Loading...
HomeMy WebLinkAboutContract 41924 (2)LENDER BORROWER DEVELOPER CONTRACTOR AMOUNT USE/PROJFC T INTEREST RATE TERM PAYMENT / REPAYMENT LATE CHARGES ORIGINATION FEE DRAW PERIOD FORT WORTH CITY T Y SECRETA CONTRACT Ha '4I C j Lee Avenue .wnholines ConcflfitiornS Cornmtmmit City of Fort Worth ("City") Fort Worth Housing Finance Corporation ("HFC") Fort Worth Housing Finance Corporation ("HFC") TBD $1,000,000.00 of HOME Investment Partnerships Program ("HOME") grant funds for eligible construction and other development costs as defined in 24 CFR 92.206 ("Loan"). The Loan will be a subordinate deferred payment loan that will be forgiven if the HFC fulfills all conditions in the Loan and the contract with the City. The parties agree that if additional HOME funds are needed to complete the project as determined by both parties, City staff will request additional funds from the City Council. Acquisition and new construction of the Lee Avenue Townhomes ("Project"). HFC will acquire tax foreclosed properties commonly known as 1402, 1404, and 1419 Lee Avenue and 406 W. Central Avenue from the City for the construction of at least four and up to seven townhouses for sale to HOME -eligible buyers. 0% 1. Each townhouse will require a separate contract between the City and the HFC. The term of each contract will be for one (1) year beginning on the date of the execution of the contract. Each contract may be extended for up to one (1) year if such extension is necessary for completion of the project. 2. .The term of the Loan will be for five (5) years. Payment will be deferred through the Loan term. The Loan is forgivable if the following conditions are met: (1) houses are sold to a HOME -eligible buyer who participate in the City's Housing Assistance Program (HAP) and will occupy the house as his or her primary residence; and, (2) proceeds from the sale of the townhouses will be returned to the City as Program Income. Upon default of the Loan terms or contract provisions the entire balance of the Loan will be immediately due and payable. N/A N/A OFFICIAL RecoRr, riling' SECRETARY Lgo !NORTH, TY HFC will be entitled to make requests fordraws, on a reimbursement basis, during the contract term. Draws will occur as scheduled and as defined in the contract. City Housing and Economic and Development tepartment The City of Fort Worth * 1000 Throckmorton Street * Fort Worth, Texas 76102 817-392-7520 * Fax 817-392-2013 will disburse funds upon receipt of satisfactory documentation and due diligence satisfaction including receipt of invoices for approved expenditures and certified releases of mechanic's liens. ELIGIBLE COSTS Eligible costs to be paid for by these HOME funds will be stipulated in the contract and are defined under 24 CFR 92.206. INVESTMENT / Estimated total amount of other sources equals $0. OTHER SOURCES AFFORDABILITY/ The Affordability Period is five (5) years from the date the project has been closed in AFFORDABILITY the HUD IDIS reporting system P ERIOD The HOME Program requires: • Each home will be sold to a HOME -eligible buyer earning equal to or less than 80% of the Area Median Income (AMI). COLLATERAL Upon execution of the contract, the City will place a first lien Deed of Trust on each of the lots. This lien will be released when the houses are purchased from the HFC by a HOME eligible homebuyer for use as his or her primary residence. L IEN POSITION The Loan will be in first lien position. The City will subordinate its lien or take a second lien position if a construction loan is required. Any changes in the City's lien position must be approved by the City. RECAPTURE If at any time the Affordability requirements are not met, the City will foreclose its deed of trust or the HOME funds will be recaptured in accordance with 24 CFR 92.254(a)(5)(ii). L IQUIDATED DAMAGES There shall be a ten percent (10%) payment of total Loan amount as liquidated damages if Affordability requirements are not maintained during the Affordability Period. This payment shall be due and payable within thirty (30) days of written notice that the City has determined in its sole discretion that the HFC has not met the Affordability requirements. TITLE INSURANCE AUDITS HFC will provide a mortgagee's title insurance policy insuring the amount of the Loan. City will conduct annual audits to ensure Affordability requirements. HFC will maintain records in accordance with the recordkeeping requirements outlined below. COMPLIANCE WITH FEDERAL, If it is determined that the use of the funding provided by the City for the stated STATE. AND LOCAL LAWS Use/Project does not meet HOME requirements, HFC will reimburse the City for the costs determined to be ineligible and/or disallowed under the HOME regulations. HFC agrees that the Project will meet the property standards requirements in 24 CFR 92.251 which includes compliance with the current edition of the Model Energy Code, International Energy Conservation Code, lead -based paint standards in 24 CFR 92.355 (if applicable), as well as City building standards. HFC must ensure that the Project is in compliance with Section 504 of Rehabilitation Act of 1973. Section 504 requires five percent (5%) of the units, or at least one (1) unit, whichever is greater, to be accessible for persons with mobility disabilities. An 2 additional two percent (2%) of the units must be accessible for persons with hearing or visual disabilities. HFC must comply with displacement and relocation requirements at 24 CFR 92.353 and 24 CFR 42 HFC certifies that it is not currently listed on the General Services Administration's List of Parties Excluded from Federal Procurement or Non -procurement Programs in accordance with Executive Orders 12549 and 12689 and will not enter into agreements to expend Federal Funds with contractors that are currently listed HFC must comply with all prescribed procedures regarding nondiscrimination and equal opportunity, affirmative marketing, displacement and relocation, labor relations lead -based paint, property standards, and conflict of interest provisions described in 24 CFR 92 Subpart H and 24 CFR 92.504 HFC must provide a tenant selection policy to ensure basic tenant rights and protections in order to comply with federal regulation 24 CFR 92.253. HFC must comply with all applicable Federal laws, laws of the State of Texas and ordinances of the City of Fort Worth. INSURANCE REQUIREMENTS HFC must maintain and present to the City on a semi annual basis, a General Liability Insurance policy in the amount of $500,000 each occurrence, $1,000,000 aggregate limit. RECORDKEEPING HFC is to maintain and present to the City on a semi-annual basis, a Business Automobile Liability Insurance as follows: $1,000,000 each accident on combined single limit basis, or $250 000 Property Damage $500 000 Bodily Injury per person per occurrence $2 000,000 Aggregate HFC and Contractor to maintain, and present to the City on a semi-annual basis, Workers' Compensation insurance as follows: Statutory Limits Employers Liability $100,000 each accident/occurrence $100,000 disease/per employee $500,000 disease policy limit Contractor is to maintain and present to the City, a Builders Risk insurance policy acceptable to the City and must be a valid policy at all times during the Loan term Contractor to maintain property and flood insurance (if required), in form and amount satisfactory to the City for the Project during the Loan term. If applicable, insurance must be evidenced by a valid binder/policy. Certificates of insurance are not acceptable. The City will be named as Mortgagee and as Additional Insured Party. All policies will also provide for 30-day prior notification to the City of cancellation HFC must maintain records that will provide accurate, current, separate, and complete disclosure of the status of the funds received pursuant to this Conditional Commitment and the contract and pursuant to any other applicable Federal and/or 3 CONDITIONS TO LOAN FUNDING OTHER REQUIREMENTS State regulations establishing applicable standards for financial management. During normal working hours and as often as City may deem necessary, HFC will make available to the City all of its records and will permit City to conduct audits of all contracts, invoices, materials, payrolls, records of personnel, conditions or employment and all other data relating to the stated Use/Project. HFC will provide quarterly financial and beneficiary reports that will contain such records, data and information as City may request pertinent to matters covered by this Conditional Commitment and contract such as leases and income eligibility certification. Reports will be due to the Housing and Economic Development Department within 45 days of the end of the quarter. Required report format/template and/or instructions will be provided to HFC by City HFC will provide any additional information as requested by the City within ten (10) days of date of receipt of written request i. The parties agree and acknowledge that this is a Conditional Commitment of funds and/or site approval, and that any commitment of funds or approval may occur only upon satisfactory completion of the subsequent items. a. An environmental review and receipt by the City of an authorization to use grant funds from the HUD under 24 CFR Part 58. The parties further acknowledge that the provision of any funds to the Project is conditional on the City's determination to proceed with, modify or cancel the Project based on the results of a subsequent environmental review. ii. City Council approval of award of HOME funds for the Project and receipt of HOME funds from HUD for the Project iii. Parties are prohibited from undertaking or committing any funds to physical or choice -limiting actions, including property acquisition, demolition, movement, rehabilitation, conversion repair or construction prior to the completion of environmental review and receipt of the Authorization to Use Grant Funds from HUD. Violation of this provision will result in the denial of funds under this Conditional Commitment. A Notice to Proceed from the City will be issued to HFC when the environmental clearance has been received. If HOME funds are to be used for property demolition, then construction must begin within twelve (12) months of purchase date or the date on which structures are demolished. ii. Documentation must be acceptable in all respects to the City and its counsel. HFC will be liable for and will promptly pay all fees HFC incurs, including expenses and charges incurred in connection with the negotiation and preparation of the documents governing or securing the Loan and other expenses incurred in connection with the Project constructed with the Loan, including appraisal and Texas Commission on Environmental Quality (TCEQ) environmental fees, whether or not the Loan closes, in addition to the principal and interest on the Loan. iv. All permits and approvals must be in place prior to funding of the Loan v. All construction contracts, plans, surveys, etc. must be acceptable to the City and assigned as additional collateral. Approval is subject to a pre- 4 ACCEPTANCE EXPIRATION construction review of plans, specifications and cost estimates. vi. HFC must agree to any reasonable terms and conditions that are necessary to ensure City and HFC remain in compliance with all applicable federal, state and City laws, regulations and ordinances regarding the Project. vii. The Loan is to be closed at no cost to the City. HFC shall be responsible for all costs associated with this transaction, including mortgagee's title insurance policy, attorney's fees, filing fees, closing costs etc. In order for this Conditional Commitment to remain effective, an original must be executed by HFC and any Guarantors and returned to the City on or before December 1, 2011. Any extension of such time for acceptance must be in writing and signed by a City representative. These terms can be modified or other terms negotiated between the parties upon mutual written agreement. To cause this Conditional Commitment to remain in effect, the contract between HFC and the City must be executed on or before December 1, 2011. Any extension of such date must be in writing and signed by the City Any funds disbursed against this Conditional Commitment will be subject to the City's receipt of satisfactory documentation of the Loan and due diligence satisfaction. This Conditional Commitment is confidential and is intended solely for the use of the Fort Worth Housing Finance Corporation. No other person or parties has any rights whatsoever with respect to the above terms and conditions. These terms can be modified or other terms negotiated between the parties upon mutual written agreement. The City attests to HFC that any funds committed herein were not first provided to the City by the Borrower, the Developer, any consultant, related party or any individual or entity acting on behalf of the HFC in its application for the Loan. 5 We hope the foregoing is responsive to your needs and that you will accept this offer. Please indicate your acceptance with your signature below and by returnina a signed copy to: City of Fort Worth Housing and Economic Development Department 1000 Throckmorton Fort Worth, TX 76102 Attn: Leticia Rodriguez, Development Project Coordinator Sincerely, Susan Alanis Assistant City Manager Approved as to form and legality: Vicki S Ganske Senior Assistant City Attorney Hendrix, Cit Date: Lola l l0 g3,?-off cOnetfii mt/b gete 'ttitme9 The undersigned hereby accepts the foregoing Conditional Commitment and the terms and requirements herein set for and agrees to be bound thereby. BORROWER Fort Worth Housing Finance Corporation Atrium )1(0-4 ByrKathleen Hicks, President C isl•egtio?.3t- 1 Contract .Authorization tip Pot@ Date: OFFICIAL RECORD. CITY SECRETARY FT. WORTJj, TX awl RESOLUTION NO. FWHFC-2011-13 FORT WORTH HOUSING FINANCE CORPORATION A RESOLUTION APPROVING A CONTRACT WITH THE CITY OF FORT WORTH FOR $1,000,000 IN HOME FUNDS FOR THE DEVELOPMENTOF THE LEE AVENUE TOWNHOMES, APPROVE PURCHASE OF 1402, 1404 AND 1419 LEE AVENUE AND 406 W. CENTRAL AVENUE FROM THE CITY OF FORT WORTH AND APPROVE ALL RELATED ACTIONS REQUIRED FOR HOUSING DEVELOPMENT WHEREAS, the City Council of the City of Fort Worth ( `City") has adopted development and revitalization of the City s affordable housing stock as a strategic goal and City citizens and the City Council have determined that quality, accessible, affordable housing is needed for moderate, low and very low income City citizens; WHEREAS, the City Council established the Fort Worth Housing Finance Corporation (the "Corporation") in 1979 pursuant to Chapter 394, Texas Local Government Code, to facilitate housing initiatives in the City, including but not limited to issuing tax exempt bonds, developing and promoting housing, and assisting low to moderate income City citizens in acquiring quality, accessible, affordable housing through lending and construction activities; WHEREAS, the City receives grant funds from the United States Department of Housing and Urban Development ("HUD") through the HOME Investment Partnerships Program (` HOME"), with which the City promotes activities that expand the supply of affordable housing and develop partnerships with neighborhood -based non profit housing organizations to benefit low and very low income City citizens by providing them with affordable housing; WHEREAS, the City wishes to enter into a contract with the Corporation for the use of up to $1,000,000.00 in City's HOME funds to acquire certain tax foreclosed properties commonly known as 1402, 1404, and 1419 Lee Avenue and 406 W. Central Avenue from the City of Fort Worth for the construction of four to seven townhomes for sale to HOME -eligible buyers; WHEREAS, the Board desires to approve and accept a Contract with the City of Fort Worth for the use of $1,000,000 in City HOME funds for the development of the Lee Avenue Townhomes approve the purchase of the tax foreclosed properties for the development from the City of Fort Worth., and approve all actions necessary for single family housing development for the project. NOW THEREFORE, BE RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION: 1. THAT the Board approves the execution and delivery of a contract ("Contract") by and between the City of Fort Worth ("City") and the Corporation for up to $1,- 000,000.00 in the City's HOME funds in order to provide funding for the development of the Lee Avenue Townhomes and for the Corporation to undertake all activities necessary to fulfill the requirements of the HOME regulations for affordable housing development. 2. THAT the Board approves the purchase 1402 1404 and 1419 Lee Avenue and 406 W. Central Avenue from the City of Fort Worth for the statutory purchase price for tax foreclosed properties but not to exceed $200,694.10, along with the payment of up to $3,000.00 in closing costs per property and the payment of any post judgment property taxes on the properties. 3. THAT Tom Higgins, General Manager of the Corporation, or Jesus Chapa, Assistant General Manager of the Corporation, are authorized to execute and deliver the Contract for and on behalf of the Corporation and any related documents necessary to implement the Contract, and each may extend, modify and amend the Contract provided any such extensions, modifications and amendments are in compliance with City Ordinances, requirements for use of HOME funds and the goals and purposes of the Corporation as amended from time to time. 4. THAT Tom Higgins, General Manager of the Corporation, or Jesus Chapa, Assistant General Manager of the Corporation, are authorized to accept the deeds, and execute and deliver the closing statements for and on behalf of the Corporation along with any related documents necessary to purchase the properties. 4. THAT this Resolution takes effect on the date of its adoption. AND IT IS SO RESOLVED Adopted June 7, 2011. FORT WORTH HOUSING FINANCE CORPORATION By: Kathleen Hicks, President City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 6/14/2011 DATE: Tuesday, June 14, 2011 REFERENCE NO.: C-24975 LOG NAME: SUBJECT: Authorize Change in Use and Expenditure of $1,000,000.00 of HOME Investment Partnerships Program Grant Funds to the Fort Worth Housing Finance Corporation in the Form of a Subordinate Loan for the Lee Avenue Townhomes, a Development of Up to Seven Townhouses Located at Lee Avenue and West Central Avenue, Authorize the Execution of a Conditional Commitment and Contract, Authorize the Sale of 406 West Central Avenue and 1402, 1404 and 1419 Lee Avenue to the Fort Worth Housing Finance Corporation for the Development for an Amount Not to Exceed $200,000.00, and Authorize a Substantial Amendment to the City's 2007-2008 Action Plan (COUNCIL DISTRICT 2) 17HFC_LEE TOWNHOMES RECOMMENDATION: It is recommended that the City Council: 1. Authorize a substantial amendment to the City's 2007-2008 Action Plan; 2. Authorize the City Manager, or his designee, to substitute funding years in order to meet United States Department of Housing and Urban Development commitment, disbursement and expenditure deadlines; 3. Authorize the change in use and expenditure of $1,000,000.00 in prior year's HOME Investment Partnerships Program Grant funds to the Fort Worth Housing Finance Corporation in the form of a subordinate loan for the development of the Lee Avenue Townhomes, a development of up to seven townhouses located at Lee Avenue and West Central Avenue; 4. Authorize the City Manager, or his designee, to execute a conditional commitment with the Fort Worth Housing Finance Corporation for a five year subordinate deferred forgivable loan that conditions funding on, among other things, satisfactory completion of HOME requirements; 5. Authorize the City Manager, or his designee, to execute a contract with the Fort Worth Housing Finance Corporation for the project for a term beginning on the date of execution of the contract and ending on the date the five year affordability period expires; 6. Authorize the City Manager or his designee, to extend and renew the conditional commitment or the contract for up to one—year if the Fort Worth Housing Finance Corporation requests and extension and such extension is necessary for completion of the project; 7. Authorize the City manager, or his designee, to amend the conditional commitment or the contract if necessary to achieve project goals provided that the amendment is within scope of the project and in compliance with City policies and applicable laws and regulations governing the use of federal grant funds. 8. Authorize the direct sale of properties located at 406 West Central Avenue and 1402, 1404 and 1419 Lee Avenue to the Fort Worth Housing Finance Corporation in accordance with Section 34.05 of the Texas Tax Code for an amount not to exceed $200,000.00; and 9. Authorize the City Manager, or his designee, to execute and record the appropriate instruments conveying the properties to complete the purchase and sale DISCUSSION: The Lee Avenue Townhomes is a proposed development of up to seven townhouses located on Lee Avenue and Central Avenue. The townhouses will be either two—bedroom/two—bath or three—bedroom/two bath units ranging in size from 1,400 to 2,000 square feet. Each townhouse will have a double garage. The townhouses will be sold to homebuyers earning 80 percent or less of the Area Median Income as determined by the United States Department of Housing and Urban Development (HUD). Buyers must meet all HOME Program requirements including applying for and receiving at least $1,000.00 in down payment and/or closing cost assistance from the City s Homebuyer Assistance Program (HAP) and must occupy the unit as their primary residence. The City will enter a contract with the Fort Worth Housing Finance Corporation (FWHFC) for $1,000,000.00 of the City's HOME funds to be used for acquisition of the tax foreclosed properties described below and for part of the construction costs for the project. The FWHFC will issue a Request for Proposal for the construction of the townhouses. The HOME funds will be in the form of a forgivable deferred payment loan. If the units are all sold to HOME —eligible buyers who occupy the units for the five—year affordability period, the loan will be forgiven. The contract and the loan terms both last for the length of the Affordability period. This project will conform to the City's Minority and Women Business Enterprise (M/WBE) ordinance. ,Staff recommends the followtne contract and loan terms: i. Units must be sold to HOME —eligible buyers who obtain at least $1,000.00 of HAP loan fund; ii. Secure performance and repayment of HOME funds in the case of default with a recorded deed of trust; and iii. Five year Affordability Period; and iv. Loan forgiven if all HOME requirements and contract terms are met. The expenditure of HOME funds is conditioned upon the following: i. Satisfactory completion of an environmental review per 24 CFR Part 58; and ii. Authorization to use grant funds from HUD. In accordance with the HOME regulations, 24 CFR Part 92 et seq., the purpose of this project is to benefit low and very —low income citizens by providing them with affordable housing. A public comment period on the change in use of these HOME funds was held from May 5, 2011 to June 6, 2011. Any comments are maintained by the Housing and Economic Development Department in accordance with federal regulations. The Action Plan funding year may vary and be substituted based on the principle of First In, First Out (FIFO) in order to expend the oldest grant funds first. The City received the below referenced properties through a Constable's Sale after a tax foreclosure suit. The City is authorized to conduct a direct sale of tax —foreclosed property to a buyer for the lesser of the market value specified in the judgment or the tax judgment amount plus any accrued court costs. A written confirmation of intent to purchase the property was received from the FWHFC The land will be used for the Lee Avenue Townhomes development. Staff recommends selling the property to the FWHFC for the project. The FWHFC is responsible for all closing costs on this transaction, including any post judgment taxes plus penalties and interest. The Planning and Development Department has reviewed the current zoning of these properties and determined that the zoning classification of the properties is compatible with respect to existing land use, the existing land uses of the surrounding neighborhood and future land use designations indicated by the Comprehensive Plan. The property located on 406 West Central Avenue will be rezoned to comply with the future use of the property. [ADDRESS k06 West Central ve 1402 Lee Ave 1404 Lee Ave 1419 Lee Ave LEGAL DESCRIPTION IPRICE ZONING North Fort Worth Block 81, Lot 1, Block 81 Lots 1 and $95,265.17 E 2 North Fort Worth Block 81, Lot 3 $21,023 45 A-5 North Fort Worth Block 81, Lot 4 $24,957.03 [A-5 North Fort Worth Block 82, Lot 12 and North 40 feet 13 I$59,448.45 IA-5 The project is located in MAPSCO 62Q and 62P and in COUNCIL DISTRICT 2. FISCAL INFORMATION: The Financial Management Services Director certifies that funds are available in the current operating budget, as appropriated, of the Grants Fund. FUND CENTERS: TO Fund/Account/Centers GR76 539120 005206181160 FROM Fund/Account/Centers $ 1.000.000.00 GR76 539120 005206181360 GR76 539120 005206181070 CERTIFICATIONS: Submitted for City Manager's Office bv: Originating Department Head: Additional Information Contact: ATTACHMENTS 1. available funds.pdf Susan Alaniz (8180) Jay Chapa (6192) Cynthia Garcia (8187) Leticia Rodriguez (7319) $600.000.00 $400.000.00