R91-042RESOLUTION NO. R91-~
A RESOLUTION OF THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA,
AUTHORIZING THE CITY OF BOYNTON BEACH TO
PROCESS DEFERRED PAYMENT LOANS FOR THE
SINGLE FAMILY HOUSING (INFILL)
CONSTRUCTION PROGRAm; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the Community Improvement Department is in the
final stages of revising the guidelines for the Infill
Construction Program; and
WHEREAS, the City Commission of the City of Boynton Beach,
Florida has deemed it to be in the best interest of the citizens
and residents of the city-s, of Boynton Beach to revise said
guidelines to reflect that th~City's financial assistance would
be provided to potential ~m~-~b~yer s instead of to the
contractor/developer; and
WHEREAS, the form of assistance would ~'-a~eferred payment
loan which would not have to be repaid to the Cit~ so long as the
terms and conditions of the loan are adhered to during i~s term.
The terms and conditions of the deferred payment l~n~ ~ are
specifically set out in Community Impr over~.ent Depar{ment
Memorandum 91-029, dated March 5, 1991, which ~s attached and
incorporated herein by reference;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF BOYNTON BEACH, FLORIDA THAT:
Section 1. The
ratified and confirmed as
herein by reference.
"WHEREAS" clauses abo~e are hereby
being true and correct and incorporated
Section 2. The City of Boynton Beach
authorized to process deferred payment loans for
Family Housing (Infill) Construction Program.
is hereby
the Single
Section 3. Said Resolution shall take effect immediately
upon passage.
PASSED AND ADOPTED this /~ day of March, 1991.
CITY OF~/O~NTON BEACH, FLORIDA
:- / ;
~-V'i c~ Mayor
C~~ner =
ATTEST-:
Ci~ierk
(Corporate Seal)
AUTHSiG.DO~~
DATE:
TO:
THRU:
FROM:
RE:
COMMONITY IMPROVEMENT DEPARTMENT
MEMORANDUM
91-029
March 5, 1991
Honorable Mayor and City
¥!. LEGAL
C.4
Commission ~,.~_- ~
j. scott Miller, City Manager ~
Johnnetta Broomfield, Director~
Request City Commission Approva£ of a Resolution
Authorizing Deferred Paymen~ Loans for use in the-
' s
City Single Family Housing (Infill) Construction
Program
The following item is being submitted to the City Commission au
this time for necessary action:
REOUEST'CI?¥ COMMISSION APPROVAL OF A RESOLUTION GIVING AUTHORITY
TO TH~ CITY TO PROCESS DEFERRED pAYMENT LOANS FOR THE SINGL~
FAMILY HOUSING ~INFTT.L~ CONSTRD~-riON PROGRAM.
The community Improvement Department is in the final stages of
revising the guidelines for the Infill Construction Program.
If you will recall (as per memo ~90-012), one of the major
chan~es in the guidelines affects the terms and conditions of the
city s financial assistance to participants of the program.
originally, the program was designed to provide assistance to the
c~ntraCtor/~eveloper for the construction of the homes by way of
,~nterest loan to the contractor/developer. The amount of
provided and the repayment terms would have been
on a case-by-case basis. The main objective of the
f financial assistance was to make the construction of
%he: homes affordable for low and moderate income families.
[elines have now been revised to reflect that the City3s
assistance would be p_~ovided to the potential home
of to the contractor/developer. The form of
ce would be a deferred payment loan which would not have
~aid to the City as long as certain conditions were
adhered to during the term of the loan (The home must be
Own~-occupied, non-rental, and maintained according to the
codes).
Mome specifically, twenty-five percent of the loan would be
forgiven the day after the end of each seven year period for a
td~al of twenty eight years. The day after the twenty-eighth
year, the entire loan would be forgiven.
If,the property owner Qiolates the terms of the contract the
ance of the loan amount is due and payable to the City. (See
payment procedures for further details.)
Page 2 - Honorable Mayor and City commission - 3/5/91
Memo ~91-029
The deferred payment loan procedure that is being considered for
use in the Infill Program is the payment procedure currently
being used for the Home Improvement Program and the
Paint-Up/Fix-Up Program.
Instead of receiving direct repayment monies back from the home
buyer on a monthly basis, the City would still realize some
monetary exchange value by way of property taxes.
For instance, the following amounts would be contributed t= the
general fund by way of annual property taxes based on the
assessed-values of the single family homes indicated (current
millage rate of 7.5927 being implied):
VALUE OF HOMESTEAD ASSESSED
HOME EXEMPTION VALUE
ESTIMATED ANNUAL
PROPERTY TAXES
$50,000 S (25,000) $25,000 $189.81
$ -0- · $50,000 $379.63
$55,000 $ (25,000) $30,000 ~227.78
$ -0- $55,000 $417.59
$60,000 $ (25,000) $35,000 $265.74
$ -0- $60,000 $455.56
$65,000 $ (25,000) $40,000 $303.70
$ -0- $65,000 $493.52
We have tried to make the loan to the home buyer as affordable as
possible. If we charge the home buyer a certain amount of money
on a monthly basis to repay the debt that is owed to the City (in
addition to the amount being paid to the Lender), it is
conceivable that 1) the loan would not be affordable for the home
buyer, and 2) the amount received on a monthly basis would be so
small, it would not generate enough money to build a new house
and also the City would then become a servicing agent, i.e., bill
collector, in receiving the monthly payments and also in taking
the time and effort to collect from the home buyers who decide
for whatever reason that they do not want to repay the loan to
the City.
-~ , -- UIRED
At this time, City Commission approval of a Resolution giving
authority to the City to process deferred payment loans for the
Single Family Housing (Infill) Construction Program is hereby
requested.
RECOM]4ENDATION
Approval of Request.
/kc attachment
The amount of assistance available to potential home,whets-for each project
will be decided on a case-by-case basis depending on the availability of
funds.
Income limits for the program are as follows:
INCOMR ELIGIBILITY LIMITS
Household
Size
Annual Gross Income
50% - 65%
Annual Gross Income
65% - 80%
2
3
4
5
6
7
8
(Note:
four)
$16,000 - $20,800
$18,000 - $23,400
$20,000 - $26,000
$21,600 -$28,080
$23,200 - $30,160
$24,800 - $32,240
$26,400 - $34,320
$20,801 - $25,600
$23,401 - $28,800
$26,001 - $32,000
$28,081 - $34,560
$30,160 - $37,120
$32,241 - $39,680
$34,321 - $42,240
The median income for Palm Beach County is $~0~000 for a
family of
Financial assistance will be based onhousehold size and annual gross income.
The specific amount of financial assistance will be based upon a predetermined
formula. In addition to the assistance provided by the City, the applicant
will be required to provide five hundred dollars ($500.00) at the time of
application. The $500.00 cannot be borrowed; however, it may be provided as a
result of a gift.
Repayment will be in the form of a deferred payment loan. Twenty five percent
(25%) of the loan will be forgiven the day after each seven (7) year interval
as follows:
I.e., g~ven a total city loan amount of $10,000 (including land and
other financing):
Day after 7th year
Day after 14th year
Day after 21st year
Day after 28th year
25% of loan amount forgiven ($2,500)
25% additionai loan amount forgiven ($2,500)
25% additional loan amount forgiven ($2,500)
25% additional loan amount forgiven ($2,500)
Eligible Uses ahd Finances
Projects which are eligible for funding include single family for-sale and
duplex for-sale developments. The size of projects may vary from a single
unit to a large number of single units on scattered sites. A project may also
involve several locations packaged by a developer/builder .and submitted at one
time. All proposals submitted for construction by contractors must have other
source(s) of finan¢ing.