San Jose Municipal Code Part 3 Authority of Director of Housing

The director shall not enter into or execute any contract, loan or grant document pursuant to the provisions of this chapter unless the monies to be expended by the city for the contract or loan document have been previously appropriated by ordinance of the city council for the fiscal year in which the contract, loan or grant document is executed.

(Ords. 23589, 24500, 26127, 26657.)

A. The director is authorized to enter into and execute, on behalf of the city or on behalf of the redevelopment agency of the City of San José, contracts, including, without limitation, any housing rehabilitation contract, loan or grant agreement which will improve or preserve the affordable housing units available in the city. The director's authority to enter into and execute such contracts, loan or grant agreements is subject to:

1. Such conditions and limitations as are set forth in this chapter, and throughout this Code, including, without limitation, Section 2.04.2620 and Part 38 of Chapter 4.80 of the municipal code.

2. The requirements and restrictions of the department's housing guidelines.

3. Such conditions and limitations as may from time to time be imposed by resolution or other action of the city council or the redevelopment agency board.

B. The maximum amount of a loan or grant to any person or entity for housing rehabilitation shall be established by resolution of the city council.

(Ords. 23589, 24500, 26127, 26657.)

A. The director is authorized to enter into and execute, on behalf of the city or on behalf of the redevelopment agency, contracts, including, without limitation, any replacement housing contract or loan document which will increase, improve or preserve the affordable housing units available in the city. The director's authority to enter into and execute such contracts and loan documents is subject to:

1. Such conditions and limitations as are set forth in this chapter and throughout this Code, including, without limitation, Section 2.04.2620 and Part 38 of Chapter 4.80 of the municipal code.

2. The requirements and restrictions of the housing guidelines.

3. Such conditions and limitations as may from time to time be imposed by resolution or other action of the city council or the redevelopment agency board.

B. The maximum amount of a loan to any borrower for a replacement housing project shall be established by resolution of the city council.

(Ords. 26127, 26657.)

A. In furtherance of the city's comprehensive affordable housing program, the director is authorized to enter into and execute, on behalf of the city or on behalf of the redevelopment agency, contracts, including, without limitation, any homebuyer program contract or loan document which will increase, improve or preserve the affordable housing units available in the city. The director's authority to enter into and execute such contracts and loan documents is subject to:

1. Such conditions and limitations as are set forth in this chapter, and throughout this Code, including, without limitation, Sections 2.04.1720 and Part 38 of Chapter 4.80 of the municipal code.

2. The requirements and restrictions of the department's housing guidelines.

3. Such conditions and limitations as may from time to time be imposed by resolution or other action of the city council or the redevelopment agency board.

B. The maximum loan to any borrower under the homebuyer program shall be established by resolution of the city council.

(Ords. 23589, 24500, 26127, 26657.)

The director is authorized to negotiate, execute and enter into contracts, loan and grant documents, other affordable housing program agreements, and agreements for other grant programs administered by the department of housing, consistent with the general parameters.

(Ords. 26127, 26657, 28067.)

A. Any amendment of a contract, or loan document, for a project with previously approved general parameters by the city council, the director is authorized to enter into and execute, on behalf of the city or on behalf of the redevelopment agency, any amendment of a contract or loan document for a project with previously approved general parameters by the city council, whether before or after the recordation of the loan documents, which involves any one (1) or more of the following circumstances:

1. A change in either the loan repayment, loan maturity, or other loan performance date, which results from unavoidable project construction schedule changes, project permit delays, requirements of other lenders, a remedy of a loan default, in advance of a loan default, or in instances when partial advance payments are made on the loan.

2. A change in the number or type of single-family dwellings or multi-family dwellings subject to the city's affordability restrictions where the change will neither exceed nor affect more than ten (10) percent of the originally approved number of units subject to the affordability restrictions and where the change will not reduce the percentage of units below the percentage required to be restricted for the project by local, state or federal law.

3. A change in the amount of the loan or loans to which the city's loan is subordinate, or a change in the city's loan priority, as long as the combined percentage of loan to value of the total loans for the housing project will not exceed either one hundred (100) percent, unless exceeding a loan to value ratio of one hundred (100) percent is necessary to preserve the affordability of the housing project, or protect the security of the city's loan.

4. An increase in the principal amount of a loan by no more than twenty (20) percent of the loan amount; provided that all of the following occur prior to the approval of any increase:

a. The director has determined by substantial evidence that:

i. The housing project which is the subject of the loan could not otherwise proceed; or

ii. The increase would materially reduce the cost or risk to the city.

b. The total percentage of loan-to-value ratio after such an increase will not exceed one hundred (100) percent, unless exceeding a loan to value ratio of one hundred (100) percent is necessary to preserve the affordability of the housing project or to protect the security of the city's loan or grant.

c. The increased loan amount is available, at the time the loan is made, from the funding sources appropriated to the department, including the low and moderate income housing funds, HOME funds, community development block grant funds, and other funds which may be appropriated to the department from time to time.

5. A forgiveness of accrued interest on any portion of a loan that is in default, or in advance of a loan default, in an amount not to exceed in the aggregate ten (10) percent of the council-approved loan principal amount, over the term of the loan.

6. Notwithstanding the limitations set forth in Section 5.06.340.A.4, an increase in the principal of a permanent loan by an amount necessary to include all accrued but uncollected interest on a city acquisition, construction or predevelopment loan for the same project; provided that both of the following occur prior to approval of such increase:

a. The director has determined by substantial evidence that:

i. The housing project which is the subject of the loan could not otherwise proceed, or

ii. The increase would materially reduce the cost or risk to the city, and

b. The total percentage of loan-to-value ratio after such an increase will not exceed one hundred (100) percent, unless exceeding a loan to value ratio of one hundred (100) percent is necessary to preserve the affordability of the housing project or to protect the security of the city's loan.

7. A change in the source of funding for a loan; provided, however, that the outstanding loan amount is available at the time of the change of the funding source, from the alternate funding sources appropriated to the department, including, without limitation, low and moderate income housing funds, HOME funds, community development block grant funds, tax-exempt bond proceeds, and other funds which the department may from time to time receive.

8. Conversion of a loan to a grant if all of the following occur prior to approval of any conversion:

a. The director has determined by substantial evidence that:

i. The housing project which is the subject of the proposed loan conversion could not otherwise proceed; and

ii. The proposed loan conversion would materially reduce the administrative cost to the city; and

iii. To the extent applicable, the law governing another lender's proposed additional funding prohibits, or makes it impractical, for another lien to exist on the property that is the subject of the loan.

9. A change in either the interest rate, interest calculation method, repayment schedule, or other loan terms, that does not materially increase the cost or risk to the city, and that results from requirements of other lenders, a need to make technical corrections to loan documents, a remedy of a loan default, or in advance of a loan default.

10. Prior to the recordation of a loan or grant security interest, a change of the borrower or grantee, provided, however, that the participation of the developer of the affordable housing project previously approved by the city council, is maintained.

11. A change to increase individual second-mortgage loan amounts by up to twenty-five (25) percent.

12. A change to allow the transfer of indebtedness and ownership of the affordable housing project to another qualified developer/sponsor if there is no increased risk to the city's loan or grant security and no change in affordability, targeted population, or services.

B. Any amendment shall be subject to:

1. Such conditions and limitations as are set forth in this chapter, and throughout this Code, including, without limitation, Section 2.04.2620, and Part 38 of Chapter 4.08 of the Municipal Code.

2. Such conditions and limitations as may from time to time be imposed by resolution or other action of the city council.

(Ords. 23589, 24500, 26127, 26657, 28067.)

A. The director is authorized to negotiate and execute, on behalf of the city or on behalf of the redevelopment agency, contracts, including, but not limited to, any amendment of a contract or grant document of a grant for a project with previously approved general parameters by the city council which involves any one or more of the following circumstances:

1. A change in grant performance dates resulting from unavoidable project construction schedule changes, project permit delays, or requirements of other lenders or grantors.

2. A change in the number or type of single-family dwellings or multi-family dwellings subject to the city's affordability restrictions where the change will neither exceed nor affect more than ten percent of the originally approved number of units subject to the affordability restrictions and where the change would not reduce the percentage of units below the percentage required to be restricted for the project by local, state or federal law.

3. An increase in the grant amount by no more than twenty percent of the grant amount; provided that all of the following occur prior to approval of any increase:

a. The director has determined by substantial evidence that:

(1) The housing project which is the subject of the grant could not otherwise proceed, and

(2) The increase would materially reduce the cost or risk to the city, and

(3) The increased grant amount is available, at the time the grant is made, from the funding sources appropriated to the department, including the low and moderate income housing funds, HOME funds, community development block grant funds, and other funds which may be appropriated to the department from time to time.

4. A change in the source of funding for a grant, provided, however, that the outstanding grant amount is available at the time of the change of the funding source, from the alternate funding sources appropriated to the department, including, but not limited to, low and moderate income housing funds, HOME funds, community development block grant funds, tax-exempt tax allocation bond proceeds, and other funds which the department may from time to time receive.

B. Any amendment shall be subject to:

1. Such conditions and limitations as are set forth in this chapter, and throughout this Code, including, without limitation, Section 2.04.2620 and Part 38 of Chapter 4.08 of the municipal code.

2. Such conditions and limitations as may from time to time be imposed by resolution or other action of the city council or the redevelopment agency board.

(Ords. 26127, 26657.)

The director is authorized to enter into, execute and submit on behalf of the city or on behalf of the redevelopment agency, loan or grant applications, applications for mortgage credit certificate (MCC) allocations, required certifications and any other related documents to obtain or maintain funding assistance necessary to carry out the purposes of this chapter, except for CDLAC applications for tax exempt financings or applications requiring a payment of funds by the city or the redevelopment agency.

(Ords. 23589, 24500, 26127, 26657, 28067.)

The director is authorized to make individual loans or grants from monies in the housing and homeless fund not to exceed amounts established by resolution of the city council, to nonprofit service providers for projects that are consistent with the city council-approved criteria for expending these funds.

(Ords. 26127, 26657.)

The director is authorized to make individual predevelopment loans or grants in amounts not exceeding one hundred thousand dollars ($100,000.00) to nonprofit housing organizations for projects with general parameters that are consistent with the criteria for expending these funds that are approved by resolution of the city council.

(Ords. 26127, 26657, 28067.)

All contracts, loan documents or amendments entered into or executed pursuant to the provisions of this chapter shall be in writing, be approved by the city attorney or the redevelopment agency general counsel, and be executed by the director in the name of the City of San José, or in the name of the redevelopment agency.

(Ords. 23589, 24500, 26127, 26657.)

The director is authorized to negotiate and execute, on behalf of the city or on behalf of the redevelopment agency, all grant agreements which are necessary to implement the housing programs and activities approved by the city council in its adoption of the annual action plan of the consolidated plan.

(Ords. 26127, 26657.)

The director is authorized to exercise all remedies available to a lender, in consultation with the city attorney, in the event of a non-monetary default, a major monetary default, or a minor monetary default, under homebuyer, project development, and housing rehabilitation loans. The director is further authorized to write-off homebuyer, project development, and housing rehabilitation loans that the director determines, after all reasonable legal collection efforts have been exhausted, to be uncollectible.

(Ords. 24500, 26127, 26657.)

Notwithstanding the provisions contained in Section 2.04.4220 of this Code, the director is authorized to acquire property for affordable housing purposes subject to the following limitations:

A. Such acquisitions are consistent with the city's administrative procedures for real property transactions; and

B. The acquisition is at a purchase price not to exceed fair market value.

(Ords. 26127, 26657.)

A. Notwithstanding the provisions of Section 2.04.4220 of this Code, the Director is authorized to provide management, (including maintenance) and/or to dispose of properties the City has acquired under this Chapter by direct purchase, foreclosure proceedings, or deeds in lieu of foreclosure, and to provide repairs to and replacement of, operating systems in those properties.

B. Notwithstanding Section 27.02.050 of this Code, the Director is authorized to expend an amount not to exceed the lesser of fifteen (15) percent of the value of the property, or five hundred thousand dollars ($500,000.00) for any reasonable rehabilitation or improvements of properties acquired under this Chapter by direct purchase, foreclosure proceedings, or deeds in lieu.

C. The Director is authorized to issue requests for proposals or requests for qualifications and to award consultant contracts up to fifty thousand dollars ($50,000.00) associated with (1) predevelopment activities for properties that the City anticipates it will purchase for affordable housing, and (2) for professional services including, but not limited to, accountancy and auditing, in order to administer the federal and other grants programs of the department of housing and to investigate the financial situations of grantees and borrowers of City funds as the need arises.

(Ords. 24500, 26127, 26657, 28067, 30308.)

The director is authorized to enter into residential leases not to exceed ninety days to provide housing for tenants of properties acquired under Section 5.06.385 or for relocation of households displaced by housing rehabilitation not to exceed ninety days.

(Ords. 24500, 26127, 26657.)

In furtherance of the city's comprehensive affordable housing program, the director is authorized to endorse insurance payment checks made payable to the city as an insured or co-insured, where the director has sufficient assurance and binding commitment from the borrower that the insurance proceeds will be used to restore the value of the security for the city's loan.

(Ords. 26127, 26657.)