Agenda

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C.62

To:	Board of Supervisors
From:	Catherine Kutsuris, Conservation & Development Director
Date:	November 10, 2009

Contra

Costa

County

Subject:

Single Family Mortgage Revenue Bond Program -- Inducement Resolution and Section 147(f) Approval

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 11/10/2009

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Susan A. Bonilla, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Jim Kennedy, 335-7225

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: November 10, 2009
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ADOPT Resolution No. 2009/515 approving the issuance of single family mortgage revenue bonds in one or more series in an aggregate amount not to exceed $50 million to first time homebuyer mortgage assistance; and AUTHORIZE submittal of an application to the California Debt Limit Allocation Committee to obtain the required allocation of private activity volume cap for the bonds.

FISCAL IMPACT:

No General Fund obligation is involved. In the event bonds are issued, the County is reimbursed for costs associated with issuance of bonds. The bonds to be issued will be solely secured by a pledge of revenues (mortgage payments, reserves, etc.) pledged under the bond documents. No County funds are pledged to secure the bonds.

BACKGROUND:

The Obama Administration recently announced a new federal Housing Initiative designed to stimulate the economy and stabilize neighborhoods. Under the initiative the Treasury will be authorized to purchase single family bonds issued by state and local housing finance authorities to provide first time homebuyer mortgage assistance at below market rates. The recommended actions will permit the County to secure the necessary authority to issue single family mortgage revenue bonds and to participate in the Temporary New Issue Bond Program implemented by the federal Housing Finance Initiative.

Eighty percent (80%) of the bonds proposed to be issued would be sold to the Federal Housing Finance Agency and/or Fannie Mae and Freddie Mac at below-market rates allowing the County to loan the bond proceeds to eligible households at an affordable mortgage rate. The remaining allocation of bonds will be sold in the public market. A minimum of 40% of the loans will be made to households earning up to 80% of the area median income (approximately $93,856). The remainder of the funds must be used for first time homebuyers with household incomes not exceeding 120% of area median income (approximately $140,784). The County’s program increases the supply of housing available to qualified homebuyers. It will primarily focus on providing assistance to first time homebuyers purchasing foreclosed homes in order to stabilize the local housing market. A portion of the funds may also be made available to homebuyers purchasing new homes from developers with standing inventory.

In order for the County to receive an allocation of private activity bonds from the California Debt Limit Allocation Committee (CDLAC) an application must be submitted to CDLAC including evidence of a public hearing and Board of Supervisor approval in accordance with the requirements of Section 147(f) of the Internal Revenue Code. Allocations will be made at the CDLAC meeting scheduled to be held on December 16, 2009.

The recommended action is the adoption of a Resolution by the Board of Supervisors, as the legislative body of the County, approving the issuance of bonds in one or more series in an amount not to exceed $50 million. The Board’s action acknowledges that a public hearing has been held by the Deputy Director – Redevelopment as required by Section 147(f) of the Internal Revenue Code. The action also authorizes execution and submittal of the CDLAC application.

The recommended action of the Board is not the Bond Sale Resolution. Such actions would come back to the Board after receipt of an allocation from CDLAC for Private Activity Bond Authority. Expected timing for a Bond Sale Resolution would be in March, 2010.