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Home My WebLink About19E - QRTLY RPT HOUSING PROJECTSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: NOVEMBER 19, 2012 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES JULY 2012 - SEPTEMBER 2012 APPROVED ? As Recommended ? As Amended ? Ordinance on 1s` Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For CITY MANAGER RECOMMENDED ACTION Receive and file. CONTINUED TO FILE NUMBER COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its regular meeting of November 6, 2012, by a vote of 6:0, (Morfin absent), the Community Redevelopment and Housing Commission recommended that the City Council receive and file. DISCUSSION This status report for the quarter ending on September 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 cost of essential repairs. Applications are mailed out and received for these programs on a continuing basis. Chart 1: Applications Mailed Single Family Rehab4 Mobile Home Hardship 4 19E-1 Quarterly Report - Housing Division Projects and Activities November 19, 2012 Page 2 Chart 1 shows the number of applications sent out by type during the quarter. Of the applications sent, two 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. One homebuyer assistance loan and one mobile home hardship loan were approved during the first quarter of the fiscal year, and Table 1 provides details on these loans. Table 1: Loans ADOroved Durina the This Quarter Address Loan Amount Loan Type 717 E. Third Street $172,600 Homebu er Assistance 2314 W. Mark Street $75,000 Homeowner Rehabilitation 2214 S. Cedar Street $50,483 Homeowner Rehabilitation Chart 2 shows the number of loans approved Chart 2. Loans Approved In FY during the fiscal year to date. 3 Construction Process 2 Z During this phase, homeowners receiving rehabilitation loans are guided through an open 1 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 Homeowner Rehab Home buyer Assistance 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. At the end of this quarter there were seven homeowner rehab projects under construction. 19E-2 Quarterly Report - Housing Division Projects and Activities November 19, 2012 Page 3 Loan Portfolio Management and Monitoring The Housing Division is responsible for ensuring the integrity of the residential loan portfolio. As of the end of this quarter, the principal balance was $105,555,110. This is comprised of 495 loans of which 430 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $50,983 in payments of principal and interest during the quarter: Table 2: Portfolio Revenue Residual Receipts Payments $ 8,558 Amortized Loan Payments $42,425 Total $50,983 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 this quarter, 174 letters were 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, and the City has begun the process for repayment. During the first quarter, staff also conducted code compliance inspections for 35 units in two projects. 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. The inspected units as well as the grounds and common areas were found to be in compliance at the time of initial inspection with the exception of two units that needed minor repairs, such as a loose toilet and an inoperable GFCI outlet. The owner made the necessary repairs, and both of the units were found to be in compliance at the time of the subsequent re- inspection. 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 this quarter we had already expended more than $6.8 million or 119% of its grant amount. The 19E-3 Quarterly Report - Housing Division Projects and Activities November 19, 2012 Page 4 amount spent is greater than the grant amount because it includes program income. Finally, the City has spent $2.4 million, or 34% 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. During this quarter, two properties are in escrow for resale and one property was sold. Table 3 and 4 provide additional detail. Table 3: NSP1 Single Family Properties Available for Sale Address Affordability Level 2537 W. Camden Moderate 1904 S. Wood Moderate Table 4: NSP1 Single Family Properties Sold During This Quarter Property Address Silent 2" 4 Income Level 2227 N. Broadway, Unit O $10,000 - Moderate 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. In this quarter, HUD approved a technical amendment to allow the City to close the DPAP activity and move the remaining $336,860 to the Single-Family Acquisition-Rehabilitation activity. During this quarter, three properties were under rehabilitation, one property was in escrow for resale and three properties were sold. Tables 5, 6, and 7 provide additional detail. Table 5: NSP2 Properties Under Rehabilitation Address Projected Completion Date 328 E. Harwood 10/12/2012 705 S. Kilson 11/23/2012 1227 W. Camile 11/22/2012 Table 6: NSP2 Single Family Properties Available for Sale Address Affordability Level 1230 W. Camden Moderate 19E-4 Quarterly Report - Housing Division Projects and Activities November 19, 2012 Page 5 Table 7. NSP2 Single Family Properties Sold Durinq This Quarter Property Address Silent 2" Income Level 2032 S. Artesia $10,000 Moderate 1317 Raymar $10,000 Moderate 1520 W. 6 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 $3.31 million in NSP 2 funds to acquire a 26-unit multi-family property at 326 S. Garnsey Street. Construction has been completed and they are in the process of leasing the units. NSP 3 Proaram 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 grant activities are: • Acquisition/Rehab/Resale-50 Percent of Area Median Income • Acquisition/Rehab/Resale-120 Percent of Area Median Income • Administration Currently, ANR is actively seeking eligible properties in the NSP 3 target area. As required by regulations, comprehensive detailed quarterly reports on all of the City's NSP Programs are posted on the City's website at http://www.santa-ana.org/cda/NSP.asp. In-Fill Development Proiects During this quarter, Habitat for Humanity of Orange County completed the construction of a single-family dwelling at 717 E. Third Street, the first of 17 sites that they will be developing, and closed escrow on two additional sites located at 4809 Edinger Avenue and 1029 McLean Drive. Both sites are currently under construction and are expected to be completed in December 2012 and January 2013, respectively. Santa Ana WBBB L.P. has four multi-family rental housing projects currently under construction. Three projects located at 217-219 S. Birch Street, 435-437 S. Birch Street, and 2034-2038 N. Bush Street, a total of 15 units, are expected to be completed by October 2012. A 36-unit multi- family housing project located at 605-611 E. Washington is currently under construction and is expected to be completed in January 2013. 19E-5 Quarterly Report - Housing Division Projects and Activities November 19, 2012 Page 6 Station District Phase I, a 74-unit, large family affordable rental housing project, is currently under construction and is expected to be completed in March 2013. Phase II incorporates an additional 40 units of large family affordable rental housing consisting of the rehabilitation of existing structures (15 units) and new construction (25 units). The rehabilitated units and the new units are expected to be completed in December 2012 and March 2013, respectively. Phase III, a for- sale housing project, to be developed by City Ventures, includes approximately 24 large family homes, with the first component of 8 townhomes expected to commence by the end of the year. Vista Del Rio, a 41-unit, handicapped accessible, affordable rental housing project, is currently under construction. The project, located at 1600 Memory Lane, is expected to be completed in March 2013. FISCAL IMPACT There is no fiscal impact associated with this action. Nancy T. Ed rds Interim Exec Wive Director Community Development Agency NTE/SLB/RL/kg 19E-6