HomeMy WebLinkAbout5.1053 Original ContractThis Conservation Loan Guarantee Agreement is made this ID day of /v( 2010, by
and between First Federal (hereinafter referred to as "Lender and the City of Port Angeles
(hereinafter referred to as "City
1. Definitions
1.1. Agreement this contract.
2. Scope of the Aareement
CONSERVATION LOAN GUARANTEE AGREEMENT
1.2. City Customer an owner of an existing residential structure or owner and /or tenant of a
commercial structure who has an active account for utility services with the City.
1.3. City Representative an officer, agent, or individual, of the City duly authorized to
execute or amend the terms of this Agreement.
1.4. Eligible Measures cost effective improvements which conserve energy or water utility
services, meet the City's specifications, and are available through the City's energy or
water conservation program.
1.5. Loan Fees costs associated with preparing, underwriting, and closing a loan as
determined by the Lender
1.6. Loan Guarantee an agreement by the City to pay to Lender the remaining unpaid
balance on an existing loan upon default by the City Customer.
1 7. Residential Structure one (1) to four (4) unit stick built single family dwellings, or
manufactured homes not older than fifteen (15) years at the time of application and that
are deeded to land
1.8 Unpaid Balance the remaining principal balance of the loan, accrued interest to date of
payment by the City, and late fees.
2.1. In consideration of the City's Loan Guarantee the Lender will extend financing, as
outlined in this Agreement, to credit worthy City Customers for Eligible Measures as
defined by the City's energy and water conversation program
2.2 All Lender loan approvals shall be conditional to the receipt of the City's Loan
Guarantee
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3. General Procedures
3.1. Loan Application
3 1.1.The Lender shall supply to the City Customer, and provide assistance in
completing, the loan application.
3.1 2 The Lender shall determine the credit worthiness of each City Customer in
accordance with Lender's generally accepted standards and current underwriting
guidelines.
3.1 3 The Lender will disclose all loan fees and charges to each City Customer.
3.1.3.1 The City Customer shall pay all Loan Fees charged by the Lender for
processing the application.
3.1.3.2. Loan Fees may be paid in cash or included in the loan amount.
3 2. Loan Guarantee
3.2.1 Upon conditional loan approval the Lender shall make a written request to the City
for the Loan Guarantee.
3.2.2.The City shall approve or deny the Lender's Loan Guarantee request in writing.
3.2.3.The Loan Guarantee shall be approved in writing, in the form attached hereto as
Exhibit 1, by an authorized City Representative.
3.3. Loan Disbursement
3 3 1 The City shall be responsible for all inspections and certifying the project has been
completed in accordance with Eligible Measures.
3 3.2.Upon written notice from the City that the project has passed the City inspection the
Lender shall disburse all funds as per the loan agreement with the City Customer.
3.4. Security
3.4.1.The Lender shall secure loans made to owners of Residential Structures in a
manner consistent with home improvement loans made outside of this Agreement.
3.4.2.The Lender shall secure loans made to business owners and /or tenants of
commercial structures in a manner consistent with Residential Commercial
Underwriting Guidelines as defined in this Agreement unless otherwise specifically
approved by a City Representative in writing.
3 4.3.AII loan documents will specifically provide that the secured interest may be
transferred and /or assigned to the City.
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3.5. Loan Default
3.5.1.The City Customer shall be considered in default if the customer has failed to make
payments to Lender on the loan for a period greater than ninety (90) days.
3.5 2 The Lender shall make commercially reasonable efforts to collect.
3.5 3.Upon loan default the Lender shall make a written request to the City which shall
include evidence of the Lender's reasonable efforts to collect and the amount of the
remaining Unpaid Balance of the loan.
3.5.4.The Lender shall supply proof that it has not allowed the security to be subordinated
unless otherwise specifically approved by an authorized City Representative in
writing.
3.5.5.The Lender will deliver, endorse, and negotiate without recourse, any and all notes
and documents to the City and transfer the security that it has associated with the
loan to the City within thirty (30) days of payment of the remaining Unpaid Balance
by the City to the Lender
3.6. Upon written request the Lender shall provide reports to the City specifying the
remaining principal balance of each loan on which a Loan Guarantee has been issued
under this Agreement.
4. Loan Characteristics
4 1. Loan payments made to loans under this Agreement by the City Customer shall be
monthly principal and interest payments.
4.2. The loan term shall be no more than two hundred forty (240) months for owners of
residential structures and no more than sixty (60) months for owners or tenants of
commercial structures unless otherwise approved by a City Representative in writing.
4.3. Loans guaranteed by the City under this Agreement shall not have pre payment
penalties.
4.4 The loans guaranteed under this agreement shall be a variable rate loan hereinafter
referred to as a 1/1 ARM
4.4.1.The note rate shall be published weekly and made available in the Lender's
ratesheet.
4.4.2.The Index shall be the twelve (12) month, or one (1) year LIBOR (London Interbank
Offered Rate) as published by the Wall Street Journal.
4.4.3.The Margin shall be 2 500%
4 4.4.The Floor Rate shall be 2.500%
4 4.5 The interest rate is subject to adjust annually.
4.4.6 Interest rate adjustments shall be calculated by adding the current Index plus the
Margin and rounding up to the nearest .125
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4.4.7 The first initial adjustment shall not result in an interest rate that is 2.000% higher or
lower than the note rate, nor be lower than the Floor Rate of 2.500
4.4.8.AII subsequent periodic adjustments shall not exceed 2.000% higher or lower than
the interest rate from the previous period, nor result in a rate lower than the Floor
Rate of 2 500
4.4.9.No interest rate adjustment shall result in a rate higher than 5.000% above the note
rate or fall below the Floor Rate of 2.500
5. Residential Underwritina Guidelines
5.1. All loans made to residential City Customers shall be underwritten to the Lender's
standard Residential Underwriting Guidelines which shall include but not be limited to;
5.1.1.The Lender determining the credit worthiness of each City Customer in accordance
with Lender's standard Residential Underwriting Guidelines.
5.1.2.The credit score, loan to value, debt to income, delinquency profile, and lien
position, must be in accordance with the Lender's home improvement loan
requirements.
5 1 3 No mortgage payments greater than thirty (30) days past due within the previous
twelve (12) months prior to application date
5.1 4 No outstanding judgments
5.1.5.Divorce proceedings must be final.
5.1.6.Title insurance (limited liability) will be required on loan amounts of $15,000 and
higher
6. Commercial Underwritina Guidelines
6.1 All loans made to commercial City Customers shall be underwritten to the Lender's
standard Commercial Underwriting Guidelines which shall include but not be limited to;
6.1.1.Lender shall determine the credit worthiness of each City Customer in accordance
with Lender's standard Underwriting Guidelines.
6.1.2.No mortgage or lease payments greater than thirty (30) days past due within the
last year.
6.1.3.Cash flow and /or debt coverage ratio in accordance with the Lender's commercial
loan requirements.
6.1.4.No outstanding judgments.
6.1 5 All legal owners shall be a party to the loan.
6.1.6.Loan term shall not exceed the remaining lease term.
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8. Notices
6.1.7.Title insurance (limited liability) will be required on loan amounts of $15,000 and
higher.
7. Termination
7 1. Either party may terminate this agreement with a thirty (30) day written notice.
7 2. The Lender and the City shall be obligated to perform under the terms of this agreement
on all loan applications and Loan Guarantees made on or before the date termination
becomes effective.
8.1. Each Lender Loan Guarantee request and each City Loan Guarantee approval shall be
in writing and shall be considered received by either party when;
8.1 1 personal ly delivered
8.1.2.three (3) days following deposit in the United States mail when mailed postage
prepaid by certified or registered mail
8 1.3 received via facsimile
8.1.4.sent by courier service and providing evidence of delivery
8.2. All Lender Loan Guarantee requests and other notices to the City shall be directed to.
Director of Public Works and Utilities
City Hall
321 East Fifth Street
P O. Box 1150
Port Angeles, WA 98362
or to such officer as designated by the Director of Public Works and Utilities.
8 3. All City Loan Guarantee approvals and other notices to the Lender shall be directed to
Director of Credit Administration
P.O. Box 351
Port Angeles, WA 98362
or to such officers designated by the Lender.
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AGREED TO BETWEEN THE PARTIES:
First Federal
By
Date
ATTEST:
J. -ssa Hurd, City Clerk
William E. Bloor, City Attorney
City Q[ Port Angeles
BY Dan Di Guilio, Mayor
5/. S// O
Date
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City Customer Name:
City Customer Address:
Total Amount Financed:
Loan Application Number:
City Representative Name
City Representative Signature
Date
Exhibit 1
Conservation Loan Guarantee
The City of Port Angeles (hereinafter referred to as the "City acknowledges and agrees to
guarantee the loan referenced here per the terms of the Conservation Loan Guarantee
Agreement between First Federal (hereinafter referred to as "Lender and the City.
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