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Home My WebLink AboutJT20B - CALHOME REHAB & REPLACE REQUEST FOR COUNCIUAGENCY ACTION MEETING DATE: ~ ~ CLERK OF COUNCIL USE ONLY: APRIL 4, 2005 TITLE: APPROVED o As Recommended o As Amended D Ordinance on 1 st Reading D Ordinance on 2nd Reading D Implementing Resolution D Set Public Hearing For CALHOME REHABILITATION AND REPLACEMENT PROGRAM ./ / ~t;Z/ / I.. /,' l41L~,,-lt.iov- CITY MANAGER EXECUTIVE DIRECTOR CONTINUED TO FILE NUMBER RECOMMENDED ACTION CITY COUNCIL ACTION 1. Approve an Appropriation Adjustment recognizing $500,000 in CalHome Program funds and appropriating same. 2. Adopt the CalHome Rehabilitation and Replacement Program. COMMUNITY REDEVELOPMENT AGENCY ACTION Adopt the CalHome Rehabili tation and Replacement Program and allocate $200,000 for Program funding. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION: 1. Recommend that the City Council: a) Approve an Appropriation Adjustment recognizing $500,000 In CalHome Program funds and appropriating same. b) Adopt the CalHome Rehabilitation and Replacement Program. 2. Recommend that the Community Redevelopment Agency adopt the CalHome Rehabilitation and Replacement Program and allocate $200,000 for Program funding. JT208-1 CalHOme Rehabilitation and Replacement Program April 4, 2005 Page 2 By a vote of 6: 0 (Turner absent) at its Regular Meeting of March 15, 2005. DISCUSSION On September 7, 2004, the City Council approved the submission of an application for funding from the California Department of Housing and Community Development CalHome Program. The City has been notified that an award of $500,000 has been allocated for this program. Under the CalHome Rehabilitation and Replacement Program (Exhibit 1), these funds will be used to offer deferred payment, thirty-year rehabilitation loans with zero percent interest rates to low income owner occupants of manufactured homes and single family homes. All homes must be located in CDBG eligible census tracts (Exhibit 2). Maximum CalHome rehabilitation loan amounts will be $10,000 for manufactured homes and $50,000 for single- family homes. Owners may also be eligible for addi tional rehabilitation assistance through existing programs offered by the City and the Agency. In cases where it is financially infeasible to rehabilitate the home, manufactured home owners may be eligible for CalHome replacement loans totaling no more than $50,000. CalHome replacement loan funds will be offered in the form of deferred thirty-year loans with zero percent interest rates. Up to $20,000 in Tax Increment Housing Set-Aside funds may also be combined with the CalHome funds. The Agency replacement loans will be amortized over thirty years. Consistent with our existing programs, the interest rates will be based on household income and will be 250 or 300 basis points below the 11th District Cost of Funds Index published by the Federal Home Loan Bank, with a minimum interest rate of one percent for very low-income households and one-and-one half percent for low-income households. As an example, based on the index as of March 1, 2005, the minimum interest rate would apply. ENVIRONMENTAL IMPACT In accordance with the California Environmental Quality Act, the proposed proj ect is exempt from further review. Categorical Exemption ER No. 2005-26 will be filed for this project. JT208-2 CalHOme Rehabilitation and Replacement Program April 4, 2005 Page 3 FISCAL IMPACT Funds will be available in the CalHome Rehabilitation and Replacement Program fund (account no. 143-149-6951). Funds will be available in the Tax Increment Housing Set-Aside fund (account no. 504-508-6951). APPROVED AS TO FUNDS AND ACCOUNTS: t~ patricia C. Whitaker Executive Director Community Development Agency rancisco Executive Finance & Gutierrez Director If/<, Management Services AgenCY~ PCW/TG/mlr H:\ACTIONS\2005 CCVT CC-CRA CalHomeRehab&ReplaceProg 4-4-05,doc JT208-3 CALHOME REHABILITATJ:ON AND REPLACEMENT PROGRAM The CalHome Rehabilitation and Replacement Program will in accordance with the requirements of the State of CalHome Program and Community Redevelopment Agency of Santa Ana Tax Increment Housing Set Aside funds. be operated California, the Ci ty of Eligible Borrowers · Borrower(s) must be the owner(s) of a single-family home, or of a manufactured home that is permanently affixed to a space in a legal, properly permitted manufactured housing park. Properties must be located in a CDBG eligible census tract in the City of Santa Ana. · Manufactured homes must be designed for long-term occupancy. Vehicles designed for recreational purposes do not qualify. · Total annual income must be at or below 80 percent of area median income, as published by the U.S. Department of Housing and Urban Development and the California Department of Housing and Community Development. Effective March 15, 2004 the maximum household incomes are as follows: Household Size 1 2 3 4 5 6 7 8 Maximum Income 40,250 46,000 51,750 57,500 62,100 66,700 71,300 75,900 · The after rehabilitation value of single family homes cannot exceed 100% of the current median sales price of single family homes in Orange County. Determination of that sales price will be made at the start of underwriting. · Borrower (s) must occupy the home as their principal residence, and shall not lease or rent the property during the term of their loan. · Borrowers must have a current credit history that demonstrates prudent use of debt and a commitment to meeting financial obligations. For single family homes, total debt on the property, including the rehabilitation loan, cannot exceed 90 percent of the after rehabilitation value of the home. EXHJ:BJ:T 1 Page 1 JT208-4 General Program Guidelines · Funds budgeted annually will be made available on a first-come, first-served basis. Priority for loan funding will be based upon the date and time a completed application and all necessary documents are submitted. The City reserves the right to make the sole determination as to when such completed applications and documents are received. · For manufactured homes, loan funds may only be used for repairs necessary to bring the home into compliance with applicable federal and state building codes. All code deficiencies must be addressed. In cases where it is economically infeasible to rehabilitate the home, funds may also be used to purchase, transport and install a new or completely refurbished unit on a spot located in a legally permitted manufactured housing park in the City of Santa Ana. · Funds may not be used to refinance existing debt or for repairs to the park. · For single family homes, all code deficiencies must be addressed, and must account for at least 40 percent of the total rehabilitation cost. · The Loan Committee will make final determination as to the eligibility of specific repairs or purchases. · All persons with an ownership interest in the home must sign the application and all loan documents. · Borrower(s) will be required to carry hazard insurance for the life of the loan. If applicable, they will also be required to carry flood insurance. Rehabilitation Guidelines · Licensed general contractors who have licensing and insurance requirements rehabilitation and construction work. complied with must perform City all Ter.ms of Rehabilitation Loans · CalHome Rehabilitation Loans may not be forgiven. · The interest rate for these loans will be zero percent. No loan payments will be due during the term of the loans which will be 30 years. · The entire loan will be due and payable upon sale or transfer of the property, when the property ceases to be owner occupied, or upon the loan maturity date. · Upon the loan maturity date, and in accordance with CalHome Program regulations, these loans may be amortized over a period of time to be determined by Loan Committee, or may be deferred for an addi tional period of time to be determined by Loan Committee. EXHIBIT 1 Page 2 JT208-5 . The maximum amount for rehabilitation of an existing manufactured home is $10,000. The maximum amount for rehabilitation of a single family home is $50,000. If addi tional funds are necessary, the household may be eligible for other programs offered by the City of Santa Ana or the Community Redevelopment Agency of the City of Santa Ana. . The ratio between total debt on a single family home and its after-rehabilitation value as determined by an appraisal cannot exceed 90 percent. . Borrower(s) will be required to execute appropriate documents incorporating the terms of their loan and the requirements of the CalHome Program. Replacement Guidelines · Licensed manufactured housing dealers and their representatives must perform all work for the transportation and installation of the replacement unit. . Replacement homes must be newly manufactured, and must be located on an appropriate site in a fully permitted manufactured housing park located in a CDBG eligible census tract in the City of Santa Ana. . Replacement units must be of comparable size as the existing home, unless it is determined the household is overcrowded and a larger unit is required. Ter.ms of Replacement Loans . The maximum amount is $70,000. Funds for the replacement program may consist of an Agency loan not to exceed $20,000 and a CalHome loan not to exceed $50,000. . The ratio between total debt on the home and its market value cannot exceed 100 percent plus a maximum of up to five percent of the sales price to cover actual closing costs. . The City's loan servicer will collect and manage impound accounts for payment of property insurance for the term of the Agency loan. . Borrower(s) will be required to execute appropriate documents incorporating the terms of their loans, the requirements of the CalHome Program and Tax Increment Housing Set Aside funds. . Both the Agency loan and the CalHome Program loan will be secured by means of a Statement of Lien added to the home's registration. The Agency loan will be in first position. Ter.ms of CalHome Replacement Loans · CalHome Replacement loans may not be forgiven. EXHIBIT 1 Page 3 JT208-6 . The interest rate for these loans will be zero percent. No loan payments will be due during the term of the loans which will be 30 years. . The entire loan will be due and payable upon sale or transfer of the property, when the property ceases to be owner occupied, or upon the loan maturity date. · Upon the loan maturity date, and in accordance with CalHome Program regulations, these loans may be amortized over a period of time to be determined by Loan Committee, or may be deferred for an additional period of time to be determined by Loan Committee. Agency Replacement Loan . The Agency loan will be amortized for 30 years. . Interest rates will be as follows: Household Income Interest Rate 0 - 50 Percent of Area 1. 00% Per Annum or 300 basis points below Median the 11th District Federal Home Loan Bank Monthly Cost of Funds Index, whichever is higher. 51 - 80 Percent of Area 1. 50% Per Annum or 250 basis points below Median the 11th District Federal Home Loan Bank Monthly Cost of Funds Index, whichever is higher. . Determination of the interest rate will be made at the time of loan approval. . During the term of the loan, upon sale or transfer, when the home is no longer owner-occupied, or upon loan maturi ty date, the entire principle is due and payable to the Agency along with the applicable interest rate. . Borrower(s) whose monthly housing debt, inclusive of the Agency loan, is less than or equal to 30 percent of their gross monthly income will make equal monthly payments in an amount that will fully amortize that loan by its scheduled maturity date. . Borrower(s) whose monthly housing debt allows for partial payments only of the Agency loan will be required to make such payments. Partial loan payments will be applied first to accrued interest and then to principal. Such borrower(s) must be income-certified every five years to insure that their monthly housing debt still allows for partial payments only. . Borrower(s) whose monthly housing debt, exclusive of the Agency loan, is equal to or more than 30 percent may have their loan payments deferred. Such borrower (s) must be income-certified every five years to insure that their monthly housing debt is still equal to or greater than 30 percent. EXHIBIT 1 Page 4 JT20B-7 City of Santa Ana 2000 Census Tracts and Block Groups '" e ~ i ~ '\ LI ..BJ ~- .;;:e'J"G'O", ~'eT B~5'3kl' BG3, BG~);C 0 ~ ~G~;:; 7B~830r i ~_: / F~N~ ~ -' \ BG-' \ BG-' "-H,(' 1 BG.1 Be,- 1 l '" BG- 17S,4 C 1 /54 04 SANTA ClARA A'" ?~I BGo . 15303 ~ ~ .r :',02 15302< ~f- { ~ BG2 i i BG2 00-] ~ 17TH ST BG- 1 BG- 1 BG- 1 11TH S1 6G-l I / B91 04 'J' 0 BG-' 8G.2 , BG- / W...._GT"N All BG, I '" /; 5;!)oB~ ' r- _ ; 52 D? B~' ~O BG 3 891 05 / / I C1VlCCENTl:ROR BG- 2 8G.:;> BG.2 ~ / In 1;G~3 BG- 3 ~ BG- 3 r BG I ~ B~G' '~ 7 bJG9~2~ 48 1,9;> 4, BG2 8G-2 BG-2 l BG.l L1 "':G2 ,,;,," BG-2 :':'". BG.3 BG.l I " CJ CJ CJ Census Block Groups Census Tracts CDBG Eligibility eG- 3 EiG.2 BG' l 754~BG-2 8G-2 75' 0 BG-3 r ! ~ 890, W!()()1 BG. 2 ~ 890 (]4 BG I i BG2 ," ~ ""- ~ 0 80-4", BG 2 ~ ~ 80-4 _ 80.4 ! 8G-l 6 6G-2 BG-2 j ~ ~G'2 7":'...... i ~ , BGI i, ~5403 ~ e ~ ...-- 44 O~ ~ BG- 2 BG- 3 g 8G-3 BG 1 74406 r \ ~ ) 8G-' 750 02 I I ~ 755iJS BG.1 IBG2 BG-1l;j h------ ~ 748 /4803 8G- 1 BG-:' BG- ',"48 748 D' BG-} 1,..-" BG J BG.4 ~ L BG.2 /4901 - BG-5 !IBG-1 I--..... BG3 8G2j1--~BG1 BGI:q ~ 0 IBG' Ii M BG 3 BG' ~~~ ~ BG 1 ~ 746 2 BG 4 ii3 74601 Me ADOEN,ft. l~ \ BG.J '48 )~21 80.J~ ,~ 744 ",,'on_. - ~ BG- 2 )flG- J flG- 1-, 7 eG- 2 /" ~,; BG2 ~ f; ~ ____ WAA":~;: -/~ / 14 BG' I i BG 3 I ,e..",J BG I 74102 80-4 BG 5 BG.5 BG.1 I M 74403 BG,' 7450) :ii / EDINOER"V BG.4 BG-l BG-2 142> io ~ BG- 1 74300 BG-3 ! BG-2 "" BG-2 WAANER " ... __1 -- O~ ~ i':c.~ )03 Be" rU-~ BG-3 80- 1 / "BG' ,liB('7 ~~ '. .11 11BG- 3 74003 ~"\ ~~ ~ BGI ~ 1 RG' .. BG3TI B~ '10 ~W3' BG.3 h 755 15 BG-1 0" '" ,ft.LTON"V ;! i" ",,0 i'~(;- ~-17 BG-3 ~ "'"", .", .~'" 7 \. + -N- . 0.0 0.5 - 1.0 1.5 - 2.0mi I ~ ~ Source: 2000 Census Data CDBG Eligibility Updated March, 2004 CcP\'l'igtlI2OOol,AHRighl5Rewrv<<l EXHIBIT 2 JT20B-8