HomeMy WebLinkAbout19C - QUARTERLY RPT FOR HOUSING DIVREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 20, 2011
TITLE:
QUARTERLY REPORT FOR HOUSING
DIVISION PROJECTS AND ACTIVITIES
j f
r ;
CITY MANAGER
RECOMMENDED ACTION
Receive and file.
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 15t Reading
? Ordinance on 2nd Reading
? Implementing Resolution
? Set Public Hearing For_
CONTINUED TO
FILE NUMBER
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION
At its regular meeting on June 7, 2011, by a vote of 4:0 (Verino absent), the Community
Redevelopment and Housing Commission approved the recommended action.
DISCUSSION
This status report for the quarter ending on March 31, 2011, 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.
19C-1
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Paqe 2
Chart 1 shows the number of applications
sent out by type through the third quarter of
the fiscal year. Of the applications sent,
eleven have been returned. As of the end of
the third quarter, five were denied or dropped
out due to title or equity issues. Six are in
process.
Single
Family
Rehab
7
Chart 1: LoanAppications Mailed
Iomebuy
er
ssistarxe
, 52
Loan Underwriting and Approval Process
Mobile
H om e, 19
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 Chart 2: Loans A
time in underwriting is largely determined by Approved
the applicant's timely submittal of the a
necessary paperwork. Once approved, staff 6
prepares all necessary loan documents, 4
makes arrangements for execution, and 2
reserves the required loan funds. Chart 2 °
shows the number of loans approved during Homeowner Homebuyer New
the third quarter of the fiscal year. Table 1 Rehab Assistance Construction
provides information on these loans. Sale
Table 1- I nnns AnnrnvPri nl lrinn tha Thirri Or inrtcr
Address Loan Amount Loan Type
1345 Cabrillo Park Drive #F09 $10,000 Homebu er Assistance
2234 Kilson Drive $35,091 Homeowner Rehab
1345 Cabrillo Park Drive #R04 $42,200 Homebu er Assistance
1046 Cabrillo Park Drive #A $10,000 Homebu er Assistance
1919 Sher Lane #15 $11,160 Homebu er Assistance
1118 Orange St. $228,000 New Construction Sale
1112 Orange St. $225,000 New Construction Sale
1527 S. Ross St. $10,000 Homebu er Assistance
1345 Cabrillo Park Drive #K05 $10,000 Homebu er Assistance
19C-2
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Page 3
Construction Process
During this phase, homeowners receiving rehabilitation loans 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 these same 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. At the end of the third quarter, 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 third quarter, the principal balance was $75,826,468. This is comprised of 460 loans
of which 401 are deferred or residual receipt payment loans. As shown in Table 2, the loan
portfolio generated $489,894 in payments of principal and interest during the first three quarters of
the fiscal year:
Table 2: Portfolio Revenue
Loan Payoffs $179,213
Residual Receipts Pa ments $149,713
Amortized Loan Payments $160,968
Total $489,894
As part of the requirements for these funds, staff must monitor the owner-occupancy for single
family homes that have received loans and the code compliance of units in rental projects with
long-term affordability covenants. During the first three quarters of the fiscal year, 110 letters were
sent to homeowners to verify that they continue to occupy the home as their primary residence.
During the same three quarter period, staff conducted code compliance inspections for 15 HOME-
assisted projects containing a total of 273 units. Of these units, only a sampling is required to be
inspected. This quarter, 45 units were inspected and seven units failed. Project owners are
required to make necessary repairs for all units found to be out of compliance, and all seven failed
units were brought into compliance within two weeks after the initial inspection.
19C-3
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Page 4
Development Projects
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 three 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 $2.3 million or
33% of its funds dedicated to projects to serve very low-income households. As of the end of the
third quarter, the City had obligated all of its NSP 1 funds in August 2010 and had expended more
than $6.2 million or 107.3% of its grant amount, which includes program income generated by
sales. This exceeded HUD's timeline requirement for grant expenditure. Currently the Program is
only operating with program income, and these funds will diminish over time.
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 third
quarter, ANR had used NSP 1 funds to acquire 34 single-family homes for rehabilitation and resale
to qualifying families. ANR has spent more than $3.3 million in NSP 1 funds and has leveraged an
additional $4.5 million in private funds to make these affordable units available. Chart 3 shows the
status of all properties purchased with NSP 1 funds as of the end of the third quarter. Tables 3
and 4 provide additional detail.
35
30
25
20
15
10
5
0
Chart 3: NSP 1- Status of All Single Familv Properties
19C-4
Acquisition Under Resale Sold
Rehabilitation
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Page 5
Table 3. NSP 1 Properties Under Pnhahilitatinn
Address NSP is for Acquisition
1001 W. MacArthur Blvd #14 $110,704.98
Table 4- NSP 1 PrnnPrtiP.Q Availahla fnr _Cahn
Address Affordability Level
1001 W. Stevens Ave #140 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 North Durant Street. The rehabilitation is
complete and the property is now occupied. The partnership also used $655,000 in NSP 1 funds
to acquire two vacant parcels at 605-611 East Washington Avenue on which they will construct
approximately 38 affordable rental units. They have submitted an application for tax credits, and
expect to start construction in September of 2011. Both projects will be targeted to households at
or below 50% of AMI.
NSP 2 Program Chart 4: NSP 2 - Status of All Single Family
Properties
The City's second io
award (NSP 2) for $10 a
million was received
through a highly 4
competitive process in 2
which only 15 local 6
government agencies Acquisition Under Resale sold
were successful. Most Rehabilitation
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 third quarter, the City had expended nearly
$2.6 million or 26% 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 $2.4 million in NSP 2 funds and has leveraged
an additional $2.6 million in private funds to make these affordable units available. Chart 4 shows
the status of all properties purchased with NSP 2 funds as of the end of the third quarter. Tables 5,
6, 7 and 8 provide additional detail.
19C-5
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Page 6
Address NSP Funds for Acquisition
1230 S. Garnse St. $154,589.30
Table 5: NSP 2 Single Family Properties Acquired During the Quarter
Table 6. NSP2 Properties Under Rahnhilitntinn
Address Pro -ected Completion Date
1510 W. 12ffi St 0411512011
2201 S. Parton 0410712011
1104 S. Raitt 0410412011
Table 7: NSP2 Sinale Familv Properties Availahla fnr gala
Address Affordability Level
503 S. Garnse St Moderate
2075 S. Van Ness Ave Moderate
1520 W. 6 St Moderate
2142 S. Park Dr Moderate
1231 S. Baker St Moderate
1422 S. Maple St Moderate
329 E. Camile St Moderate
214 N. Bush St Moderate
1201 W. 6 St Moderate
Table 8: NSP 2 Sinale Family Pmnertia.c .11?nlrl l )i,rinrr th o nt in or
Property Address Silent 2" Income Level
1527 S. Ross St. $10,000 Moderate
NSP 3 Program
The U. S. Department of Housing and Urban Development (HUD) has allocated the amount of
$1,464,113 in NSP 3 funds to the City of Santa Ana. To receive these funds, the City adopted a
substantial amendment to its Annual Action Plan and submitted it to HUD on February 28, 2011.
The amendment was approved, and the City signed a grant agreement with HUD on March 10,
2011. The City will implement the following programs with these funds:
• Acquisition/Rehab/Resale-50 Percent of Area Median Income
• Acquisition/Rehab/Resale-120 Percent of Area Median Income
• Administration
In order to facilitate implementation of the first two programs, the City released a Request for
Proposals (RFP) for intermediaries on February 28, 2011.
19C-6
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Page 7
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 to construct single family and multifamily units on these parcels. Habitat for Humanity
of Orange County was selected as developer for single family housing at sites identified as 719 &
812 North Concord Street; 1114, 1121 South Cypress Avenue; 1314 Eastwood Avenue; 4809
West Edinger Avenue, 4010 & 4018 West McFadden Avenue; 4106 & 4110 West McFadden
Avenue; 717 East Third; and 1029 McLean Drive for a total of 17 single family units. A Disposition
and Development Agreement (DDA) was approved by the City Council and Redevelopment
Agency on March 21, 2011. They are currently going through the planning process.
Also approved was OHDC and C&C Development as the developer for multi-family housing at
sites identified as 217, 219 & 435, 437 South Birch Street; 2034 & 2038 North Bush Street; and
North Spurgeon & East 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. They have applied for tax credits, which is necessary
financing for the construction.
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 East 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
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 first phase of the project will be 74 podium apartment units to be rented to extremely-low and
very-low income households. In March the developer submitted an application to the State of
California for low income housing tax credits which will provide critical financing for this phase. If
19C-7
Quarterly Report for Housing Division Projects and Activities
June 20, 2011
Page 8
the application is approved, the developer anticipates that construction will start in October of 2011
and be completed in approximately 18 months.
FISCAL IMPACT
There is no fiscal impact associated with this action.
?a'Yl G?
Nancy T. Ed rds
Interim Exe ive Director
Community Development Agency
NTE/SLB/MA/kg
19C-8