Loading...
HomeMy WebLinkAboutContract 1535LOAN ORIGINATION AGREEMENT This LOAN ORIGINATION AGREEMENT ("Agreement")is made this / ~'~day of _August, 2000, by and between THE CITY OF COLUMBIA HEIGHTS, v~;ith offices at 590 40m Avenue NE, Columbia Heights, MN 55421 ("CITY"), and CENTER FOR ENERGY AND ENVIRONMENT, with offices at 211 North 1st Street North, Suite 455, Minneapolis, Minnesota 55401 ("CEE"), RECITALS CITY has a need for certain professional services and desires to retain CEE to provide said services, all subject to the terms and conditions contained in this Agreement. CEE is qualified to provide the desired professional services and desires to provide said services for CITY, all subject to the terms and conditions contained in this Agreement. CEE has applied for and received funds from the Minnesota Housing Finance Agency (MHFA) under the MHFA Community Revitalization Program (CRV). Funds provided under the CRV shall be used to write down the interest rate on MHFA loans originated by CEE for borrowers in the City of Columbia Heights. Funds for the interest write down shall be provided by MHFA, the Metropolitan Council and the City of Columbia Heights. NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained in this Agreement, the parties agree as follows: 1. Services/Scope of Work CEE shall originate MHFA discount loans as described in the program description in EXHIBIT A. 2. Compensation CITY shall compensate CEE for the Services as follows: 2.1 CITY shall pay an Administrative Fee of $125.00 for each loan originated under this agreement. The Administrative Fee shall compensate CEE for the administrative costs of processing the MHFA discount loan. Mortgage filing costs shall be paid by the borrower. 2.2 CEE shall submit to CITY, on a monthly basis, invoices for services performed under this Agreement. CEE shall provide a copy of the loan note and MHFA Columbia Heights Discount Loan Program Agreement Page 1 o e 2.3 Lender's Certificate as documentation of the discount loan origination and sale with each invoice. CEE shall also provide on a monthly basis, a program activity report showing the amount of funds used through the reporting period and the remaining balance of funds available. CITY shall pay each properly submitted invoice within thirty (30) days after submission of the invoice by CEE. CITY's Obligations 3.1 CITY shall provide up to $50,000 to write down the interest rate on MHFA loans originated by CEE. CITY shall advance $25,000.00 to CEE upon execution of this agreement. 3.2 CITY shall make reasonable efforts to respond promptly to requests from CEE for information and approvals regarding the services to be provided under this Agreement. CEE's Obligations 4.1 CEE shall use its best efforts to provide services under this Agreement in a professional manner consistent with the care and skill used by reputable members of CEE's profession. 4.2 CEE, and all of its employees or agents, shall comply with all statutes, ordinances, rules, regulations and other laws applicable to the provision of services under this Agreement. 4.3 CEE shall not engage in discriminatory employment practices against any employee or applicant for employment and shall in all respects comply with all federal, state and local laws, regulations and orders, including without limitation, Chapter 363 of the Minnesota Statutes, as amended from time to time. Failure to comply with the provisions hereof shall be deemed a material default under this Agreement. Right to Audit 5.1 CEE shall maintain accurate and detailed records, in accordance with generally accepted accounting principles consistently applied, for all loans originated under this Agreement. CITY has the right to inspect, examine and makes copies of any or all books, accounts, records and other writings of CEE relating to the loans originated under this Agreement. These audit rights shall be extended to CITY or to any representative designated by CITY. Audits shall take place at times and locations mutually agreed upon by both parties, although CEE must make the materials to be audited available within one (1) week of the request for them. Costs incurred in undertaking the audit will be borne by CITY but costs Columbia Heights Discount Loan Program Agreement Page 2 incurred by CEE as a result of CITY exercising its right to audit will be borne by CEE. Term and Termination 6.1 Unless earlier terminated as provided in the following paragraphs, this Agreement shall become effective on _August ,2000, and continue through December 31,2001. 6.2 This Agreement may be terminated by either party, for any reason or no reason, immediately upon written notice to the other party. In the event this Agreement is terminated by CEE prior to the expiration of the term set forth in paragraph 6.1, CITY shall compensate CEE for all services delivered up to the date of termination and CEE shall provide CITY with such information as CITY may request regarding the status of any ongoing project. 6.3 Upon term or termination of this agreement, CEE shall return all remaining unspent program funds to CITY. 6.4 Any termination of this Agreement shall not release either party from their respective obligations under sections 8 and 9 of this Agreement. Insurance 7.1 During the term of this Agreement, CEE shall obtain and maintain workers' compensation, comprehensive general liability, and automobile liability insurance. Comprehensive general liability insurance shall have and aggregate limit of $2,000,000. 7.2 Upon request by the CITY, CEE shall provide CITY with a certificate or certificates of insurance relating to the insurance required pursuant to paragraph 7.1. Liability and Indemnification 8.1 CEE represents that the services to be provided under this Agreement are reasonable in scope and that CEE has the experience and ability to provide the services. 8.2 CEE shall indemnify, defend and hold harmless CITY and its officers, directors, employees and agents from and against any and all claims, damages, losses, injuries and expenses (including attorneys' fees and damages for death, personal injury and property damage) which CITY may incur as a result of any act or omission by CEE in providing services under this Agreement. Columbia Heights Discount Loan Program Agreement Page 3 8.3 CITY shall indemnify, defend and hold harmless CEE and its officers, directors, employees and agents from and against any and all claims, damages, losses, injuries and expenses (including attorneys' fees and damages for death, personal injury and property damage) which CEE may incur as a result of any act or omission by CITY in discharging its duties under this Agreement. Confidentiality Unless otherwise agreed by CITY in writing, CEE shall maintain in confidence and not disclose to any third party any information obtained regarding CITY and/or any borrowers for which CEE is providing services; provided, however, that this obligation to maintain confidentiality shall not apply to: a) Information in the public domain at the time of disclosure; b) Information which becomes part of the public domain after disclosure through no fault of CEE; or c) Information which CEE can demonstrate was known by it prior to the date of this Agreement. 10. Relationship of Parties 11. CEE will provide services as an independent contractor under this Agreement. Neither CEE, nor any of its employees or agents, shall be considered employees of CITY for any purpose, and neither shall CEE be eligible for any compensation or benefits which CITY may provide to its employees from time to time. CEE shall be solely responsible for all employment and other taxes applicable to providing services hereunder, and CITY will not withhold any taxes or contributions from the compensation payable to CEE under this Agreement. If any govemmentai authority (federal, state or other) claims that CITY owes taxes or contributions which allegedly should have been withheld or made, then, to the extent permitted by law, CEE shall pay CITY the amounts claimed to be due, plus reasonable attorneys' fees and any other costs which CITY may incur in defending such claim, whether or not a lawsuit is commenced. Notices All notices, requests, demands and other communications required to be given in writing under this Agreement shall be given to the other party in person or by mail as provided in this section. If delivered personally, notice shall be deemed to have been duly given on the date of delivery. If delivered by mail, such notice shall be sent via first class U.S. mail, postage prepaid, to the address set forth at the beginning of this Agreement or such other address as a party may otherwise request by written notice, and notice shall be deemed duly given three (3) business days after mailing. Columbia Heights Discount Loan Program Agreement Page 4 12. Assignment This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns; provided, however, that neither party shall assign or transfer in any manner, this Agreement or any portion hereof without the prior written consent of the other party, and any attempt to assign or transfer without prior written consent shall be void and of no effect. 13. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 14. Miscellaneous 14.1 Headings and captions used in this Agreement are for convenience only and shall not affect the meaning of this Agreement. 14.2 This Agreement contains the entire agreement of the parties and supersedes all prior agreements, discussions and representations, written or oral, concerning the subject matter hereof. 14.3 No waiver by CITY of any term or condition of this Agreement or any document referred to herein shall, whether by conduct or otherwise, be construed as a waiver or release of any other term or condition of this Agreement. 14.4 This Agreement may only be amended in a written agreement signed by both parties. 14.5 Except as expressly set forth in Section 8, the rights and benefits under this Agreement shall inure solely to the benefit of CITY and CEE, and this Agreement shall not be construed to give any rights, benefits or causes of action to any third party. 14.6 The invalidity or partial invalidity of any provision of this Agreement shall not invalidate the remaining provisions, and the remainder shall be construed as of the invalidated portion shall have never been a part of this Agreement. 14.7 This Agreement may be signed in any number of counterparts, each of which shall be deemed an original and one and the same instrument. Columbia Heights Discount Loan Program Agreement Page 5 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. City of Columbia Heights By: Its: ! City Mayor Its: CENTER FOR ENERGY AND ENVIRONMENT ~i ty ~la'rf~er ~he'~l'don Stroria .... Executive Director Federal Tax Identification Number: 41-1647799 600\Reports\col Hts Disc Loan Odg Agree.doc August 1~., 2000 Columbia Heights Discount Loan Program Agreement Page 6 EXHIBIT A Terms of the Columbia Heights Discount Loan Program CEE will utilize City of Columbia Heights, Minnesota Housing Finance Agency, and Metropolitan Council funds to write down the interest rate on the Minnesota Housing Finance Agency's (MHFA) Community Fix-up Fund and Fix-up Fund Loan Programs. The intent of the program is to offer an attractive interest rate to encourage homeowners to make home improvements to their properties and leverage additional dollars for the community. 8% MHFA loans will be written down to an effective rate of 6%. Program Allocation: $100,000. ($50,000 City of Columbia Heights, $25,000 MI-IFA, and $25,000 Metropolitan Council). Underwriting Decision: Underwriting of these loans will follow the MHFA procedural manuals and normal and prudent underwriting criteria. 3. Loan Amount: The maximum loan amount is $35,000. Income Limit: Per MHFA guidelines, eligible borrowers must have an annual household income of less than $78,890. Debt - to Income Ratio: Per MHFA guidelines, applicants must prove the ability to repay the loan and have a debt to income ratio less than 45%. Eligible Improvements: Per MHFA guidelines, eligible improvements are determined by the MHFA for the individual financing programs and are stated in the Procedural Manuals for each program. Eligible Properties: Eligible properties are restricted to Cape Cod and Rambler style homes constructed prior to 1970 located in the geographical boundaries of the City of Columbia Heights. 8. Loan Servicing: MHFA will be responsible for servicing the loans. Work Completion: As required by MHFA, all work must be completed within 9 months of the loan closing. 10. Disbursement of Funds: Per MHFA guidelines, loan funds will be disbursed to borrower upon loan closing. ll. Loan Security: As required by the MHFA, in most cases, only loans over $5,000 will be secured with a mortgage. 12. Calculation of Loan Discount: The Loan Discount shall be calculated utilizing the ratios outlined in Exhibit B of this contract. Columbia Heights Discount Loan Program Center for Energy and Environment Page 1 August 11, 2000 EXHIBIT B ATTACHMENT TO ADDENDUM I. Programs and Interest Rates Pr°lg~am PROGRAM NAME INTEREST - RATE 508 Fix-up Fund Discount 3% 3% 509 Fix-up Fund Discount 4% 4% 510 Fix-up Fund Discount 5% 5% 511 Fix-up Fund Discount 6% 6% 512 Community Fix-up Fund Discount 3% 3% 513 Community Fix-up Fund Discount 4% ~t% 514:;:' '.' Community Fix-up Fund Discount 5% 5% 504 Community Fix-up Fund Discount 6% '= 6% II. Purchase Price Discount Percentages Yield to Yield to Yield to MHFA: MHFA: MHFA: 8% 6% 4% Loan Term Interest Rate Interest Rate Interest BPaid by paid by Rate pald orrower Borrower by Borrower 6% 5% 4% 3% 5% 4% 3% 3% 6-60 months 95.5 93.3 91.1 89 97.7 95.4 93.2 97.7 ' 61-120 months 91.7 87.8 83.9 80 95.7 91.5 .87.4 95.5 121-180 months 88.6 83.1 77.9 72.8 93.9 88 82.3 93.6 181-240 months 85.9 79.3 73 67 92.3 84.9 77.9 91.8 A,Jdcn~lum to Purch~c A .~-~.c.mcn~ For Home Impmvcmcnl La~n ProD-~ms I Z/30198