Agenda Packets - 1995/06/05 - Laserfiche WebLink

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-7- PROGRAM ADMINISTRATION: Under the MCPP, cities have flexibility in the creation and administration of a program to ddress their specific needs. In effect, cities have the option to create a more complex program, if that is necessary to properly target the funds to the neighborhood or population group in greatest need of subsidized mortgage funds. In addition, if the city has access to additional resources which may be used to further enhance the impact of the program locally, they may add a layer of guidelines as required by the source of the subsidy. For these types of local program modifications, individual cities are responsible for the clear definition of any added guidelines, and the enforcement of them at the local level (with the potential assist of the local lender). MHFA will not enforce specific local targeting guidelines or limitations added for outside subsidy sources. The Agency will, however, place descriptions of unique targeting and subsidies in marketing materials (e.g.: brochures) prepared for each city. Outside of the creation of the local program and enforcement of special added guidelines, MHFA will provide complete administrative services for the program. This includes completion of the supporting bond sale, contracting with and training of lenders, marketing support, the purchase of loans originated locally for placement into the Agency's portfolio, and periodic reporting to the cities on program fund use. Cities applying under the MCPP should be aware that the Minnesota Department of Finance will charge a modest fee to cover the costs involved with processing housing pool allotment requests. This fee -is not due with submission of this application, but must be remitted with the allocation agreement executed and returned by each city shortly before bonds are sold to fund the MCPP. The amount of the fee to be charged will be $20 for each $100,000 in allotment provided (e.g.: $60 for minimum allotment of $250,000, $200 for a $1,000,000 allotment, _etc.). To participate in the MCPP, cities must also arrange with local lenders to originate mortgage loans under the program. Enclosed with this packet, you will find a copy of our current "Minnesota Mortgage Program Lender List? Lenders shown on this list are currently under contract with MHFA to provide loan origination services for MHFA single family mortgage programs. These lenders are also familiar with mortgage industry lending .guidelines and the unique requirements of mortgage revenue bond programs necessary to process loans under the MCPP. To complete their MCPP appiicatio , each city must contact at least one lender from this list, gain their approval to midi ; ,ate MCPP loans and enclose a letter from each lender indicating their willingness to do so. It is suggested that each city designate at least two lenders to provide adequate origination services for their proposed program; especially if a large alloo to , request is involved. Once cities have identified those lenders that have agreed to participate in their MCPP application, no additional lenders may be added for the balance of the program term, unless necessary due to special circumstances (e.g., where the only experienced lender drops out). This policy will help the Agency maintain an accurate lender list for consumers. Participation in the. MCPP is optional for lenders currently offering the Minnesota Mortgage Program. Most lenders, however, find it advantageous to offer MCPP funds, given that income and purchase price limits are typically higher that those under the Minnesota Mortgage Program, that lender compensation is 1/2% higher than other Agency programs, and that there is no additional charge to the lender to originate MCPP loans.