HomeMy WebLinkAboutReso 127-2011 RESOLUTION NO. 127 -2011
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO,STATE OF CALIFORNIA
ADOPT A RESOLUTION APPROVING THE USE OF FUNDS
FROM THE AFFORDABLE HOUSING TRUST FUND TO
PRESERVE THE AFFORDABILITY OF BELOW - MARKET
RATE (BMR) UNITS CITYWIDE, APPROVING A LOAN IN
THE AMOUNT OF $50,000 TO PRESERVE A UNIT AT OAK
FARMS, AND APPROVING EXECUTION OF DOCUMENTS
IN CONNECTION WITH SUCH LOAN
WHEREAS, the City of South San Francisco (the "City ") operates an Affordable
Housing Trust Fund (the "Housing Trust Fund ") which provides assistance for the
development, improvement and preservation of affordable housing for low- and moderate -
income households;
WHEREAS, the City Council previously approved the allocation of $52,218 from the
Housing Trust Fund to assist in the preservation of affordability of certain condominium units in
the City Lights development;
WHEREAS, the City Council desires to permit the use of Housing Trust Fund monies to
assist in preserving affordability of below - market rate (BMR) units throughout the City;
WHEREAS, as more particularly described in the staff report accompanying this
Resolution, staff has identified an eligible moderate - income household that is interested in
purchasing an affordable unit in the Oak Farms development (the "Home ");
WHEREAS, in order to assist in making the Home affordable, staff recommends that the
City provide a deferred payment loan in the amount of $50,000 using funds from the Housing
Trust Fund;
WHEREAS, to document the proposed loan, and to ensure the long -term affordability of
the Home, staff recommends that the homebuyer sign a Resale Restriction Agreement which will
restrict the sale price of the Home to an affordable price for a period of fifty -five (55) years, a
Secured Promissory Note evidencing the homebuyer's obligation to repay the City loan and any
"excess proceeds" that may result from future sales of the Home, and a Deed of Trust securing
repayment of the City loan;
WHEREAS, the homebuyer will finance the purchase of the Home with a first mortgage
loan provided by a conventional lender;
WHEREAS, the lender has indicated that it is unwilling to fund its loan without
subordination of the City Resale Restriction Agreement and the City Deed of Trust;
WHEREAS, the lender has agreed to provide extended notice and cure rights to the City
and other protections in the event the homebuyer defaults under the first mortgage.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San
Francisco hereby:
1. Authorizes Housing Trust Fund monies to be used to assist in the development,
improvement and preservation of affordability for housing affordable to low- and moderate -
income households on a City -wide basis.
2. Approves the provision of a loan in the amount of $50,000 (the "Loan ") to enable
an eligible moderate - income household to purchase a home in the Oak Farms development.
3. Directs staff, to prepare, in consultation with the City Attorney, documents for the
Loan, including a Resale Restriction Agreement, a Secured Promissory Note, a Deed of Trust,
and a Notice of Affordability Restrictions (collectively, the "Loan Documents ").
4. Authorizes the City Manager or his designee to execute those Loan Documents to
which the City is a party in form approved by the City Attorney.
5. Authorizes the City Manager or his designee to execute a Subordination
Agreement in form approved by the City Attorney pursuant to which the City Loan Documents
will be subordinated to a first mortgage on the Home.
6. Authorizes the City Manager or his designee to execute such other instruments
and to take such other actions necessary to carry out the intent of this Resolution, including
without limitation, causing the Resale Restriction Agreement, the Deed of Trust and the Notice
of Affordability Restrictions to be recorded in the Official Records of San Mateo County.
I hereby certify that the foregoing Resolution was regularly introduced and adopted by
the City Council of the City of South San Francisco at a regular meeting held on the 26 day of
October, 2011 by the following vote:
AYES: Councilmembers Pedro Gonzalez, and Karyl Matsumoto,
Vice Mayor Richard A. Garbarino and Mayor Kevin Mullin
NOES: None
ABSTAIN: None
ABSENT: Councilmembers Mark Addiego
ATTE T:
di & City Clerk