1981-136-Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION 1981 -136
TOWN COUNCIL RESOLUTION SPECIFYING RULES, PROCEDURES
AND CRITERIA FOR THE TOWN'S B=V M7IRKET PRICE PROGRAM
This resolution effects the provisions of Zoning Ordinance Sections
3.90.100 through 3.90.135, regarding the Below Market Price Program.
Resolved:
A. Buyer Qualification
I. Priority of eligibility at the time of purchase:
a. First priority - 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.
b. Second priority - persons who live and work in the Town of Los
Catos 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 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. Family Size/Unit Size.
The size of the family will be considered when a hone is sold. The
2-
number of bedrooms that a family qualifies for is based on the family size
according to the following schedule:
1 -2 Family members ................... 1 Bedrcom 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% - 1200 of Santa Clara County Median
Income, JuZy 2980).
% of Median
80
120
Persons in
HousehoZd
1
13,350
20,025
2
15,250
22,875
3
17,150
25,725
4
19,050
28,575
5
20,250
30,375
6
21,200
32,100
7
22,600
33,750
8
23,800
35,700
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 &%1P Program.
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B. Buyer Selection
1. Applications will be prioritized in accordance with the established
place of employment and income requirements on a first -come, first-
serve basis.
2. Applicants who qualify for a project will be drawn from the eligible
applicant pool as units become available for sale.
3. An applicant has two opportunities to refuse a unit before being
removed from the current applicant pool.
4. 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 ordinance requirements, such
as changes in carpeting, lighting fixtures, etc.
2. The initial price is limited to direct construction cost and a propor-
tionate 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 premhiun points, loan
standby fees, landscaping, parking, recreational facilities, engineering
and architectural fees related to construction.
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
-4-
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 rpoperty may be leased for limited pericds 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.
All leases must be arranged through the Community Housing Developers
Corporation and the owner must accept tenants qualified by the California
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. If the owner elects to sell his unit, the Ton and /or CILD must be
notified.
2. When a Below Ntarket 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 SID, will. deter-
mine the resale price by adding to the original price:
a. the percentage increase in the median fnecm:e index for Santa Clara
Count.',; as pubZished by the United States t'epar,t^;cn, o Yousin anI
Urban. Development for the years the owner has lived in the unit;
b. the value of any substantial improvements the owner has made on L,he
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 CHD 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.
F. This resolution repeals and supercedes Resolution No. 1981 -191.
PASSED AND ADOPTED at a regular meeting of the Town Council of
the Town of Los Gatos held on the 15th day of June 1981, by
the following vote:
AYES: COUNCIL MEMBERS Ruth Cannon, Thomas J. Ferrito, Roar
J. Rasmussen, Brent N. Ventura and Peter W. Siemens
NOES: COUNCIL WEEPS None
ABSTAIN: COUNCIL ME7,I30RS None
ABSENT: COUNCIL i`�BERS None
f
SIGNED:
f IAAYO,R CC THE TC ''N OF LOS GATOS
ATTEST:
C"i EPE A TKE TOWN OF L0' tIOS