Agenda Date: 07/02/2019
Subject:
Title
Ordinance 17-2019: Second introduction of an ordinance approving the city's participation in the Metro Mortgage Assistance Plus Program and authorizing the execution of the Delegation and Participation Agreement
Body
Prepared by:
Tiffany Hooten, Finance Director
POLICY QUESTION:
Does city council support the city's participation in the Metro Mortgage Assistance Plus Program (MMA+), also called MetroDPA, and execution of the Delegation and Participation Agreement officially supporting access to low interest mortgages and down payment assistance for qualifying residents earning up to 150% of the Area Median Income (AMI)?
BACKGROUND:
The MMA+ program was created by the City and County of Denver in 2013 as a replacement to a housing revenue bond program. The new program became necessary when housing bonds fell out of favor with investors following the housing and mortgage market crash in 2008. The City and County of Denver restarted the mortgage program along with a third-party administrator by providing borrowers with a 4% down payment assistance (DPA) grant along with a first mortgage at a slightly higher interest rate. The Metro Mayors Caucus (MMC) invited member jurisdictions to demonstrate support for the MMA+ program by resolution (the City of Littleton requires an ordinance due to the term of the agreement) and a Delegation and Participation Agreement. There is no financial obligation for participation in the program. The demonstrated support by ordinance is expected to extend the region's collaborative interest in the success of the MMA+.
The program faced changing market conditions over the past two years which resulted in decreased use of the program. A review of the terms found rapid refinancing of MMA+ grants caused high loan prepayment speeds which diminished the premium loan servicers are willing to pay, thereby increasing mortgage interest rates to cover the DPA. The MMA+ loan interest rates became more co...
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