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
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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
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