R-80-330 - 9/25/1980of repair; and
CITY OF ROUND ROCK, TEXAS
DEPOSIT CONTRACT
LOAN INDEMNIFICATION FUNDS
PART I
This Contract made and entered into this „2,S rN day of4W
1980, by and between Equitable Savings, 200 West Main Street, Round Rock, Texas;
Farmers's State Bank, 1111 North Interregional 35, Round Rock, Texas; and First
National Bank, 118 East Main Street, Round Rock, Texas, hereinafter referred to
as "Lenders" and the City of Round Rock, Texas, hereinafter referred to as "City ".
WITNESSETH
WHEREAS, the City has received a block grant from the Department of Housing
and Urban Development (HUD) to provide adequate housing for low and moderate
income residents of the City of Round Rock, Texas, Community Development Project
Area, hereinafter referred to as "McNeil Area ", by 'rehabilitating houses in need
WHEREAS, the financial plan for this rehabilitation effort involves lever-
; -
aging private financial resources to provide affordable loans to low and moderate
income families; and
WHEREAS, the intended use of loan repayments and interest earned, as well
as the proposed use of deposited rehabilitation funds includes: (a) making
direct rehabilitation loans; (b) paying interest subsidies or establishing a
fund for payment of subsidies on rehabilitation loans made by LENDERS; (c)
guaranteeing repayment of rehabilitation loans made to property owners by
LENDERS; (d) serving as collateral for financing actually extended to make
rehabilitation loans or grants; (e) funding reserves and /or paying issuance
of bonds or notes used to fund rehabilitation loans or grants; and (f) paying
reasonable administrative fees and charges of LENDERS and the CITY related to
its financing of rehabilitation efforts; and
WHEREAS, the above named LENDERS are federally insured private financial
institutions in the City of Round Rock, Texas, and desire to participate in the
financing of this rehabilitation effort by providing subsidized financing for
eligible property owners who qualify for first and second mortgage loans under
current standard lending criteria,
NOW, THEREFORE, upon the terms and conditions hereinafter set out, the
LENDERS and CITY agree as follows:
(1) This contract shall be effective for the purpose of making loans for
rehabilitation for a period of one year from date.
(2) The CITY shall divide whatever Community Development Block Grant funds
it receives between each of the three LENDERS, and LENDERS shall place said rehabili-
tation funds in accounts or certificates providing the CITY the maximum yield
on its investment. The interest shall accumulate and be withdrawn only with
mutual consent of the CITY and LENDER ihvolved, and interest earned by the CITY
shall be to support eligible rehabilitation activities, under 24 CFR 570.202 of
HUD regulations. This principal fund, however, shall be used to pay loans in
default, if any.
(3) Each LENDER shall appoint one member to the Application Review Committee
(ARC). The ARC shall approve all loan applications and assignments to a LENDER.
(4) The LENDER will reserve the right to apply standard credit review
procedures to each applicant for a Home Improvement Loan.
(5) The LENDER to which the application is submitted will then advise the
CITY, within one week thereafter, of whether the loan application is preliminarily
approved.
(6) If the potential borrower is found to be eligible, the CITY will
inspect the property to determine the extent and costs of necessary rehabilitation
work. The CITY will gather detailed specifications, bid documents, and other
necessary information to submit to the LENDER for final approval.
(7) While approximately $206,150.00 is anticipated to be budgeted for this
rehabilitation fund program and deposited with the LENDERS, the CITY and LENDERS
understand and expressly agree that all funding referred to in this contract,
and the terms hereof, are conditional upon approval by the U.S. Congress and
HUD.
(8) Accounts shall be reviewable annually by the CITY, ARC, and LENDERS to
determine which accounts will be assumed by the LENDER under its normal lending
procedures and release the CITY from its obligation.
(9) The CITY will make periodic disbursements to the LENDER as requested
by the LENDER for administrative expenses associated with the rehabilitation
program.
(10) The LENDER will make a maximum loan to eligible borrowers for amounts
not exceeding $18,000.00.
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(11) The interest rate will be set by the ARC and shall not exceed the
Federal Home Loan Mortgage Corporation (FHLMC) sixty -day rate on the date of
submission of the application. The interest rate will not fluctuate during
the loan period and shall be at a simple rate.
(12) A rotating basis will be used for submission of loan applications
in the following alphabetical order: Equitable Savings and Loan Association,
Farmers' State Bank, and First National Bank. If an eligible borrower already
has an existing loan and /or account with one of the LENDERS, the loan appli-
cation will be submitted to that LENDER for approval or disapproval and the
rotation basis procedure will be adjusted accordingly.
(13) If a loan application is disapproved by the ARC, the CITY shall
have the option to underwrite and to guarantee the loan to the LENDER to which
the application was initially sent.
(14) The ARC will advise the LENDER of the'method of financing to be
used.
(15) The loan program will be administered as follows:
The CITY will perform an initial screening of applicants for rehabilitation
loans and shall, in turn, submit a preliminary screening package to the ARC
for each applicant for approval. This package will include the following:
1. Pre - application form
2. An informal title search,(Mortgagee!s Information Letter :from
a•title company) "
3. A work write -up and cost estimate
4. A credit report (Bank will order) r s
At the time of the loan closing, the following will be added and provided to
the LENDER:
1. A copy of the winning bid document
2. Any information regarding tandem financing for rehabilitation
3. LENDER forms which provide verification of employment, mortgage,
deposit, and other earnings, along with a signed application for
the rehabilitation loan.
(16) The CITY will pay the cost of the following loan processing
requirements: written credit reports, appraisal fees (which shall be limited
to $60.00 per appraisal and shall be performed by the appraiser chosen by the
LENDER involved, but with no charge being made for the appraisal if the appli-
cation is disapproved), title examination, which shall be performed by an
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attorney selected by the CITY,` but which must be an approved attorney of each
of the LENDERS, all document preparation including note, mortgage, and deed,
and all recording fees.
(17) The CITY will deposit, at the time of loan closing, a sufficient
amount of "interest ", "rebate or subsidy ", to be charged over the full period
of the loan in a passbook account to cover all interest charges over the life
of the loan when appropriate.
(18) The LENDER will make periodic disbursements to contractors, as
directed and approved by the CITY, with supporting documentation agreed upon
by the CITY and the LENDER.
(19) If the borrower becomes sixty (60) days past due on the loan, the
LENDER shall notify the City in writing. When the borrower becomes ninety(90)
days past due, and if the LENDER decides to enforce its mortgage lien by a
legal foreclosure action, the LENDER, prior to filing such action, shall give
the CITY twenty (20) days written notice for the purpose of permitting the CITY
the option to purchase the loan declared to be in default, from the reserve
account. -
(20) In consideration of the large amount of rehabilitation funds to be
deposited in its institutions, and the agreement of the CITY to purchase loans
in default from the CITY'S reserve account to avoid expense of a foreclosure
action by the LENDERS, the LENDERS agree to provide these loans herein referred
to without charging origination fees or discount points.
(21) In carrying out the program specified in this agreement, the LENDER
shall comply with the CITY'S Grant Agreement with the U.S. Department of
Housing and Urban Development.
(22) The LENDER will not make loans under this program to any City
employee or CITY board member who directly or indirectly exercises any respon-
sibility or function with respect to the Community Development Program, or to
any elected official of the City of Round Rock, without prior written approval
from the HUD office in San Antonio, Texas.
DISCLAIMER
This Agreement may be modified or amended by the parties to this contract by
their executing and approving such modification or amendment in the same manner
as this agreement with the approval of HUD.
Also, upon thirty (30) days written notice, either party may terminate this
agreement as to all future loans. However, the LENDER will' be responsible
for the continued administration and servicing of all loans made prior to
termination.
n ,
In the event that any * portion of this contract is in violation of federal or
state laws or regulations, only that portion of the contract is to be considered
void by both parties (LENDER and CITY), and the remaining provisions of this
contract shall remain in full force and effect.
ATTACHMENT: This contract is subject to and does hereby incorporate the
attached hereto as Part II.
Executed in quadruplicate originals of this day 46479/4;4)645, /Wig
CITY OF RO
By
ROCK, TEXA
y Tonn, Mayor
City of Round Rock, Texas
ATTEST:
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EQUITABLE SAVINGS
By
FARMERS' STATE BANK
FIRST NATIONAL BANK
PART II
COMPLIANCE WITH GRANT REQUIREMENTS
A. The Contractor complies with Executive Order 11246, entitled
"Equal Employment Opportunity ", as amended by Executive Order 11375,
and as supplemented in Department of Labor Regulations (41 CFR, Part
60). T '
B. The Contractor complies with the Copeland "Anti -Kick Back" Act
(18 U.S.C. 874) as supplemented in Department of Labor Regulations (29
CFR Part 3).
C. The Contractor complies with the Davis -Bacon Act (40 U.S.C. 276a
to a -7) and as supplemented by Department of Labor Regulations (29 CFR
Part 5).
D. The Contractor complies with Sections 103 and 107 of the Contract
Work Hours and Safety Standards Act (40 U.S.C. 327 -330) as supplemented
by Department of Labor Regulations (29 CFR, Part 5).
E. The Contractor shall allow the grantee, the Federal grantor
agency, the Comptroller General of the United States, or any of their
duly authorized representatives, to have access to any books, documents,
papers, and records of our firm which are directly pertinent to this
specific grant program for the purpose of making audit, examination,
excerpts, and transcriptions.
F. The Contractor complies with all applicable standards, orders, or
regulations issued pursuant to the Clean Air Act. of 1970 (42 U.S.C. 1857
et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et
seq.) as amended.
G. During the performance of this contract, the contractor agrees as
follows:
1. The Contractor will not discriminate against any employee or
applicant for employment because of race, color, religion, sex, or national
origin. The contractor will take affirmative action to ensure that applicants
are employed, and that employees are treated during employment, without regard
to their race, color, religion, sex, or national origin. Such action shall
include, but not be limited to, the following: Employment, upgrading,
demotion, or transfer, recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of compensation; and selection for
training, including apprenticeship. The contractor agrees to post in con-
spicuous places, available to employees and applicants for employment,
notices to be provided by the contracting officer setting forth the pro-
visions of this nondiscrimination clause.
1 :_ '. ' .
2. The contractor will, in all solicitations or advertisements
for employees placed by or on behalf of the contractor, state that all
qualified applic will receive consideration for employment without
regard to race, color, religion, sex, or.national origin.
3. The contractor will send to each labor union or representative
of workers with which he has a collective bargaining agreement or
other contract or understanding, a notice to be provided by the Contract
Compliance Officer advising the said labor union or workers' represen-
tatives of the contractor's commitment under this section and shall post
copies of the notice in conspicuous places available to employees and
applicants for employment.
4. The contractor will comply with all provisions of Executive
Order 11246 of September 24, 1965, and of the rules, regulations, and
relevant orders of the Secretary of Labor.
5. The contractor will furnish all information and reports
required by Executive Order 11246 of September 24, 1965, and by the
rules, regulations, and orders of the Secretary of Labor, or pursuant
thereto, and will permit access to his books, records, and accounts by
the Department and the Secretary of Labor for purposes of investigation
to ascertain compliance with such rules, regulations, and orders.
6. In the event of the contractor's noncompliance with the non-
discrimination clauses of this contract or with any of such rules,
regulations, or orders, this contract may be canceled, terminated or
suspended in whole or in part and the contractor may be declared in-
eligible for further Government contracts or federally assisted construc-
tion contract procedures authorized in Executive Order 11246 of
September 24,_1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
7. The contractor will include the portion of the sentence
immediately preceding paragraph (1) and the provisions of paragraphs
(1) through (7) in every subcontract or purchase order unless exempted
by rules, regulations, or orders of the Secretary of Labor issued pursuant
to section 204 of Executive Order 11246 of September 25, 1965, so that
such provisions will be binding upon each subcontractor or vendor. The
contractor will take such action with respect to any subcontract or
purchhse order as the Department may direct as a means of enforcing
such provisions, including sanctions for noncompliance: Provided,
however, that in the event a contractor becomes involved in, or is
threatendd with, litigation with a subcontractor or vendor as a result
of such direction by the Department, the contractor may request the
United States to enter into such litigation to protect the interest of
the United States.
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WHEREAS, the City has received a block grant from the De-
partment of Housing and Urban Development, and
WHEREAS, the grant funds will be used to provide subsi-
dized financing by private institutions for the rehabilita-
tion of low and moderate income housing, and
WHEREAS, Equitable Savings, Farmers State Bank, and
First National Bank have agreed to participate in the pro-
gram, and
WHEREAS, the City Council desires to enter into a De-
posit Contract with said financial' institutions, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
That the Mayor is hereby authorized and directed to
execute on behalf of the City a Deposit, Contract- with the
r _ t _
aforementioned financial institutions, a copy of said con-
tract being attached hereto and incorporated herein for all
purposes.
ATTEST:
RESOLVED this 25th day of Septel 1980.
L ' RYL L. ONN, Mayor
City of Round Rock, Texas
h am 4,
i.
' IA/ J/1
J?'NNE LA D5 C ty Secretary
RESOLUTION NO. 33D R