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Item 10 - Fiscal Year 2023-24 Homeownership Initiatives
Community Development Agency www.santa-ana.org/community-development Item # 10 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report October 17, 2023 TOPIC: Fiscal Year 2023-24 Homeownership Initiatives AGENDA TITLE Authorize Issuance of the Fiscal Year 2023-24 Request for Proposals for Affordable Homeownership Opportunities; Approve an Update to the Down Payment Assistance Program Guidelines; Allocate Additional Funds to Down Payment Assistance RECOMMENDED ACTION 1. Authorize the City Manager to issue a Fiscal Year 2023-24 Request for Proposals for Affordable Homeownership Opportunities to solicit proposals for affordable ownership project(s) in the City of Santa Ana with funding from the HOME Investment Partnerships (HOME) Program. 2. Authorize the City Manager to update the City's Down Payment Assistance Program to include City's high school loan forgiveness incentive and increase the maximum debt -to -income ratios. 3. Approve an Appropriation Adjustment to recognize $762,979.40 in CalHome Program Re -use Funds and $1,527,020.60 in Inclusionary Housing Funds and appropriate these additional funds to the Down Payment Assistance Program. (Requires five affirmative votes) GOVERNMENT CODE §84308 APPLIES: No COMMUNITY DEVELOPMENT COMMISSION RECOMMENDATION At its regular meeting on September 27, 2023, the Community Development Commission amended the Down Payment Assistance Program Guidelines to include trade schools with 4-year colleges and recommended approval of the Recommended Action by a vote of 4:0 (Martinez, Padilla and Rios -Pacheco absent). DISCUSSION Homeownership can be a way that a family can build generational wealth. As a family makes mortgage payments and their home value appreciates over time, they build equity in their property. This equity can be passed on to their heirs when they sell the home or through an inheritance. There are various other benefits to homeownership including stability and security, tax benefits, and pride. Buying a home is the lifelong Fiscal Year 2023-24 Homeownership Initiatives October 17, 2023 Page 2 goal of many renters. For the first time ever in the history of the City of Santa Ana, staff is recommending approval of over $10 million in affordable housing funds for homeownership opportunities. This is the largest one-time investment in affordable homeownership in the City of Santa Ana ever made. This investment will be allocated between developing new homeownership opportunities ($7.7 million) and the City's Down Payment Assistance Program ($2.3 million). The following discussion describes this investment in greater detail. RFP for Affordable Homeownership Opportunities Under Section III of the Affordable Housing Funds Policies and Procedures amended by City Council on August 18, 2020, the Community Development Agency, upon City Council approval, will issue a Request for Proposals (RFP) for available funds. The RFP will be open and provide sufficient time for applicants to identify an eligible site and complete and submit a proposal. As such, staff is requesting authorization to release the Fiscal Year 2023-24 Request for Proposals for Affordable Homeownership Opportunities (Exhibit 1). The available funds for this RFP include $7,796,256 in funds available in the HOME Investment Partnerships (HOME) Program for affordable homeownership opportunities. The RFP will be restricted to projects that will provide affordable homeownership opportunities. Available program funds may be used for affordable housing development loans for the following eligible purposes: (1) The purchase of existing multi -family or other buildings for sale to low- and moderate -income households. (2) The purchase or lease of land and buildings for new construction. (3) The development of limited -equity housing cooperatives through either conversion or new construction. (4) The provision of interim loan funds for any of the above purposes prior to the funding of a public or private loan. Eligible development costs for the above uses include, but are not limited to: a. Site acquisition and preparation b. Rehabilitation of dwelling units, common areas, and related structures c. New construction d. Carrying charges and financing fees e. Architectural, legal, and organizational fees f. Temporary or permanent tenant relocation costs Land Assets Owned by the Housing Authority Staff is also including a land asset currently held by the Housing Authority in this RFP. This will be the fourth time this land asset has been included in an RFP. The proposed development of the property would be solely for the development of affordable homeownership. The land asset owned by the Housing Authority and available for development under this RFP is as follows: (1) 2101 N. Spurgeon Street a. APN:003-122-25 Fiscal Year 2023-24 Homeownership Initiatives October 17, 2023 Page 3 b. Lot Size: 27,817 square feet c. Current Zoning: R1 Single -Family Residence, which allows one house per lot d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside e. Previous Use: Purchased from Cal Trans. It was a remnant parcel from the freeway -widening project. The site was vacant and undeveloped at the time it was acquired f. General Plan: Low Density Residential, which allows single-family residences and ancillary uses g. Maximum du/ac: Seven units per acre h. Site Condition / Environmental Conditions: Property is irregular in shape, and will most likely require the approval of several variances from the zoning code in order to facilitate a residential unit Dependent on the proposal's financial parameters, staff is amenable to conveying the land asset for $1. Staff is currently monitoring legislative amendments to the Surplus Land Act. If this legislation is not signed by the Governor, staff may remove the land asset from the RFP by issuing an addendum. With approval by City Council, the RFP for Affordable Homeownership Opportunities will be issued on October 18, 2023. The first deadline for the RFP will be on Friday, December 15, 2023 and the second deadline will be on Monday, April 1, 2024. The RFP will be published on the City's website, a public notice will be published in the OC Register, an e-mail will be sent out to Orange County's largest affordable housing membership associations including the Kennedy Commission, 2-1-1 Orange County, and the Southern California Association of Nonprofit Housing, and a letter will be e- mailed to interested developers and nonprofit organizations who had previously requested to be informed of development opportunities on the Community Development Agency's RFP database. Developers and nonprofit organizations interested in being added to the RFP Database can do so by contacting the City's Housing Division. After each deadline, staff will conduct a minimum threshold review of each proposal to ensure the proposal complies with all of the minimum requirements in the RFP. Following the minimum threshold review, staff will form a Review Panel that consists of at least one employee from the City of Santa Ana Public Works Agency, Planning and Building Agency, and Community Development Agency, and one outside agency or government entity. If an employee is not available in one department, a second employee may be requested from one of the other two departments so long as there are at least two of the three City Agencies represented on the Review Panel. Staff will also have a real estate financial advisor on the Review Panel. In compliance with the City's Affordable Housing Funds Policies and Procedures, the Review Panel will use the proposal Scoring and Selection Criteria from the RFP to conduct their review and analysis of each proposal. The Scoring and Selection Criteria includes additional points for projects that will serve veterans, teachers, and first responders. Fiscal Year 2023-24 Homeownership Initiatives October 17, 2023 Page 4 Update to the Down Payment Assistance Program On November 2, 2021, the City Council approved an update to the Down Payment Assistance Program. The City Council also allocated $1.2 million in Inclusionary Housing Funds to expand the program. Since that last update, staff has awarded over $2,240,000 in down payment assistance for 21 families to purchase a home in Santa Ana. This includes $800,000 in Inclusionary Housing Funds and $1,440,000 in Community Development Block Grant (CDBG) Program funds. Staff proposes to update the Down Payment Assistance Program again and allocate additional funds because more families have been assisted in the last two years with down payment assistance than in the previous ten years combined. College Graduate, Veteran, and Active Military Incentive The first update to the program is for the City's high school loan forgiveness incentive. Currently the incentive is that prospective homebuyers who graduated from a high school located in the City and have a 4-year college degree are eligible for loan forgiveness. Under the loan forgiveness incentive, $10,000 will be forgiven every five (5) years over a 20-year period up to a maximum of $40,000. Staff is recommending an update that prospective homebuyers who also had a Santa Ana address while attending any high school and have a 4-year college or trade school degree are eligible for this loan forgiveness incentive. Staff is also recommending that U.S. Military Veterans and Active Duty Military will be eligible for this loan forgiveness incentive up to $40,000. Increase Debt to Income Ratio per Recent Underwriting Standards The second update to the program will be an increase to the maximum debt -to -income ratios. Currently the program allows a maximum debt -to -income ratio of 38/43 percent, which in today's lending market is considered conservative. This means that the buyer's prospective mortgage payment cannot exceed 38 percent of the household's gross monthly income, and all of the household's monthly debt payments (inclusive of the prospective mortgage payment) cannot exceed 43 percent of their gross monthly income. This ratio ensures that a buyer is not paying an excessive amount of their income toward their mortgage and other debt payments, which would increase their risk of foreclosure. Staff is proposing to increase the maximum debt -to -income ratio to 40/45 percent to align with today's underwriting standards and lower this barrier for families. With these two updates, staff is confident that more homebuyers will be able to qualify for the Down Payment Assistance Program. These updates are reflected in the Down Payment Assistance Program Guidelines attached as Exhibit 2. To launch the updated Down Payment Assistance program, staff will market these new guidelines and conduct additional outreach to prospective homebuyers. Staff will begin providing one (1) City -run workshop every month on the Down Payment Assistance Program. This will be in addition to the outreach, workshops, and events staff is continuously invited to on a monthly basis, which includes a monthly workshop with NeighborWorks Orange County. Additional marketing will include: Fiscal Year 2023-24 Homeownership Initiatives October 17, 2023 Page 5 1. Social media posts highlighting the updated program guidelines to the City's social media pages and promoting the monthly workshops; 2. Mass mailings to Santa Ana residents; and 3. Global e-mails to City employees, Santa Ana Unified School District employees, and County of Orange employees. Additional Funds for Down Payment Assistance On May 2, 2023, City Council approved $300,000 in CDBG Program funds for the Down Payment Assistance Program for FY 2023-24. In addition, the City has $410,000 remaining in Inclusionary Housing Funds that were allocated by City Council on November 2, 2021. Staff is now seeking approval to allocate an additional $2,290,000 by recognizing and appropriating $762,979.40 in CalHome Program Re -use Funds and $1,527,020.60 in Inclusionary Housing Funds. This will provide a total of $3 million in funds for the Down Payment Assistance Program. Regarding the CalHome Program Re -use Funds, in the past the City received funding from the State of California Department of Housing and Community Development (HCD) CalHome Program to fund a CalHome Rehabilitation and Manufactured Home Replacement Program. Under the CalHome Rehabilitation and Manufactured Home Replacement Program, the funds were used to offer deferred payment, thirty-year (30- year) rehabilitation loans with zero percent (0%) interest rates to low-income owner occupants of manufactured homes and single-family homes. Over the years, CalHome loan payoffs totaling $762,979.40 have been received and deposited into the CalHome Re -use account including interest. The State of California HCD recently approved the City to begin using these remaining funds for the Down Payment Assistance Program. In order to maximize the City's investment in the Down Payment Assistance Program, staff is recommending to allocate these CalHome Program Re -Use Funds together with $1,527,020.60 in Inclusionary Housing funds. In total, the $7.7 million RFP for Affordable Homeownership Opportunities and additional $2.3 million for the Down Payment Assistance Program will make available over $10 million for homeownership, which is the largest one-time investment in affordable homeownership opportunities in the City of Santa Ana. FISCAL IMPACT Approval of the appropriation adjustments will recognize $762,979.40 in the CalHome Program Re -use funds Prior Year Carry -Forward (account no. 14318002-50001) and $1,527,020.60 in the Inclusionary Housing funds Prior Year Carry Forward (account no. 41718002-50001). Any unspent funds at the end of the current fiscal year will be included in future -year carry -forward for City Council consideration. The expenditure plan is as follows: Fiscal Year 2023-24 Homeownership Initiatives October 17, 2023 Page 6 Accounting Fund Accounting Fiscal Year Unit -Account Description Unit, Account Amount Description 14318763- CalHome CalHome Owner 69152 Program Occupied, Loans $762,979.40 FY 2023-24 & Grants (July —June) 41718820- Inclusionary Inclusionary 69152 Housing Fee Housing, Loans $1,527,020.60 & Grants Total $2,290,000 The above spending plan is only an estimate and is subject to change. EXHIBIT(S) 1. FY 2023-24 RFP for Affordable Homeownership Opportunities 2. Down Payment Assistance Program Guidelines Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Steven A. Mendoza, Assistant City Manager EXHIBIT 1 REQUEST FOR PROPOSALS RFP # 23-156 AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES CITY OF SANTA ANA Community Development Agency 20 Civic Center Plaza Santa Ana, CA 92701 Claudia Fernandez -Shaw Housing Programs Analyst Tel: (714) 667-2265 cshaw(aD_santa-ana.org KEY RFP DATES: Issue Date: First Review of Proposals: Second Review of Proposals: Wednesday, October 18, 2023 Friday, December 15, 2023 Monday, April 1, 2024 City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 1 EXHIBIT 1 NOTICE INVITING PROPOSALS NOTICE IS HEREBY GIVEN that proposals will be received from qualified firms (Developers/Proposers) for the development of affordable homeownership opportunities in the City of Santa Ana. The RFP Process will be open ("Open RFP Process") and provide sufficient time for applicants to identify an eligible site and complete and submit a proposal in response to the RFP announcement. The first review of proposals will be December 15, 2023 and second review of proposals will be April 1, 2024. After each deadline, staff shall review the Proposals to determine that the minimum Program and RFP Process requirements are met (minimum threshold review). Proposals that do not meet the minimum threshold review will be considered non -responsive. If the Proposal meets the minimum threshold review, staff will form a Review Panel. The Review Panel for the RFP Process will consist of at least one employee from the City of Santa Ana Public Works Agency, Planning and Building Agency, and Community Development Agency, and one outside agency or government entity. If an employee is not available in one department, a second employee may be requested from one of the other two departments so long as there are at least two of the three City Agencies represented on the Review Panel. Using the scoring and selection criteria provided in the RFP, the Review Panel shall determine whether the proposal is recommended for an award in the form of a pre -loan commitment. Using the scoring and selection criteria, the Review Panel shall review the design of the proposed project for appropriateness for the proposed target group, compatibility with surrounding uses, cost effectiveness of construction, and appropriateness of the design and construction for low maintenance and long term durability. If the Review Panel determines, in its discretion, that the proposal may be recommended for approval, the Housing Division shall request an underwriting and subsidy layering review by a real estate advisor selected by the City of Santa Ana and paid for by the Proposer. The real estate advisor shall confirm the underwriting for the project, the financial gap, and other programmatic requirements related to the funding sources. If the Review Panel determines that the proposal will not be recommended for approval or an award of funds, the Proposer will be notified in writing of the decision. It is the responsibility of the Proposer to ensure that any proposals submitted shall have sufficient time to be received by the City of Santa Ana prior to the proposal due date and time. Any questions regarding this Request for Proposals shall be made in writing via e-mail to Claudia Fernandez -Shaw, Housing Programs Analyst, at cshaw(c-Dsanta-ana.org. MAILED, DELIVERED BY HAND, OR COURIERED PROPOSALS WILL BE ACCEPTED AS FOLLOWS: City of Santa Ana Claudia Fernandez -Shaw, Housing Programs Analyst Community Development Agency 20 Civic Center Plaza, Sixth Floor Santa Ana, CA 92701 PLEASE DO NOT E-MAIL RFP RESPONSES. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 2 EXHIBIT 1 CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES PAGE I. INTRODUCTION 4 II. SCOPE OF WORK 5 III. GENERAL INFORMATION 6 IV. COORDINATION 6 V. DEVELOPER RESPONSIBILITIES 6 VI. CITY BUSINESS LICENSE 7 VII. UNIQUE ENTITY ID 7 VIII. RULES FOR PROPOSALS 7 IX. PRE -PROPOSAL MEETING 7 X. E-MAIL COMMUNICATIONS AND INTERPRETATIONS/CLARIFICATIONS 7 XI. ADDENDA 7 XII. SUBMITTAL REQUIREMENTS INFORMATION AND DEADLINE 7 XIII. MINIMUM QUALIFICATIONS 7 XIV. SUBMITTAL REQUIREMENTS 8 XV. DEVELOPER SELECTION — PROPOSAL AND EVALUATION 12 XVI. PUBLIC RECORDS 13 XVII. FILING A PROTEST 14 EXHIBIT A SCOPE OF WORK Attachment 1 Early Outreach Community Meeting Attachment 2 City of Santa Ana Rehabilitation Standards 15 23 24 EXHIBIT B ADDITIONAL INSURED ENDORSEMENT FOR GENERAL LIABILITY POLICY 32 EXHIBIT C PROPOSAL CONTRACT AND AGREEMENT: PROPOSER'S STATEMENT 33 EXHIBIT D PROPOSAL CONTRACT AND AGREEMENT: CERTIFICATION OF NONDISCRIMINATION 34 EXHIBIT E PROPOSAL CONTRACT AND AGREEMENT: NON -COLLUSION AFFIDAVIT 36 EXHIBIT F PROPOSAL CONTRACT AND AGREEMENT: COMMITMENT TO ENTER INTO MOU 37 EXHIBIT G CITY OF SANTA ANA MAP OF OPPORTUNITY ZONES 38 EXHIBIT H HOUSING AND COMMUNITY DEVELOPMENT NOFA CALENDAR 43 EXHIBIT I COMMUNITY OUTREACH GUIDELINES 44 City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 3 EXHIBIT 1 CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES I. INTRODUCTION The City of Santa Ana (City) and the Housing Authority of the City of Santa Ana (Authority) are issuing this Request for Proposals (RFP) for the development of affordable homeownership opportunities in the City. Proposed developments may be for acquisition and rehabilitation of eligible properties for ownership housing units; acquisition and conversion of non-residential property to ownership housing units; and/or new construction of housing units for ownership housing. Priorities and Objectives: In particular, the City is interested in furthering the following priority through this RFP: Projects that will provide affordable homeownership opportunities Available Funds for this RFP: The available funds for this RFP include funds available in the HOME Investment Partnerships Program (HOME). Available program funds may be used for development loans for the following eligible purposes: 1) The purchase or lease of land and buildings for new construction or rehabilitation of housing that may utilize available State and Federal housing assistance programs for homeownership projects. 2) The purchase of existing multi -family or other buildings that result in the sale of units to low- and moderate income households. 3) The provision of interim loan funds for any of the above purposes prior to the funding of a public or private loan. Eligible development costs for the above uses include, but are not necessarily limited to: a. Site acquisition and preparation; b. Rehabilitation of dwelling units, common areas and related structures; c. New construction; d. Carrying charges and financing fees; e. Architectural, legal, and organizational fees; f. Temporary or permanent tenant relocation costs. Please refer to the Affordable Housing Funds Policies and Procedures amended by City Council on August 18, 2020 for more information. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 4 EXHIBIT 1 As of the date of issuance, the Available Funds for this RFP will be as follows, subject to change: HOME Investment Partnerships Program (HOME) $7,796,256 Land Asset Owned by the Housing Authority: The Housing Authority of the City of Santa Ana acting as the Housing Successor Agency (Authority) is also issuing this RFP for the development of land currently held by the Authority within the City of Santa Ana. The proposed disposition and development of the property would be solely for the development of affordable housing in accordance with requirements for an exemption from the California Surplus Land Act (Gov. Cody section 54220 et seq.). The Land Asset owned by the City and Housing Authority that is available for development under this RFP are as follows: (1) 2101 N. Spurgeon Street (also identified as 302 E. 22"d Street) a. APN:003-122-25 b. Lot Size: 27,817sf c. Current Zoning: R1 Single -Family Residence, which allows one house per lot. d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside e. Previous Use: Purchased from Cal Trans. It was a remnant parcel from the freeway - widening project. The site was vacant and undeveloped at the time it was acquired. f. General Plan: Low Density Residential, which allows single-family residences and ancillary uses. g. Maximum du/ac: Seven units per acre. h. Site Condition / Environmental Conditions: Property is irregular in shape and will most likely require the approval of several variances from the zoning code in order to facilitate a residential unit. The City and Authority currently owns this land asset. Dependent on the proposal's financial parameters, the City and Housing Authority are amenable to conveying the land asset for $1.00. Respondents should assume that the City and Authority owned parcels will be conveyed, in an as -is condition. The Authority is currently monitoring legislative amendments to the Surplus Land Act. If this legislation is not signed by the Governor, the Authority may remove this property from the RFP by issuing an addendum. II. SCOPE OF WORK The Scope of Work will include any and all work efforts related to the development of affordable homeownership opportunities per EXHIBIT A - SCOPE OF WORK. Available funds can be used for a variety of housing types and preferences. Please see the table below for the general allowable uses of funds for each source. Please see Exhibit A for a more detailed description of the eligible uses for each source. L O� L � OO E m C 0� V1 E IO ION O V fn W C In d p +. ;n ++ Source of Funds co E 3 E 3 � c V a o > O) 3 3 U m 0 o d •N ZV xa Q as0 (D HOME Program Funds X X X X X X City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 5 EXHIBIT 1 The Developer shall be an independent developer capable of providing experienced, knowledgeable and professional staff. The Developer shall be responsive and maintain excellent working relationships with city residents, businesses, government officials and City staff. The Developer shall provide adequate staffing levels at all times and adhere to established schedules. The Developer shall be knowledgeable of and comply with federal, state and local laws, including the Santa Ana Municipal Code, as it applies to their proposal. III. GENERAL INFORMATION A. Following the RFP Process and conditional on meeting other requirements and conditions, a pre -loan commitment letter may be drafted by the Housing Division, reviewed and approved by the Housing Division Manager, the City Attorney's Office, and the Executive Director of Community Development, before being recommended for approval by the City Council. The letter shall state the maximum amount of program funds and/or land asset reserved for the project and list all of the additional conditions, documents and steps that must be taken by the Developer prior to loan closing. B. When determined appropriate, the City will provide information in its possession relevant to preparation of required information in the RFP. The City will provide only the staff assistance and documentation specifically referred to herein. C. The Developer shall be responsible for retaining data, records and documentation for the preparation of the required information. These materials shall be made available to the City as requested by the City. D. This RFP does not commit the City to pay costs incurred in preparation of a response to this RFP. All costs incurred in the preparation of the proposal, the submission of additional information and/or any aspect of a proposal prior to award of a written contract will be borne by the respondent. The City reserves the right to accept or reject the combined or separate components of any proposal in part or in its entirety or to waive any informality or technical defect in the proposal. E. All data, documents and other products used, developed or produced during response preparation to the RFP will become property of the City. All responses to the RFP shall become property of the City. The City will make best efforts to maintain Proposer information identified as proprietary information confidential, to the extent allowed under the California Public Records Act. F. The City reserves the right to reject, replace or approve any and all subcontractors. All subcontractor(s) shall be identified in the response to the RFP and the City reserves the right to reject any subcontractor(s). Subcontractors shall be the responsibility of the Developer and the City shall assume no liability for such subcontractors. IV. COORDINATION Coordination by the awarded Developer with the City, other contractors and agencies will be required to achieve satisfactory and timely delivery of the required work. Coordination may include, but not be limited to, coordination with impacted businesses, neighborhood and civic groups, local and/or state agency boards and staff, or attendance at Community Development Commission meetings or City Council meetings. The City will decide the manner in which the coordination efforts will be conducted. At the City's option, coordination efforts may be performed by the Developer's direct contact, by the Developer acting through the City or by the City only. When coordination efforts require agreements, such agreements shall be coordinated with the City. V. DEVELOPER RESPONSIBILITIES The selected Developer will assume responsibility for all aspects of the development, and for insuring that the project is developed and operated in accordance with applicable state and federal laws. The City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 6 EXHIBIT 1 selected Developer will ensure that the project is developed and operated in accordance with the City laws, regulations, and planning and development process. VI. CITY BUSINESS LICENSE The selected proposer shall be required to obtain a City of Santa Ana business license within 30 days of selection and must provide a copy to the City project manager or designee prior to commencing any work in Santa Ana. VII. UNIQUE ENTITY ID A SAM.gov registration is required for any entity to bid on and receive payment for federal contracts or to receive federal funds. These include for -profit businesses, nonprofits, government contractors, government subcontractors, state governments, and local municipalities. VIII. RULES FOR PROPOSALS The signer of the proposal must declare in writing that the only person, persons, company or parties interested in the proposal as principals are named therein; that the proposal is made without collusion with any other person, persons, company or parties submitting a proposal; that it is in all respects fair and in good faith without collusion or fraud; and, that the signer of the proposal has full authority to bind the proposer (Exhibit E). IX. PRE -PROPOSAL MEETING The City will not have a pre -proposal meeting for this RFP. X. E-MAIL COMMUNICATIONS AND INTERPRETATIONS/CLARIFICATIONS To facilitate the RFP process, proposers are required to monitor and respond to e-mail requests within 48 hours. No oral interpretations will be made by the City to any proposer as to the meaning of requirements identified herein including the Scope of Work. Every request for such an interpretation must be made in writing via e-mail to Claudia Fernandez -Shaw, Housing Programs Analyst, at cshaw(a-_)santa-ana.org. Significant interpretations or clarification will be provided in the form of a Questions and Answers Addendum and sent directly to the Developer who requested the interpretation or clarification. 1:1�_1QQ=1L4IIM If clarification or interpretation of this RFP is considered necessary by the City, a written Questions and Answers Addendum shall be updated and provided directly to the Developer(s) who asked the question(s). XII. SUBMITTAL REQUIREMENTS INFORMATION AND DEADLINE Proposals are due to the City of Santa Ana, at the dates, times and location set forth on the Notice Inviting Proposals. Faxed and e-mailed proposals will not be accepted. XIII. MINIMUM QUALIFICATIONS Proposers shall have a minimum of five (5) years recent experience in the development of affordable housing projects similar to their proposed project. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 7 EXHIBIT 1 XIV. SUBMITTAL REQUIREMENTS Proposers shall submit seven complete hard copies of their proposal, and one additional electronic copy on a USB flash drive. All seven copies of the proposal must include a signed cover letter. This cover letter must include a declaration that the only person, persons, company, or parties interested in the proposal as principals are named herein; that the proposal is made without collusion with any other person, persons, company, or parties submitting a proposal; that it is in all respects fair and in good faith without collusion or fraud, and that the signer has full authority to bind the proposer. It must also include an email address and contact information for the signer. All proposal submissions shall be on 8-1/2" x 11" white paper. All project proposals must contain the following minimum submission requirements: 1) Statement of Qualifications (SOQ). The SOQ must include the following components: Developer Team. An organizational chart showing lines of responsibility, as well as a list of team members and their duties as part of the team. If the developer is a nonprofit corporation, or if a nonprofit is one of the team members, the SOQ must include documentation that the corporation is certified by the U.S. Internal Revenue Service as a 501(c)3 tax exempt non-profit corporation, and is in good standing with both state and federal compliance. If the developer is a Community Housing Development Organization (CHDO), the SOQ must include documentation that the developer can be certified as a CHDO for the City of Santa Ana. The Developer needs to identify if any contractor(s) and/or subcontractor(s) are a subsidiary to any member of the development team. • Developer Experience. A narrative describing recent affordable homeownership residential development experience, with an emphasis on experience gained in the last five years on projects similar to the one being proposed. o Include project name and type (special needs, senior, large family, etc.), project address, developer team members, unit count and bedroom type, affordability requirements, and funding sources in your description. o Include a description of your experience doing community outreach and capacity including resources, staffing, and available funding. • Financial Capacity. Description of the developer's financial strength and ability to obtain project financing, and to provide sufficient equity for the successful completion of the proposed project. o Include a description of current relationships with major lending institutions. o Any developer that is selected for recommendation to City Council, or if a partnership, the team members who will retain an ownership interest in the project, will be required to submit complete financial statements for the last three years. Because of the possibility of public records requests, the City cannot guarantee that these statements will remain confidential. References. Include a list of at least three references from public agency partners and professional lenders/investors with full names, contact information, and identification of the project(s) worked on. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 8 EXHIBIT 1 • Page Limit. SOQs must be limited to a maximum of 25 pages, excluding front and back covers, section dividers, and exhibits. 2) Project Description. Detailed and concise narrative describing the proposed project, including at a minimum and as appropriate the development concept for the site or a description (with photographs) of the building to be acquired or developed, proposed building square footage, number of units and bedrooms per unit, total parking spaces, proposed ingress and egress, proposed affordability levels, any special needs groups or target population to be served, and amenities to be provided onsite. If there will be a Homeowner's Association (HOA), describe in detail how the HOA will be managed and provide the name of the proposed Management Company. Please make sure to include the following: • Narrative description of the project and conceptual site plans if available. o Site size and location. o Total gross building area (GBA), as well as a breakdown of: ■ Residential GBA; ■ Circulation/Common Area GBA; and ■ Retail GBA. • Residential unit mix: o Number of units of each bedroom type by affordability level; o Unit square footage by bedroom type; and • Common area amenities to serve the residential development. • List of anticipated retail tenants (if applicable). • Parking: o Total number of spaces proposed: o Number of spaces dedicated to the residential uses; and o Number of spaces dedicated to other uses. o Number and square footage of parking spaces provided by type: ■ Above -ground; ■ Surface; and ■ Subterranean. For all projects, the narrative must also address site control, current zoning and any required zoning changes, anticipated development costs, City funds required, requested City loan terms, developer access to additional funds required for the project, and proof that the property is under contract. A site map showing the project's location should accompany this narrative. 3) Development Pro Forma. Identify the sources and uses of all funds necessary to complete the project. The pro forma should identify important underlying assumptions applicable to the proposed project. The cost estimates in the Sources and Uses budget should assume the payment of Davis - Bacon prevailing wages, compliance with the City's Community Workforce Agreement, and relocation benefits, if applicable. The pro forma must include a calculation of the return on investment to the developer. Please make sure to include the following, if applicable: • Land Costs: o The property assemblage costs should include the following if applicable: acquisition costs, relocation costs, demolition costs, and closing costs. The developer should include an appraisal and the proposed purchase and sale agreement (if available). • Construction Costs: o Identify whether the direct cost estimate reflects a premium for labor requirements, including prevailing wages, Davis -Bacon, and compliance with the City's Community City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 9 EXHIBIT 1 Workforce Agreement. Provide a direct construction cost breakdown (include a contractor's detailed estimate, if available) that disaggregates the following information: o Off -site improvements; o On -site improvements; o Parking costs; o Residential shell costs; o Community room/office space costs; o Commercial space shell costs; o Commercial space tenant improvement costs; o General conditions; o Contractor fees; and o Direct cost contingency allowance. Provide a breakdown of the project's indirect costs such as: o Architecture, engineering and consulting fees; o Public permits and fees costs including all city fees, school district fees, impact fees and any other fees that would be assessed on the projects; o Taxes, legal and accounting costs; o Insurance costs; o Marketing costs; o Development management fee; and o Indirect cost contingency allowance. Provide the following financing cost information: o Predevelopment/bridge loans (loan amounts, interest rates, length of term and projected average outstanding balance of loan funds during predevelopment/construction); o Construction loans (loan amounts, interest rates, length of term and projected average outstanding balance of loan funds during predevelopment/construction); o Loan fees; o Amount of cash equity contribution and the return requirement on these funds during the construction period; o Capitalized reserves. • Provide the proposed sales prices for the units. Financial Parameters o Equity contribution: ■ Quantify the equity contribution to be provided with cash during construction, and the amount of cash equity that will be left in the project on a permanent basis. ■ Identify the funding source that will be used to refund any construction period equity that is to be returned to the developer upon the completion of construction. ■ Define the preferred return requirements applied to the cash equity funds provided to the proposed project. o Describe the other proposed governmental subsidies (City of Santa Ana, etc.). If assuming a competitive funding source, provide an estimate of how the project scores in the identified funding competitions. o Describe the terms under which any deferred developer fee will be repaid. • Public Assistance Terms City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 10 EXHIBIT 1 o Identify any responsibilities that will be requested of the City of Santa Ana. 4) Projected Sales Prices. Please include the following information related to proposed market rate and affordable sales prices: • Market Rate Sales Prices: o Provide the proposed market sales prices for each unit type; o Include evidence that the market rate sales prices shown in the pro forma are reasonable and achievable. Please include a preliminary market study analysis that demonstrates that the sales prices are achievable. Affordable Sales Prices: o Provide the proposed affordable sales prices for each proposed income level by unit bedroom type. o Provide the assumptions utilized for the affordable sales price calculations including: ■ Proposed income limits; ■ Utility allowances; ■ HOA, insurance and maintenance allowances; and ■ The Interest rate assumed for the homebuyer first trust deed mortgages. 5) Community Inclusion. • Describe how neighborhood input was solicited and utilized in the development of your proposal. Specifically, provide a description of any community outreach efforts that you undertook to inform the development of your proposal, including early outreach meetings with local stakeholders, outreach to the Santa Ana Unified School District, engagement with local neighborhood associations, letters of support requested or received from local community groups, and any commitment to donate a portion of your developer fee to a project or initiative in the surrounding neighborhood. • Provide details on the development team's community outreach strategy for the project. Describe the steps you will take after approval of your pre -loan commitment letter to ensure maximum feasible participation of local low-income residents and businesses in the development of the project. Describe how the project will be developed and operated so as to ensure compliance with all relevant components of the Americans with Disabilities Act. Please refer to the Community Outreach Guidelines in Exhibit I for additional guidance. 6) Proposed Development Schedule. Taking as a starting point City Council approval of the pre - loan commitment letter, provide a proposed development schedule that includes the following milestones at a minimum: site acquisition, additional required loan commitments and funding from all other funding sources, zoning change approvals (if necessary), preparation and approval of construction plans, start of construction, completion of construction, and sale of the units. 7) Current Tenants. Provide a listing of all tenants currently residing in the units, if applicable. 8) Proposer shall complete and return the following Exhibits attached herewith: • Exhibit B — Additional Insured Endorsement for Commercial General Liability Policy (Not required until after Developer selection) • Exhibit C — Proposer's Statement • Exhibit D — Certification of Nondiscrimination City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 11 EXHIBIT 1 Exhibit E — Non -Collusion Affidavit • Exhibit F — Commitment to Enter into Memorandum of Understanding with the Santa Ana Work Center The proposal must be completely responsive to the RFP. Incomplete proposals will be deemed as nonresponsive and will be rejected. The City reserves the right to reject any or all proposals submitted and no representation is made hereby that any commitment will be awarded pursuant to this RFP or otherwise. XV. DEVELOPER SELECTION — PROPOSAL AND EVALUATION After each deadline for the Open RFP Process, staff shall review any proposal(s) to determine if the minimum program and RFP Process requirements are met (minimum threshold review). Proposals that do not meet the minimum threshold review will be considered non -responsive. If the Proposal meets the minimum threshold review, staff will form a Review Panel. The Review Panel for the RFP Process will consist of at least one (1) employee from the City's Public Works Agency, Planning and Building Agency, and Community Development Agency, and one (1) outside agency or government -entity. If an employee is not available in one City Agency, a second employee may be requested from one of the other two City Agencies so long as there are at least two of the three City Agencies represented on the Review Panel. Using the scoring and selection criteria provided below, the Review Panel shall determine whether the proposal is recommended for a pre -loan commitment. Using the scoring and selection criteria, the Review Panel shall also review the design of the proposed project for appropriateness for the proposed target group, compatibility with surrounding uses, cost effectiveness of construction, and appropriateness of the design and construction for low maintenance and long term durability. If the Review Panel determines, in its discretion, that the Proposal may be recommended for approval, the Housing Division shall request an underwriting and subsidy layering review by a real estate advisor selected by the City and paid for by proposer. The real estate advisor shall confirm the underwriting for the Project, the financial gap, and other programmatic requirements related to the funding sources. If the Review Panel determines that the Proposal will not be recommended for approval, the Developer will be notified in writing of the decision and the result will be published in the Housing Division Quarterly Report. Each member of the Review Panel will evaluate and rank each proposal using the evaluation criteria listed below: COMPETITIVE SELECTION CRITERIA 1. LEVEL OF AFFORDABILITY AND TARGET POPULATION ELIGIBLE (Max. 25 Points) POINTS Project significantly increases affordable homeownership opportunities for 10 large families (three- and four -bedroom units) Project provides at least 50% or more of the units for low-income families at 80% Area Median Income (possible points based on a tiered scoring — 10 pts. 10 for 120% Area Median Income, 5 pts.) Project increases affordable housing opportunities for specific populations including, but not limited to, veterans, teachers and police officers and 5 families, and persons with a disability Sub -total 25 2. TIMELINESS TO BUILD NEW HOUSING (Max. 20 Points) Project has demonstrated site control 7 Project is zoned appropriately 5 Project does not have any other site -related issues 5 City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 12 EXHIBIT 1 Project aligns with the City's Housing Element, Strategic Plan, and/or 5-Year Consolidated Plan 3 Sub -total 20 3. SALES EXPERIENCE AND SHILLS (Max. 15 Points) Project is energy efficient and incorporates green -building techniques 6 Applicant's ability to income qualify prospective homebuyers in compliance with all applicable affordability requirements 3 Applicant's past experience in the sale of affordable units 3 Applicant's capacity and ability to quickly sell completed units 3 Sub -total 15 4. DEVELOPER EXPERIENCE AND SHILLS (Max. 15 Points) Applicant's experience in obtaining additional financing 5 Applicant's capacity and ability to obtain entitlements 5 Applicant's overall past and projected effectiveness to provide affordable homeownership housing 5 Applicant's past and projected effectiveness to manage the construction process and stay on schedule 5 Sub -total 20 5. LEVERAGING OF CITY FUNDS (Max. 5 Points) Applicant's potential or capacity to obtain additional financing for this project 5 Sub -total 5 6. ANTICIPATED FINANCIAL PARAMETERS (Max. 10 Points) Project's proposed development costs are reasonable and comparable 5 Project's proposed sales prices are realistic 5 Sub -total 10 7. COMMUNITY INCLUSION (Max. 5 Points) Project demonstrates how neighborhood input was solicited and utilized in the development of the proposal including any community outreach efforts; or project provides details on the development team's community outreach strategy for the project. 10 Sub -total 10 BONUS POINTS: Developer commits to donate a portion of their developer fee to a project or initiative in the surrounding neighborhood 10 TOTAL ELIGIBLE POINTS 110 XVI. PUBLIC RECORDS Proposals will become public record after submission of the proposal. Interested proposers may submit a written request to receive the results of the evaluation. The City will make best efforts to maintain Proposer information identified as proprietary information confidential, to the extent allowed under the California Public Records Act. Submit your request to, City of Santa Ana Community Development Agency, Attn: Claudia Fernandez -Shaw, Housing Programs Analyst, 20 Civic Center Plaza M-26, Santa Ana, CA 92701. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 13 EXHIBIT 1 XVIL FILING A PROTEST In the event of a dispute of the decision of the Review Panel, proposers may file a "protest" with the City's Community Development Agency. In order for a proposer's protest to be considered valid, the protest must: 1. Be filed in writing within five (5) business days of notification of rejection; 2. Clearly identify the specific irregularity or allegation; 3. Clearly identify the specific City staff determination or recommendation being protested; 4. Specify, in detail, the grounds of the protest and the facts supporting the protest; and 5. Include all relevant, supporting documentation with the protest at time of filing. If the protest does not comply with each of these requirements, it will be rejected as invalid. If the protest is valid, the City Manager, or his/her designee, shall review the basis of the protest and all relevant information. The City Manager will provide a written decision to the protestor within fourteen (14) calendar days from receipt of protest. The decision from the City Manager, or his/her designee, is final and no further appeals will be considered. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 14 EXHIBIT 1 EXHIBIT A — SCOPE OF WORK CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES I. INTRODUCTION In order to meet the City's goals, the City is soliciting proposals for the development of affordable homeownership projects from developers who are experienced, very knowledgeable of affordable housing programs and its requirements, financially creative and capable of developing, managing and maintaining high quality housing. The selected developer must have a demonstrated history of working cooperatively with surrounding neighborhoods in all phases of project development. Both nonprofit and for profit developers are eligible to apply, either individually or in partnership with other entities. Developers who can demonstrate the capability to make other funds a significant part of the financing mix for their proposed project will score higher in the selection process than those who cannot. The funding and property data provided in this RFP is not guaranteed, and the availability of such funding or properties is subject to change at any time. The City of Santa Ana makes no guarantee of the availability of the proposed funding and properties for any particular applicant or project. The submission of a proposal in response to this RFP does not commit the City to providing any funding or land asset to a proposed project. The City reserves the right to determine at its sole discretion how to sell available properties, if at all. II. DEVELOPMENT PRIORITIES Both the Strategic Plan and the City's Housing Element identify affordable ownership housing suitable for larger households as a high priority for the City. In addition, the City of Santa Ana will be targeting low-income and moderate -income households within the city, veterans, teachers, fire fighters and/or large families. One of the primary rating criteria is the depth of homeownership. The City desires proposed projects to have dedicated units for low-income families earning no more than 80% Area Median income (AMI). Project design and construction will be subject to and carried out in accordance with established City standards and procedures. In accordance with the City's Early Outreach policy (Attachment 1), the selected developer may be required to solicit significant neighborhood input during the design process. Priorities and Objectives: In particular, the City is interested in furthering the following priority through this RFP: Projects that will provide affordable homeownership opportunities. In addition, the City recommends: 1) Review Exhibit G — City of Santa Ana Map of Opportunity Zones to determine if your proposed project can leverage this potential source of private investment in your project. 2) Review Exhibit H — HCD NOFA Calendar to determine a path forward where you can most effectively leverage funds from HCD for your project. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 15 EXHIBIT 1 III. HOME INVESTMENT PARTNERSHIPS PROGRAM Source of Funds Funding for this Program is provided through the U.S. Department of Housing and Urban Development (HUD) HOME Program (including program income), and therefore is subject to the federal rules and regulations found in 24 CFR Part 92, as amended from time to time. Eligible Borrowers/Grantees Eligible borrowers are nonprofit Housing Development Corporations (HDC's) duly organized to promote and undertake community development activities on a not -for -profit basis, and which have a valid 501(c)(3) or (4) designation from the IRS, or for -profit housing developers or development corporations, with proven capacities to develop, own, and operate affordable housing. Limited partnerships whose general partners are otherwise eligible under the above are also eligible to borrow Program funds. Eligible Projects Projects eligible for HOME funding shall: 1) be an affordable homeownership project located in the City of Santa Ana; 2) contribute to the achievement of the City's Strategic Plan and fair housing goals; 3) be free of significant adverse environmental impacts, except those that can be mitigated through the project itself; 4) minimize tenant displacement; 5) comply with all local building and zoning codes and standards, including energy efficiency and water conservation standards, and meet housing quality standards in Section 882.109 of Title 24. Newly constructed housing must meet the current edition Model Energy Code of the Council of American Building Officials; 6) make efficient use of public funds and avoid "layering" of subsidies beyond those necessary to achieve a financially feasible project; and, 7) have at least 51 % of the project space be residential, if in a mixed -use project. Eligible Uses and Activities HOME funds may only be used to finance new construction or acquisition and/or rehabilitation of single family ownership housing which is affordable to low-income households as defined by 24 CFR 92.2. HUD defines "Single Family Housing" as a one -to -four family residence, condominium unit, cooperative unit, combination of manufactured housing and lot, or manufactured housing lot. Fifteen percent (15%) of the annual HOME fund allocation shall be set aside for certified Community Housing Development Organizations (CHDO's). New construction costs eligible for HOME funding shall be as specified in 24 CFR Part 92, including: 1) site acquisition; 2) site preparation costs (grading, filling, etc.); 3) financing costs as described in 24 CFR 92.206; 4) architectural, engineering, and other related soft costs; 5) the cost of extending or upgrading utilities to the site to support the proposed project; 6) construction costs; 7) relocation costs; and, 8) affirmative marketing and audit costs related to HOME program requirements. Rehabilitation costs eligible for HOME funding include: 1) project acquisition with or without rehabilitation; 2) financing costs, as described in 24 CFR 92.206; 3) architectural, engineering, or other design costs; 4) utility upgrade or extension costs; 5) costs associated with demolition (where necessary) only if rehabilitation is commenced within 12 City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 16 EXHIBIT 1 months of demolition; 6) construction costs; 7) project audit costs; and, 8) affirmative marketing costs. Ineligible Uses and Activities The following costs are not eligible for HOME funding: 1) project reserve accounts for replacement or operating reserves, and operating subsidies; 2) payment of impact fees; 3) land banking; 4) emergency repair or weatherization programs; 5) commercial properties; 6) temporary shelters; or 7) project -based rental assistance. Qualification as Affordable Homeownership Housing N 92.254) HUD considers Affordable Homeownership Housing as housing that is for acquisition by a family that meets the following affordability requirements: • The housing must be single-family housing. • The housing must be considered modest housing with maximum purchase prices (inclusive of all subordinate loans) limited to the following: 2023 Maximum HOME Purchase Prices 1-Unit 2-Unit 3-Unit 4-Unit New Construction* $765,000 $979,000 $1,185,000 $1,468,000 Existing Homes* $765,000 $979,000 $1,185,000 $1,468,0000 *In 2023, the maximum HOME purchase prices for New Construction and Existing Homes are the same. Eliaible Homebuvers and Affordable Sales Prices The housing must be acquired by a homebuyer whose family qualifies as a low-income family, and the housing must be the principal residence of the family throughout the period described below. In determining the income eligibility of the family, the City will include the income of all persons living in the housing. The homebuyer must receive housing counseling. Each home must be sold at an affordable sales price, which will be less than the maximum HOME purchase prices described above. The affordable sales price must be based on the income limits published by HUD, and incorporate applicable housing expenses such as utilities, HOA fees, insurance, and property taxes. If there is no ratified sales contract with an eligible homebuyer for the housing within 9 months of the date of completion of construction or rehabilitation, the housing must be rented to an eligible tenant in accordance with § 92.252. Periods of Affordability and Recapture Provisions The HOME -assisted housing must meet the affordability requirements for not less than the applicable period specified in the following table, beginning after project completion. The per unit amount of HOME funds and the affordability period that they trigger are described more fully below: fninq the HOME Period of Afforda HOME Assistance per Unit or Buyer I Length of the Affordability Period City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 17 EXHIBIT 1 Less than $15,000 5 years $15,000 - $40,000 10 years More than $40,000 15 years The City incorporates a recapture requirement into written agreements and long-term affordability covenants for homebuyer assistance activities administered by the City as required by 24 CFR 92.254. For any homebuyer assistance activity implemented by subrecipients or CHDOs, this recapture requirement shall also be used. The amount subject to recapture is the direct HOME subsidy received by the homebuyer. Direct HOME subsidy includes the HOME investment that enabled the homebuyer to purchase the property. This includes down payment assistance, closing costs, or other HOME assistance provided directly to the homebuyer and/or the difference between the fair market value of the property (as determined by appraisal) and a reduced sales price attributable to HOME development assistance. The recapture provision ensures that the entire amount of the City's direct HOME subsidy to homebuyers is recaptured if the housing does not continue to be the principal residence of the family for the duration of the applicable period of affordability (e.g., the home is sold, the home is foreclosed, the assisted owner is no longer residing in the assisted residence, or for any other breach of the agreement with the City). The HOME -assisted homebuyer may sell their unit at any time during the period of affordability, to any willing buyer, and at the price the market will bear. The recapture provision requires that the City's direct HOME subsidy and any interest due under the HOME loan (that has not previously been repaid) is returned to the City from net proceeds first, subject to the limitation that if there are no net proceeds or the net proceeds are insufficient to repay the HOME investment due, the City may only recapture the net proceeds, if any. Net proceeds are defined as the sales price minus superior loan repayment (other than HOME funds), and any closing costs. In the event of a mortgage default, a provision in the written agreement and long-term affordability covenant stipulates that the City has the right of first refusal before foreclosure and may use additional HOME funds or other resources to acquire the housing in order to preserve the housing's affordability. Other Requirements Minimum Loan: All HOME investments must total not less than $1,000 multiplied by the number of HOME - assisted units in the project. Maximum Loan: The maximum amount of subsidy per unit shall not exceed the maximum allowed by HUD under the HOME program (24 CFR 92.250). The City will avoid unnecessary layering of subsidies from different federal, state and local programs and seek to maximize the benefit to target households from the investment of HOME funds in a project. The Housing Division will use HUD's Cost Allocation Tool to identify the maximum subsidy per unit for each project. Property Standards: Housing that is assisted with HOME funds must meet, at a minimum, the City's Property Standards, including all applicable local, State and Federal codes and regulations. Newly constructed housing must also meet the current edition of the Model Energy Code published by the Council of American Building Officials. Substantially rehabilitated housing must meet the cost-effective energy conservation and effectiveness standards in 24 CFR 39. Labor Standards/Construction Contracts: Any contract for construction (whether it is for rehabilitation or for new construction) of affordable housing with 12 or more units assisted with HOME funds must contain a provision requiring that not less than the prevailing wages paid in the locality, as determined by the Secretary of Labor pursuant to the Davis -Bacon Act, will be paid to all laborers and mechanics employed in the development of the project. Contracts over $10,000 must comply with Equal Opportunity Affirmative Action requirements of Section 3 of the Housing and Urban Development Act of 1968. All efforts shall be made to provide equal opportunity for employment without discrimination as to race, marital status, sex, color, age, religion, national City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 18 EXHIBIT 1 origin or ancestry, and to seek out qualified local tradespeople for contracting and subcontracting bids. Contractors and subcontractors must comply with regulations issued under this Act and pertaining to labor standards and HUD Handbook 1344.1. These provisions apply whether HOME funds are used for construction or non -construction costs. The City of Santa Ana has established a Community Workforce Agreement (CWA) with the goal of ensuring that the community is a part of the workforce on public works construction projects. The CWA applies to city -funded affordable housing projects, and imposes requirements on the project that will be enforced in any final agreement with the City. The Developer will be solely responsible for compliance with the CWA and ensuring any contractors comply with the CWA. Among other things, the CWA requires that all contractors working on CWA covered projects participate in a process for using local and skilled workers from the union hiring halls of the various construction trades. It is the contractor's responsibility to ensure that the project's craft hours are performed at least 30% by workers from Tier 1 and 2 ZIP codes and/or veterans and Building Trades Multi -Trade Craft Core Curriculum Pre -Apprenticeship Program graduates, regardless of where the live. Tier 1 ZIP codes are those comprising the City of Santa Ana and Tier 2 ZIP codes are those comprising Orange County. The local hire attainment will be calculated by dividing the hours reported as performed by local workers on Certified Payroll Reports by the total number of hours reported on Certified Payroll Reports. It is the prime contractor's responsibility to determine how to attain that goal. Although each subcontractor is not required to meet the goals, the project overall must meet it. Lead -based Paint: Housing assisted with HOME funds constitutes HUD -associated housing for the purpose of the Lead -Based Paint Poisoning Prevention Act and the Lead Safe Housing Rule, and is therefore subject to 24 CFR Part 35. Unless otherwise provided, borrowers are responsible for testing and abatement. For more information, please see 24 CFR Part 92. IV. DEVELOPER REQUIREMENTS AND RESPONSIBILITIES L INSURANCE Prior to undertaking performance of work under this Agreement, Developer shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: 1) Commercial General Liability Insurance. Developer shall maintain commercial general liability insurance, which shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting there from and damage to property, resulting from any act or occurrence arising out of Developer's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting there from, and property damage, in the total amount of $2,000,000 per occurrence, $2,000,000 in the aggregate. 2) Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $2,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non - owned automobiles. 3) Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Developer is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Developer agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 19 EXHIBIT 1 The following requirements apply to the insurance to be provided by Developer pursuant to this section: a. Commercial general liability and business automobile insurance policies shall (a) name the City, Authority, its officers, employees, agents, volunteers and representatives as additional insured(s); (b) be primary and not contributory with respect to insurance or self-insurance programs maintained by the City and Authority; and (c) contain standard separation of insureds provisions. A sample additional insured endorsement is attached hereto as Exhibit C. Developer shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. b. Certificates of insurance shall be furnished to the City and Authority upon execution of this Contract and shall be approved in form by the City Attorney. c. Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City and Authority. If Developer fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City and the Authority with required proof that insurance has been procured and is in force and paid for, the City and Authority shall have the right, at the City's/Authority's election, to forthwith terminate the Contract. Such termination shall not affect Developer's right to be paid for its time and materials expended prior to notification of termination. Developer waives the right to receive compensation and agrees to indemnify the City and the Authority for any work performed prior to approval of insurance by the City and Authority. ii. HOLD HARMLESS/ INDEMNIFICATION To the fullest extent permitted by law, Developer shall indemnify, defend and hold harmless City, Authority, its officers, agents and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to any work performed or services provided under this Contract (including, without limitation, defects in workmanship and/or materials) or Developer's presence or activities conducted performing the work (including the negligent and/or willful acts, errors and/or omissions of Developer, its principals, officers, agents, employees, vendors, suppliers, contractors, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable for any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Developer to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of the Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Developer. iii. NOTICE City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 20 EXHIBIT 1 Any notice, tender, demand, delivery or other communication pursuant to this contract shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication to the following persons: To City: Clerk of the Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Fax 714-647-6956 With courtesy copy to: Housing Division Manager City of Santa Ana Community Development Agency 20 Civic Center Plaza (M-26) Santa Ana, CA 92701 Fax 714-667-2225 iv. TERMINATION The City and the Authority reserves the right to terminate the contract, without penalty, for cause immediately or without cause. 1) In the event Developer fails or refuses to timely perform any of the provisions of the Agreement in the manner required, or if Developer violates any provision of the Agreement, Developer shall be deemed in default. City shall provide written notice of such default to Developer's Project Manager. Developer shall cure said default within a period of two (2) working days. If such cure is not completed in a timely manner, City may assess liquidated damages or terminate the Agreement forthwith by giving written notice to Developer's Project Manager. City may, in addition to the other remedies provided in the Agreement or authorized by law, terminate this Agreement by giving written notice of termination. Developer shall be responsible for all costs incurred by City, including replacement costs of equipment and labor required to provide service during Developer's default. 2) This agreement maybe terminated without cause by City and/or Authority upon thirty (30) days written notice delivered to the Developer either personally or by mail. Upon termination, City and/or Authority shall pay to Developer that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination. V. DEVELOPER OPTION FOR TERMINATION The Developer may request termination of the contract when conditions during the contract make it impossible to perform or when prevented from proceeding with the contract by act of God, by law or official action of a public authority or in the event on nonpayment by the City or Authority. Such request will require one -hundred and eighty (180) days written notice prior to contract termination date requested. In the event of nonpayment of undisputed sums by the City and/or Authority, Developer shall give the City and/or Authority thirty (30) working days to cure the alleged breach. VI. EMPLOYMENT OPPORTUNITIES FOR SANTA ANA RESIDENTS Developer shall solicit and advertise employment opportunities to Santa Ana residents. The City shall City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 21 EXHIBIT 1 inform the Developer of areas to publicize recruitment opportunities, such as the Santa Ana WORK Center and community centers. Such effort and procedure will be provided to the City for review. vii. COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS 1) Developer shall perform all requirements under the contract in strict observance of and in compliance with all applicable environmental, traffic, safety and any other laws, regulations, ordinances, codes and any other legislative or statutory requirements. 2) Developer warrants that the performance of services under the contract shall be compliant with the current requirements of the Occupational Safety and Health Act (OSHA) and as it may be amended or updated throughout the term of the contract. viii. ASSIGNMENT Inasmuch as the Agreement is intended to secure the specialized services of Developer, Developer may not assign, transfer, delegate or subcontract any interest herein without the prior written consent of City and/or Authority, and any such assignment, transfer; delegation or subcontract without the City's and/or the Authority's prior written consent shall be considered null and void. ix. JURISDICTION —VENUE The Contract will be executed and delivered in the State of California and the validity, interpretation, performance and enforcement of any of the clauses of the Contract shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of the Contract. x. FINES The Developer shall be liable for all violation fines levied against the City and the Authority by State or Federal Agencies and the Courts. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 22 EXHIBIT 1 ATTACHMENT 1: EARLY OUTREACH COMMUNITY MEETING Information regarding the City's Early Outreach Community Meeting requirement can be accessed here: https://www. santa-ana. org/sunshine-ordinance-guide-to-community-meetings/ City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 23 EXHIBIT 1 ATTACHMENT 2: CITY OF SANTA ANA REHABILITATION STANDARDS PREFACE The primary purpose of these standards is to address the quality of workmanship and materials expected, and to achieve consistency throughout the program activities administered by the City of Santa Ana. These standards are not intended to reduce or exclude the requirements of any federal, state or local codes, standards, ordinances and regulations that apply to residential rehabilitation. WORKMANSHIP All work shall be performed in a professional and workmanlike manner. The quality and durability of the work shall meet or exceed the standards established by the construction industry and various trades. MATERIALS & EQUIPMENT • All materials and equipment shall comply with and be installed in accordance with the manufacturer's requirements and all applicable codes, standards, ordinances and regulations. If a discrepancy occurs between the requirements, the more stringent shall prevail. • Unless otherwise specified, all materials and equipment shall be medium grade. • Economy grade materials and equipment are unacceptable. • All materials and equipment shall be new, in excellent condition, and delivered to the job in the manufacturer's original packaging. • The description of materials and equipment found in this document establish a minimum standard. ENERGY EFFICIENCY, WATER CONSERVATION & RECYCLED MATERIALS To the extent possible and practical, standard measures related to energy conservation, energy efficiency, water conservation and the use of recycled materials have been incorporated herein. Gut rehabilitation or new construction of residential buildings up to three stories will be designed to meet the standard for Energy Star Qualified New Homes. Gut rehabilitation or new construction of mid or high-rise multi -family housing must be designed to meet the American Society of heating, Refrigerating and Air -Conditioning Engineers (ASHRAE) Standard 90.1-2004, Appendix G plus 20 percent. LEAD -BASED PAINT All housing built before 1978 must comply with 24 CFR Part 35 Subpart J and HUD's Lead Safe Housing Rule regarding the evaluation and control of lead -based paint hazards. HUD's guidelines are available at https://www.hud.gov/program offices/healthy homes/enforcement/Ishr BUILDING STANDARDS Minimum Standard • The site shall be hazard -free and sanitary. • The site and all paving shall drain away from the dwelling and accessory buildings, but not onto adjacent properties. • Paving and walkways shall be hazard -free and intact. • Landscaping and irrigation systems shall be hazard -free and in relatively good condition. All dead vegetation shall be removed. • Fencing, walls and gates hazard -free and intact. All gates shall be in good working order. • The site shall be free from trash, debris and hazardous materials. • Accessory buildings shall be safe and sound. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 24 EXHIBIT 1 Paving • All new paving and walkways shall be constructed with concrete (2,000 PSI @ 28 days). • Driveways shall be reinforced with wire mesh. Sawn expansion - contraction joints shall be placed every 8 feet in both directions. • All paving and walkways shall be finished with a light broom texture. • All walkways shall be at least 3 feet wide. Sawn expansion -contraction joints shall be placed every 4 feet. Landscaping & Irrigation • To the extent possible and practical all new landscaping shall be drought resistant. • When a lawn is being replaced, the new lawn area shall be reduced to aid in the reduction of water consumption. • New irrigation controllers shall be weather or sensor based and EPA Water -Sense qualified. • All new irrigation systems shall be designed to conserve water. Fences, Walls & Gates • All new wood fences shall be made from good quality materials. They shall be properly supported with 4X4 pressure treated posts (8 feet O.C.) and 2X4 rails (top and bottom). The posts shall be embedded in a concrete footing at least 18" deep. • All new block walls shall be constructed with 6X8X16 concrete block. They shall be properly supported by a continuous footing and reinforced with steel bar. Minimum Standard Roof Coverings • Roofs shall be safe and structurally sound. • Roof coverings shall be intact and watertight. • Roofing metal and flashing shall be intact and rust free. • Gutters and downspouts shall be intact and rust free. • Roof coverings with five or less years of useful life shall be replaced. • Roofs that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. • The replacement of roofing includes the replacement of all metal (roof jacks and flashing). • Gutters and downspouts shall be installed to properly discharge rain water run-off. • 25-year, 3-tab, self-sealing composition shingle. Built-up membrane (hot mop) system on all flat roofs. • Lighter colored coverings are preferred for energy efficiency. J Minimum Standard • Safe, structurally sound and watertight. Rehabilitation • Decks, balconies and railing that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Finishes • Zero or low VOC primers, paint and coatings. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 25 EXHIBIT 1 EXT. STEPS / STAIRWAYS / RAILING Minimum Standard Safe and structurally sound. IXIM110 11IL43LIVII CXI. SLeps, 5Ldnwdy5 dnU railing that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Finishes . Zero or low VOC primers, paint and coatings. FOUNDATIONS Minimum Standard • Safe and structurally sound. Rehabilitation . Foundations that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. • If the project involves a gut rehab, raised foundations shall be completely insulated. Concrete • 2,000 PSI (minimum). EXTERIORCOVERINGS_ Minimum Standard • Safe, structurally sound and watertight. Rehabilitation • Exterior walls that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. • If the project involves a gut rehab, all exterior walls shall be insulated. I Minimum Standard . Safe, sound, weather -tight and in good working order. Rehabilitation • Exterior doors that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. New Doors • EPA Energy Star qualified, zero or low VOC finish. New Hardware • Reputable manufacturer. lifetime finish. Minimum Standard . Safe, sound and in good working order. Doors shall be impermeable (primed and painted). • Five or more years of practical utility. Rehabilitation • Garage doors and openers that do not meet the minimum standard shall ` be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. WINDOWSWINDOW Minimum Standard 0 Windows shall be safe, sound, weather -tight and in good working order. Windows that can be opened shall have a tight -fitting insect screen. • Five or more years of practical utility. Rehabilitation 0 Windows that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 26 EXHIBIT 1 New Windows Reputable manufacturer. EPA Enerav Star aualified. Minimum Standard . Homes built before 1978 must comply with 24 CFR Part 35 Subpart J I and HUD's Lead Safe Housing Rule regarding the evaluation and control of lead -based paint hazards. • All exterior paint shall be intact and free of corrosion. • Five or more years of practical utility. Rehabilitation . All surfaces to be painted shall be prepared properly. All loose material and peeling paint shall be removed. • All holes and cracks shall be filled and finished so that they blend into the surrounding area. • All stucco surfaces to be painted shall receive a complete and even coverage of stucco paint. • All wood surfaces to be painted shall receive a complete and even coverage of flat exterior paint. • Poor workmanship will not be tolerated. New Paint • Reputable manufacturer. • Highest quality available. • Zero or low VOC paint, caulking and fillers. WALLSCOVERINGS Minimum Standard . Safe and structurally sound. • All plaster, drywall and paneling shall be safe and intact. Rehabilitation Walls and wall coverings that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. • If the project involves a gut rehab, the attic, walls and floor on raised foundations shall be insulated. Minimum Standard • Safe, sound and sanitary. • Five or more years of practical utility. " Rehabilitation Floor coverings that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Replacement Floor • Carpet & Pad (Reputable manufacturer, recycled materials). Coverings . Resilient Flooring (Reputable manufacturer, 10 year wear warranty). • Ceramic Tile (Reputable manufacturer) J • - • • Minimum Standard . Safe, sound and in good working order. • Five or more years of practical utility. " Rehabilitation . Interior doors that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Replacement Doors & Doors (Reputable manufacturer, masonite, raised panel). Hardware Hardware (Reputable manufacturer, lifetime finish). City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 27 EXHIBIT 1 INTERIOR PAINT Minimum Standard • Homes built before 1978 must comply with 24 CFR Part 35 Subpart J and HUD's Lead Safe Housing Rule regarding the evaluation and control of lead -based paint hazards. • All interior paint shall be intact and corrosion -free. • Five or more years of practical utility. Rehabilitation • All surfaces to be painted shall be prepared properly. All loose material and peeling paint shall be removed. • All holes and cracks shall be filled and finished so that they blend into the surrounding area. • All surfaces to be painted shall receive a complete and even coverage of flat paint (semi -gloss in kitchens, bathrooms and laundry rooms). • Poor workmanship will not be tolerated. New Paint _ • Reputable manufacturer. • Highest quality available. • Zero or low VOC paint, caulking and fillers. J KITCHEN CABINETS/ COUNTERTOPS Minimum Standard • Cabinets shall be safe, sound, sanitary and in good working order. • Countertops shall be safe, sound, sanitary and watertight. • Five or more years of practical utility. Rehabilitation • Cabinets and countertops that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Replacement Cabinets • Reputable manufacturer. • Solid hardwood face -frames, doorframes and drawer fronts. • Metal and nylon drawer guides. • Low or zero VOC adhesives and finishes. Replacement • Reputable manufacturer. Countertops • 4" ceramic tile, 6" backsplash, bull -nose edge. Minimum Standard • Safe, sound, sanitary and in good working order. • Faucets shall (at a minimum) be equipped with a low -flow aerator. • Five or more years of practical utility. Rehabilitation • Kitchen fixtures, equipment and appliances that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Replacement Sinks Replacement Faucets Replacement Disposals Replacement Dishwashers Reputable manufacturer. • 18-guage (minimum) stainless steel. • EPA Water -Sense qualified. • Reputable manufacturer. • Brass construction, metal housing. • Reputable manufacturer. • '/z HP motor (minimum). • Stainless steel swivel lugs. • EPA Energy Star qualified. • Reputable manufacturer. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 28 EXHIBIT 1 Replacement Range • EPA Energy Star qualified. Hoods . Reputable manufacturer. Replacement Ranges • Reputable manufacturer. • Pilot -free ignition. • Four sealed burners. • Self-cleaning oven with timer. Replacement Cook Tops . Reputable manufacturer. • Pilot -free ignition. • Four sealed burners. Wall Ovens • Reputable manufacturer. • Pilot -free ignition. • Self-cleaning oven with timer. Minimum Standard Rehabilitation • Replacement Sinks Replacement Faucets Replacement Toilets Replacement Tubs Replacement Combination Tub -Showers Replacement Showers Replacement Medicine Cabinets Li Safe, sound, sanitary and in good working order. Faucets shall (at a minimum) be equipped with a low -flow aerator. Showerheads shall (at a minimum) be equipped with low -flow aerator. Porcelain sinks shall be free from any cracks or chips. Steel sinks shall be free from any rust or corrosion. Five or more years of practical utility. Bathroom fixtures and equipment that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Toilets that require more than 1.6 GPF shall be replaced regardless of their condition. Reputable manufacturer. Cast iron, white enamel finish. _ EPA Water -Sense qualified. Reputable manufacturer. Brass construction, metal housing. Reputable manufacturer. EPA Water -Sense qualified (1.28 GPF) _ Reputable manufacturer. Cast iron body, white enamel finish, slip resistant bottom. EPA Water -Sense qualified plumbing fixtures. Reputable manufacturer. Cast iron body, white enamel finish, slip resistant bottom. 4" ceramic tile surround. Anodized aluminum doors with tempered glass. EPA Water -Sense qualified plumbing fixtures. Reputable manufacturer. 4" ceramic tile. Anodized aluminum door with tempered glass. EPA Water -Sense qualified plumbing fixtures. Reputable manufacturer. Steel body, beveled mirror door. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 29 EXHIBIT 1 Towel Bars & Toilet Paper • Reputable manufacturer. Holders • Metal construction, polished chrome finish. Minimum Standard • Safe, sound and leak -free. Rehabilitation • Piping (supply, waste and vent) that does not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Replacement • Copper, type "L". Water Supply Piping Replacement • Schedule 40 ABS. Waste & Vent Piping WATER HEATERS Minimum Standard • Safe, sound and in good working order. • Five or more years of practical utility. Rehabilitation • Water heaters that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. Replacement • Reputable manufacturer. Water Heaters (Tank) • EPA Energy Star qualified. • 40-gallon insulated tank. Replacement • Reputable manufacturer. Water Heater EPA Energy Star qualified. (Tank -Less) ELECTRICAL SERVICE WIRING Minimum Standard Safe, sound and in good working order. • 100-ampere minimum service. Rehabilitation • Electrical service panels, breakers and wiring that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. • Knob and tube wiring shall be replaced regardless of its condition. • Overhead wiring from a dwelling to a detached garage or accessory building shall be installed underground regardless of its condition. Replacement • Reputable manufacturer. Service • 100-am ere (minimum). Replacement Wiring • Romex NM cable). ELECTRICAL SWITCHES / • Minimum Standard Safe, sound and in good working order. • Light fixtures shall (at a minimum) be equipped with CFL bulbs. • Exterior lighting fixtures used for security shall be equipped with a motion sensor. Rehabilitation Electrical switches, outlets and lighting fixtures that do not meet the minimum standard shall be replaced. Practical, cost effective repairs are City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 30 EXHIBIT 1 acceptable as long as compliance with the minimum standard will be achieved. • All new light fixtures shall be U.L. approved and Energy Star qualified. • Outlets located within 6 feet of a source of water shall be ground fault protected. • Exterior switches and outlets shall be weatherproof. Replacement • U.L. approved. Switches & Outlets Replacement • Reputable manufacturer. Lighting Fixtures • U.L. approved and EPA Energy Star qualified. Minimum Standard • Safe, sound and in good working order. • Five or more years of practical utility. Rehabilitation • HVAC that does not meet the minimum standard shall be replaced. Practical, cost effective repairs are acceptable as long as compliance with the minimum standard will be achieved. • Tune-up all HVAC equipment (as a minimum). • Seal all ducts (as a minimum). • All new HVAC equipment shall be sized properly. Furnaces • Reputable manufacturer. • EPA Energy Star qualified. Central Air Conditioners • Reputable manufacturer. • EPA Energy Star qualified. Thermostats • Reputable manufacturer. • EPA Energy Star qualified. • Programmable. Minimum Standard • Additions and alterations that were constructed without a building permit and are clearly substandard shall be removed. • Garages converted to living quarters shall be returned to their original use. • Additions and alterations that were constructed without a building permit, but appear to be compliant, shall be inspected by the City's Building Official to determine if a building permit can be issued and they can be saved. City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 31 EXHIBIT 1 EXHIBIT B NOT REQUIRED UNTIL AFTER DEVELOPER SELECTION CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES ADDITIONAL INSURED ENDORSEMENT FOR COMMERCIAL GENERAL LIABILITY AND BUSINESS AUTOMOBILE POLICIES Insurance Company This endorsement modifies such insurance as is afforded by the provisions of Policy # relating to the following: 1. The City of Santa Ana and the Housing Authority of the City of Santa Ana, 20 Civic Center Plaza M-25, Santa Ana, California 92701; its officers, employees, agents, volunteers and representatives are named as additional insureds ("additional insureds") with regard to liability and defense of suits arising from the operations and uses performed by or on behalf of the named insured. 2. With respect to claims arising out of the operations and uses performed by or on behalf of the named insured, such insurance as is afforded by this policy is primary and is not additional to or contributing with any other insurance carried by or for the benefit of the additional insureds. 3. This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the company's limits of liability. The inclusion of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included. 4. With respect to the additional insureds, this insurance shall not be cancelled, or materially reduced in coverage or limits except after thirty (30) days written notice has been given to the City of Santa Ana, 20 Civic Center Plaza M-25, Santa Ana, California 92701. (Completion of the following, including countersignature, is required to make this endorsement effective.) Effective Policy # Issued to , this endorsement form as part of Name Insured Countersigned by: Authorized Representative City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 32 EXHIBIT 1 EXHIBIT C TO BE INCLUDED IN PROPOSAL CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES PROPOSAL & CONTRACT AGREEMENT PROPOSER'S STATEMENT Proposer understands and agrees that this written RFP (or any part thereof specifically designated and accepted by the City of Santa Ana and the Housing Authority of the City of Santa Ana, hereinafter collectively referred to as the City) shall constitute the entire agreement between proposer and the City only after it has been accepted by the City Council, endorsed by the Clerk of the Council with her signature and official seal noting here on the action of approval of the Council, signed by the Executive Director or his duly authorized agent, and signed by the City Attorney, denoting her approval of the form of this document, and its execution, and when it or an exact copy of it has been either delivered to proposer or deposited with the United States Postal Service properly addressed to the proposer with the correct postage affixed thereto. Proposer further agrees that upon delivery (as defined above) of the accepted agreement he/she will furnish City all required bonds and certificates of liability insurance within ten (10) days (excluding Saturdays, Sundays and City's legal holidays), or the funds, check, draft, or proposer's bond substituted in lieu thereof accompanying this proposal shall become the property of the City and shall be considered as payment of damages due to the delay and other causes suffered by City because of the failure to enter into an Agreement and/or furnish the necessary bonds and because it is distinctly agreed that the proof of damages actually suffered by City is difficult to ascertain; otherwise said funds, check drafts, or proposer's bond substituted in lieu thereof shall be returned to the undersigned. Proposer understands that a proposal is required for the entire work, that the estimated quantities set forth in the RFP schedule are solely for the purpose of comparing proposals, and that final compensation under the contract will be based upon the actual quantities of work satisfactorily completed. All terms contained in the Specifications, the Certification of Non -Discrimination by Developers, and the Workers' Compensation Insurance Certificate are to be incorporated by reference into this Agreement and are made specifically as part of this RFP. SIGNED AND PRINTED NAME I�L`r1:11 City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 33 EXHIBIT 1 EXHIBIT D TO BE INCLUDED IN PROPOSAL CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES PROPOSAL AND CONTRACT AGREEMENT CERTIFICATION OF NONDISCRIMINATION BY DEVELOPER The undersigned Developer or corporate officer, during the performance of this contract, certifies as follows: The Developer shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Developer shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without, regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. 2. The Developer shall, in all solicitations or advertisements for employees placed by or on behalf of the Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. 3. The Developer shall send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the Developer's commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. 4. The Developer shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. 5. The Developer shall furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his/her books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation, to ascertain compliance with such rules, regulations, and orders. 6. In the event of the Developer's non-compliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, the contract may be canceled, terminated, or suspended in whole or in part and the Developer may be declared ineligible for further Government contracts or federally assisted construction/services contracts in accordance with procedures authorized in Execution Order 11246 of September 24, 1965,and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulations, or order of the Secretary of Labor, or as otherwise provided by law. 7. The Developer shall include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontract or purchase order as the administering agency may direct as means of enforcing such provisions, including sanctions for City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 34 EXHIBIT 1 noncompliance; provided, however, that in the event the Developer becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the administering agency, the 8. Developer may request that the United States enter into such litigation to protect the interests of the United States. 9. Pursuant to California Labor Code Section 1735, as added by Chapter 643 Stats. 1039, and as amended, No discrimination shall be made in the employment of persons because of race, religious creed, color national origin, ancestry, physical handicaps, mental condition, marital status, or sex of such persons, except as provided in Section 1420, and any Developer violating this Section is subject to all the penalties imposed for a violation of the Chapter. FIRM SIGNED AND PRINTED NAME TITLE City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 35 DATE EXHIBIT 1 EXHIBIT E TO BE INCLUDED IN PROPOSAL CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES PROPOSAL AND CONTRACT AGREEMENT NON -COLLUSION AFFIDAVIT (Title 23 United States Code Section 112 and Public Contract Code Section 7106) To the CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY In accordance with Title 23 United States Code Section 112 and Public Contract Code 7106 the PROPOSER declares that the bid is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the bid is genuine and not collusive or sham; that the PROPOSER has not directly or indirectly induced or solicited any other PROPOSER to put in a false or sham bid, and has not directly or indirectly colluded, conspired, connived or agreed with any PROPOSER or anyone else to put in a sham bid, or that anyone shall refrain from bidding; that the PROPOSER has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the bid price of the PROPOSER or any PROPOSER, or to fix any overhead, profit, or cost element of the bid price, or of that of any other PROPOSER, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the bid are true; and, further, that the PROPOSER has not, directly or indirectly, submitted his or her bid price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham bid. Note: The above Non -collusion Affidavit is part of the Proposal. Signing this Proposal on the signature portion thereof shall also constitute signature of this Non -collusion Affidavit. PROPOSERS are cautioned that making a false certification may subject the certifier to criminal prosecution. State of California County of Subscribed and sworn to (or affirmed) before me on this day of , 20 , by , proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. Notary Public Signature Notary Public Seal City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 36 EXHIBIT 1 EXHIBIT F TO BE INCLUDED IN PROPOSAL CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY REQUEST FOR PROPOSALS FOR AFFORDABLE HOMEOWNERSHIP OPPORTUNITIES PROPOSAL AND CONTRACT AGREEMENT COMMITMENT TO ENTER INTO MEMORANDUM OF UNDERSTANDING WITH THE SANTA ANA WORK CENTER Proposer understands and agrees that s/he will be required to enter into a Memorandum of Understanding (MOU) with the Santa Ana Work Center to coordinate services. The purpose of the MOU is to establish a cooperative working relationship between the parties in order to provide program beneficiaries with information about Work Center opportunities to find better jobs and careers. The MOU serves to establish the framework for providing services to employers, job seekers and others needing workforce services. The goal is to ensure that all program beneficiaries have been provided an opportunity to connect with the Work Center and be assisted with the tools and knowledge necessary to enter the workforce or obtain a higher -paying job. The Santa Ana WORK Center is available to connect program beneficiaries to a full range of no -cost services, resources and opportunities to help: • Build the skills employers want most • Access training and/or education programs that lead to employment • Find the jobs and employers who are hiring • Screen for additional employment or social services • Receive support to succeed in job search Proposers are encouraged to contact the Santa Ana Work Center at (714) 565-2629 to learn more about their programs and services and the terms and conditions of the MOU. A template for the MOU will be provided promptly to the proposer after the announcement of an award. All terms contained in the Memorandum of Understanding are to be incorporated by reference into this Agreement and are made specifically as part of this RFP. FIRM SIGNED AND PRINTED NAME TITLE City of Santa Ana Community Development Agency Request for Proposals for Affordable Homeownership Opportunities Page 37 DATE CITY OF�" . SANTA ANA .0 U lk 16 Opportunity Zone Prospectus .r February 2021 =;,J S A ly IIJIIIIIIIIIIIL� .I , • h • Or , EXHIBIT 1 Mayor Vicente Sarmiento Ward 4 Phil Bacerra Ward 1 Thai Viet Phan Mayor Pro Tern David Penaloza Ward 5 Johnathan Ryan Hernandez Ward 3 Jessie Lopez Ward 6 Nelida Mendoza The City of Santa Ana is a beautiful, diverse group of people who share a deep passion for creating a better future for the community and its businesses by growing job and housing opportunities and installing public amenities and public infrastructure. The Federal Opportunity Zone Program provides the City an ability to enhance its economic vitality and effectively promote and guide the direction of future private sector investment toward key underserved development opportunities/areas throughout the City. The City has put together a qualified OZ team. Information on how to contact them as well as summaries of current OZ opportunities are included. We are committed to working with the private sector and our local, regional, and State partners to help support/complement and enhance the OZ investment program and strengthen the local and regional economy Sincerely, Cityof Santa Ana CityCoundI Vicente Sarmiento, Our purpose is to provide quality service to enhance Mayor, City of Santa Ana the safety, livability and prosperity of our community. EXHIBIT 1 Santa Ana is excited to utilize the Opportunity Zone program to catalyze positive community developments that leverage and build upon the City's foundation that offer the best opportunities for sustainable economic growth and development: • Existing civic, cultural, and other public amenities; • Transportation such as the OC Street Car & Santa Ana Regional Transportation Center (SARTC); • Upcoming revitalization projects:(e.g. —$300M MainPlace Mall revitalization) and other development activity throughout the City TOO Civic Center ArtistVillage SARTC OC Streetcar Downtown mill ',4J_. 4t" Street Market MainPlace Mall Revitalization New Developments Willowick Revitalization EXHIBIT 1 ti PoVpr k 9 a t gri „ � Zqn m WSanhVx.i Avg B "- foirtsn 0 9 q 4 HW MsMngton • I I. ©h ` E Fruit 51 L+31 nut St PhR$I = -7'77r— } 17l — i Q 409 ai war ,r,JV110,.,.aY- to I 4 p�. I I I OZ Census Tract ' W S I Andrewp, F. SI Arrdrn: I / r Future Santa W rnwo°d Pi I , Ana Streetcar earGeri Route Future Santa _ r �3 Ana Streetcar Stop 9 Santa Ana's Opportunity Zones are generally centered along major commercial/industrial corridors and downtown areas in the City, including along proposed stops for the future Santa Ana OC Streetcar route. • 11 Qualified Opportunity Zones (OZs) in City of Santa Ana comprised of —3,800 Acres; • Santa Ana OZs represent -22% of the City area and —41 % of OZs in Orange County; •—76,500 residents reside within OZs (22.7% of City population); and •—47,000 jobs within OZs (35.5% of total City jobs). Population (2020) 76,451 336,744 3,230,429 Jobs (2020) Median Age Average Household Income (2020) 47,015 132,519 1,581,134 27.8 30.8 37.5 $62,382 $80,706 $126,141 Source: ESRI Business Analyst Online,Accessed September 2020 4 See pages 12 - 16 for additional information about development opportunities. ? 17— — 11 �WM Ah r1 '77 rd at W PO4 V II Write SI T -Wlbft W MIS1104 Ave L A Legend 11 OZ Target Areas Future Santa Ana Streetcar Route Future Santa Ana Streetcar Stop + OZ Opportunities G,—fi.— Gas R.d.,U.n Fund NOPAM.,t,,, Millions M - Wt.— and Aff.,d.bi. Housing Bond Ad (P.p 1) nd Subsequent G....l Fund kg—Mti— NOFAM11— S82 - Building Jobs ..d H.— Ad (D.dluW Source) NOFA M-1,, M11— N. Pl.. Like H... (Prop 2) NOPA M—t- M11— ft., SW. Funded P,.g,... NOFA M.,t,,, Mll— Federally Funded Programs OFA mWimiWIMM" r MIT, pfflll� Federally Funded Disaster R..p.— and Ru.—y Programs Amounts 11 M111— EXHIBIT 1 EXHIBIT I COMMUNITY OUTREACH GUIDELINES The Community Development Agency makes available the following guidelines to assist developers of affordable and special needs housing in obtaining community input and support for affordable housing projects. These guidelines are not meant to be a rigid checklist, but rather a flexible approach that can assist developers in building and maintaining a constructive relationship with community and political stakeholders. Four Steps to Building Community Support The approach consists of four steps: 1. The development team meets early to research, assess and plan in five key areas. 2. Prepare a strategy to build active community support for your proposal. 3. Prepare a strategy to address community concerns and deal with active opposition. 4. Prepare a public relations/media strategy to inform decision -makers and the public. These steps are described in detail below: 1. Plan meetings to research, assess and plan strategies in five key areas. Schedule two or more meetings of the entire development team together with local advocates and assign responsibility for organizing the meetings (e.g. inviting key people) to a staff member. At the first meeting, assess the following: a. The organization's reputation, capacity to attract broad community support, and its previous experience in dealing with local government, opponents, and the media. b. What local government approvals are required, who will decide, what are the processes and criteria for decisions, and an expected timeline. c. The government and community's current knowledge of and support for affordable and supportive housing, the organization's work, and the current proposal. d. Full analysis of the neighborhood surrounding the proposed site (history, problems, assets, etc.) e. Likely concerns neighbors might have, the neighborhood's experience with similar programs, and the potential for support or organized opposition. f. Potential legal issues associated with the development proposal, including the legal rights of all parties. g. The media approach to the proposal Based on these assessments, at later meetings determine: 1. Strategies toward the community, potential supporters, potential opponents, and legal issues (steps 2-5); 2. Staffing required to implement these strategies; and, 3. Any consequences for the proposal's time line, funding needs, or site selection. EXHIBIT 1 Each strategy should have a clear plan of action: who will do what, when, how. Efforts to implement these four strategies will be going on simultaneously and timing issues are critical and must be decided after consultation with persons most familiar with the relevant neighborhood. Expect to change and improvise your plans as you go along. You won't regret your planning because it will help you manage the process and avoid surprises. Most importantly, draw on the collective experience of others to gain further insight into the strategies for community acceptance. 2. Prepare a strategy to build public support a. Active, vocal community support for the proposal will help get support, counter opponents, tell the accurate story to the media (if needed) and, when appropriate, say the hard things that must be said. b. Identify and prioritize actual and potential supporters, including tactical allies. Think widely about potential allies before contacting potential opponents. c. Plan recruitment of supporters and what you want them to do. d. Support allies with background information, housing tours and up-to-date information. e. Mobilize supporters at critical points (e.g. using a database and fact sheets.) 3. Prepare a strategy to address community issues a. Notification and community out -reach decisions should be designed to surface and deal effectively with legitimate concerns and for positive presentation of the proposal. b. Consider alternative methods for community outreach (e.g. door-to-door canvassing, open -house forums or small house meetings) instead of the large open community meetings. c. Use an issue -based strategy for working through local community concerns. d. Find out the probable basis of the concerns before fashioning a response (e.g. misinformation, fears about impacts, expectation to participate, prejudice, or issues unrelated to your proposal.) e. Prepare appropriate responses to each kind of concern (e.g. education, reassurance by trusted authority, appropriate forum for participation, negotiation, clarifying legitimate/illegitimate issues.) 4. Prepare a public relations/media strategy a. Plan ahead in order to be able to respond effectively to any negative media or other type of coverage you receive, or believe you will receive. b. Designate and prepare a spokesperson(s), including former tenants and supporters. c. Develop messages for target audiences. d. Prepare brief fact sheets about the organization, the proposal, the supporters, efforts to resolve legitimate community concerns, and other information to support the proposal. e. Invite opponents for a tour of existing facilities and to meet staff and clients. f. Follow up on any coverage received with thank you notes and corrections. EXHIBIT 1 Additional Outreach Principles Low key contact with neighbors, with the support of local allies, is the most effective form of outreach. The most effective forms of low-key contacts are either person to person or small group "house' meetings. In small meetings, the goal is to "humanize" the issue, give it a face that the audience can understand and empathize with, depolarize the potential residents/clients and the program to help remove them as the issue. If possible, have potential residents/clients attend and tell their story. Trying to convince people about the merits of an issue they oppose on an intellectual basis with facts, laws, and details does not affect their "feelings" about the issue. The team should reflect the cultural diversity of the City of Santa Ana and our residents and needs. If the project is intended for a target population, the provider and neighborhood should discuss the following non-exclusive list of issues: 1. Organization/Agency history of housing/services offered. 2. Residents/Clients to be served by this housing/service; numbers, general daily activity and schedule. 3. Special characteristics of the resident/client population (e.g., large families, extremely low-income families, mental illness or recovering substance abusers), likely length of stay in the project, and types of staff or support services, available and mandatory, whether on or off site. 4. The provider's history and reputation - Characteristics of success and failure within the program, in general terms, e.g., possible outcomes for clients and how the program responds to each possibility. 5. The neighborhood and characteristics of the area that might be of concern to neighbors and provider alike. 6. Mechanisms for communication between the provider and its neighbors. The provider should offer a 24-hour contact number if one exists, or best after hours contact available. The neighborhood should identify persons who can act as a contact. The security of knowing where to call to get a response is important. Discuss how to maintain ongoing communications, e.g., repeat visits to community meetings or written updates for newsletters. 7. Names of interested neighborhood organizations and how to contact them. 8. The development of a community advisory committee, if needed. An advisory board is an excellent vehicle for mutual education and effective communication. Exhibit 2 CITY OF SANTA ANA My First Home Program GUIDELINES The Program offers zero percent, deferred payment loans up to a maximum of $120,000. Homebuyer Assistance funds can help meet both a borrower's down payment and closing cost requirements. FUNDS ARE LIMITED - FIRST COME, FIRST SERVE Eligibility Requirements • Borrower(s) must be a first time homebuyer who has not owned a home during the three- year period before the purchase of a home with Program assistance, except that the following individual or individuals may not be excluded from consideration as a First -Time Homebuyer under this definition: (A) A displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not within the preceding two years worked on a fulltime basis as a member of the labor force for a consecutive 12-month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment, and worked primarily without remuneration to care for his or her home and family; (B) A single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody, or is pregnant. • Total Annual Income of the household, meaning all persons residing in the home as their principal place of residence, cannot exceed the income limits established below: Household Size Low Income* Moderate Income 1 $80,400 $107,350 2 $91,850 $122,700 3 $103,350 $138,000 4 $114,800 $153,350 5 $124,000 $165,600 6 $133,200 $177,900 7 $142,400 $190,150 8 $151,550 $202,400 *Loans funded with CalHome funds are restricted to Low Income limits as set by the State of California Department of Housing and Community Development • Complete a minimum of eight (8) hours of in -person homeownership training offered by a counseling center approved by the U.S. Department of Housing and Urban Development (HUD). Exhibit 2 • Must have at least three percent (3%) of the purchase price for a down payment from seasoned funds (at least 90 days seasoned). Three most- recent bank statements are required to verify seasoned funds. Seasoned funds cannot be from gift funds. Gift funds may contribute towards the purchase; gift funds may not exceed 3% of purchase price. • Must have a positive credit history and obtain a fixed-rate first mortgage. Co-signers and variable rate loans are not allowed. • The Housing Division has a local preference for veterans and applicants who live or work in the City of Santa Ana. • Borrowers shall occupy units as their principal place of residence for the term of the Loan and shall not rent or lease the property. For CalHome Funded Loans Only • Maximum appraised home values at time of purchase shall not exceed the most recent median sales price, by county, posted at the California Association of Realtors website at https://www.car.org/en/marketdata/data/countysalesactiyjiy • The Loan -to -Value Ratio for a Mortgage Assistance CalHome program Loan, when combined with all other indebtedness to be secured by the property, shall not exceed 100 percent of the sales price plus a maximum of up to 5 percent of the sales price to cover actual closing costs. • Loan Forgiveness is not allowed with CalHome funded loans. Use of Loan Proceeds • Will be approved based on need. A minimum mortgage -to -income ratio of 28 percent is required. Maximum debt -to -income ratios cannot exceed 40/45. o If CalHome funded: Loans of up to 40 percent of the Borrower's purchase price for the property, up to a maximum of $120,000 will be provided. • City of Santa Ana loan proceeds may be applied to down payment and closing costs associated with the purchase of a home in Santa Ana. • City of Santa Ana down payment assistance loan proceeds may not be applied to down payment and closing costs associated with the purchase of an Inclusionary home made available through the City's Housing Opportunity Ordinance. Interest Rates and Repayment • Financial assistance provided to qualified individual homeowners shall be in the form of deferred payment Loans, repayable upon the sale or transfer of the homes, when the home ceases to be owner -occupied, or upon the Loan maturity date, whichever occurs first. • Repayment of the City loan principle balance will be required at the end of the 45 year term of affordability. ■ If CalHome funded: Repayment of the City loan principle balance will be required at the end of the 30-year term of affordability. Exhibit 2 • Loans are not assumable. • A Borrower may pay the Loan amount, in part or in whole, at any time without penalty. • College Graduate, Veteran and Active Military Incentive. ■ Prospective homebuyer that graduated from a high school located in Santa Ana and has a 4-year college or trade school degree is eligible for a loan forgiveness up to $40,000 ($10,000 will be forgiven every five (5) years up to a twentyyear period) ■ Prospective homebuyer who is a U. S. Military Veteran or on Active Military Duty will be eligible for a loan forgiveness up to $40,000 ($10,000 will be forgiven every five (5) years up to a twenty-year period) Application and Approval Process • Prospective homebuyer completes a HUD approved 8-hour homebuyer class. • Homebuyer chooses a local lender and gets pre -qualified for a First Mortgage • Homebuyer signs a Purchase Contract and opens escrow. • Homebuyer and or Lender provides a complete My First Home Program Applicant Packet to the City of Santa Ana Housing Division for review and pre -approval with all required documents and forms. All applications must contain the documents indicated in the attached Document Checklist. • Lender Packet must be submitted which includes: ■ Purchase Contract ■ 1003 Application ■ First Mortgage Loan Approval letter with terms ■ DU Summary/AUS Findings ■ Copy of the Credit report ■ Estimated Closing Statement ■ Copy of Appraisal and Home Inspection to be provided when available ■ Realtor and Title & Escrow company contact information ■ Wire Instructions • In addition to the City loan approval, the property must pass an inspection by City Staff for lead -based paint hazards and building/health and safety code deficiencies. • If homebuyer is eligible and home passes inspection, City of Santa Ana reserves funds and notifies the Homebuyer and Realtor. • Realtor notifies the City of Santa Ana of scheduled closing date ten (10) business days prior to close of escrow date. • Any cash out of escrow to Borrowers is prohibited. • Total process can take 30-45 days. • Recipients must obtain title insurance at close of escrow. • Fire insurance (and flood insurance where applicable) requirements are as follows: 0 Recipient must require Borrowers to maintain insurance on the Exhibit 2 property in an amount at least equal to the replacement value of the improvements; and City must be named as additional loss payee on the policy. Incomplete application packets will cause delays in the approval process. Please contact Santa Ana's Housing Division at (714) 667,2250 should you have questions or require additional information. City of Santa Ana Community Development Agency Housing and Neighborhood Development Division 20 Civic Center Plaza, 6th Floor Santa Ana, California 92702