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HomeMy WebLinkAbout1979-06-01 - Minutes - MINUTES OF A RESIDENTIAL• HOUSING FACILITIES BOARD MEETING A meeting of the City of Fayetteville, Arkansas, Residential Housing Facili- ties Board was held on Friday, June 1, 1979, at 4:30 o'clock P.M. in the Board of Directors Room, City Administration Building, Fayetteville, Arkansas. MEMBERS PRESENT: Chairman F. H. Martin, Ron Pennington, Dale Christy, John Dominick and George Faucette, Jr. MEMBERS ABSENT: None. MINUTES: No mention was made of the minutes of the previous meeting of May 24, 1979. UNFINISHED BUSINESS: Discussion ensued concerning correspondence LETTER OF COMMITMENT/ received by Chairman Martin from City Attorney EFFECTIVE DATE/ Jim McCord concerning whether a loan application REFINANCING under the Fayetteville Housing Bond program could be approved if the applicant had previously been issued a letter of commitment for permanent financing. (A copy of said letter, dated May 30, 1979, is attached hereto and made a part of the minutes of this • meeting.) It was noted that this opinion letter stated in substance that such applications could be approved if the letter of commitment was issued on or after March 19, 1979, the date of the Advance Commitment Agreement executed by the participating lenders. Dale Christy stated that he felt the opinion letter should be accepted and noted that there was nothing else that couldn't be handled in due course of an application being filed and processed with the Administrator making the decisions as to which situations did or did not qualify "unless we're gonna object to their (bond counsel and legal counsel of Administrator) interpretations or try to change these dates." Chairman Martin stated that he did not understand why there needed to be any effective starting date. Ron Pennington agreed, stating that he could see the logical reason behind eliminating refinancing but that he did not think it was fair that a person who builds a spec house is more entitled to sell his prop- erty in this program than someone else. Chairman Martin stated "if getting a commitment and then going to this is refinancing, then I don't think he (the applicant) should be able to do it." "If it isn't refinancing, then I think he should do it," he added. Dale Christy stated that he was willing to finance anything eligible under the program, unless the Administrator or bond counsel turned it down by reason of its not meeting the criteria of the bond indenture. "I think they are going to have to make those determinations," he stated, "and if we have a date problem, then we' ll just have to live with it." Mr. Christy moved "that it is the intent of this Board that any application % i be approved that is a new residential housing loan and meets the criteria of the bond indenture." George Faucette seconded the motion. Further discussion ensued. 0 1979 [cECL- Residential Housing Facilities Board k June 1, 1979 Page 2 Chairman Martin stated that he had never felt that the public purpose aspect included the reasoning that a person had to have been turned down for another loan before being eligible for one of these. "I'm sure there are people who are getting loans out of this program that should go get other loans--there's no doubt about it," he stated. John Dominick stated that he didn't like the idea of a date at all. He said that if it was the Administrator's definition that obtaining a letter of commitment and applying for one of these loans was refinancing, he didn't agree with that definition of refinancing. "I would be for getting around the idea of having a cut-off date," he said. After further discussion, Mr. Christy withdrew. his motion. Chairman Martin then asked "that someone move that it's our opinion or interpretation that the fact that a fellow had a previous commitment letter is not a refinancing and in that sense would not disqualify; also, unless there is another legal reason to disqualify him, we would prefer that he not be disqualified." He added: "Then, if our lawyers say that there is another legal reason, such as a public purpose, then I guess we can take them to court!" George Faucette so moved. John Dominick seconded the motion, which passed unanimously. George Faucette stated that he agreed with COMMITMENTS TO BUILDERS • taking absolutely no action on allowing commit- ments to builders. "I think that ought to remain prohibited and if there's no reason, in light of existing commitments or applica- tions being taken, then there is no reason to get in any sweat about money being left over, in my opinion." Chairman Martin stated that he agreed with THE McWETHY SITUATION the opinion letter that this situation was not a prohibited residential refinancing under this bond program and stated that "according to what we did last time and what this letter says, I don't think we need to do anything else." • OTHER BUSINESS: Discussion ensued concerning payment of expenses of members of the Board. Chairman Martin asked that all requisitions for reimbursement of expenses be sent to him as he had been given authority to sign all such requisitions author- izing reimbursement of expenses. 1 ADJOURNMENT: There being no further business to come before the meeting, said meeting adjourned at 5:05 o'clock P.M. ATTEST: Ron Pennington, Secretary I F. H. Martin, Chairman L .• - v , Te:> rE rEM"V I I_J 1_ , 1 M ARKANSAS * OFFICE OF CITY ATTORNEY W:ka. .i 1,y-K,71 -CION Os-3-f' POSTAL DRAWER F 72701 (501) 521-7700 %`- -c.•:,,..4.- May 30 , 1979 Mr. F. H. Martin Attorney at Law One Mcllroy Plaza Suite 501 Fayetteville , AR 72701 Re : Fayetteville Residential Housing Facilities Board Bond Issue Dear F. H. : I have consulted with Bond Counsel on the question of whether a loan application under the Fayetteville Housing Bond program can be approved if the applicant has previously been issued a letter of commitment for permanent financing. Bond Counsel has in turn consulted with legal counsel for the administrator. Mr. James A. Buttry advised me by telephone this morning that it is the opinion of bond counsel and counsel for the administrator that such an application may be approved if the letter of commitment was issued on or after March 19 , 1979 , the date of the Advance Commitment Agreement executed by the participating lenders . The date of the Advance Commitment Agreement is a logical "cut-off date" because (1) a permanent financing commitment made prior to this date could not have been made with the reasonable expectation that housing bond proceeds would be available to finance the loan, and (2) the public purpose requirement , i. e . providing decent, safe , sanitary housing to persons who would otherwise be unable to obtain such housing, would not appear to be met for persons who were able to obtain a commitment for permanent resi- dential financing prior to the date on which availability of the housing bond proceeds could have reasonably be expected. My survey of local participating lenders reveals that they favor allowing a borrower to participate in the City ' s housing bond program even though the borrower may have been issued a letter of commitment for permanent residential financing prior to the availability of the bond proceeds . Bond Counsel and legal counsel to the administrator have determined that the conversion of a wood shop (on which there is Mr. F. H. Martin May 30 , 1979 Page Two an existing 10 year commercial loan) into a residential structure is not a prohibited residential refinancing under the City' s Housing Bond Program. Sincerely, CITY ATTORNEY 4 . 7,7tid) ames N. McCord JNM: smb