2-32-950 Definitions for Article XI.

   Whenever used in Sections 2-32-950 through 2-32-1080, the following words or terms shall have the following respective meanings unless different meanings clearly appear from the context:

   (a)   "Bonds" means the revenue bonds authorized under this ordinance and includes notes and any and all other limited obligations payable as provided hereunder.

   (b)   "Municipality" means the City of Chicago, Cook County, Illinois.

   (c)   "Person" means any individual, partnership, copartnership, firm, company, corporation, lending institution, association, joint stock company, trust, estate, political subdivision, state agency or any other legal entity, or its legal representative, agent or assigns, but shall, when used with reference to a mortgagor or owner of a home, mean a natural person or a trust for the benefit of such natural person.

   (d)   "Residential development" means the acquisition, construction, reconstruction, rehabilitation, repair, alteration, improvement or extension of any land, interest in land, building, structure, facility, system, fixture, improvement, addition, appurtenance, machinery or equipment or any combination thereof, all real and personal property deemed necessary in connection therewith and all real and personal property or improvements functionally related and subordinate thereto, substantially for use by or intended to be occupied substantially by persons of low or moderate income for the purpose of decent, safe and sanitary housing, and in connection therewith nonhousing facilities which are an integral part of or functionally related to such residential development not to exceed ten percent of the cost of such residential development in accordance with the terms contained in this ordinance. Any such residential development shall be located within the municipality.

   (e)   "Development costs" means and includes the sum total of all reasonable or necessary costs incidental to the acquisition, construction, reconstruction, rehabilitation, repair, alteration, improvement and extension of a residential development, including, without limitation, the following: the cost of studies and surveys; plans and specifications; architectural and engineering services; underwriting fees; legal, accounting, marketing and other special services relating to residential development or incurred in connection with the issuance and sale of bonds; necessary application and other fees to federal, state and local government agencies for any requisite approvals for construction, for assisted financing or otherwise; financing, acquisition, demolition, construction, equipment and site development of new and rehabilitated buildings; the relocation of utilities, public ways and parks; the construction of recreational, cultural and commercial facilities; rehabilitation, reconstruction, repair or remodeling of existing buildings and all other necessary and incidental expenses, including trustee and rating agency fees and an initial bond and interest reserve together with interest on bonds issued to finance a residential development to a date six months subsequent to the estimated date of completion; any premiums for mortgage insurance or insurance with respect to bonds; and such other expenses as the municipality may deem appropriate to effectuate the purposes of this ordinance.

   (f)   "Lending institution" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker or other financial institution or governmental agency which customarily provides service or otherwise aids in the financing of mortgages on single-family residential housing or multifamily residential housing located in the municipality or any holding company for any of the foregoing.

   (g)   "Home mortgage" means an interest-bearing loan to a mortgagor for the purpose of purchasing or improving a home, evidenced by a promissory note and secured by a mortgage on such home, but shall not include a loan primarily for the purpose of refinancing an existing loan.

   (h)   "Home" means real property and improvements thereon located within the municipality consisting of not more than six dwelling units, including but not limited to condominium units, owned by one mortgagor who occupies or intends to occupy one of such units.

   (i)   "Mortgagor" means a person or persons whose adjusted gross aggregate income, together with the adjusted gross aggregate income of all persons who intend to reside with such person or persons in one dwelling unit, shall not have exceeded $50,000.00 for the immediately preceding taxable year and who has received a home mortgage on a home.

(Prior code § 7-85)

2-32-960 Purpose of Article XI provisions.

   It is hereby determined and declared that the purpose of this ordinance is to provide a means of financing the cost of residential ownership and development that will provide decent, safe and sanitary housing for residents of the municipality at prices they can afford; it is further determined and declared that such residential ownership and development will (a) provide for and promote the public health, safety, morals, and welfare; (b) relieve conditions of unemployment and encourage the increase of industry and commercial activity and economic development so as to reduce the evils attendant upon unemployment; (c) provide for efficient and well-planned urban growth and development including the elimination and prevention of potential urban blight and the proper coordination of industrial facilities with public services, mass transportation and residential development; (d) assist low- and moderate-income persons in acquiring and owning decent, safe and sanitary housing which they can afford; (e) promote the integration of families of varying economic means; and (f) preserve and increase the municipality's ad valorem tax base; and the foregoing are hereby determined and declared to be public purposes and functions pertaining to the government and affairs of the municipality.

(Prior code § 7-86)

2-32-970 Mortgage, bond and other financial powers and duties.

   In addition to powers which the municipality may now have, the municipality shall have all powers necessary to accomplish the purposes of this ordinance including, but not limited to, the following:

   (a)   Residential development. The municipality shall have the power to plan, conduct research, study, develop and promote the establishment of residential development.

   (b)   Home mortgages. The municipality shall have the power:

      (1)   To acquire, and contract and enter into advance commitments to acquire, home mortgages owned by lending institutions at such purchase prices and upon such other terms and conditions as shall be determined by the municipality or such other person as it may designate as its agent, to make and execute contracts with lending institutions for the origination and servicing of home mortgages and to pay the reasonable value of services rendered under those contracts;

      (2)   To make loans to lending institutions under terms and conditions which, in addition to other provisions as determined by the municipality, shall require the lending institutions to use substantially all of the net proceeds thereof, directly or indirectly, for the making of home mortgages in an aggregate principal amount substantially equal to the amount of such net proceeds;

      (3)   To establish, by rules or regulations, in ordinances relating to any issuance of bonds or in any financing documents relating to such issuance, such standards and requirements applicable to the purchase of home mortgages or the making of loans to lending institutions as the municipality deems necessary or desirable, including but not limited to: (i) the time within which lending institutions must make commitments and disbursements for home mortgages; (ii) the location and other characteristics of homes to be financed by home mortgages; (iii) the terms and conditions of home mortgages to be acquired; (iv) the amounts and types of insurance coverage required on homes, home mortgages and bonds; (v) the representations and warranties of lending in situations confirming compliance with such standards and requirements; (vi) restrictions as to interest rate and other terms of home mortgages or the return realized therefrom by lending institutions; (vii) the type and amount of collateral security to be provided to assure repayment of any loans from the municipality and to assure repayment of bonds; and (viii) any other matters related to the purchase of home mortgages or the making of loans to lending institutions as shall be deemed relevant by the municipality; provided, however, that in no case shall any such lending institution charge and retain an origination fee in excess of three percent of the principal amount of any such home mortgage; and, further provided, the interest rate on such home mortgage (or on the municipality's participation interest in such home mortgage if the municipality shall own less than 100 percent of such home mortgage) shall be at least one and one-half percent less than the stated interest rate being charged on 95 percent loan-to-value ratio mortgages made in the municipality or one percent less than the stated interest rate for 80 percent loan-to-value mortgages made in the municipality. The determination of such rates shall be made on any reasonable basis as determined by the comptroller, on a day established by the comptroller reasonably proximate to the date of execution of a contract for the sale of the related bonds;

      (4)   To require from each lending institution from which home mortgages are purchased or to which loans are made the submission, at the time of such purchase or loan, of evidence satisfactory to the municipality of the ability and intention of such lending institution to make home mortgages, and the submission, within the time specified by the municipality for making disbursements for home mortgages, of evidence satisfactory to the municipality of the making of home mortgages and of compliance with any standards and requirements established by the municipality; in connection therewith, the municipality may inspect the books and records of such lending institutions.

   (c)   Bonds. The municipality shall have the power:

      (1)   To issue its bonds to defray, in whole or in part, the development costs of any residential development; to issue its bonds to defray, in whole or in part, the costs of purchasing, or funding the making of, home mortgages including, but not limited to, the costs of studies and surveys, insurance premiums, underwriting fees, legal, accounting and marketing services incurred in connection with the issuance and sale of such bonds, including bond and interest reserve accounts and trustee, custodian and rating agency fees; and to designate appropriate names for such bonds. The municipality need not acquire or hold title to or any interest in a residential development or home mortgages;

      (2)   To rent, lease, sell or otherwise dispose of any residential development or home mortgages, in whole or in part, or to loan sufficient funds to any person to defray, in whole or in part, the development costs of any residential development or the costs of purchasing home mortgages, so that the rents or other revenues to be derived with respect to the residential development or home mortgages, together with any insurance proceeds, reserve accounts and earnings thereon shall be designed to produce revenues and receipts at least sufficient to provide for the prompt payment at maturity of principal, interest and redemption premiums, if any, upon all bonds issued to finance such costs;

      (3)   To pledge any revenues and receipts to be received from any residential development or home mortgages to the punctual payment of bonds authorized under this ordinance, and the interest and redemption premiums, if any, thereon;

      (4)   To mortgage, pledge or grant security interests in any residential development, home mortgages, notes or other property in favor of the holder or holders of bonds issued therefor;

      (5)   To sell and convey any residential development or home mortgages, including, without limitation, the sale and conveyance thereof subject to a mortgage, pledge or security interest, if any, as provided in the ordinance relating to the issuance of the bonds for such prices and at such times as the governing body of the municipality may determine;

      (6)   To issue its bonds to refund in whole or in part at any time bonds theretofore issued by the municipality under authority of this ordinance;

      (7)   To apply for and accept on its own behalf or on behalf of any person, advances, loans, grants, contributions, guarantees, rent supplements, mortgage assistance and any other form of financial assistance from the federal government, the state, any county or municipality, or any other public or quasi-public body, corporation or foundation, or from any other source, public or private, including any person, for any of the purposes of this ordinance, and to include in any contract for financial assistance such conditions as it may deem reasonable and appropriate and which are not inconsistent with the purposes of this ordinance;

      (8)   To make and execute contracts and other instruments necessary or convenient to the exercise of any of the powers granted herein;

      (9)   Bonds shall not be issued hereunder unless they receive at least an "A" rating from one of the nationally recognized rating agencies.

(Prior code § 7-87)

2-32-980 Ordinance authorizing bonds – Contents – Bond specifications.

   Any ordinance authorizing the issuance of bonds authorized under this ordinance shall require the submission of a program for residential development. The exercise of any or all powers granted by this ordinance may be authorized and the bonds may be authorized to be issued under this ordinance for the purposes set forth in this ordinance, by ordinance of the governing body of the municipality, and, provided that each such ordinance shall have been considered by the finance committee of the governing body of the municipality prior to its final adoption, shall take effect immediately upon adoption. Any such ordinance shall set forth a legislative finding and declaration (i) of the public purpose therefor and (ii) that such ordinance is being enacted pursuant to the powers granted by this ordinance.

   The bonds shall bear interest as such rate or rates, may be payable at such times, may be in one or more series, may bear such date or dates, may mature at such time or times not exceeding 40 years from their respective dates, may be payable in such medium of payment at such place or places, may carry such registration privileges, may be subject to such terms of redemption at such premiums, may be executed in such manner, may contain such terms, covenants and conditions, and may be in such form, either coupon or registered, as such ordinance may provide. The bonds may be sold at public or private sale in such manner and upon such terms as may be provided in such ordinance. Pending the preparation of definitive bonds, interim receipts or certificates in such form and with such provisions as may be provided in such ordinance, may be issued to the purchaser or purchasers of bonds sold pursuant to this ordinance. The bonds and interim receipts or certificates shall be deemed to be securities and negotiable instruments within the meaning and for all purposes of the Uniform Commercial Code.

(Prior code § 7-88)

2-32-990 Covenants in bonds.

   Any ordinance authorizing the issuance of bonds under this ordinance may contain covenants as to (a) the use and disposition of the revenues and receipts from any residential development or home mortgages for which the bonds are to be issued, including the creation and maintenance of reserves; (b) the issuance of other or additional bonds relating to any residential development or any rehabilitation, improvements, renovations, enlargements or additions thereto; (c) the maintenance and repair of such residential development or any homes; (d) the insurance to be carried on any residential development, home, home mortgage or bonds and the use and disposition of insurance moneys; (e) the appointment of one or more banks or trust companies within or outside the State of Illinois, having the necessary trust powers, as trustee and/or custodian for the benefit of the bondholders, paying agent or bond registrar; (f) the investment of any funds held by such trustee or custodian; (g) the maximum interest rate payable on any home mortgage; and (h) the terms and conditions upon which the holders of the bonds or any portion thereof or any trustees therefor, are entitled to the appointment of a receiver by a court of competent jurisdiction, and said terms and conditions may provide that the receiver may enter and take possession of the residential development or home mortgages, or any part thereto, and maintain, lease, sell or otherwise dispose of such development or mortgages, prescribe rentals or other payments and collect, receive and apply all income and revenues thereafter arising therefrom. Any ordinance authorizing the issuance of bonds under this ordinance may provide that the principal of and interest on any bonds issued under this ordinance shall be secured by a mortgage, pledge, security interest, insurance agreement or indenture of trust covering such residential development or home mortgages for which the bonds are issued and may include any improvements or extensions thereafter made. Such mortgage, pledge, security interest, insurance agreement or indenture of trust may contain such covenants and agreements to properly safeguard the bonds as may be provided for in the ordinance authorizing such bonds and shall be executed in the manner as may be provided for in the ordinance. The provisions of this ordinance and any such ordinance and any such mortgage, pledge, security interest or indenture of test shall constitute a contract with the holder or holders of the bonds and continue in effect until the principal of, the interest on, and the redemption premiums, if any, on the bonds so issued have been fully paid or provision made therefor, and the duties of the municipality and its corporate authorities and officers under this ordinance and any such ordinance and any such mortgage, pledge, security interest or indenture of trust shall be enforceable as provided therein by any bondholder by mandamus, foreclosure of any such mortgage, pledge, security interest or indenture of trust or other appropriate suit, action or proceeding in any court of competent jurisdiction; provided the ordinance or any mortgage, pledge, security interest or indenture of trust under which the bonds are issued may provide that all such remedies and rights to enforcement may be vested in a trustee (with full power of appointment) for the benefit of all the bondholders which trustee shall be subject to the control of such number of holders or owners of any outstanding bonds as provided therein.

(Prior code § 7-89)

2-32-1000 Signature of bonds – Validity of proceedings.

   The bonds shall bear the manual or facsimile signatures of such officers of the municipality as may be designated in the ordinance authorizing such bonds and such signatures shall be the valid and binding signatures of the officer of the municipality, notwithstanding that before the delivery thereof and payment therefor any or all of the persons whose signatures appear thereon have ceased to be officers of the municipality issuing such bonds. The validity of the bonds is not dependent on nor affected by the validity or regularity of any proceedings relating to the residential development or home mortgages for which the bonds are issued. The ordinance authorizing the bonds may provide that the bonds shall contain a recital that they are issued pursuant to this ordinance, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.

(Prior code § 7-90)

2-32-1010 Securing of bonds.

   Bonds issued under this ordinance may be secured by a pledge of or lien upon the revenues and receipts derived from the residential development or home mortgages or from any notes or other obligations of lending institutions with respect to which the bonds have been issued, and the governing body may provide in the ordinance authorizing such bonds for the issuance of additional bonds to be equally and ratably secured by a lien upon such revenues and receipts or may provide that the lien upon such revenues and receipts is subordinate.

(Prior code § 7-91)