ACTION REQUESTED:
Title
Communication from the City Manager with a Request to ADOPT an ORDINANCE to Approve a Home Rule Volume Cap Allocation for PRIVATE ACTIVITY BONDS to the ILLINOIS ASSIST MCC PROGRAM.
Body
Background:
The City of Peoria receives an annual Volume Cap allocation as a Home Rule Unit of government. The Volume Cap allocation for 2021 is $12,252,680. The calculation of the Volume cap for 2021 is based on $105 per resident. Based on Section 146 of the Internal Revenue Code of 1986, as amended (the “Code”), The number of residents for 2021 has been calculated based on 111,388 residents. The “Code” allows the volume cap to be allocated to certain tax-exempt private activity bonds.
In addition to the Code above the Illinois Private Activity Bond Allocation Act, (the “Act”), provides that a home rule unit of government may transfer its allocation of volume cap to any other home rule unit of government, the State of Illinois or any State agency, or any non-home rule unit of government.
Under the authority of the Statues above the City of Peoria has made Volume Cap allocation transfers to Illinois Assist MCC Program (IAssist).
IAssist is sponsored by communities throughout the State. IAssist promotes individual home ownership. The home buyer assistance features of the Assist program provide families with funds to pay all or most of their closing costs and down payment, enabling families with good credit but little capital to by their home. Additional benefits of the program include a mortgage credit certificate which reduces the homebuyers’ ongoing cost of borrowing in form of a credit that reduces the effective rate they pay on interest for the mortgage.
The recommendation is to continue the contribution of the Volume Cap into the Illinois Assist MCC Program in the amount of $12,252,680. This year we have no other pending projects competing for volume cap allocations
FINANCIAL IMPACT: If approved, the City will transfer the 2021 allocation to the IAssist program. No further financial contribution is required.
NEIGHBORHOOD CONCERNS: Not applicable.
IMPACT IF APPROVED: First-time home buyers seeking homes will have a tool that will reduce the cost of home ownership within the City of Peoria. IAssist supports homeowners by reducing the cost associated with home purchase as well as reducing the ongoing costs associated with homeownership.
IMPACT IF DENIED: Home buyers in Peoria would need to find an alternative program to fill the void created by not funding IAssist. IAssist has been used to purchase on average 86 homes over the most recent 3year period. The average loan size has been $91,456. Additionally, developers seeking to multi-family housing projects would have to rely on more conventional l financing which in most cases is more expensive. This would make the properties within the City less competitive with alternative sites.
Alternatives: N/A
EEO CERTIFICATION NUMBER: Not applicable
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2014-2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Grow Peoria: Businesses, Jobs, and Population
2. Attractive Neighborhoods with Character: Safe and Livable
3. Vibrant Downtown: Riverfront/Central Business District/Warehouse District
WHICH CRITICAL SUCCESS FACTORS(S) FROM THE COMPREHENSIVE PALN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in Neighborhoods
Department: City Manager’s Office