1984-136-Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION _1984 -136
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 1983 -190. 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.
(3) Senior Citizens who have lived in the Town and have moved out of
the Town within the previous five years at time of application.
b. Second priority - 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 family 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 family will be considered when a home is sold. The number
of bedrooms that a family qualifies for is based on the household size
according to the following schedule:
1 -2 Family Members .....................I Bedroom and Studio
2 -4 Family Members .....................2 Bedrooms
3 -6 Family 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, June 25, 1984).
rul
rersons in
1 21,152
31,731
24,176
36,264
3 27,198
40,797
30,220
45,330
32,183
48,275
33,967
50, 951
4. A buyer's qualification is determined by the family ability to make the
monthly payments for the unit.
The monthly housing cost shall include the following factors:
a. BMP Price.
b. Current Lending Rates.
C. Estimated Taxes.
d. Estimated Insurance.
e. Homeowners' Fees.
f. Other expenses as determined necessary by the lender.
Closing costs for the unit shall include a fee to cover
the administration
of the DIP Program.
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 Sellin 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 ordinance 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.
D. Deed Restrictions
1. All Below Market Price dwelling units must be owner- occupied except as
noted in (2) below.
2. As 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 B income limits. All 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.
-3-
5. Resale provisions are provided in Section E below.
E. Resale of Units
1. If the owner elects to sell his unit, the Town and /or CHO 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 CHD, 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;
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 dwelling unit.
4. The repair of any damage to the unit will be done prior to resale. The CHU
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. CHD 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 20th day of August 1984 by the
following vote:
AYES: COUNCIL MEMBERS Joanne Benjamin, Eric D. Carlson Terrence
J. Dailv. and Mayor Thomas J. Ferrito
NOES: COUNCIL MEMBERS None
ABSTAIN:
COUNCIL
MEMBERS
None
ABSENT:
COUNCIL
MEMBERS
Brent N. Ventura
SIGNED:
ATTEST:
1. L '}S y 4