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R-99-02-11-11B1 - 2/11/1999RESOLUTION NO. R- 99- 02- 11 -11B1 WHEREAS, the HomePlan USA Employer Assisted Housing program is a program whereby employers of residents of the City of Round Rock will provide down payment and closing cost assistance to their respective employees as an employee benefit, and WHEREAS, such assistance would be used in conjunction with additional down payment and closing cost assistance to be provided by the Texas Department of Housing and Community Affairs and the City, and WHEREAS, this program will be utilized with the City's Home Ownership Assistance Program, which will provide to qualified first time homebuyers a non - interest bearing non - assumable loan to be used to assist with purchasing their first home, and WHEREAS, HomePlan USA, L.L.C., Mortgage Guaranty Insurance Corporation, Freddie Mac, the Texas Department of Housing and Community Affairs, and the City wish to set forth their mutual intent and understandings with respect to participating in the HomePlan USA Employer Assisted Housing Program, 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 Memorandum of Understanding with HomePlan USA, L.L.C., Mortgage Guaranty Insurance Corporation, Freddie Mac, and the Texas Department of Housing and Community Affairs, a copy of such Memorandum being attached hereto and incorporated herein for all purposes. K \ WPDOCS \RESOLUTI \R9021181.WPD /ecg The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and the Act. RESOLVED this llth day of February, 1999. ATTEST: E LAND, City Secretary 2 CHARLES CULPEI7PER! M ayor City of Round Rock, Texas MEMORANDUM OF UNDERSTANDING BETWEEN HomePlan USA, L.L.C. MORTGAGE GUARANTY INSURANCE CORPORATION FREDDIE MAC TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS CITY OF ROUND ROCK, TEXAS For the HomePlan Employer Assisted Housing Program (Round Rock,Texas Project) WHEREAS, Freddie Mac, is a stockholder -owned corporation chartered by Congress in 1970 to create a continuous flow of funds to mortgage lenders. By supplying lenders with the money to make mortgages and packaging the mortages into marketable securities, Freddie Mac sustains a stable mortgage credit system and reduces the mortgage rates paid by homebuyers. Over the years, Freddie Mac has helped finance one in six American homes; and WHEREAS, Mortgage Guaranty Insurance Corporation ( "MGIC "), the principal subsidiary of MGIC Investment is the nation's leading private mortgage insurance company. MGIC has helped lenders put more families in homes with low- down - payment mortgage than any other insurer; and WHEREAS, Texas Department of Housing and Community Affairs operates a Down Payment Assistance Program to assist very low and low income families (80% Area Median Family Income or less) in purchasing a home by providing an interest free loan for down payment and allowable closing costs; and WHEREAS, the City of Round Rock through its Office of Community Development conducts a program to assist low and moderate income families in the purchase of housing by providing down payment assistance; and WHEREAS, HomePlan USA L.L.C. is a Texas limited liability company (hereinafter called "HomePlan USA ") formed to engage in the business of designing, developing, implementing and operating home ownership plans and programs primarily assisting low to moderate income individuals; and WHEREAS, HomePlan USA has developed a home ownership program known as the "HomePlan Employer Assisted Housing Program" (hereinafter called the "Program ") and has requested Freddie Mac, MGIC, TDHCA and the City to participate in the Program as stated in this Memorandum; NOW, THEREFORE, in consideration of these premises, HomePlan USA, Freddie Mac, TDHCA and City have agreed to work collaboratively together to implement the Program developed by HomePlan USA to address the shortage of affordable housing for low and moderate income persons in the municipal limits of the City as stated in this Memorandum. DESCRIPTION OF THE HomePlan USA EMPLOYER ASSISTED HOUSING PROGRAM The HomePlan USA Employer Assisted Housing Program is a program pursuant to which employers of residents of the City provide down payment and closing cost assistance to their respective employees as an employee benefit. Such assistance would be used in conjunction with additional down payment and closing cost assistance to be provided to such employees by TDHCA and City Funding of the traditional mortgage loan to these employees is to be provided by Freddie Mac, which will issue purchase commitments to Freddie Mac qualified home mortgage lenders and package and sell pools of such mortgage loans via participation certificates and other standard Freddie Mac securities. MGIC is to provide mortgage insurance of such mortgages. II. RESPONSIBILITIES OF THE PARTIES 2.1 HomePlan USA will locate employers who employ residents of City which meet the income limitation requirements set forth below: 2 3 4 5 6 7 8 $31,000 $35,450 $39,900 $44,300 $47,850 $51,400 $54,950 $58,500 HomePlan USA will design the employee — assisted housing program for such employers. Following the establishment of a plan for an employer, HomePlan USA will provide the following services and perform the following functions to implement the plan: A. provide the requisite homeownership counseling services to applicants; B. assist applicants with the completion of their loan application and their application under the program and prequalify applicants under both the employer's program and the assistance programs of TDHCA and the City; C. assist applicants with local available housing which can be financed under the employer assisted housing program; D. assist with obtaining hazard insurance; and E. assist with all aspects of the closing process. 2.2. TDHCA will commit to providing down payment assistance to qualified persons employed by employers who have adopted a employer assisted housing program designed by HomePlan USA. The maximum amount of such assistance during the term of this agreement will be $5,000. 2.3. The City will commit to providing and provide down payment assistance to qualified persons employed by employers who have adopted a employer assisted housing program designed by HomePlan USA. The maximum amount of such assistance during the term of this agreement will be $5,000. 2.4. Freddie Mac will commit to purchasing and will purchase up to $ 25,000,000 in the aggregate of home mortgage loans which meet Freddie Mac requirements at the time of closing of such loans and which were made pursuant to the employer assisted housing programs designed by HomePlan USA. 2.5. MGIC will commit to insuring and will insure up to $25,000,000 in the aggregate of home mortgage loans which meet MGIC requirements at the time of closing of such loans and which were made pursuant to the employer assisted housing programs designed by HomePlan USA. III. TERMS OF AGREEMENT This agreement is effective February 11, 1999, and shall expire on February 10, 2001 unless extended by the parties hereto. IV. MISCELLANEOUS Notwithstanding anything in this agreement to the contrary, no party hereto shall be obligated to provide any financing or assistance, or issue any securities or guarantee any securities or loans, unless and until such party issues a formal commitment to do the same. IN WITNESS WHEREOF, the parties have executed this Memorandum of Understanding on this l l w day of February, 1999. FREDDIE MAC MORTGAGE GUARANTY INSURANCE CORPORATION By: By: Name: Name: Title: Title: TEXAS DEPARTMENT OF HOUSING AND CITY OF ; OUND ROCK COMMUNITY AFFAIRS By: By: Name: Name: CRIMES U' Title: Title: /r1AyG'e HOMEPLAN USA, L.L.C. By: Name: Title: DATE: February 5, 1999 SUBJECT: City Council Meeting - February 11, 1999 ITEM: 11.B.1. Consider a resolution authorizing the Mayor to execute a Memorandum of Understanding between HomePlan USA, LLC, Mortgage Guaranty Insurance Corporation, Freddie Mac, Texas Department of Housing and Community Affairs for the HomePlan Employer Assisted Housing Program. The HomePlan USA Employer Assisted Housing Program is a program which employers of residents of the City provide down payment and closing cost assistance to their respective employees as an employee benefit. Such assistance would be used in conjunction with additional down payment and closing cost assistance to be provided by Texas Department of Housing and Community Affairs (TDHCA) and the City. This program will be utilized with Round Rock's Home Ownership Assistance Program (HOAP). HOAP will provide to qualified first time income eligible homebuyers a non - interest bearing non- assumable loan to be used to assist with purchasing their first home. Staff Resource Person: Joe Vining, Planning Director.