§ 4.32.020. Program loans.

A.

The city may make, purchase from qualified mortgage lenders, or otherwise contract with qualified mortgage lenders for the making of, loans to participating parties for any of the following purposes:

1.

To finance the rehabilitation of residences, or the acquisition of newly rehabilitated residences, located within a rehabilitation area or a redevelopment project area, subject to the following limitations:

a.

No more than twenty (20) percent of any such loan may be used for rehabilitation which is not required under the rehabilitation standards, except that in the case of owner-occupied one- to four-dwelling-unit properties, up to forty (40) percent of any such loan may be used for rehabilitation not required under the rehabilitation standards, and

b.

Loans may not be made for the purpose of refinancing outstanding indebtedness with respect to a residence which has been or will be subject to rehabilitation, or for the purpose of financing the cost of acquisition of a residence which has been or will be subject to rehabilitation, unless the cost, including in such costs any amounts previously expended for rehabilitation of such residence within a rehabilitation area or redevelopment project area established at the time of such expenditure, of meeting the rehabilitation standards is at least twenty (20) percent of the principal amount of the loan;

2.

To finance the acquisition of residences not newly rehabilitated, located within rehabilitation area or a redevelopment project area, provided, however, that for purposes of this subsection "residence" shall not include any residential structure, the average sales price of dwelling units in which exceeds area median sales price as determined by the city;

3.

To finance the acquisition, construction or rehabilitation by a person or family of low or moderate income of a residence located within the city, for occupancy by such person or family; or

4.

To finance the acquisition, construction or rehabilitation by any participating party of a residence, the occupancy of at least thirty (30) percent of the dwelling units in which will be limited to persons and families of low or moderate income.

B.

The city may fix fees, charges, and interest rates for program loans and may from time to time revise such fees, charges, and interest rates to reflect changes in interest rates on the city's bonds, losses due to defaults, changes in program loan servicing charges, or changes in other expenses related to the program loans, including city administrative expenses. Any change in interest rate on a program loan shall conform to the provisions of Section 1916.5 of the Civil Code.

C.

The city may fix the character, terms and conditions upon which program loans may be made. Program loans made to participating parties by qualified mortgage lenders shall be of such character and on such terms and conditions as previously established by the city.

D.

The city may fix fees for servicing of program loans, or may itself undertake, or may contract to pay any person, partnership, association, corporation, or public agency for such servicing.

E.

The city may hold deeds of trust or mortgages as security for program loans and may pledge or assign the same as security for repayment of bonds. Such deeds of trust or mortgages may be assigned to, and held on behalf of the city by, any bank or trust company appointed to act as trustee by the city in any resolution or indenture providing for issuance of bonds.

F.

The city may employ such engineering, architectural, financial, accounting, legal or other services as may be necessary in the judgment of the city for the purposes of this Chapter.

G.

The city may acquire by deed, purchase, lease, contract, gift, devise or otherwise any real or personal property, structures, rights, rights-of-way, franchises, easements, and other interest in lands necessary or convenient for the purposes of this Chapter, upon such terms and conditions as it deems advisable, and may lease, sell, or dispose of the same in such manner as may be necessary or desirable to carry out the purposes of this Chapter, upon such terms and conditions as may be established by the city.

H.

In addition to all other powers specifically granted by this Chapter, the city may do all things necessary or convenient to carry out the purposes of this Chapter.

I.

The Council may by resolution designate an area within the city as a rehabilitation area upon making the following findings:

1.

There are a substantial number of deteriorating structures in the area which do not conform to community standards for decent, safe and sanitary housing;

2.

Financial assistance from the city for rehabilitation is necessary to arrest the deterioration of the area; and

3.

Financing of residential rehabilitation in the area is economically feasible.

(Prior code § 12-2.01—12-2.09)