IGA AMENDMENT 1 RE HOME IN FIVE HOMEBUYERS ASSISTANCE PROGRAM WITH INDUSTRIAL DEVELOPMENT AUTHORITY OF MARICOPA COUNTY.PDF
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C-22-24-002-X-01 Amendment No. 1 The Industrial Development Authority of the County of Maricopa Page 1 of 6 AMENDMENT NO. 1 TO THE INTERGOVERNMENTAL AGREEMENT BETWEEN MARICOPA COUNTY ADMINISTERED BY ITS HUMAN SERVICES DEPARTMENT AND THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA I. The Industrial Development Authority of The County of Maricopa (“Subrecipient”) and Maricopa County (“County”) administered by its Human Services Department entered into an Agreement on or about July 26, 2023, to expand the Home In Five Homebuyers Assistance Program (Program) that will support eligible Maricopa County homebuyers with assistance to increase homeownership affordability. The County provided the Subrecipient with $500,000 in American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds under CFDA number 21.027 for these services. The initial Agreement term is July 26, 2023, through February 28, 2025. The County and the Subrecipient may be referred to individually as “Party” or collectively as “Parties.” II. The Parties now agree to modify the Agreement through this Amendment No. 1 to address the following. A. Revise Paragraph 2.0 (Purpose), by removing in its entirety and replacing with the following: 2.0 PURPOSE Through this Agreement, homebuyer affordability opportunities will be expanded for approximately 42 low-to-moderate income families through the Home In Five Homebuyers Assistance Program (the “Program”). The County shall provide Subrecipient with American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds to expand the homebuyer assistance program throughout Maricopa County. The execution of this project shall provide eligible homebuyers with assistance to increase homeownership affordability. B. Revise Paragraph 3.0 (Term of Agreement), Subparagraphs 3.1 and 3.2, by removing in their entirety and replacing with the following: 3.0 TERM OF AGREEMENT 3.1 The term of this Agreement is from July 26, 2023 through December 31, 2025. 3.2 This Agreement may be extended, but not to exceed beyond December 31, 2026, with the condition the Subrecipient is in compliance with the terms and conditions of this Agreement and the extension is contained in an Amendment as provided in Section 4.0 below. C-22-24-002-X-01 Amendment No. 1 The Industrial Development Authority of the County of Maricopa Page 2 of 6 C. Revise Paragraph 8.0 (Responsibilities Of Organizations), Subparagraph 8.1.1, by removing in its entirety and replacing with the following: 8.0 RESPONSIBILITIES OF ORGANIZATIONS 8.1 The Subrecipient shall: 8.1.1 Provide down payment and closing cost assistance to eligible homebuyers throughout Maricopa County. D. Revise Paragraph 13.0 (Notices), by updating the Subrecipient contact with the following: 13.0 NOTICES The Industrial Development Authority of the County of Maricopa C/O Julie Arvo MacKenzie, General Counsel (602) 834-5226 Ext. 4 julie@mcida.com 8687 E. Via de Ventura, Suite 306 Scottsdale, AZ 85258 E. Add the following paragraphs to the Agreement: 56.0 UNIQUE ENTITY IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT REGISTRATION All Contractors that receive Federal funding must obtain Unique Entity Identifier (UEI) and remain current with their registration in www.sam.gov. The Contractor and all subcontractors or subrecipients shall have a valid UEI and an active profile in SAM.gov. Documentation of the UEI Number must be included in all Project files. 57.0 PROVISIONS REQUIRED BY LAW Each and every provision of law and any clause required by law to be in this Agreement will be read and enforced as though it were included herein and, if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, this Agreement will promptly be physically amended to make such insertion or correction. F. Revise Exhibit A (Statement of Work) by removing in its entirety and replacing with the following: 1.0 Project Description: 1.1 The Project as described herein, shall utilize $500,000 ARPA funds to provide down payment and closing cost assistance (“DPA”) to Eligible Homebuyers looking to purchase homes throughout Maricopa County. The $500,000 ARPA funds would be provided to borrowers through a zero interest, deferred payment, forgivable second loan, in connection with the 30-year fixed rate governmental or conventional first mortgage loan. Assuming an average 4% DPA level (as a percentage of the first mortgage) and a $300,000 average loan size, that equates to around $12,500,000 of loans to 42 homebuyers. C-22-24-002-X-01 Amendment No. 1 The Industrial Development Authority of the County of Maricopa Page 3 of 6 1.2 Eligible homebuyers must meet all applicable credit and underwriting guidelines. Eligible homebuyer’s annual household incomes must not exceed 120% area median income (AMI) based on homebuyer's household size. Updated HOME income limits from the Maricopa County Housing & Community Development division are available annually. These limits are adjusted annually by the U.S. Department of Housing & Urban Development (HUD). The Subrecipient can request the updated limits from the County or by going to https://www.maricopa.gov/3893/Notices-Documents or going to HUD’s website for the updated versions each year. 1.3 The Program has evolved to include various second loan sizes (DPA ranging from 3-6%) and repayment term product options. For a 7-year repayment term, the second loan would be forgivable over seven years and reduced by 1/84th per month for as long as the borrower remains in the home and has not sold or refinanced. This secondary loan assistance is evidenced by a subordinate note and secured by a subordinate lien on the property. If the property is sold or refinanced before the end of the repayment term, any recaptured funding is subject to be deposited into a revolving loan account that will be used to continue funding the project. 1.4 All homes acquired with Federal Housing Administration (FHA) loans will be required to meet FHA home inspection requirements. 1.5 The ARPA funding will allow the Subrecipient to provide lower interest rates on 3% DPA loans and increase the availability of loans with 4% or 5% of DPA. 1.6 The table below shows the number of borrowers that could be assisted with ARPA funds assuming an average 4% DPA level. ARPA Funds Average 2nd First Loans (est. $300,000 average mortgage loan size) Borrowers (#) $500,000 4% $12,500,000 42 2.0 Project Background: 2.1 Program History: Since 2012, Maricopa County Industrial Development Authority’s Home in Five Homebuyers Assistance Program has funded $4.99 billion in First Loans and $191.3 million 2nd loans for the benefit of 24,816 homebuyers throughout Maricopa County. An additional $3.74 million of assistance has also been funded for Targeted Borrowers – i.e., borrowers earning up to 50% of the County median income or purchasing homes in designated Low Income Census Tracts, First Responders, Military Personnel, and K-12 teachers. C-22-24-002-X-01 Amendment No. 1 The Industrial Development Authority of the County of Maricopa Page 4 of 6 3.0 Home in Five Homebuyers Assistance Program Description: 3.1 The Program is jointly sponsored by the Industrial Development Authorities of the City of Phoenix and the County of Maricopa. The Program is available throughout Maricopa County, including the City of Phoenix and other incorporated cities. In 2019, the Program was reorganized, with a new Master Servicer (Lakeview Loan Servicing) and a new Program Administrator (Stifel Nicolaus). Since 2019, the Program has expanded its loan origination network to include 112 correspondent and wholesale lenders. 3.2 The Program offers FHA-insured, VA-guaranteed, Fannie Mae and Freddie Mac eligible first mortgage loans and has offered DPA of up to 7% of the First Loan Amount through Second Loans, with 3- year, 7-year, 10-year or 30-year forgiveness. The Second Loans are subject to repayment if the property is sold or refinanced within the forgiveness period, but the borrower is eligible for a reduction (“forgiveness”) over time. 3.3 Lower rates and additional down payment assistance are available for Targeted Borrowers – i.e., (i) those borrowers earning up to 50% of the County median income, (ii) those borrowers purchasing homes in Low-Income Qualified Census Tracts, and (iii) those borrowers who qualify as first responders, military personnel, or K- 12 teachers. 3.4 Eligible Homebuyers must qualify for the First Loans subject to certain credit score minimums and debt-to-income ratio maximums and in accordance with FHA, VA, Fannie Mae and Freddie Mac, and Lakeview underwriting guidelines. 3.5 Historically, the second loan assistance was generated through the sale of the First Loans as mortgage-backed securities at a premium into the secondary mortgage market. Given recent market conditions, these premium levels are significantly lower. The Program has been hard-pressed to offer a 3% 2nd loan option but has been virtually unable to fund the 4%, 5% and 6% sized options. The ARPA contribution will allow the Program to continue to offer the desired 3%, 4%, 5%, and 6% sized assistance at a lower first loan rate for eligible homebuyers. 4.0 Deliverables: Beneficiaries Number of households (units) 42 Number of people served annually (approximate) 125 C-22-24-002-X-01 Amendment No. 1 The Industrial Development Authority of the County of Maricopa Page 5 of 6 5.0 Budget: Fund Sources Sources Total Maricopa County – ARPA $500,000 6.0 Proposed Project Schedule: Project Milestone Estimated Completion Date Comments Provide $125,000 of assistance to approximately 10 homebuyers 11/30/2024 10 borrowers Provide $125,000 of assistance to approximately 10 homebuyers 2/28/2025 10 borrowers Provide $125,000 of assistance to approximately 11 homebuyers 5/31/2025 11 borrowers Provide $125,000 of assistance to approximately 11 homebuyers 8/31/2025 11 borrowers III. Under A.R.S. §38-511, the Parties may cancel this Agreement without penalty of further obligation within three years after execution of this Agreement if any person significantly involved in initiating, negotiating, securing, drafting, or creating this Agreement on behalf of the County is, at any time while this Agreement or any extension is in effect, an employee or agent of any other party to the Agreement in any capacity or consultant to any other party of this Agreement with respect to the subject matter of this Agreement. IV. The Agreement is amended to incorporate the changes contained in this Amendment No. 1. All other terms and conditions of the Agreement remain in full force and effect as approved, amended and executed by the Parties. V. The Parties have authorized the undersigned to execute this Amendment No. 1 on their behalf. [Signatures contained in the following page] C-22-24-002-X-01 Amendment No. 1 The Industrial Development Authority of the County of Maricopa Page 6 of 6 IN WITNESS, the Parties have approved and signed this Amendment No. 1: FOR INDUSTRIAL DEVELOPMENT AUTHORITY OF MARICOPA COUNTY: ____________________________________ Executive Director Date FOR MARICOPA COUNTY: ____________________________________ Jack Sellers, Chairman Date Maricopa County Board of Supervisors Attested to: ____________________________________ Juanita Garza, Clerk of the Board Date IN ACCORDANCE WITH A.R.S. §§ 11-201, 11-251, AND 11-952, THIS AMENDMENT NO. 1 HAS BEEN REVIEWED BY THE UNDERSIGNED ATTORNEY WHO HAS DETERMINED THIS AGREEMENT IS PROPER IN FORM AND WITHIN THE POWERS AND AUTHORITY GRANTED TO MARICOPA COUNTY UNDER THE LAWS OF THE STATE OF ARIZONA. APPROVED AS TO FORM: ____________________________________ Deputy County Attorney Date