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HomeMy WebLinkAboutAgr 2010-07-01 (Marin Housing Authority)February 1, 2010 Heidi Bigall Director of Administrative Services Town of Tiburon 1505 Tiburon Blvd. Tiburon, CA 94920 -ii wwft. i s FEB -32010 ! r p FINANCE DEPARTMENT TOWN OFTIBURON RE: Below Market Rate (BMR) Homeownership Program Revised Agreement for BMR Management Services Dear Heidi; N/"RoktrN HOUSING Making Housing More Affordable 4020 Civic Center Drive San Rafael, CA 94903-4173 Executive Director Dan Nackerman Enclosed please find the signed copy of the Agreement for BMR Program Portfolio Management for your files. I appreciate your promptness in returning the document to our office. Thank you for your assistance. Sincerely, Carmen Hall Soruco Homeownership Program Specialist Enc/ Housing Authority of the Countv of Marin 415/491-2525 (FAX) 4151/472-2186 (TDD) 1-800-735-2929 www.marinhousing.org Agreement for BMR Program Portfolio Management This Agreement for BMR Program Portfolio Management (the "Agreement") is entered into as of July 1, 2010, between the Housing Authority of the County of Marin (the "Authority") and the Town of Tiburon ("Jurisdiction") with respect to the Portfolio Management of Jurisdiction's Below Market Rate Homeownership Program (the `BMR Program"). This Agreement shall define all of the policies and procedures which shall govern the pre-development planning, consulting services, initial sale, monitoring, resale and refinance of each unit within Jurisdiction that is administered by the Authority through the BMR Program (the `BMR Unit"). There are currently 24 BMR units located within Jurisdiction which constitutes 8% of the Marin County BMR portfolio. Six of the BMR units are owned and administered by the Town of Tiburon with the remaining 18 units administered under this Agreement. THE AUTHORITY AND THE JURISDICTION AGREE AS FOLLOWS: 1. RETAINER FEE PROGRAM MANAGEMENT SERVICES: In consideration for Jurisdiction's payment of an Annual Retainer of $10,764 (or $598 per unit, per year) (see Exhibit A), the Authority shall provide the following services to Jurisdiction: A. SALE AND RESALE SERVICES to cause the sale or resale of Jurisdiction's BMR Units as follows: i. Meet with Jurisdiction and prospective developers to describe (1) Jurisdiction's inclusionary housing requirements; (2) how those requirements can be satisfied through the BMR Program; and (3) how to determine a specific "affordable" sales price to be applied to a general income level target. ii. Establish the initial for-sale unit pricing information for the Below Market Rate Housing Agreement pursuant to the affordability requirements established by Jurisdiction, and conduct resale price evaluations for existing BMR Units. iii. Advertise the BMR Program and BMR Units for sale or resale to the general public through e-mail blasts and/or mailers to community service providers, lenders, the Authority BMR data base, BMR Unit Open Houses, and the Authority website. iv. Record or cause to be recorded the Resale and Refinancing Restriction Agreement and Option to Purchase, the Authority Deed of Trust and Security Agreement and the Notice of Affordability Restrictions on each property prior to close of escrow. Below Market Rate Portfolio Management Agreement Page 1 v. Consult with Jurisdiction, Owner and Lenders regarding requests to modify or subordinate Authority documents and obtain consent from Jurisdiction prior to agreeing to and executing any such modifications or subordinations. vi. Utilize the following documents, and obtain all necessary signatures thereon, in connection with all BMR Unit sales and resales during the term of this Agreement: 1. Resale and Refinancing Restriction Agreement and Option to Purchase (current version); 2. Buyer's Disclosure Statement - Marin County Below Market Rate Home Ownership Program (current version); 3. Authority Deed of Trust and Security Agreement securing the Resale and Refinancing Restriction Agreement and Option to Purchase (current version), and 4. Below Market Rate Housing Agreement (a three-party agreement by and among the Authority, Jurisdiction, and the Developer/Contractor.(current version) 5. Notice of Affordability Restrictions vii. Maintain and update all BMR Program documents including (but not limited to) the documents listed above, for program compliance with all state and federal laws and all applicable mortgage loan programs, including, but not limited to, Fannie Mae, FHA and CalHFA. viii. Subject to availability, provide down payment assistance to the BMR buyers. Programs may include, but shall not be limited to, the Mortgage Credit Certificate Program (MCC), ADDI, HOME and any programs that may be funded by Jurisdiction. ix. Provide or cause to provide by sellers the repair or upgrading of BMR Units to Housing Quality Standards (HQS) to increase BMR Units marketability for sale or re-sale. (excludes "Option-Exercised" units.) X. Establish Priorities and Preferences in the Selection of Buyers by: 1. Pre-qualifying BMR Program Applicants upon application submittal; 2. Utilizing a lottery system to select prospective buyers from among all qualifying BMR Program applicants; and 3. Utilizing the standard definition of live/work in Marin County adopted by the Authority in 2007 as a priority in the selection of prospective buyers for any BMR Unit. B. PROVIDE BMR PROGRAM MONITORING SERVICES as follows: Below Market Rate Portfolio Management Agreement Page 2 i. Provide annual monitoring of no less than one-third of Jurisdiction's existing BMR Units to verify the existing BMR owners' compliance with the Resale Restrictions Agreement (e.g., continuing owner occupancy, no subleasing, no refinancing, no over-encumbering, etc.). ii. Provide semi-annual status reports to Jurisdiction on BMR sales activity, refinancing activity, and other related information (e.g., BMR owner demographics, current affordability levels, number of BMR resales and fees collected by the Authority on those resales, highlights and concerns, etc.). C. PROVIDE INFORMATION AND EDUCATION as follows: i. Provide Jurisdiction, BMR program participants, and lenders with information concerning resale procedures, BMR Unit resale restrictions, refinancing, determination of affordability, capital improvements, and interpretation of the BMR restrictions including owner occupancy and inheritance issues. ii. Provide, or cause to be provided, counseling workshops to first-time home buyers, including, but not limited to, information concerning qualifications, mortgages, refinancing, fair housing, and HOA's. iii. Provide current Median Household Income information to Jurisdiction and prospective developers and provide details concerning Income Limits and Median Income, the relationship between those factors, and how those factors typically are used to determine affordability. iv. Provide or cause to be provided semi-annual newsletters to BMR participants and other stakeholders, and a web-site with the most current information on affordable housing programs in Marin County. II. BMR PROGRAM VIOLATION ENFORCEMENT SPECIALIST SERVICES: A. Should the Authority, in the course of Program Management Services (section I. above), identify program violations by any of the BMR Owners, the Authority's BMR Program Enforcement Specialist ("Enforcement Specialist") shall immediately contact the BMR Owner to demand correction of their violation(s). The Enforcement Specialist, with the consent of the Jurisdiction, will enforce the BMR Resale Restrictions Agreement (RRA) to secure and preserve the BMR Unit for the Jurisdiction and enforce compliance with the BMR Program until such time as the violation has been cured. Below Market Rate Portfolio Management Agreement Page 3 B. Within ten (10) business days of the Enforcement Specialist's determination of the existence of a BMR Program Violation, the Enforcement Specialist shall: document such violation in the BMR Owner file, provide written notice to Jurisdiction, and send, by Certified Mail, a demand that the BMR Owner meet with the Enforcement Specialist or immediately cure the violation. The Enforcement Specialist shall require that this meeting occur no later than ten (10) business days from mailing of said written demand. Should the BMR Owner fail to meet with the Enforcement Specialist, fail to cure the violation, or not respond to the Notification, the Enforcement Specialist may, with Jurisdiction's consent, engage the Authority's litigation counsel ("law firm") according to Paragraph III. below. C. FEE TO AUTHORITY FOR BMR PROGRAM VIOLATION ENFORCEMENT SPECIALIST SERVICES: Enforcement Specialist services will be provided on a case-by-case basis only upon Jurisdiction's written consent. The Enforcement Specialist, an employee of the Authority, will bill to Jurisdiction an hourly rate of $75 per hour (billable in 1/4 hour increments) with a maximum limit of $1,500 (or not to exceed 20 hours) per BMR Unit as a "Fee for Program Enforcement Services." The Enforcement Specialist will submit detailed monthly billings to Jurisdiction reflecting the services rendered by the Enforcement Specialist. No fees shall be billed to Jurisdiction in excess of the above maximum limit without Jurisdiction's prior written approval. III. BMR PROGRAM DEFAULT OPTION EVENT AND 3RD PARTY LEGAL W.RVIC.F,S! A. LEGAL SERVICES IN THE EVENT OF BMR DEFAULT OPTION EVENTS In the event any BMR Unit violation cannot be cured, as set forth in Paragraph II. above, and said Unit is deemed in default per the terms of the RRA, or is threatened by any other legal proceedings, the Enforcement Specialist may, with Jurisdiction's prior written consent, refer the case to the Authority's litigation counsel. Said law firm shall represent the Authority in connection with Exercise of the Option and preservation of the BMR Unit for purposes of the BMR Program. The law firm will assist the Enforcement Specialist in providing legal opinions and advice, and representation in litigation. Enforcement Specialist will provide regular advice and notice to Jurisdiction concerning all litigation and pre- litigation activities. B. FEE TO AUTHORITY TO REIMBURSE 3' PARTY LEGAL SERVICES FOR DEFAULT OPTION EVENTS: The Enforcement Specialist will continue to provide services until such time as the Default has been settled or resolved, or the 3rd party Legal Fees have reached a Below Market Rate Portfolio Management Agreement Page 4 maximum of $5,000 in attorneys' fees and costs (to be billed on an hourly basis, with detailed billings to be provided to Jurisdiction), at which time Jurisdiction will be briefed on the recommended course of action and the Authority will proceed with no further legal action for said BMR Unit unless and until it receives written approval from Jurisdiction. C. FEE TO AUTHORITY FOR DEFAULT OPTION EVENT ENFORCEMENT SERVICES: Each month, the Enforcement Specialist will provide Jurisdiction with detailed hourly billing records (billable in 1 /4 hour increments) for services rendered in connection with default option event enforcement for Jurisdiction's individual BMR Units. Jurisdiction agrees to pay the Authority $75 per hour for these additional Enforcement Services to engage and manage the law firm actions in preserving and recovering the BMR Unit. D. BMR PROGRAM EXERCISE OF OPTION TO PURCHASE PURSUANT TO RESALE RESTRICTION AGREEMENT: In the event of an Exercise of Option to Purchase, the Authority shall: i. Notify Jurisdiction in writing within five (5) working days of the Enforcement Specialist's determination that an "Option Event", as defined by the Resale Restriction Agreement, has occurred; ii. The written notification shall include the nature of the Option Event, the current resale price, and any other information that will assist Jurisdiction in deciding the proper course of action including legal recommendations per paragraph III A above; iii. Within ten (10) working days of receipt of such notice by the Authority, Jurisdiction will provide written instructions to the Authority to exercise the Option; or assign Jurisdiction the option to purchase the BMR unit with Jurisdiction assuming responsibility to enforce the Resale Restriction Agreement and Deed of Trust and Security Agreement; or file a Notice of Abandonment; If the Jurisdiction requests that the Authority exercise the Option, the Authority shall: iv. Utilize the funds collected through resales within Jurisdiction, if any, to purchase the unit; or v. Jurisdiction will provide the Authority with a short term loan to complete the purchase event. IV. BMR PROGRAM SALES MANAGEMENT AND 3RD PARTY BROKERAGE MANAGEMENT SERVICES: Below Market Rate Portfolio Management Agreement Page 5 A. Based on previous BMR Unit sales and resales experience, the Authority may recommend that a BMR Unit being made ready for sale or resale would benefit from 3rd party professional real estate brokerage services. Such additional services may not be engaged without Jurisdiction's prior written approval. The Authority shall provide a written justification when recommending such services to demonstrate the need for increased market exposure and/or add additional brokerage representation services above and beyond those already provided by the Authority as stated in Paragraph I.A iii above. B. BMR PROGRAM SALES MANAGEMENT FEE AND ADDITIONAL BROKERAGE SERVICES FEES: At close of Escrow, and from the closing proceeds, the Authority shall be entitled to receive a sales fee as set forth in the RRA. In most cases, the resale fee will be 2% Fee. In the event a 3rd party Broker is engaged per section IV A above, and earns a brokerage Fee, an additional 3% Sales Fee shall be paid to a listing broker and in the event of a selling broker causing the sale, a Fee shall be paid to the selling broker. Total sales fees for units that are sold through a 3rd party broker shall not exceed six percent (6%); a maximum of 4 % to the outside brokers and 2% to the Authority. V. BMR PROGRAM HOME OWNER FEES TO AUTHORITY: A. BMR Program Lottery Application Fee - Each applicant interested in the BMR Program shall pay to the Authority an annual fee of $25 for the calendar year, payable to the Authority at the time of submitting an application. This fee entitles the prospective BMR Owner to obtain information about the program, requesting pre-qualification, lottery inclusion based on the family composition, and hands-on assistance in the next steps in the process. If the Applicant has completed a First Time Homeownership Counseling Workshop from a pre-approved provider prior to applying for the Lottery, the $25 fee will be waived. B. BMR Program Resale Price Valuation Fee - The Authority shall charge a fee of $50 for preparing a BMR Resale Price Valuation. This fee will be paid by the owner at the time of the request. This fee will only be charged to BMR Home Owners as this service is included in Jurisdiction's Program Management Fee. C. BMR Program Capital Improvements Evaluation Fee - The Authority shall charge a fee of $50 for the evaluation and approval of capital improvements to be added to the resale price. This fee shall be paid by the owner at the time of the request. The fee for this service shall be $100, if a physical inspection is required. The Authority will not consider any capital improvement evaluation request for improvements of less than $1,000. VI. JURISDICTION RESPONSIBILITIES: Below Market Rate Portfolio Management Agreement Page 6 Jurisdiction shall be responsible for the following: A. Executing and recording the initial three-party (Authority, Jurisdiction, and Developer/Contractor) Below Market Rate Housing Agreement; B. Meeting with Authority staff on an annual basis to review the asset management portfolio and BMR Program Portfolio Management Services; C. Assessing and promptly approving the Authority's request for payment of annual invoices for the BMR Program Management Services (per Paragraph I); monthly invoices for BMR Program Enforcement Specialist Services (per Paragraph II); BMR Program Default Option Event Litigation Fees and Enforcement Specialist Fees (per Paragraph III). The invoiced fees and related expenses shall be reimbursed by Jurisdiction within thirty (30) days of Authority's submission of detailed billings as required by this Agreement. Jurisdiction further agrees to assume all and any financial responsibility for any 3rd party legal services performed on Jurisdiction's behalf per this Agreement, so long as Jurisdiction's prior written approval is obtained prior to the provision of such services. D. Provide or cause to provide access to any and all Jurisdiction documentation necessary for the Authority to conduct its services, including but not limited to, documents recorded by Jurisdiction. VII. TERM OF AGREEMENT Regardless of the term of the BMR Resale Restrictions recorded with Jurisdiction's BMR Units, the term of this Agreement shall be for two (2) years from the date of this Agreement, with an option to renew for subsequent two (2) year terms, upon written approval of both parties to this Agreement. VIII. INTEGRATION CLAUSE This Agreement constitutes the entire agreement between the parties to this Agreement with respect to the subject matter of this Agreement, and there are no other terms, obligations, covenants, representations, statements, or conditions except as set forth in this Agreement. No change or amendment to this Agreement will be effective unless in writing and signed by the parties to this Agreement. Failure to insist upon strict compliance with any term or provision of this Agreement will not be deemed to be a waiver of any rights under a subsequent act or failure to act. This Agreement specifically supersedes all prior agreements between the parties. IX. CONSTRUCTION The parties to this Agreement have been represented by counsel in the negotiation and preparation of this Agreement, and this Agreement will be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in interpreting this Agreement. Below Market Rate Portfolio Management Agreement Page 7 X. SEVERABILITY In the event that for any reason one or more of the provisions of this Agreement or its or their application to any person or circumstance is held to be invalid, illegal, or unenforceable in any respect or to any extent, such provisions will, nevertheless, remain valid, legal, and enforceable in all other respects and to such extent as may be permissible, and, in addition, any such invalidity, illegality, or unenforceability will not affect any other provision hereof, but this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. XI. NOTICES Notices shall be sent to the following addresses: Authority: Housing Authority of the County of Marin Attention: Executive Director 4020 Civic Center Drive San Rafael, CA 94903-4173 Jurisdiction: Town of Tiburon, Town Manager 1505 Tiburon Blvd. Tiburon, CA 94920 Below Market Rate Portfolio Management Agreement Page 8 IN WITNESS WHEREOF, the Housing Authority of the County of Marin and the City of San Rafael, have executed this Contract as of the date first above written. The undersigned represent and warrant that he/ she has full power and authority to enter into this Contract and to bind each other in accordance with its terms. For the Town of Tiburon: hu, Authorized ~)gnatory: For the Housing Authority of the County of Marin: Dan Nackerman, xecutive Director Approved as to Form: County of Marin Housing Authority Counsel ==END OF AGREEMENT /-)6-/0 DATE DATE Below Market Rate Portfolio Management Agreement Page 9 Exhibit A BMR Program Fee Schedule Effective January 2, 2009 Annual Retainer The Jurisdiction as set below, shall pay to the Authority an Annual Retainer Fee, payable upon presentation of invoice. If the Annual Retainer is paid by the Jurisdiction, all services except legal, title, recording, enforcement and loan charges will be provided by Authority at no additional cost to the Jurisdiction. Exceptions have been identified in Section 2 of this Agreement. BMR oPro-uram Co sts bN' Juris diction Corte Madera County Larkspur Mill Valley San Anselmo San Rafael Tiburon TOTAL BMR Units 31 91 25 25 3 116 24 (18) 315 % of Inventory 9% 29% 8% 8% 1 % 37% 8% 100% % of Operating $18,529 $549391 $14,943 $14,943 $1,793 $69,932 $10,764 $185,295