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Home My WebLink About19D - RPT - QRTLY HOUSING RPTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 4, 2012 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES APRIL 2012 - JUNE 2012 "CITY MANAGER RECOMMENDED ACTION Receive and file. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its regular meeting of August 21, 2012, by a vote of 7:0, the Community Redevelopment and Housing Commission recommended that the City Council receive and file. DISCUSSION This status report for the quarter ending on June 30, 2012, 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 CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1 s' Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER Chart 1: Applications Mailed ¦ Mobile Home Hardship (7) ¦ Single Family Rehab (13) ¦ Homebuyer Assistance (48) 19D-1 Quarterly Housing Projects & Activities September 4, 2012 Page 2 cost of essential repairs. Applications are mailed out 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, three have been returned and are being processed. Loan Underwriting 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 for 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. Five Homeowner Rehab loans, two homebuyer assistance loans and three mobile home hardship loans were approved during the third quarter of the fiscal year. Table 1 provides details on these loans. Table 1: Loans A roved Durin the Third Quarter Address Loan Amount Loan Type 4211 W. First Street # 143 $5,000 Mobile Home Hardship 2610 S. Towner $74,828.50 Homeowner Rehab 3313 W. Charlaine $75,000 Homeowner Rehab 3505 S. Birch $63,490 Homeowner Rehab 4117 McFadden $5,000 Mobile Home Hardship 432 S. Harbor # 143 $3,300 Mobile Home Hardship 701W. Park Place $29,656 Homeowner Rehab 1443 S. Garnse Street $68,270 Homeowner Rehab 216 N. Bush $17,694 Homebu er Assistance 216 N. Bush $25,137 Homebu er Assistance Chart 2 shows the number of loans approved during the fiscal year to date. Chart 2: Loans Approved in FY Construction Process 25 20 During this phase, homeowners receiving rehabilitation loans are guided through an open 15 selection of contractors to complete the work on their homes. Each homeowner is given a list of 10 contractors that have been screened by staff for 5 insurance and bonding requirements. However, homeowners are allowed to select any 0 contractor that is licensed and meets these same requirements. Staff assists the 19D-2 Homeowner Rehab (12) Homebuyer Assistance (20) Quarterly Housing Projects & Activities September 4, 2012 Page 3 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 fourth quarter, there were seven new construction projects with 206 units 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 fourth quarter, the principal balance was $83,041,465. This is comprised of 486 loans of which 430 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $387,976 in payments of principal and interest during the quarter: Table 2- Portfolio RPVPnijP_ Residual Receipts Payments $343,908 Amortized Loan Payments $ 44,068 Total $387,976 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 fiscal year to date, 136 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 since they no longer live in the homes. The City has begun the process to obtain repayment. During the fourth quarter, staff also conducted code compliance inspections for 36 units in two projects containing a total of 152 units. 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. Owners of buildings found not to be in compliance are given a deadline by which all repairs must be made and staff conducts re-inspections to ensure that repairs have actually been made. 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 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 19D-3 Quarterly Housing Projects & Activities September 4, 2012 Page 4 third 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. Finally, the City has spent $2.34 million, or 33% 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 overtime. 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 utilized NSP 1 funds to acquire 37 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. Three of the families purchasing these homes also received a total of $104,243 in NSP1-funded down payment assistance loans from the City. Chart 3 shows the status of all single family properties purchased with NSP 1 funds as of the end of the fourth quarter. 40 Chart 3: NSP -Status of All Single Family Properties 35 30 2 5 20 15 10 5 0 Acquisition Under Resale Sold Rehabilitation No NSP1 properties were sold during the fourth quarter. 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 19D-4 Quarterly Housing Projects & Activities September 4, 2012 Page 5 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 fourth quarter, the City had expended $8.8 million or 88% of its funds. The most current federal reports show that only 5 percent of NSP2 grantees have spent 75 percent or more of their funds. NSP 2 implements three programs: Down Payment Assistance 35 Program, Single-Family 30 Acquisition-Rehabilitation 25 Program, and a Multifamily Acquisition-Rehabilitation 20 Program. ANR has spent is more than $4.8 million in io NSP 2 funds and has 5 Chart 4: NSP 2 - Status of All Single Family Properties leveraged an additional $4.8 ° million in private funds to Acquisition make these affordable units available. Two of the families purchasing an NSP2 home received a down payment assistance loan from the City, and a third down payment assistance loan was made to a family purchasing a home that ANR did not acquire. A total of $88,277 in NSP2 funds have been used for down payment assistance loans. Chart 4 shows the status of all properties purchased by ANR with NSP 2 funds as of the end of the fourth quarter. Tables 3, 4, and 5 provide additional detail. Table 3: NSP2 Properties Under Rehabilitation Address Projected Completion Date 1901 S. Wood Street 8/4/2012 1230 W. Camden Place 8/26/2012 2537 W. Camden Place 9/3/2012 328 E. Harwood Place 11/5/2012 19D-5 Under Rehab Resale Sold Quarterly Housing Projects & Activities September 4, 2012 Page 6 Table 4: NSP2 Single Family Properties Available for Sale Address Affordability Level 1317 W. Ra mar Street Moderate 2032 Artesia Street Moderate Table 5: NSP 2 Single Family Properties Sold Durinq the Third Quarter Pro a Address Silent 2nd Income Level 1119 W. 5th Street $10,000 Moderate 410 E. Wakeham Ave. $10,000 Moderate 323 E. Chestnut Ave. $10,000 Moderate 216 N. Bush Street $10,000 Moderate The partnership of Orange Housing Development Corporation (OHDC) and C&C Development was also selected to implement the NSP2 Multifamily Acquisition/Rehabilitation Program. To date, the partnership has used $4.29 million in NSP 2 funds to acquire a 26-unit multi-family property at 326 S. Garnsey Street. Once completed, 25 of the units will be rented to very low-income families at affordable rents. The remaining unit will be reserved for the onsite manager. All 26 units offer two bedrooms. 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 19D-6 Quarterly Housing Projects & Activities September 4, 2012 Page 7 family homes in accordance with NSP3 regulations. ANR Homes, Inc. was selected to receive the contract and received City Council approval 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. In-fill Development Projects Habitat for Humanity of Orange County is in escrow to sell their first of 17 homes which is located at 717 E. Third Street. Escrows for 1029 McLean Drive and 4809 W. Edinger are expected to close in August 2012. Other ecrows are expected to close in the near future. OHDC and C&C Development are currently constructing a total of 15 units on the sites located at 217 & 219 S. Birch Street, 435 & 437 S. Birch Street, 2034 & 2038 N. Bush Street, and 36 units on the site located at 605-611 E. Washington Avenue. 217 & 219 S. Birch Street, 435 & 437 S. Birch Street, 2034 & 2038 N. Bush Street are expected to be completed in August 2012. The projected completion date for 605-611 E. Washington Avenue is January 2013. 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 to be completed in March 2013. Phase II is under construction and is anticipated to be completed by March 2013 as well. It 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). 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 by the end of the year. FISCAL IMPACT There is no fiscal impact associated with this action. Nancy T. Ed rds Interim Exec ive Director Community Development Agency NTE/SLB/kg 19D-7 19D-8