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Federal Home Loan Bank ApplicatRESOLUTION NO. 128-00 A RESOLUTION AUTHORIZING SPONSORSHIP OF AN APPLICATION TO THE FEDERAL HOME LOAN BANK OF DES MOINES FOR AFFORDABLE HOUSING PROGRAM FUNDS. Whereas, the Federal Home Loan Bank has published notice of availability of funds under the Affordable Housing Program; and Whereas, local member FHLB lending institutions have agreed to submit an application for these funds, for a program of homeownership assistance to lower-income households; and Whereas, the City's CHAS and Consolidated Plan promote the objectives of homeownership assistance and stabilization of target neighborhoods; and Whereas, provision of homeownership opportunities to the City's working families is a necessary complement to on-going economic development efforts. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA. Section 1. The Mayor is hereby authorized to execute this resolution in sponsorship of an application to the Federal Home Loan Bank for Affordable Housing Program funds, to assist low- and moderate-income families to purchase homes. Section 2. This resolution shall take effect immediately. Attest: ,. / -------. / . ~ /74/-/~/ ~ /' /U Jeánne F Schneide~ City Clerk CITY OF DUBUQUE, IOWA MEMORANDUM March 30, 2000 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Applications for Homeownership Assistance Funds . Housing Services Manager David Harris is recommending approval of an application for Affordable Housing Program funds to the Des Moines Federal Home Loan Bank to assist income-qualifying families to purchase a home. All local lending institutions will be participating in the program. I concur with the recommendation and respectfully request Mayor and City Council approval. fYLrJ lc" !t~ Michael C. Van Milligen MCVM/dd Attachment cc: Barry Lindahl, Corporation Counsel Tim Moerman, Assistant City Manager David Harris, Housing Services Manager . VI 'C!l\:)iYJ,nq . e~U)O /\0 60:S ~d O£ ~~\, OO 03!\\::\;J3d .~ It't .bo~"" CITY OF DUBUQUE, IOWA MEMORANDUM 27 MarchOO To: Mike V~{\lIigen, City Manager From: David Harris, Housing Services Re: Application for Homeownership Assistance Funds Introduction The purpose of this memorandum is to request the Mayor's execution of the attached resolution, approving sponsorship of an application to the Federal Home Loan Bank (FLHB) for Affordable Housing Program funds to assist income-qualifying families to purchase a home. . Background In October 98 the Housing Services Department sponsored an application to the Federal Home Loan Bank for a first-time buyer down payment assistance program. The application was approved in January 99, in the amount of $350 000. Dubuque Bank and Trust served as lead participating lender, in partnership with the City and the following lending institutions: American Trust, Firstar Bank, Mercantile Bank, Premier Bank and Dupaco Credit Union. Within a four-month period, 38 loans were committed, all to buyers eaming less than 60% of area median income. Matching funds committed by the lenders and buyers totaled more than $ 2 million. All participating families were required to complete a series of homebuyer workshops and financial counseling sessions, sponsored by the Dubuque County Extension Office. Because demand for these classes exceeded Extension's staff capacity, each of the lenders contributed funds to extend the part-time hours of the financial counselors. A high degree of cooperation was also obtained from area appraisers and realtors. By all measures, the program was a highly successful partnership, enabling many families to realize their dream of homeownership who otherwise could not have qualified. Discussion We are again proposing an application for the April 2000 FHLB funding cycle. All area lending institutions have been contacted and each has agreed to participate. This year Dutrac Credit Union and East Dubuque Savings Bank have joined as partners. American Trust has volunteered to serve as lead bank. The application will request $230 000, as approved by the Housing Trust Fund Committee. . The application proposal will again target all lower-income households, with assistance to 23 buyers, all eaming less than 50% of area median income. Five-year forgivable loans will be offered, for down payments and closing costs. Buyers will be required to contribute three percent of the purchase price. Participating lenders will provide first mortgages for the balance of financing. . . . In addition, the program design includes AHP funds for costs of necessary rehabilitation. Up to $5000 per home will be made available for rehab, as part of the forgivable loan package. All participating families will again be required to attend the homebuyer workshops, sponsored by the County Extension office. The Housing Department will inspect all homes, specify necessary repairs, authorize payments and monitor rehabilitation activities. All AHP funds will be required to be expended within a twelve-month timeframe. It is expected that announcement of the award will be made by June. As part of the application package, member Federal Home Loan Bank members are encouraged to enlist the sponsorship of local area govemments. The Housing Department has convened the discussion among the lenders and has proposed that City sponsorship again be incorporated within the project proposal. The sponsorship must be endorsed by the City Council. Recommendation It is recommended that the Council endorse the attached resolution. This program of homeownership assistance will complement existing programs currently sponsored by the City. These include the First Time Homebuyer Program, funded with CDBG revenues, operating City-wide for households earning up to 80% of area median income; and the Moderate Income Home-buyer Program, for families earning 80-100% and funded with a grant from the Iowa Department of Economic Development. The Affordable Housing Program grant - named PATH: Pathways Affordable to Homeownership - will complement these activities by emphasizing assistance to lower-income (below 60% median) households, incorporating rehabilitation assistance and making properties throughout the targeted neighborhoods elilgible for purchase. As with all the Housing Department's lending activities, this program will serve to enhance the existing partnerships the City enjoys with Dubuque's lending institutions. The participating banks will gain credit for federal Community Reinvestment Act (CRA) activities in support of income-qualifying households. And the City will continue to promote its objectives of providing assistance to families seeking their dream of homeowership, while serving to revitalize the downtown neifghborhoods. Action Step The action requested of the City Council is to approve the Mayor's execution of the attached resolution, in sponsorhip of an application for Affordable Housing Program funds to the Des Moines Federal Home Loan Bank.