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..,..,"'.".
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'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
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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:!
~
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....
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....
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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.