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RDA O4 MTG CREDIT CTF 02-20-01
A'GENDA R, ,POR'T RDA NO. 04 02-20-01 MEETING DATE: TO' FROM' SUBJECT: FEBRUARY 20, 2001 WILLIAM A. HUSTON, EXECUTIVE DIRECTOR REDEVELOPMENT AGENCY STAFF PARTICIPATION UNDER COUNTY OF ORANGE APPLICATION FOR ALLOCATION OF MORTGAGE CREDIT CERTIFICATES SUMMARY Agency staff is requesting approval of the Tustin Community Redevelopment Agency's participation in the Mortgage Credit Certificate (MCC) Program administered by the County of Orange under the County's application for an allocation of $100,000,000 for the 2001 MCC Program. RECOMMENDATION It is recommended that the Redevelopment Agency adopt the attached Resolution No. RDA 01-3 approving participation in a Mortgage Credit Certificate Program in cooperation with the County of Orange. FISCAL IMPACT Cost to the Redevelopment Agency for the administration of the MCC Program through the County of Orange is estimated at $6,000, which is included in the 2000-2001 budget for the Housing Set-Aside Funds for the Town Center and South Central Project Areas. These costs are also proposed to be carried over in the 2001-2002 budget. BACKGROUND/DISCUSSION Under the mortgage credit certificate program, first time homebuyers who qualify by income and by the price of the unit they purchase, receive a certificate authorizing them to receive a federal income tax credit of up to 20% of their annual interest payment. The 20% tax credit is in addition to their remaining annual interest payment that is permitted to be taken as a home mortgage interest rate deduction. Certificate holders receive the tax credit 'each year that they have the original mortgage and continue to live in the qualified unit they purchased. The Federal Government allocates a set amount of mortgage credit authorization for each state, which is credited against a portion of the state's debt ceiling for private activity bonds. The State of California sub-allocates its share of mortgage credit amounts to local jurisdictions through the California Debt Limit Advisory Committee (CDLAC). The County of Orange is filing an application to CDLAC for an allocation of $100,000,000 for the 2001 MCC Program. For the 2001 MCC Program application, the William A. Huston Application for Allocation of Mortgage Credit Certificates February 20, 2001 Page 2 County has agreed to set aside the required one half of one percent of the allocation being requested thus there is no need for the City of Tustin to provide a certificate of deposit for the amounts it may use. The City and Agency has previously found and determined that it is in the best interest of the City to participate in the MCC Program and consented to the operation of the Program by the County within the boundaries of the City of Tustin. As in recent allocations, the County is proposing to make the 2001 allocation available to homebuyers countywide on a first-come, first-served basis rather than appropriating the MCC allocation among the 29 participating cities and unincorporated areas. Under the County's 2001 MCC Program, certificates can be allocated to first-time homebuyers of both new homes and existing homes, providing the purchase price does not exceed $358,763 for new homes or $250,974 for existing homes. The program also has a maximum annual income level of between $71,665 for a one or two-person household and $82,414 for a household of three or more persons. The primary responsibility for program administration is the County's, for which the County is reimbursed by the cities. The County's contractor, Affordable Housing Applications, Inc. (AHA) will process all allocation requests by individual homebuyers, and each city will be credited accordingly. Other than marketing the program and directing the applicants to AHA for pre-qualifying and processing, the City has no other administrative obligations under the program. Administrative costs will be billed by the County based upon the City's pro-rata share of total administrative costs. The pro-rata share is based on the amount of MCC allocation used by the City to the total amount used by the County and cities as a whole. The Redevelopment Agency's estimated administrative costs are in the amount of $6,000. Christine Shingletor~ Assistant City Manager Draug~d'n Senior Project Manager Attachments RDA\ccreport\MCC 2001.doc. ]0 14 ]? 20 2.2 23 24 26 2? 28 RESOLUTION NO. RDA 01-3 A RESOLUTION OF THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, ADOPTING A MORTGAGE CREDIT CERTIFICATE PROGRAM IN COOPERATION WITH THE COUNTY OF ORANGE The Tustin Community Redevelopment Agency does hereby resolve as follows' ko There is a shortage in the County of Orange (the "County") and in the City of Tustin (the "City") of decent, safe and sanitary housing, particularly of housing affordable by first-time home buyers, and a consequent need to encourage the availability of homes affordable by such persons and otherwise to increase the housing supply in the City and in the County for such persons. 0 The Board of Supervisors of the County has established a mortgage credit certificate program (the "Program") pursuant to Part 5 of Division 31 of the Health and Safety Code of the State of California (the "Act") for the purpose of issuing mortgage credit certificates pursuant to the Act. C, The City and Redevelopment Agency have previously found and determined that it is in the best interest of the City to participate in the Program and to consent to the operation of the Program by the County within the geographic boundaries of the City pursuant to the Act. D, The City has previously entered into a Cooperative Agreement with the County to permit the operation of the Program within the boundaries of the City. E, Section 146 of the Internal Revenue Code of 1986, as amended (the "Code"), limits the amount of mortgage credit certificates that may be issued in any calendar year by entities within a state and authorizes the governor or the legislature of such state to provide the method of allocation within such state. Fo Chapter 11.8 of Division 1 of Title 2 of the Government Code of the State of California (the "Government Code") governs the allocation of the state ceiling (as that term is defined in the Code) among governmental units in the State of California (the "State") having the authority to issue mortgage credit certificates. e,, Section 8869.85 of the Government Code requires a local agency to file an application for a portion of the state ceiling with or upon the direction of the California Debt Limit Allocation Committee ("CDLAC") prior to the issuance of mortgage credit certificates. Ho The Redevelopment Agency desires that the County file an application with CDLAC on behalf of the City for an allocation of authority to issue mortgage credit certificates and elects to transfer to the County pursuant to Section 8869.85(d) of the Government Code, the total amount, if any, of such authority allocated to the City. Resolution No. RDA 01-3 Page 2 One percent of the amount of the allocation t© be requested on behalf of the County is to be held in an account established by the County pursuant to Section 8869.84 of the Government Code and the Regulations of the CDLAC. NOW, THEREFORE, the Tustin Community Redevelopment Agency resolves as follows: Section 1. Each of the foregoing recitals is true and correct. Section 2. The Executive Director, or his designee, is authorized, on behalf of the City and Redevelopment Agency, to take such steps and execute such documents as are necessary for the submission of an application by the County of Orange to CDLAC on behalf of the participating cities and unincorporated areas in the County for an allocation in the amount of $100,000,000 for application to the issuance of mortgage credit certificates by the County. Section 3. The Redevelopment Agency agrees to pay to the County the City's ~; proportionate share (based upon the number of City of Tustin participants i'n the Program) of administration costs applicable to the allocation received from CDLAC, ~4 which share is estimated not to exceed $6,000. Section 4. The Redevelopment Agency hereby authorizes the transfer to the County of the Total principal amount, if any, of the authority to issue mortgage credit certificates allocated to the City by CDLAC. The Executive Director or his designee, on behalf of the Agency, is authorized and directed to take such steps and execute such documents as are necessary to effect the transfer of such allocation to the County solely for application to the issuance of mortgage credit certificates, which are to be used to induce the origination of home mortgage loans to qualifying persons. Section 5. The officers and employees of the Redevelopment Agency are authorized and directed, jointly and severally, to do any and all things necessary or advisable in order to effectuate the purposes of this resolution or the issuance of the ~.~ mortgage credit certificates by the County, and all actions previously taken by such officers and employees in connection with the application for the allocation authorized ~_2 to be requested are ratified and approved. 2; Section 6. This resolution shall take effect immediately upon its adoption by the Tustin Community Redevelopment Agency, and the City Clerk shall certify the ~4 vote adopting this resolution. 26 28 ]0 ]4 l? 2o 22 2~ 24 25 26 2? Resolution No. RDA 01-3 Page 3 PASSED AND ADOPTED at a regular meeting of the Redevelopment Agency held on the 20th day of February, 2001. Tustin Community TRACY WILLS WORLEY, Chairperson PAMELA STOKER City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) SS I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 01-14 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 20TM day of February 2001, by the following vote' COUNCILMEMBER AYES: COUNCILMEMER NOES: COUNCILMEMBER ABSTAINED: COUNClLMEMBER ABSENT: PAMELA STOKER CITY CLERK rda\ccresos\2001 MCC.doc