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CC Resolution No. 8339 RESOIlJI'ION NO. 8339 A RESOIlJI'ION OF 'lHE CITY OOUNCIL OF 'lHE CITY OF aJPERl'INO AUIHORIZING EXmJI'ION OF A rnoPERATIVE AGREEMENI' BEIWEEN THE <XJUNI"{ OF SANTA Cf.ARA AND THE Cl'I'Y OF aJPERl'INO FOR PARI'ICIPATION IN A IDRIGAGE CREDIT CERI'IFICATE P:RCX;RAM AND AUI'HORIZING APPLICATION FOR ALIDCATION OF IDRIGAGE CREDIT CERI'IFICATE ISSUANCE AUIHORITY WHEREAS, there opportunities within harnel:uyers¡ and is a continuing need for affordable homeownership the City of CUpertino, particularly for first-t:i1ne WHEREAS, issuance of Mortgage Credit certificates to individual home purchasers would enhance the affordability of both new and existing homes within the statutory limits and thus enable the City to help meet its assisted housing goals for lOCJderate income persons, as described in the General Plan Housing Element¡ and WHEREAS, there has been presented to the City council a cooperative agreement between the City of cupertino and County of Santa Clara regarding participation in a mortgage =edit certificate program¡ and WHEREAS, the terms and conditions of said agreement have been reviewed and approved by the Director of Planning and Development and the City Atto=ey¡ NOW THEREFORE, BE IT RESOLVED that the designated representative of the Santa Clara County Board of Supervisors is hereby authorized to make immediate application to the state Mortgage Bond Allocation CoImnittee in the name of the City of CUpertino for a mortgage bond allocation in the amount of $250,000 to be converted for authority to issue Mortgage Credit certificates in the amount of $62,500 (based upon the 4: 1 conversion factor) ¡ PASSED AND AOOPl'ED at a regular meeting of the City Council of the City of CUpertino this ~ day of March , 1991 by the following vote: VOI'E: MEMBERS OF THE CITY mUNCIL AYES: NOES: ABSENI': ABSTAIN: Goldman, Sorensen, Szabo, Koppel None Rogers None APPROVED: /s/ Barb Koppel MAYOR, CITY OF CUPERl'INO A'ITEST: /s/ Dorothy Cornelius Cl'I'Y CLERK pcresos/rsomcc CXJOPERATIVE AGREEMENI' BEIWEEN THE 00UNl'Y OF SANI'A CIARA AND THE Cl'I'Y OF aJPERI'IN0 '!HIS CXJOPERATIVE AGREEMENI' ('!he "Cooperative Agreement") is made and entered into as of March 4, 1991, by and between the (X)UN!'Y OF SANl'A CIARA, a legal suIxlivision and 00dy corporate and politic of the state of ealifonria (the "County"), and the city of cupertino, a municipal corporation of the state of ealifonria (the "City"). WHERFAS, the Tax Reform Act of 1984 established the Mortgage Credit Certificate Program (hereinafter referred to as ''MCC PRCX::RAM") as a means of assisting qualified individuals with the acquisition of new and existing single family housing; and WHERFAS, the County and the City have heretofore determined to engage in an MCC Program pursuant to Clapters 1399, statutes of 1985 Section 50197, et seq of the Health and Safety Code of the state of ealifornia (the "Act") in order to assist individual home purchasers in the County to afford both new and existing homes within the statutory limits as provided for in said Act; and WHERFAS, in furtherance of the MCC Program, the City Council has authorized the County to apply to the state of ealifonria Debt Limit Allocation Canunittee (mIAC) in the name of the City of cupertino for a mortgage borxi allocation in the amount of $250,000 to be traded for authority to issue Mortgage Credit Certificates in a face amount of $62,500 (based upon the 4: 1 trade-in value of borxi allocation); and WHERFAS, it is expected that the City's application for the MCC Program will be subsequently approved by the mIAC; and WHERFAS, the County Housing Borxi Coordinator is administering a Countywide MCC Program; and WHERFAS, the City and the County wish to cooperate with one another pursuant to the Act in the exercise of their powers under the Act for the purposes of the MCC Program; WHERFAS, the County will be operating an MCC Program in the County, and the City desires that the Program be applicable to otherwise eligible real property in the City; NOO, THEREFORE, in consideration of the covenants hereinafter provided, the parties hereto agree as follows: SECITON 1. The woros and phrases of this Cooperative Agreement shall, for all purposes hereof unless otherwise defined herein, have the meanings assigned to such woros and phrases in the Act. SærION 2. 'Ihe City represents and warrants to the County that: (i) the City has heretof=e adopted a General Plan f= the City in conformance with the provisions of the Planning and Zoning Law of the state of california (Goverrnænt Code Sections 65000 et seq.), (H) said General Plan includes a land use element and a housing element as required by Government Code Section 65302, and (Hi) the Program complies with said land use element and housing element. SærION 3. 'Ihe county shall continue to staff a program for the effective administration of the Mœ program within the geographical bo\.l!XJaries of the County. 'Ihe County shall continue its cooperation with local real estate and lending institutions in order to maintain their participation in securing applications from eligible applicants f= review and approval by County representatives on behalf of the County and the city. SærION 4. If, during the term of this agreement, the city determines that it cannot utilize all of the Mœ allocation provided by the mIAC, the City will have the option to assign a portion of the allocation to the County for redistribution among the County and other participating cities. SærION 5. '!his agreement may be terminated by either party upon 90 days written notice delivered to the other party. The term of this agreement shall extend until such termination by written notice. SærION 6. The City agrees to undertake such further proceedings or actions as may be necessary to can:y out the terms and intent of this agreement as expressed in the recitals hereto; provided, however, that nothing herein shall require the City to appropriate any funds to the County for services under this agreement. Funds for the administration of the program shall be derived by the County from the application fee paid by Mœ applications administered by the County. These fees shall be collected and retained by the County in all cases administered by the County including those where the City's Mœ allocation is debited. SærION 7. Nothing in this Cooperative Agreement shall prevent the County from entering into one or more agreements with other municipal corporations within the County, if deemed necessary and advisable to do so by the County. SærION 8. '!his Cooperative Agreement may be amended by one or more supplemental agreements executed by the County and the City at any time. SærION 9. relationship of County . Nothing contained herein shall be interpreted to impose a partners of joint ventures between the City and the SærION 10. The County agrees to indemnify, defend and hold the City, its officers, attorneys, employees and agents harmless against any and all clailns, danages or causes of action arising from any act or omission on the part of the county, its officers, attorneys, employees and agents. IN Wl'INESS WHEREDF, the parties hereto have caUSed this Cooperative Agreement to be executed and attested by their proper officers thereunto dully authorized, and their official seals to be hereto affixed, all as of the day first above written. aJUNl'Y OF SANl'A CUIRA (SEAL) ATI'EST: By C1airperson of the Board of SUpervisors ATI'EST: Clerk, Board of SUpervisors APPROVED AS 'IO FORM AND LÐSALITY: City of County Counsel By Mayor ATI'EST: APPROVED AS 'IO FORM City Clerk City Atton1ey (MISC\AGREEMcc) EXHIBIT A MORTGAGE CREDIT CERTIFICATE SUMMARY, SANTA CLARA COUNTY, CA. Printed 1/24/91 Issuing .:'.,·}'\1990,\::,....: MCCs Jurisdiction Aíiôêåtiôn'" Committed' Santa Clara Co. $7,722,522 254 Los Gatos will draw from County Allocation San Jose Target Area'" Campbell Gilroy Cupertino Mountain View Milpitas Morgan Hill Sunnyvale Santa Clara Palo Alto TOTAL $8,400,006 $350,000 $1,500,066 $899,898 $82,500 $2,100,027 $1,800,047 $472,500 $1,900,040 $1,652,394 $82,500 $26,962,500 Allocations Used $6,299,842 340 o $8,390,038 $0 Allocations Remainina $1,422,680 $9,968 $350,000 $756,652 $432,173 $22,920 $857,587 $477,043 $94,540 $837,837 $678 $44,848 $5,306,926 MCCs Remainina" 57 o 14 28 16 1 35 17 4 31 o 4 207 Issuing ,...,.....1989...,.", MCCs Allocations Allocations MCCs "'------"',""---' Jurisdiction ·,··'·'.:Allôêåt¡On.:'.:' Committed' Used Remainina Remainina" San Jose $5,000,000 246 $4,997,164 $2,836 0 Santa Clara Co, $3,902,394 178 $3,901,890 $504 0 Santa Clara $850,000 39 $850,000 $0 0 TOTAL $9,752,394 463 $9,749,054 $3,340 0 28 $743,414 17 $467,725 $59,580 $1,242,440 $1,323,004 $377 ,960 $1,062,203 $1.651,716 . Includes commitments and certificates as of January 28, 1991. .. Estimated number of additional MCCs that can be issued, based on average mortgage amount for each jurisdiction, to date, ... San Jose Target Area is Census Tract 5009 bounded by East Santa Clara, South 10th, East William, and South 1st Street. By law, a certain portion of the MCC allocation must be reserved for the target area for one year, 2 51 47 15 39 66 3 $37,652 862 $21,655,574 MCCs and Commitments issued 2I28/9CHJ1/28/91 = Average Mortgage = 1990 Mortgage Credit Certificate Authority used = 662 $125.612 $21.655.574 Housing Bond Coordinator, 70 West Hedding Street. 11th Floor, San Jose, CA 95110 ARE YOU BUYING YOUR FIRST HOME? An MCC CAN HELP! Jð~~TC!Ã~Ë~<;}~Yf,m CERTIFICATE <i..,..,"'.". , ',',',' "'p ','" ,. ,','..,. " ".... 'i>rogram ". .',,',.', ," ','. If you are eligible, a Mortgage Credit Certificate (MCC) can help you qualify for a mortgage loan, and it can reduce your effective mortgage interest rate by two percentage points. The Mortgage Credit Certificate Program, authorized by Congress in the Tax Reform Act of 1984, provides financial assistance to first-time home-buyers for the purchase of single-family homes, townhouses, and condominiums, An MCC gives the home-buyer a federal income tax credit each year the buyer keeps the same mortgage loan and liyes in the same house. The MCC tax credit equals 20% of the mortgage interest paid each year. That 20% is subtracted dollar-for-dollar from your federal income taxes. The remaining 80% of your mortgage interest is taken as a deduction from gross income in the usual manner. 0 t1 >< ::z:: .... = .... ....¡ = Your Realtor can ønswer /Ù/ of your questions .waut th£ MCC progrœn. If you Iuroe ø p"rticulJJr problem or question, you ""'y write or aùl us: MCC PlOgrøm, County of San'" CLua 70 West Hedding Street, 1 Hh Floor San Jose, CA 95110 (408) 2994711 HOW THE MCC BENEFITS THE HOME-BUYER EFFECTIVE MORTGAGE RATES WITH AND WITHOUT AN MCC Without With MCC MCC Sales Price $145,000 $145,000 First Mortgage Amount $130,000 $130,000 Mortgage Interest Rate 10.75% 10,75% Term (years) 30 30 Monthly Mortgage $1,214 $1,214 Payment MCC Rate - 20% Monthly Credrt Amount - $233' Effective Monthly Mortage Payment $1,214 $981 Effective Interest Rate 10.75% 8.2% , represents a do/lar·for-doflar tax credit The MCC will reduce the amount of your income taxes otherwise due to the federal goyemment; howeyer, the tax benefit cannot exceed the amount of federal taxes owed for the year, after other credits and deductions haye been taken. Instead, the unused tax credits can be carried forward three years, until used. INCOME TAX DETAILS You may wish to adjust your federal income tax withholding (W-4) in order to receiye the MCC benefit on a monthly basis. Talk to your payroll department at your place of work. By reduång YOUT monthly withholding, you will haye more disposable (after-tax) income with which to make mortgage payments. WHAT IS THE DIFFERENCE BETWEEN A "TAX CREDIT" AND A "TAX DEDUCTION"? A "tax deduction"is subtracted from your adjusted gross income before you calculate YOUT federal income taxes. A "tax credit," on the other hand, entitles you, the taxpayer, to subtract the amount of the credit from your total federal income tax bill. 0 ' We are not tæ""d17Ísors. If you Iuroe øny questions about how your taxes will be affected, you should consult your tax aæoun"'nt or call th£ IRS øt 1 (800) 424,1040, WHERE CAN I BUY A HOME? Eleven cities in Sånta Clara County participate in the Mortgage Credit Certifi- cate Program, You may obtain an MCC if you buy a qualifying residence in anyone of the following cities. . Application Fee: You pay a!!.Q!l- refundable application fee of $150 to your lender; $100 of that goes to Santa Clara County to administer this program. Campbell Cupertino Gilroy Los Gatos Milpitas Morgan Hill Mountain View Palo Alto San Jose Santa Clara Sunnyvale Your Redtor can answer aU of your questwns about tlr" MCC program. If you have a particular problem or question, you may write or call us: to:! ~ 0:1 .... 0:1 .... ..,¡ 0:1 MCC Program, ûunty of Santa Clara 70 West Hedding Street, 11thf/!>!>, San lose, CA 95110 (408) 299-4711 After the escrow closes and you receive your MCC, you can take the income tax credit eyery year, as long as you keep the same home and the original first mortgage and continue to live in the house as your principal residence. 0 WHO AND WHA TIS ELlGIBILE? · First-Time Homè-"Buyers:· Those per- sons who have not owned a "principle residence" within the past three years. , Owner-Occupants: You must live in the house you are buying. · Income: Your total household income (and that includes the income of anyone who is listed on the title with you) cannot exceed: $54,000 if there are one or two persons in your household; , $62,100 if there are three or more per- sons in your household. · House Prices: You can get an MCC in Santa Clara County if you buy a home that costs less than: $211,972 if the home is new, never previously occupied. In San Jose, the maximum is $188,419." $194,394 if the home is existing and has been preYiously occupied. In San Jose, the maximum is $172,794." · Figures are based on Average Area Pur- chase Prices for Santa Oara County of $235,524 for new housing and $215,993 for existing housing as determined by a county-wide survey in May 1989. The figures will be up- dated from time to time. . No refinancings or subordinated mortgages: An MCC can only be issued to a home-buyer who is obtaining a new first mortgage. You cannot refinance your existing mortgage or assume a seller's existing mortgage. HOW DO I GET AN MCC? The County does not make home loans. You, the home-buyer, go through the normal process of choosing a Realtor, finding a house, condo, townhouse or mobile home, and arranging financing with one of our parlicipating lenders. The lender determines that you and the home you are buying are eligible, fills out the MCC application forms for you, and sends them to the County. The County reviews the forms sent in by the Lender to verify that you and your home qualify. The County can then issue an MCC.