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HomeMy WebLinkAbout19D - QRTLY REPORT HOUSING DIVISIONREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 7, 2011 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES CITY MANAGER RECOMMENDED ACTION Receive and file. CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1s' Reading ? Ordinance on 2"d Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on February 15, 2011, by a vote of 5:0 (Bist absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This status report for the quarter ending on December 31, 2010, provides statistics for the day-to- day affordable housing activities of the City and the Community Redevelopment Agency. The report is divided into three sections: Loan Activity, Loan Portfolio Management and Monitoring, and Development Projects. Loan Activity Applications The Housing Division offers several different programs. The loans offered include homebuyer down payment assistance and rehabilitation loans for historic single family, single family and mobile homes. Mobile home loans are offered as forgivable grants and are used to cover the cost of essential repairs. The Housing Division reviews applications to determine which program best fits the needs of the applicants. Applications are mailed out and received for these programs on a continuing basis. 19D-1 Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 2 Chart 1 shows the number of applications sent out by type during the second quarter of the fiscal year. Of these applications sent, one application was received this quarter but denied due to insufficient equity in the home to qualify under the program guidelines. Loan Underwriting and Approval Process Chart 1: Loan Applications Homebuyer Adk Assistance, 21 Single Family Rehab 34 Mobile Home, 4 In this process, staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to determine eligibility per program guidelines. In addition, staff conducts an inspection of the unit, prepares a work write up to determine rehabilitation work to be performed, and develops a budget for the work. Due to the complex funding requirements, applicants may be in underwriting several months. The length of time in underwriting is largely Chart 2: Loans Approved determined by the applicant's timely submittal of the necessary paperwork. 10 Once approved, staff prepares all 8 necessary loan documents, makes 6 arrangements for execution, and reserves the required loan funds. The 4 following information is on the loans 2 made this quarter Chart 2 shows the . 0 number of loans approved during the second quarter of the fiscal year. Single Family Rehab Home buyer Assistance Address Loan Amount Loan Type 333 E Berkeley St $10,000 Homebu er Assistance 1020 N Flower St $10,000 Homebu er Assistance 1422 S Shelton St $18,000 Homebu er Assistance 1422 S Shelton St $17,000 Homebu er Assistance 1090 Cabrillo Park Dr $10,500 Homebu er Assistance 1090 Cabrillo Park Dr $15,900 Homebu er Assistance 1241 W Camden PI $10,000 Homebu er Assistance 2607 W Northwood Ave $12,300 Homebu er Assistance 601 E 20 St $75,000 Single Family Rehabilitation 601 E 20 St $60,000 Single Family Rehabilitation 1921 N Sher Ln #102 $25,900 Homebu er Assistance 19D-2 Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 3 Construction Process During this phase, homeowners are guided through an open selection of contractors to complete the work on their homes. Each homeowner is given a list of contractors that have been screened by staff for insurance and bonding requirements. However, homeowners are allowed to select any contractor that is licensed and meets insurance and bonding requirements. Staff assists the homeowners in selection of a contractor, monitors the construction work, approves payments to contractors, and tracks expenditures to ensure they do not exceed available funds. Multifamily projects may involve additional issues such as compliance with prevailing wage requirements and/or Davis-Bacon. As of December 31, 2010, there were 34 multifamily units and four single family units for a total of 38 units underway. Loan Portfolio Management and Monitoring The Housing Division is responsible for ensuring the integrity of the residential loan portfolio. As of the end of the second quarter, the principal balance was $74,730,818. This is comprised of 455 loans of which 395 are deferred or residual receipt payment loans. The loan portfolio generated $174,962.29 in payments of principal and interest during the first two quarters of the fiscal year. As part of the requirements for these funds, staff must monitor the owner-occupancy for single family homes that have received loans and the physical quality of units in the rental projects with long-term affordability covenants. During the first two quarters of the fiscal year, 110 letters were sent to homeowners to verify that they continue to occupy the home as their primary residence. Under the terms of the HOME program, units assisted with these funds must periodically be inspected for compliance with the City's building codes. During the first two quarters of the fiscal year, staff conducted the necessary inspections for four HOME-assisted projects containing a total of 140 units. Of the 140 units, only a sampling is required to be inspected. This quarter, 14 units were inspected and six units failed inspection. Project owners are required to make necessary repairs for all units found to be out of compliance. Development Projects 703 N. Lacy Street On January 5, 2009, the City Council and Agency approved loans to OHDC and C&C Development for acquisition and rehabilitation of a 27-unit building at 703 N. Lacy Street. Rents are restricted to extremely low- and very low-income households. Rehabilitation on this project is complete and 26 units have been leased to income qualified residents. The developer is working with its lender and tax credit equity investor to convert the construction loan to a permanent loan. The estimated conversion date is April 2011. 19D-3 Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 4 NSP 1 Program The federal Neighborhood Stabilization Program (NSP) is intended to target and stabilize communities hardest hit with foreclosures. To date, the City has received two NSP awards. The first award (NSP 1) came through a noncompetitive process in the amount of $5,795,155. Under its terms, all grant funds must be obligated by September 5, 2010, and expended by March 26, 2013. In addition, NSP grantees must expend at least 25% of the funds on households who are very low-income. However, the City has exceeded this requirement by obligating $2.45 million or 42% of its grant to very low-income households. Currently, the City has expended $2.1 million or 32% of its funds dedicated to projects to serve very low-income households. As of the end of the second quarter, the City had obligated all of its NSP 1 funds in August 2010 and had expended $6,054,509.22 or 104.5%, which includes program income generated by sales. NSP 1 includes the following four programs: Down Payment Assistance Program, Single-Family Acquisition-Rehabilitation Program, Historic/Condominium Acquisition-Rehabilitation Program and a Multifamily Acquisition-Rehabilitation Program. ANR Industries, the intermediary selected to implement homeownership programs including the Single-Family and Historic/Condominium, is responsible for the acquisition, rehabilitation, and resale of the foreclosed units. These homes are sold to families with incomes up to 120% of the area median (AMI). As of the end of the second quarter, ANR had used NSP 1 funds to acquire 33 single-family homes for rehabilitation and resale to qualifying families. ANR has spent more than $3.2 million in NSP 1 funds and has leveraged an additional $4.4 million in private funds to make these affordable units available. As of the end of the second quarter, the following activity had occurred: 30 Chart 3 shows the status of all 25 properties purchased with NSP 1 20 funds. 15 10 0 Chart 3: NSP 1- Status of All Single Family Properties Rehabilitation 19D-4 Acquisition Under Resale Sold Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 5 NSP 1- Properties Available for Sale Address Affordability Level 1001 W Stevens Ave #140 Moderate 1046 Cabrillo Park Dr #A Moderate 1345 Cabrillo Park Dr #F09 Moderate 1345 Cabrillo Park Dr #K05 Moderate 1345 Cabrillo Park Dr #R04 Moderate NSP 1 - Single Family Properties Sold During the Quarter Property Address Silent 2" Homebu er Income Level 1090 Cabrillo Park Dr #E $15,900 Low 1921 N Sher Ln #102 $25,900 Low 1422 S Shelton St $17,000 Moderate 1020 N Flower St $10,000 Moderate 333 E Berkeley St $10,000 Moderate The partnership of OHDC and C&C Development was selected to implement the Multifamily Acquisition/Rehabilitation Program. To date, the partnership has used $1.4 million in NSP 1 funds to acquire a 14-unit multi-family property at 1410 N. Durant Street. The rehabilitation is complete and the property is currently being leased and 13 units are occupied. The partnership also used $655,000 in NSP 1 funds to acquire two vacant parcels at 605-611 E. Washington Avenue on which they will construct approximately 38 affordable rental units. They have re-submitted plans for development review. Both projects will be targeted to households at or below 50% of AMI. NSP 2 Program The City's second award (NSP 2) for $10 million was received through a highly competitive process in which only 15 local government agencies were successful. Most awards were made to nonprofit consortiums. Under the terms of this award, there is no obligation deadline to meet; however, there is an expenditure deadline. Fifty percent of the funds must be expended by February 11, 2012, and the remainder by February 11, 2013. As of the end of the second quarter, the City had expended $2,391,584 or 23.9% of the funds. NSP 2 implements three programs: Down Payment Assistance Program, Single-Family Acquisition-Rehabilitation Program, and a Multifamily Acquisition-Rehabilitation Program. ANR has spent more than $2.2 million in NSP 2 funds and has leveraged an additional $2.4 million in private funds to make these affordable units available. As of the end of the second quarter, the following activity had occurred- 19D-5 Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 6 NSP 2 - Single Family Properties Purchased During the Quarter Address NSP Funds for Acquisition 503 S Garnse St $232,180.81 214 N Bush St $73,613.66 1520 W 6 St $112,267.81 2075 S Van Ness Ave $126,111.46 1104 S Raitt St $173,067.33 2142 S Park Dr $180,822.06 2201 S Parton St $163,830.77 1231 S Baker St $177,505.04 1510 W 12 St $162,682.74 Chart 4: NSP 2 - Status of All Single Family Properties 14 Chart 4 shows the status of all 12 properties purchased with NSP 2 10 8 funds. 6 4 0 Acquisition Under Resale Sold Rehabilitation NSP 2 - Sinqle Family Properties Sold Durinq the Quarter Prope!ty Address Silent 2" Income Level 1241 W. Camden PI ±:?: $10,000 Moderate As required by regulations, comprehensive detailed quarterly reports on the City's NSP Programs (NSP 1 and NSP 2) are posted on the City's website at http://www.santa-ana.org/cda/NSP.asp. Scattered Sites On October 9, 2009, the Agency released a Request for Qualifications for the selection of qualified developers for 13 Agency-owned parcels. On December 21, 2009, the Agency selected three developers for the project. Habitat for Humanity of Orange County was selected as developer for 19D-6 Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 7 single family housing at sites identified as 719 & 812 N. Concord Street; 1114, 1121, S. Cypress Avenue; 1314 Eastwood Avenue; 4809 W. Edinger Avenue; 4010 & 4018 W. McFadden Avenue; 4106 & 4110 W. McFadden Avenue; 717 E. Third; and 1029 McLean Drive for a total of 17 single family units. Staff is finalizing the Disposition and Development Agreement (DDA) with presentation to the Agency for approval in March 2011. Also approved was OHDC and C&C Development as the developer for multi-family housing at sites identified as 217, 219 & 435, 437 S. Birch Street; 2034 & 2038 N. Bush Street; and N. Spurgeon & E. 22nd Street. They have submitted plans for the Birch Street and Bush Street properties. Their DDA was approved on September 7, 2010 for all sites except North Spurgeon, which is still being negotiated. Finally, the Agency selected Hope Builders, a Division of Taller San Jose, as developer for two single family homes on a site identified as 542 E. Central Avenue. This site will afford Hope Builders further training in the construction of single family dwellings and assist in its mission of providing high quality construction jobs for local Santa Ana residents who are graduates of Taller San Jose. The Developer has submitted its plans into the City's site plan review process, while Agency staff continues working with them on its DDA. Station District On June 7, 2010, after an extensive public outreach process which garnered a great deal of input on community needs and issues, the City Council/Redevelopment Agency approved several monumental actions to facilitate the development of an affordable housing project, located in the 94-acre Station District, that will enhance the Lacy neighborhood and support the transit vision for the area. The project is situated along a corridor and is a key connection from the 1-5 freeway into the Downtown and will also serve as a major transportation link for the planned Go Local Fixed Guideway System. Related California/Griffin Realty Corporation, the master developer selected last year after a wide-reaching Request for Proposals process, helped spearhead the outreach efforts with support from the City. The project calls for the construction of approximately 112 rental units and 32 for sale units on a total of approximately six acres of land. The City is also looking to provide a community center and park/open space along with the developer project. Of the 112 rental units, all but two (manager units) will be available to persons at or below 50% of the adjusted median income (AM[); and of those, 20% of the units will be offered to residents at 30% AMI. This amount of affordability exceeds that required by State law, as well as the requirements imposed for state tax credit financing. The term of affordability will be for 55 years. Additionally, six of the for-sale units will be offered at 120% AMI. The estimated market price for a three bedroom home in the Lacy Neighborhood today is approximately $290,000. The 26 market rate homes will be sold between $250,000 and $300,000. The affordable homebuyers (120% AMI) will be provided a $30,000 silent second loan, thus reducing the sales price to the range of $220,000 and $270,000. 19D-7 Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 8 The first component of the developer project would be 74 podium apartment units to be rented to extremely-low and very-low income households. The 74 unit project was submitted for State tax credit financing in July 2010; however, the application had to be rescinded due to a lawsuit being filed on the EIR for the project and larger Transit Zoning Code area. It is hoped that the developer will be able to resubmit for tax credits in March 2011. If successful in securing the credits, construction will commence in October 2011 and take approximately 18 months to complete. The for-sale project is slated to commence construction in mid 2011 and be completed within 18 months. FISCAL IMPACT There is no fiscal impact associated with this action. Nancy T. E ards Interim Executive Director Community Development Agency NTE/SLB/MA/mlr 19D-8