06-12-1985 Council Agenda - Laserfiche WebLink

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City Officials May 2, 1985 Page 2 for both State agencies and local communities to sell mortgage revenue bonds. This same law also limits the total volume of bonds which can be sold in each state during a calendar year. For this reason, the MHFA Board of Directors took action in 1983 which allows the MHFA to work more closely with local communities in using tax - exempt bond funds to meet local housing goals. These actions have resulted in the Municipal Home Mortgage Program, as well as a local participation program for home improvement loans. The funds for the Municipal Home Mortgage Program are provided under the MHFA Single Family Mortgage Loan Program (SFMLP). Thus, most of the requirements and administrative procedures of the SFMLP apply. Notwithstanding this fact, under the Municipal Home Mortgage Program, local communities are given flexibility to design their own mortgage programs, and within certain constraints, to address their local housing needs. Such programs may be as targeted as to provide for construction of a certain project or end loan financing for certain rehabilitated homes, or as open as to simply provide financing opportunities for first -time homebuyers within the community. Local communities may also implement variations to the MHFA SFMLP to meet their objectives, such as imposing a lower adjusted income requirementsfor local participants, providing a commitment to a specific builder or real estate agent to deliver the program, leveraging local funds with the mortgage funds to provide more affordable housing opportunities, targeting funds to certain geographic areas within the community, and imposition of more restrictive energy requirements. Local communities must make arrangements with a local mortgage lender to deliver the program in accordance with local program requirements and MHFA requirements and procedures. Local mortgage lenders should be informed that they would net fee income of 2% of the original principal balance of each mortgage loan closed under the program; mortgage loan servicing shall be assigned to a lender designated by MHFA. Also, MHFA may require the local mortgage lender to sell loans to MHFA through a designated program administrator (known as a "Review Contractor ") if, in MHFA's sole discretion, the local mortgage lender does not have adequate secondary market mortgage lending experience to sell loans directly to MHFA. As specified above, to be eligible to submit applications under the Municipal Home Mortgage Program, the local community must have a population of 5,000 or more. The maximum commitment of mortgage funds to a local community under the Program may not exceed $2 million. MHFA will not consider applications for mortgage funds under $500,000 or over $2 million for communities with populations of 10,000 or above, or requests under $250,000 or over $2 million for communities with populations between 5,000 and 10,000. 3 7