CC 04-28-20 #2 Emergency Assistance Funds for Tenants_Meriwest PresentationCity of Cupertino
Rental Assistance
Loan Program Proposal
April 17, 2020
Rental Assistance
Loan Program Outline
Meriwest Credit Union (MCU) shall offer, make, and
service low-interest loans to income qualified Cupertino
residents
Loan Purpose is to provide low interest loans for up to
two months of monthly rental assistance payments to
achieve housing stability during the COVID-19 crisis.
City of Cupertino shall place $100K into a MCU share
account as collateral for the loans for up to 24 months.
Loans will be fully secured by City of Cupertino share
account in the event of borrower default during the
repayment period.
Proposed Borrower Loan Terms
Max Loan Amount of $3,000 or two months
borrower paid rental housing payment, whichever
is less
Loan Annual Percentage Rate is 1%.
Max Loan Term is up to 24 months
First payment Due Date deferred up to six months,
loan payments amortized over remaining 18
months
Loan payment history shall be included in borrower
credit reporting files
Proposed Borrower
Underwriting Guidelines (subject to City approval)
Residents earning less than 100% of Area Median
Income based on household size
Proof of Income, Residency in City of Cupertino, and
Rental Agreement required.
Maximum Debt to Income Ratio of 60% based on
housing payment and liabilities from credit report.
Minimum credit score of 620 FICO score for primary
borrower
Borrower(s) will be required to open a $5 membership.
Borrower(s) signed certification of income and housing
size will be required.
Proposed Servicing and Reporting
A one time $50 life of loan servicing fee for each loan
funded-will be invoiced separately to the City each month.
Borrowers will receive monthly statements with payment
due dates, amounts, and outstanding balances.
MCU to provide normal servicing procedures including
courtesy calls for past due loans, payment processing, credit
reporting, and bankruptcy processing as needed.
MCU shall report monthly to City each loan made,
outstanding balance, due dates, chargeoffs, offsets and
recoveries.
MCU shall chargeoff bad debt after 60 days and offset City
share account. MCU shall remit any payments to chargeoff
debt back to City