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Home My WebLink About19E - QRTLY REPORTS FOR HOUSING DIVISIONREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 6, 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 1st 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 August 16, 2011, by a vote of 6:0 (Verino absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This status report for the quarter and fiscal year ending on June the day-to-day affordable housing activities of the City and Agency. The report is divided into three sections: Loan Activity, Monitoring, and Development Projects. Loan Activity Applications 30, 2011, provides statistics for the Community Redevelopment Loan Portfolio Management and 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. 19E-1 Quarterly Report for Housing Division Projects and Activities September 6, 2011 Page 2 Single Family Rehab 118 Chart 1 shows the number of applications sent out by type during the fiscal year. Of the applications sent, fifteen have been returned. As of the end of the fiscal year, ten were denied or dropped out due to title or equity issues. Five are in process. Loan Underwriting and Approval Process Chart 1: Loan Applications Mailed Mobile Home, 22 omebuyer ssistance, 77 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 determined by the applicant's timely submittal of the necessary paperwork. Once approved, staff prepares all necessary loan documents, makes arrangements for execution, and reserves the required loan funds. Ten homebuyer assistance loans were approved during the fourth quarter, and Table 1 provides details on those loans. Table 1: Loans Ar)Droved Durina the Fourth Ounrter Address Loan Amount Loan Type 214 Bush Street $10,000 Homebu er Assistance 1802 Westwood Avenue $35,640 Homebu er Assistance 1001 W. Stevens Avenue, #140 $10,000 Homebu er Assistance 329 E. Camile Street $10,000 Homebu er Assistance 1422 S. Maple Street $10,000 Homebu er Assistance 1201 W. Sixth Street $10,000 Homebu er Assistance 1231 S. Baker Street $10,000 Homebu er Assistance 1520 W. Sixth Street $10,000 Homebu er Assistance 503 S. Garnse Street $10,000 Homebu er Assistance 1510 W. Twelfth Street $10,000 Homebuyer Assistance Chart 2 below shows the number of loans approved during the fiscal year. Construction Process Chart 2: Loans Approved 30 25 During this phase, homeowners receiving 20 15 rehabilitation loans are guided through an 10 5 3 2 1- 0 Homeowner Homebuyer New 19E-2 Rehab Assistance Construction Sale Quarterly Report for Housing Division Projects and Activities September 6, 2011 Page 3 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 fiscal year, there were 34 multifamily units and two single family units for a total of 36 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 fourth quarter, the principal balance was $80,172,016. This is comprised of 308 loans of which 275 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $573,205 in payments of principal and interest during the fiscal year: Table 2: Portfolio RPvPnua Loan Payoffs $223,516 Residual Receipts Payments $154,965 Amortized Loan Payments $194,724 Total $573,205 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 fourth quarter seventeen letters were sent to homeowners to verify that they continue to occupy the home as their primary residence. A total of 127 such letters were sent during the entire fiscal year. Nearly all homeowners have responded, and are in compliance. The remaining few have been sent or will receive a follow-up letter. During the fourth quarter staff also conducted code compliance inspections for a sample of 93 units in fifteen projects that contain a total of 274 units. A total of 30 projects containing 541 units were inspected during the fiscal year. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to insure they also meet City code requirements. All the inspected units as well as the grounds and common areas were found to be in compliance. All but seven units passed at the time of inspection. The seven units required minor repairs and a follow-up visit by staff. 19E-3 Quarterly Report for Housing Division Projects and Activities September 6, 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 all three NSP awards for which it was eligible. 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. The City has exceeded all of these requirements. All of its NSP 1 grant funds were obligated by August of 2010, and as of the end the fourth quarter it had already expended more than $6.2 million or 107.3% of its grant amount. The amount spent is greater than the grant amount because it includes program income. Finally, the City has already spent $2.3 million, or 33% of all its NSP 1 funds, on projects that serve very low-income households exclusively. Currently NSP 1 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 fourth 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 fourth quarter. Table 3 provides additional detail on the one property that has not yet been sold. Chart 3: NSP 1- Status of All Single Family Properties 35 30 25 20 15 10 0 0 Acquisition Under Resale Sold Rehabilitation 19E-4 Quarterly Report for Housing Division Projects and Activities September 6, 2011 Page 5 Table 3: NSP 1 Properties Available for Sale Address NSP Funds for Acquisition 1001 W. MacArthur Blvd #14 $110,704.98 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 36 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 award (NSP 2) for $10 14 million was received 12 so through a highly 6 competitive process in 4 which only 15 local o government agencies were successful. Most awards were made to Rehabilitation 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 fourth quarter, the City had expended $6.3 million or 63% 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 $3.17 million in NSP 2 funds and has leveraged an additional $3.6 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 fiscal year. Tables 4, 5, and 6 provide additional detail. Table 4. NSP2 Properties Under Rehabilitation Address Projected Completion Date 1410 S. Shelton 712112011 1233 W. Myrtle 8115111 2047 S. Birch 8108111 1319 W. 7 8118111 1643 W. 12th 9102111 19E-5 Acquisition Under Resale Sold Quarterly Report for Housing Division Projects and Activities September 6, 2011 Page 6 Table 5: NSP2 Single Family Properties Available for Sale Address Affordability Level 2075 S. Van Ness Moderate 2142 S. Park Moderate 2201 S. Parton Moderate 1230 S. Garnse Moderate Table 6: NSP 2 Single Family Properties Sold Durina the Ouarter Property Address - Silent 2" v Income Level 1510 W 12 St $10,000 Moderate 503 S. Garnse $10,000 Moderate 214 N. Bush $10,000 Moderate 1520 W. 6 St $10,000 Moderate 1231 S. Baker $10,000 Moderate 1201 W. 6 $10,000 Moderate 1422 S. Maple $10,000 Moderate 329 E. Camille $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. ANR Homes, Inc. was selected to receive the contract, and it was approved by City Council on June 20, 2011. 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. 19E-6 Quarterly Report for Housing Division Projects and Activities September 6, 2011 Page 7 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 19E-7 Quarterly Report for Housing Division Projects and Activities September 6, 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. Nancy T. Ed rds Interim Exec ve Director Community Development Agency NTE/SLB/TG/mlr 19E-8