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TO: Mayor Robert J. O'Connor
FROM: Brian W. Caputo, Chief Financial Officer/City Treasurer
DATE: November 30, 2016
SUBJECT:
An Ordinance Amending and Restating Certain Documents Relating to the Collateralized Single Family Mortgage Revenue Bonds of the City of Aurora, Kane, DuPage, Will and Kendall Counties, Illinois, in an Aggregate Principal Amount Not to Exceed $600,000,000, Authorizing the Execution and Delivery of Certain Documents in Connection Therewith, and Related Matters.
PURPOSE:
To obtain the City Council's approval of an ordinance that would permit the execution of documents amending certain terms of the city-sponsored Illinois Assist Program.
BACKGROUND:
For many years, the city has facilitated the issuance of revenue bonds to provide low-cost financing for first-time single-family homebuyers as well as other homebuyers in certain census tracks. Federal law permits local governments to issue tax-exempt bonds to provide this financing. Mortgages financed by the bonds have sometimes been issued at an interest rate that is lower than rates available for conventional mortgages. In addition, homebuyers in the program receive an effective cash award of 3% to 5% of the mortgage amount toward a down-payment. Only 30-year, fixed rate mortgages are supported by single-family mortgage revenue bonds.
The city does not provide any kind of financial guarantee for the single-family mortgage revenue bonds that are issued in its name.
The City of Aurora is the lead agency for a program that provides down-payment assistance for counties and cities throughout Illinois. The program has come to be known as the Illinois Assist Program. Currently, about 80 jurisdictions currently participate in our program.
Private activity bond volume cap is required for the issuance of single-family mortgage revenue bonds. Each year, jurisdictions cede all or a portion of their private activity bond volume cap to the city in order to participate in the program.
Mo...
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