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HomeMy WebLinkAbout19- Amendment 2 to PSA - The Human Resources Development Council - Affordable Housing Program Services <�4N, SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS SECOND AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR Affordable Housing Program Services dated the 7th day of March, 2016 (the"Agreement") is made and entered into this :, day of March, 2019, by and between the CITY OF BOZEMAN, MONTANA, a self-governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as "City," and, The Human Resources Development Council,hereinafter referred to as "Contractor." In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 1. Extension of Term. Section 30 of the Agreement is extended for an additional one(1) year period. The Agreement shall terminate on March 7th,2020. 2. Agreement still valid. All remaining terms and provisions of the Agreement remain valid. ****END OF AGREEMENT EXCEPT FOR SIGNATURES Second Amendment to Professional Services Agreement for Affordable Housing Program Services FY 2019-FY 2020 77 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA HRDC District IX,Inc. B B Andrea S&ratt, ' a a rC4fe—afferenier, e ident/CEO APPROVED AS TO FORM By: Greg ll n, Bozeman City Attorney Second Amendment to Professional Services Agreement for Affordable Housing Program Services FY 2019-FY 2020 78 HRDC PROPOSAL FOR SERVICES For Affordable Housing Flag Implementation — City of Bozeman OVERVIEW HRDC is pleased to submit this proposal for services to support the City of Bozeman in achieving its goals for affordable housing development by providing an expanded version of our homeownership center services including pre-approval processes for new developments, loan originations, monitoring,deed re-conveyances at sale, and compliance components. The purpose of this proposal is to assist the City in administering Chapter 38,Article 43, Bozeman Municipal Code as created pursuant to Ordinance 1922,and to achieve the goals outlined in Affordable Housing Ordinance Administrative Manual. HRDC is certified by The US Department of Housing and Urban Development to provide housing counselling and education. Structure <Homebuyer Education and Certification: $20,000 annually HRDC's homebuyer education provides an important first point of entry for many local residents seeking affordable housing. Our nine hour, comprehensive homeownership education course, directed by a HUD- approved instructor, helps potential homeowners to better understand the home purchase process.Topics covered include:the advantages and disadvantages of homeownership; assessing homeownership readiness; understanding credit; managing your finances;the mortgage process; special programs for first time buyers; shopping for a home, a lender, and a realtor;closing your deal; and maintaining your home and your finances after you purchase. Completion of homeownership education makes customers a smarter, better borrower, and may help them become eligible for down-payment assistance, low-interest mortgages, and matched savings programs. The course is open to everyone and is free of charge. HRDC commits to providing a minimum of 18 Homebuyer Education classes in the City of Bozeman annually with an anticipated participation of 300 local residents. <Pre-Purchase Counselling and Screening for Pre-Approval:$20,000 annually Pre-purchase counselling is provided by HUD certified counselors on a one on one basis to local residents with the purpose of helping households better understand their specific home buyer readiness and identify any barriers to successful and sustainable homeownership. HRDC will assist clients with budgeting,credit, home search,financing,low-interest loan and other subsidy programs, home care and maintenance, purchase procedures,closing, RESPA, loan document review services,terms, and other necessary aspects to purchasing a home.As part of the initial counseling session, all clients receive the following materials, "For Your Protection, Get a Home Inspection", and "Ten Important Questions to Ask a Home Inspector", along with disclosure regarding housing quality standards. Anticipated participation in pre-purchase counseling is more than 200 households annually. HRDC will evaluate and determine eligibility for anyone interested in purchasing a home generated through the Inclusionary Housing Policy. Eligible applicants will be placed on a waiting list and notified of new developments as they are approved by the City of Bozeman. 1 83 Also included in pre-purchase counselling session is an assessment for eligibility for Down Payment Assistance and Secondary Lending opportunities which are available locally through the City of Bozeman's affordable housing initiatives and the HOME Program Homebuyer Assistance Programs in partnership with the Montana Department of Commerce. Process for pre-approval for affordable building options: 1. Homebuyer Education 9 hour course, offered twice per month. 2. Pre-purchase counselling with HRDC's HUD certified counselor 3. Determine eligibility pursuant to: a. between 65-80%of Area Median Income(qualified for down payment assistance); b. between 81-100%of Area Median Income (qualified for purchase of moderate priced homes); c. 1st time homebuyer as defined by HUD; d. Pre-qualification for 1st time mortgage from lending institution, pursuant to item (f)of Section 3, Pricing of Affordable Homes; e. Estimate housing ratios to ensure maximum housing expense ratio of 33%; f. Home will be purchaser's primary residence; g. Full purchase price is below identified program limits; h. Unit must pass Uniform Physical Conditions Standards (as defined by MDOC); i. Household's liquid assets projected at the time of closing not to exceed$25,000; 4. Meet with participating SWMIBIA builder to discuss potential locations, building options, pricing, etc. 5. Written pre-approval for secondary loan through down payment assistance program (if applicable)or written approval of income eligibility for moderate priced homes; 6. Placement on the waiting list for homes constructed via the Inclusionary Housing Program. Pre-approval will be conducted pursuant to Items(d)and(e)of Section 3, Pricing of Affordable Homes, and Section 6,Applying for, Qualifying, Buying, and Occupying Lower-Priced Homes <HomeKeeper system management, maintenance and data sharing: $1,000 annually HRDC has invested in the HomeKeeper program management system. HRDC will provide City staff with one of our available licenses to assist in pipeline management and communications. HRDC will be responsible for maintaining the annual license(full cost totals$2,500)with City assistance. Both parties will utilize HomeKeeper to share information,track customer progress, and manage waitlists and pipeline. <Loan Origination/Deed Restriction/Lien Documents: $1,000 per closing Trained professionals that hold certification in home ownership counselling,financial literacy training and foreclosure prevention act as a support and intermediary with local real estate agents, lenders and title agents to ensure that the home purchase process including down payment assistance, is carried out efficiently and in compliance with program regulations. Loan origination/Deed Restriction/Lien Document components will be conducted pursuant to Section 8, Recordation and Subsidy Recapture for Lower- Priced Homes. This will be verified pursuant to Section 6, Review of Sales Contract. <Monitoring; Compliance: $100 per loan per year This ensures that Bozeman residents (who have participated in the affordable housing program)are utilizing the assisted housing unit as their primary residence. Each owner will sign an occupancy agreement upon closing and will be asked to provide documentation of owner occupancy on an annual basis. Staff time of 4 hours per household annually to document compliance. Owner-occupancy will be verified annually pursuant to Section 6, Owner-Occupancy Requirement, Method of Verification. <Deed Re-conveyance/Subsidy Recapture at resale: $250 per re-conveyance/recapture When a homeowner has met one of the conditions of deed re conveyance(i.e. first mortgage paid in full, sale of the home, re-finance with cash back to borrower, default or no longer utilizing the unit as their primary residence)our staff work closely with customers, lenders, realtors and title agents to ensure that 2 84 all the terms of the loans are met and a payoff amount is reached and understood by all parties. Necessary documentation is originated by HRDC staff, provided to appropriate parties, and utilized to full close out the loan agreement. Staff time of 20 hours per re-conveyance. Deed Re-conveyance/Buyer subsidy Recapture Lien/Down Payment Assistance Lien Recapture will be conducted pursuant to Section 8, Recordation and Subsidy Recapture for Lower-Priced Homes. 3 85 �q�BUZZ, i �x & ^ 4�qr SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS SECOND AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR Affordable Housing Program Services dated the 7th day of March, 2016 (the"Agreement") is made and entered into this day of March, 2019, by and between the CITY OF BOZEMAN, MONTANA, a self-governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as "City," and, The Human Resources Development Council,hereinafter referred to as "Contractor." In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 1. Extension of Term. Section 30 of the Agreement is extended for an additional one(1) year period. The Agreement shall terminate on March 7th,2020. 2. Agreement still valid. All remaining terms and provisions o f the Agreement remain valid. ****END OF AGREEMENT EXCEPT FOR SIGNATURES i I I Second Amendment to Professional Services Agreement for Affordable Housing Program Services FY 2019-FY 2020 I 77 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA IIRDC District IX,Inc. By: E( Andrea Surratt, City Manager eather Grenier, P sident/CEO APPROVED AS TO FORM By: Greg Sullivan, Bozeman City Attorney Second Amendment to Professional Services Agreement for Affordable Housing Program Services FY 2019-FY 2020 78 HRDC PROPOSAL FOR SERVICES For Affordable. Housing Ira Implementation . City of Bozeman OVERVIEW HRDC is pleased to submit this proposal for services to support the City of Bozeman in achieving its goals for affordable housing development by providing an expanded version of our homeownership center services including pre-approval processes for new developments, loan originations, monitoring,deed re-conveyances at sale, and compliance components. The purpose of this proposal is to assist the City in administering Chapter 38,Article 43, Bozeman Municipal Code as created pursuant to Ordinance 1922, and to achieve the goals outlined in Affordable Housing Ordinance Administrative Manual. HRDC is certified by The US Department of Housing and Urban Development to provide housing counselling and education. Fee StruCtUre ® <Homebuyer Education and Certification: $20,000 annually HRDC's homebuyer education provides an important first point of entry for many local residents seeking affordable housing. Our nine hour, comprehensive homeownership education course, directed by a HUD- approved instructor, helps potential homeowners to better understand the home purchase process. Topics covered include:the advantages and disadvantages of homeownership; assessing homeownership readiness; understanding credit; managing your finances;the mortgage process; special programs for first time buyers; shopping for a home, a lender, and a realtor; closing your deal; and maintaining your home and your finances after you purchase. Completion of homeownership education makes customers a smarter, better borrower, and may help them become eligible for down-payment assistance, low-interest mortgages, and matched savings programs. The course is open to everyone and is free of charge. HRDC commits to providing a minimum of 18 Homebuyer Education classes in the City of Bozeman annually with an anticipated participation of 300 local residents. <Pre-Purchase Counselling and Screening for Pre-Approval:$20,000 annually Pre-purchase counselling is provided by HUD certified counselors on a one on one basis to local residents with the purpose of helping households better understand their specific home buyer readiness and identify any barriers to successful and sustainable homeownership. HRDC will assist clients with budgeting, credit, home search,financing, low-interest loan and other subsidy programs, home care and maintenance, purchase procedures,closing, RESPA, loan document review services,terms, and other necessary aspects to purchasing a home.As part of the initial counseling session,all clients receive the following materials, "For Your Protection, Get a Home Inspection", and "Ten Important Questions to Ask a Home Inspector", along with disclosure regarding housing quality standards. Anticipated participation in pre-purchase counseling is more than 200 households annually. HRDC will evaluate and determine eligibility for anyone interested in purchasing a home generated through the Inclusionary Housing Policy. Eligible applicants will be placed on a waiting list and notified of new developments as they are approved by the City of Bozeman. 't 83 Also included in pre-purchase counselling session is an assessment for eligibility for Down Payment Assistance and Secondary Lending opportunities which are available locally through the City of Bozeman's affordable housing initiatives and the HOME Program Homebuyer Assistance Programs in partnership with the Montana Department of Commerce. Process for pre-approval for affordable building options: 1. Homebuyer Education 9 hour course,offered twice per month. 2. Pre-purchase counselling with HRDC's HUD certified counselor 3. Determine eligibility pursuant to: a. between 65-80%of Area Median Income(qualified for down payment assistance); b. between 81-100%of Area Median Income (qualified for purchase of moderate priced homes); c. 1 st time homebuyer as defined by HUD; d. Pre-qualification for 1s'time mortgage from lending institution, pursuant to item (f)of Section 3, Pricing of Affordable Homes; e. Estimate housing ratios to ensure maximum housing expense ratio of 33%; f. Home will be purchaser's primary residence; g. Full purchase price is below identified program limits; h. Unit must pass Uniform Physical Conditions Standards (as defined by MDOC); I. Household's liquid assets projected at the time of closing not to exceed$25,000; 4. Meet with participating SWMIBIA builder to discuss potential locations, building options, pricing, etc. 5. Written pre-approval for secondary loan through down payment assistance program (if applicable)or written approval of income eligibility for moderate priced homes; 6. Placement on the waiting list for homes constructed via the Inclusionary Housing Program. Pre-approval will be conducted pursuant to Items(d)and(e)of Section 3, Pricing of Affordable Homes, and Section 6,Applying for, Qualifying, Buying, and Occupying Lower-Priced Homes <HomeKeeper system management, maintenance and data sharing: $1,000 annually HRDC has invested in the HomeKeeper program management system. HRDC will provide City staff with one of our available licenses to assist in pipeline management and communications. HRDC will be responsible for maintaining the annual license(full cost totals$2,500)with City assistance. Both parties will utilize HomeKeeper to share information,track customer progress, and manage waitlists and pipeline. <Loan Origination/Deed Restriction/Lien Documents: $1,000 per closing Trained professionals that hold certification in home ownership counselling,financial literacy training and foreclosure prevention act as a support and intermediary with local real estate agents, lenders and title agents to ensure that the home purchase process including down payment assistance, is carried out efficiently and in compliance with program regulations. Loan origination/Deed Restriction/Lien Document components will be conducted pursuant to Section 8, Recordation and Subsidy Recapture for Lower- Priced Homes. This will be verified pursuant to Section 6, Review of Sales Contract. <Monitoring; Compliance: $100 per loan per year This ensures that Bozeman residents (who have participated in the affordable housing program)are utilizing the assisted housing unit as their primary residence. Each owner will sign an occupancy agreement upon closing and will be asked to provide documentation of owner occupancy on an annual basis. Staff time of 4 hours per household annually to document compliance. Owner-occupancy will be verified annually pursuant to Section 6, Owner-Occupancy Requirement, Method of Verification. <Deed Re-conveyance/Subsidy Recapture at resale: $250 per re-conveyance/recapture When a homeowner has met one of the conditions of deed re conveyance(i.e.first mortgage paid in full, sale of the home, re-finance with cash back to borrower, default or no longer utilizing the unit as their primary residence)our staff work closely with customers, lenders, realtors and title agents to ensure that 2 84 all the terms of the loans are met and a payoff amount is reached and understood by all parties. Necessary documentation is originated by HRDC staff, provided to appropriate parties, and utilized to full close out the loan agreement. Staff time of 20 hours per re-conveyance. Deed Re-conveyance/Buyer subsidy Recapture Lien/Down Payment Assistance Lien Recapture will be conducted pursuant to Section 8, Recordation and Subsidy Recapture for Lower-Priced Homes. 3 85