10. Approval of MOU and Program Income Plan - Glacier Affordable Housing FoundationMEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF KALISPELL
AND
GLACIER AFFORDABLE HOUSING FOUNDATION
WHEREAS, the City of Kalispell entered into a $400,000 Home Investme art 0r.ps Program
(H.O.M.E.) Grant contract on June 2, 1995, and a $400,000 Community nt Block Grant
(CDBG) contract on April 18, 1995 with the Montana Departm f Como une 2, 1995, t(
provide for the construction of forty-four home for low and ow incorsidzts� and,
WHEREAS, the City of Kalispell was awarded $198,000
funds by the Glacier Affordable Housing Foundation for
the amount of $4,500 per home; and
WHEREAS, the H.O.M.E. and AHP grants require either
affordable or the program income they generate remajj
residents for home ownership opportunities for a peiotl
WHEREAS, the City of Kalispell adopted arthe
ag
Affordable Housing Foundation (GAHF) cCi
income funds to assure that future low x ery to
as follows:
THEREFOREthq City of
l . THAT, GAHF °bere
income famlliesci
South Woodland:
2. THt e City o
w rI 60% to 80%
the
and closing
in
vlct3homes remain
to fu d very low income
(30) ye
)ber 1995 which allows Glacier
k and recycle these program
are assisted in purchasing homes
Housing Foundation do herein agree:
Inds fits commitment of $4,500 to forty-four (44) low and very low
down yrnen, rzd closing cost assistance in the subdivisions known as
u and on Terrace; and,
market the program to assure recipients of such funds will be
:ome: and
3. A7THAT, the City of ispell will do all required marketing and advertising as per CDBG and
*)ME requirer - and will pre -qualify all applicants prior to referring those individuals to the
p�Icipating leriffing institutions; and,
4. �TMAT` urn closing, the closing agent will furnish to the PECDD staff and to GAHF a copy of
the na closing statement with the distribution of funds, the Trust Indenture which secures the
loan and the Promissory Note and any other documents which provide for equity sharing and
repayment of the second mortgage; and,
June 3, 1996 1
5. THAT, in the event GAHF is unable to provide continued assistance of CDBG, HOME and AHP
funds to future low and very low income home buyers within the city limits, all future CDBG
and HOME Program Income will revert to the City of Kalispell to be used exclusively in
providing affordable housing stock. It is understood and agreed to between GAHF and the City
of Kalispell that CDBG and HOME Program Income will only be utilized to provide affordable
housing subsidy dollars in the future and not to cover administrative costs on the part of either
P.nity
City
Atte;
June 3, 1996 2
Program Income Agreement
Between
The City of Kalispell, Montana
and
Glacier Affordable Housing Foundation
This Program Income Plan specifically addresses program income gene d fr accomplishe
first time home buyer opportunities created in South Woodl Court Terrace,
Kalispell, Montana, by the City of Kalispell and funding £� .'dell b w w G, HOME and
the Affordable Housing Program grant programs..
Program Income will be generated if and when a home elAvagaor the Curren o See's to
refinance. All CDBG, HOME and Affordable Housing rp r (AHF) funds u , 61a silly to
the purchase of the targeted for first time home buyers w ective counties, per the
terms of the grants, will be considered as Program Inco main available to
subsequent low and very low income home buyers for ture p hin those counties.
Thus it will become the responsibility of Glacier le Hous tion, on behalf of
the City of Kalispell, to account for and admi ' & the orlg�nal subsi ": us a prorated
percentage based subsidy provided to the put
p'ce ofwhatevera ue the home and lot
have appreciated.
CDBG, HOME and AHP Program < me created in the direct subsidy of the cost of
the home and/or mortgage buy d ill be tected t gh a promissory note made payable
to GAHF and a second mortag erein is nq ,,,d beneficiary. The zero interest, silent
second mortgage loan amour t ether wi a propoftionate share of the appreciated equity, will
be due d thel-"C
eat me -esale or� Ice Debts or liens against the property which
occur aX G, H ; . , P grant subsidies were provided will be subordinate to the
CDBG, HOME and`; P assistari� e� the net proceeds from the sale of the property will be
used to repay the gin 3.,istanc
Glacier A ordable dation (GAHF) has been registered with the State of Montana
as a c . ,oration whose =: se is providing affordable housing to low and very low income
ind' i uals on an on-goi is and 501(c)3 status has been awarded by the Internal Revenue
S ice. GAHF was for fled with a $610,000 "Affordable Housing Program" grant from the
Fer�e�ral Home Loan B . of Seattle to be utilized in a five -county area. Thus, GAHF is in a
,5 ,
pc'-f don to assume- ehalf of the above respective Counties and NMHR the responsibility for
tracking; admini ng, and recycling the Program Income generated by the targeted units to be
0- -- -
asStstrnfhef ur counties.
If the net proceeds from the resale or refinance of a unit assisted with CDBG, HOME and AHP
subsidies are not sufficient to recapture the full CDBG, HOME and AHP investment plus enable
the homeowner to recover the amount of the homeowner's down payment, principal payments,
and any capital improvement investments the owner may have made, the federal grant criteria
could allow the subsidy repayment to be reduced. The City of Kalispell and GAHF will review,
on a case by case basis, every request for such action.
GAHF will notify the City of Kalispell of the amount of Program Income recaptured when a unit
located within the two subdivisions is resold. This amount will be held by GAHF to be recycled
to another buyer within the city limits when that low income buyer has been qualified for bank
financing.
In the event GAHF is unable to provide continued assistance of CDBG d/or = ,�' E Program
Income funds to future low and very low income home buyer in the r ;spe vie counties, all
future CDBG and HOME Program Income, and all compliA requirements,- will revert to the
City of Kalispell to be used exclusively in providing affo b- e housing stock If"Is understood,`
and agreed to between GAHF and the City of Kalispell it CDBG ; _ d' H ME ?fo am Inctm'
will only be utilized to provide affordable housing subs y dollars r the future aridaticmoever
administrative costs on the part of either entity. y�
Douglas D. Rauthe, Mayor � f v flan HelAn, Ighairman
City of Kalispell rlacierffordable'Housing Foundation
Attested:
c:\homeownr\council\progincm