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HomeMy WebLinkAbout19D - QUARTERLY REPORT FOR HOUSING DIVISION PROJECTSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 5, 2012 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES: OCTOBER 2011 - DECEMBER 2011 CITY MANAGER RECOMMENDED ACTION Receive and file. CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1s` 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 February 21, 2012, by a vote of 6:0 (Morfin absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This status report for the quarter ending on December 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. Applications are mailed out Chart 1: Applications Mailed Single Family Rehab 12 Homebuyer Assistance 25 Mobile Home Hardship 3 19D-1 Quarterly Report for Housing Division Projects and Activities: October 2011 - December 2011 March 5, 2012 Page 2 and received for these programs on a continuing basis. Chart 1 shows the number of applications sent out by type during the quarter. Of the applications sent, none have been returned. Loan Underwritinq and Approval Process 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. Three homebuyer assistance loans and two homeowner rehabilitation loans were approved during the second quarter of the fiscal year, and Table 1 provides details on these loans. Table 1: Loans Approved Durina the Second Quarter Address Loan Amount Loan Type 1319 Seventh Street $10,000 Homebu er Assistance 1634 Twelfth Street $10,000 Homebu er Assistance 2519 Jacaranda St. $16,649 Homeowner Rehab 432 Harbor Blvd., Sp 154 $5,000 Homeowner Rehab 701 Park PI. $20,160 Homebu er Assistance Chart 2 shows the number of loans approved during the fiscal year to date. 9 8 7 6 S 4 3 2 1 0 Chart 2. Loans Approved In FY 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 19D-2 Homeowner Rehab Home buyer Assistance Quarterly Report for Housing Division Projects and Activities: October 2011 - December 2011 March 5, 2012 Page 3 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 the 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 second quarter, there were four multifamily projects with 51 units under construction and five homeowner rehab projects under construction. 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 $83,873,724. This is comprised of 477 loans of which 417 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $70,721 in payments of principal and interest during the quarter: Table 2: Portfolio Revenue Unscheduled Loan Payoffs $28,085 Amortized Loan Payments $42,636 Total $70,721 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 year to date 160 letters have been sent to homeowners to verify that they continue to occupy the home as their primary residence. Four homeowners have been found not to be in compliance with their loan terms because they no longer live in the homes the City assisted, and the City has begun the process to get repayment. During the second quarter, staff also conducted code compliance inspections for 39 units in nine projects. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet City code requirements. All of the inspected units, as well as the grounds and common areas, were found to be in compliance. All of the units passed at the time of inspection, and no follow-up visits were required. 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 19D-3 Quarterly Report for Housing Division Projects and Activities: October 2011 - December 2011 March 5, 2012 Page 4 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 that have very low-incomes. The City has exceeded all of these requirements. All of our NSP 1 grant funds were obligated by August of 2010; and by the end of the second quarter, we had already expended more than $6.7 million or 116% of its grant amount. The amount spent is greater than the grant amount because it includes program income. The most current federal reports show that only 23% of NSP 1 grantees have spent 100% or more of their grant amount. Finally, the City has spent $2.34 million, or 33% of all of 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 second quarter, ANR had used NSP 1 funds to acquire 35 single-family homes and condominium units 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 single family properties purchased with NSP 1 funds as of the end of the second quarter. 40 Chart 3: NSP 1-Status of All Single Family Properties 35 30 25 20 15 10 5 0 Acquisition Under Resale Sold Rehabilitation No NSP 1 properties were sold during the second quarter. 19D-4 Quarterly Report for Housing Division Projects and Activities: October 2011 - December 2011 March 5, 2012 Page 5 The partnership of Orange Housing Development Corporation (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 were approved for tax credits and have started construction. 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 $7.7 million or 77% of its funds. The most current federal reports show that only 18% of NSP 2 grantees have spent 50% or more of their 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 $4.3 million in NSP 2 funds and has leveraged an additional $4.8 million in private funds to make these affordable units available. Chart 4 shows the status of all properties purchased with NSP 2 funds additional detail. Chart 4: NSP 2-Status of All Single Family Properties 25 20 15 10 5 0 Acquisition Under Rehab Resale Sold as of the end of the second quarter. Tables 4, 5, and 6 provide Table 4: NSP 2 Properties Under Rehabilitation Address Projected Completion Date 410 Wakeham 3/1/2012 19D-5 Quarterly Report for Housing Division Projects and Activities: October 2011 -December 2011 March 5, 2012 Page 6 Table 5: NSP 2 Single Family Properties Available for Sale Address Affordability Level 1340 S. Douglas Moderate 927 W. Berkeley Moderate 323 E. Chestnut Moderate 216 N. Bush Moderate 1119 W. 5 Moderate Table 6: NSP 2 Single Family Properties Sold Durinq the Second Quarter Property Address Silent 2" Income Level 1634 W. 12th $10,000 Moderate 2047 S. Birch $10,000 Moderate 1319 W. 7th $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. The RFP solicited the services of an individual or firm qualified to acquire, rehabilitate, and resell foreclosed and abandoned single family homes in accordance with NSP 3 regulations. 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 all the City's NSP Programs are posted on the City's website at http://www.santa-ana.org/cda/NSP.asp. 19D-6 Quarterly Report for Housing Division Projects and Activities: October 2011 - December 2011 March 5, 2012 Page 7 In-fill Development Projects Habitat for Humanity of Orange County expects to close escrow in February on the property at 717 E. Third Street. This will be the site of their first single family development. OHDC and C & C Development have begun construction of multi-family housing on the sites located at 217, 219 & 435, 437 South Birch Street, 2034 & 2038 North Bush Street, and 605-611 E. Washington. Finally, the Redevelopment Agency selected Hope Builders, a subsidiary of Taller San Jose, as the developer for two single family homes on a site identified as 542 East Central Avenue. Unfortunately, staff and Hope Builders were unable to come to terms and sign a Disposition and Development Agreement prior to the elimination of the Agency. Station District The Station District Apartment Homes Phase I will include 74 units of large family affordable rental housing which are currently under construction and expected for completion in the 1St Quarter 2013. Phase II will include an additional 40 units of large family affordable rental housing involving a combination of new construction (25 units) and rehabilitation of existing residential structures (15 units). Phase II is expected to finalize financing and will commence construction in March 2012. In addition, a third phase of for sale housing, to be developed by City Ventures, will include approximately 24 units of large family homes, with the first component of eight townhomes expected to commence construction in Spring 2012. FISCAL IMPACT There is no fiscal impact associated with this action. Nancy T. E ards Interim Executive Director Community Development Agency NTE/SLB/TG/mlr 1901-7 19D-8