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1983-154-Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION 1983-154 TOWN COUNCIL RESOLUTION SPECIFYING RULES, PROCEDURES AND CRITERIA FOR THE TOWN'S BELOW MARKET PRICE PROGRAM This resolution effects the provisions of Zoning Ordinance Sections 3.90.100 through 3.90.135, regarding the Below Market Price Program. This supersedes Resolution 1982 -84. Resolved: A. Buyer Qualification 1. Priority of eligibility at the time of purchase: a. First priority - (1) Senior citizens who have lived in the Town for at least two years. A senior citizen is defined as any person 60 years of age or older, or married couples living together when at least one spouse is 60 years of age or older. (2) Salaried Town employees as defined in the Town's personnel Rules, who have been employed by the Town for a period of no less than 12 months. b. Second priorty - Persons who live and work in the Town of Los Gatos and have lived and worked in the Town for at least two years. c. Third priority- Single heads of households with dependent children who have lived in the Town for at least two years. d. Fourth priority - Persons who live or work in the Town of Los Gatos and have lived or worked in the Town for at least two years. e. Fifth priority - All other applicants who live or work within Santa Clara County and are eligible according to household size and income criteria. All persons must qualify for their own mortgage without assistance from the Town. Qualifications must include the ability to pay taxes, insurance, and any homeowner association fees in addition to the mortgage. 2. Household Size /Unit Size The size of the household will be considered when a home is sold. The number of bedrooms that a household qualifies for is based on the household size according to the following schedule: 1 -2 Household Members . . . . . . . . . . . . 1 Bedroom and Studio 2 -4 Household Members . . . . . . . . . . . . 2 Bedrooms 3 -6 Household Members . . . . . . . . . . . . 3 Bedrooms No distinction is made between adults and children. For example, a husband and wife are eligible for a 2- bedroom unit, as well as a parent and child. 3. Income limits by household size (80% - 120% of Santa Clara County Median Income, April 18, 1983). % of Median 80 120 Persons in Household 6 31,250 46,876 4. A buyer's qualification is determined by the household ability to make the monthly payment £or the units. The monthly housing cost shall include the following factors: a. BMP Price. b. Current Lending Rates. c. Estimated Taxes. d. Estimated Insurance. e. Homeowners' Fee. f. Other expenses as determined necessary by the lender. Closing costs for the unit shall include a fee to cover the administration of the BMP Program. - 2 - B. Buyer Selection 1. Applications will be prioritized in accordance with the established place of employment and income requirements. 2. A lottery will be used to rank each qualified applicant within each of five priorities. 3. Applicants who qualify for a project will be drawn from the eligible applicant pool as units become available for sale. 4. An applicant has two opportunities to refuse a unit before being removed from the current applicant pool. 5. Applicants who do not qualify for a particular project shall retain their eligibility. C. Determination of Initial Selling Price 1. The initial sales price of the unit will be determined by consultation between the Town Manager or delegate and the builder. The Manager is authorized to approve changes in specifications to lower the price of the BMP units which do not affect any Town code or ordinace requirements, such as changes in carpeting, lighting fixtures, etc. 2. The initial price may include direct construction cost and a proportionate share of the costs of preparing working drawings and specifications, Providing utility services, required off -site and on -site improvements, Public agency fees, bonds, insurance, financing and premium points, loan standby fees, landscaping, parking, recreational facilities, engineering and architectural fees related to construction; provided, that the price shall not exceed an amount which will allow a range of qualified buyers to purchase (as defined above). 3. The initial price shall not include cost of land, builder's profit, marketing costs, planning, promotional or advocacy expenses, options, or preliminary drawings. - 3 - D. Deed Restrictions 1. All Below Market Price dwelling units must be owner-occupied except as noted in (2) below. 2. An owner of a Below Market Price dwelling unit is not permitted to lease, rent, sublet, or otherwise assign his interests in the property, except that the property may be leased for limited periods of time when the owner is required to live elsewhere and expects to return. Tenants will be limited to persons qualified under the Section 8 income limits. A11 leases must be arranged through the Community Housing Developers Corporation and the owner must accept tenants qualified by the Community Housing Developers. 3. In order to lease a unit under the terms of (2) above, the owner must still be qualified within the income limits of the Below Market Price Program in effect at the time of the lease, otherwise the owner must sell the unit. 4. The Town has the right of first refusal on the sale of the BMP units. The Town must exercise its right of refusal within six months from notice of availability of a unit. The developer has second right of refusal on first sale of all new units if the Town is unable to find a buyer. 5. Resale provisions are provided in Section E below. E. Resale of Units 1. I£ the owner elects to sell his unit, the Town and/or CHD must be notified. 2. When a Below Market Price dwelling unit becomes available for resale, the owner must allow the Town to set the resale price and make the unit available to other program applicants. 3. The Town, after receiving a recommendation from the CHID, will determine the resale price by adding to the original price. a. The percentage increase in the median income index for Santa Clara County as published by the United States Department of Housing and Urban Development for the years the owner has lived in the unit. - 4- b. The value of any substantial improvements the owner has made on the property, and will deduct from the price of the unit any costs incurred to repair damages to the Below Market Price unit. 4. The repair of any damage to the unit will be done prior to resale. The CHID will arrange for the repairs. Money to cover the costs of repair may be loaned to the CHD by the Town if there is a delay of close of escrow and the CHD will reimburse the Town after the sale. 5. CHU notifies the next qualified buyer in the application pool. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos held on the I lst day of August , 1983, by the following vote: AYES: COUNCIL MEMBERS: Joanne Benjamin, Terrence J. Daily Thomas J. Ferrito and Mayor Brent N. Ventura NOES: COUNCIL MEP ,BERS: None ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: Mares J. Rasmussen ATTEST: CLERK OF THE TOWN OF LOS GATO SIGNED: - 5 - MAYOR OF THE TOWN OF LOS GATOS