Fresno Municipal Code Art. 5 Revenue Bonds—multifamily Housing Revenue Bond Law

This article may be cited as the City of Fresno Multifamily Housing Revenue Bond Law.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

(a) The Council hereby finds and declares that it is necessary, essential, a public purpose and a municipal affair for the city to be authorized to finance residential rehabilitation in depressed residential areas within the city in order to encourage the upgrading of property in such areas. Unless the city intervenes to provide some form of assistance to finance residential rehabilitation, many such depressed residential areas will deteriorate at an ever accelerated pace because property owners cannot obtain rehabilitation loans from private sources.

(b) The Council hereby finds and declares that it is necessary, essential, a public purpose and a municipal affair for the city to finance residential construction to encourage the development of adequate multifamily housing for persons and families of low or moderate income, and to develop viable communities by providing decent housing, enhanced living environments, and increased economic opportunities for persons and families of low or moderate income.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The definitions and provisions contained in Chapter 8, Division 2, Article 1 of this Code shall govern the construction, meaning, and application of this article unless the particular provisions or the context otherwise required.

(a) "Area median income" means the median household income within the city, as adjusted for family size, as determined by the city. Nothing in this definition shall prevent the city from adopting federal or state estimates of area median income for the city or for the standard metropolitan statistical area which includes the city, or federal or state formulas for the adjustment of area median income for family size.

(b) "Participating party" means any person, company, corporation, partnership, firm, local agency, political subdivision of the state or other entity or group of entities eligible to receive a loan pursuant to the terms of this division. No elective officer of the city shall be eligible to be a participating party. A participating party is a company within the meaning of Article 1 of this division.

(c) "Persons and families of low income" means persons and families whose income does not exceed 80 per cent of area median income.

(d) "Persons and families of low or moderate income" means persons and families whose income does not exceed 120 per cent of area median income, or any higher percentage of area median income upon a determination by the Council that such amount of income is too low to qualify a substantial number of persons and families who can afford the rental or purchase of residences financed pursuant to this division.

(e) "Program loan" means any loan made pursuant to this article for any purpose specified in Section 18-504.

(f) "Qualified mortgage lender" means any mortgage lender authorized by the city to aid the city pursuant to this article. A qualified mortgage lender may be a state or national bank, federal- or state-chartered savings and loan association, trust company, mortgage banker or other financial institution.

(g) "Rehabilitation" means the reconstruction, renovation, replacement, extension, repair, betterment, equipping, developing, embellishing or otherwise improving of existing residences consistent with standards of strength, effectiveness, fire-resistance, durability and safety so that such structures are satisfactory and safe to occupy for residential purposes and are not conducive to ill health, transmission of disease, infant mortality, juvenile delinquency and crime because of any one or more of the following factors:

(1) Defective design and character of physical construction;

(2) Faulty interior arrangement and exterior spacing;

(3) Inadequate provision for ventilation, lighting and sanitation; or

(4) Obsolescence, deterioration and dilapidation.

(h) "Rehabilitation area" means any area so designated by the city pursuant to Section 8-2-511 or any area designated by the city as a residential rehabilitation area pursuant to a comprehensive residential rehabilitation financing program adopted pursuant to the provisions of the Marks-Foran Residential Rehabilitation Act of 1973 as set forth in the Health and Safety Code 37910 to 37964, as amended.

(i) "Rehabilitation standards" means the applicable local or state standards for the rehabilitation of residences located in residential rehabilitation areas, including any higher standards adopted by the city.

(j) "Residence" means real property improved with a multifamily rental housing development, which development may contain commercial space to the extent consistent with the purposes of this article. Residence is a Facility within the meaning of Article 1 of this division.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The city may make, purchase from qualified mortgage lenders, or otherwise contract with qualified mortgage lenders for the making of loans, upon such terms and conditions as the city shall deem proper, to any participating parties for any of the following purposes:

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

(1) No more than 40 per cent of any such loan may be used for rehabilitation which is not required under the rehabilitation standards.

(2) 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 established at the time of such expenditure, of meeting the rehabilitation standards is at least 20 per cent of the principal amount of the loan.

(b) To finance the acquisition, construction or rehabilitation by any participating party of a residence, the occupancy of at least 30 per cent of the dwelling units in which will be limited to persons and families of low or moderate income, or the occupancy of at least 15 per cent of the dwelling units in which will be limited to persons of low income.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The city may fix fees, charges and interest rates for program loans in the Master Fee Resolution and may from time to time as appropriate 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.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

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.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

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.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

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 of issuance providing for issuance of bonds.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

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 article, 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 article, upon such terms and conditions as may be established by the city.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

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

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

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

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

(b) Financial assistance from the city for rehabilitation is necessary to arrest the deterioration of the area, and

(c) Financing of residential rehabilitation in the area is economically feasible.

Concurrently with any such designation, the city shall adopt a plan for such public improvements as are necessary to successful rehabilitation of such rehabilitation area.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The city may, from time to time, issue bonds pursuant to the procedures set forth in Article 1 of this division for any of the purposes specified in Section 8-2-504.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

Developers, owners or participating parties of multifamily housing projects, the acquisition, construction, rehabilitation or development of which was financed from the proceeds of revenue bonds issued by the city and subsequently refinanced from the proceeds of revenue refunding bonds issued by the city shall indemnify, hold harmless and defend the city, its officers, officials, agents, employees, advisors and counsel for all loss, liability, costs and damages arising for any reason out of the issuance of any such refunding bonds. Such indemnification shall include all litigation expense, costs and attorneys' fees incurred by the city, its agents and employees.

(Added Ord. 94-5, § 1, eff. 2-11-94; Am. Ord. 2007-97, § 2, eff. 1-19-08).