t1l.t50 target lacose 123.750 target Income 1VAN Uep $7.006 $7,000 17,000 IsprO.eautt 010,000 - 150.000} ----000- Total Costs 0 ==g.7.00. ..$57,004 FIM KIMC 157.001 157,040 {l7.Ao1 ousplget geapl 111,006) 111,500f 462,0501 1Mrtlap agnate. 1n1 Mtg $20.000 11311611 154.150 Bad oil 136,000 #25,514 IS •. .7 Financial Tema assulf Mmrtogst palogt fall Yr ! - P Yr 3 • 90 Tr 3176 Yr 1 - 2Yr3 - 1613Tr 16+4-2117 Yr 1 - 2 Yr 3 • 15 _ sm eartpp Styr lot 1t76 $176 40 30Yr tot 1264 1264 $469 Mir 101 15e2 15R tut OF 01g1 led amrtpp 30.0Yr of iq 1104 62SO So Yr 62 1111 am io 6o 60 1P1 1"" $141 179 $79 $146 a79 67► ilel ITO IS l.urama 120 62o 420 620 oil 620 Sao $21 •- Romig Amrtpp Values Ioly31 .^...$379 ..._.an$ ._....la.......,.6$508 ___.._=..16811 Ill l.coge Required to Seppert itortpgt . ,.11819 =m.m.60319 315,146 415.144 a15.141 423.11" IMS20 $23,529 $29,gee• , 8 .220 .= FOOTMOTES ill cramp let cost is 07,000. - 121 Estinated amenat r"I state taus a. uprmvad Ind Ora ♦1.676. -� ritust eoustud Empties is gurs 1 a 2. i31 S.suraace gas cfitimated to be $211 a gnar. 1 141 longer requirmd to uppsrt the aertpge rag f.g.rmd at 301 or Crass I.cnae. �J Alaroatt o Target Iuest 135.625 67,000 /so.66o ar.006 $51.110 469.4561 $34.150 Trt-2Yr3-15 1STr tot am 6502 60 00 $141 6T9 Ito 120 4742 fill $29.680 127.20 "w c; r�r 1'� m