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Home My WebLink About19F - QRTLY RPT HOUSINGREQUESTFOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 4, 2013 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES JULY 2013 — SEPTEMBER 2013 CITY MANAG&R RECOMMENDED ACTION Receive and file. DISCUSSION CLERK OF COUNCIL USE ONLY: -:• -s ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2 "0 Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER This status report for the quarter ending on September 30, 2013, provides statistics for the day -to- day affordable housing activities of the City and the Community Development 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, including 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 shows the number of applications sent out by type for the quarter. Of the applications sent, four have been returned and are being processed. 19F -1 70 so so 40 30 20 10 0 Chart 1: Applications Mailed During the Quarter Single Family Mobile Home Homebuyer Rehab Hardship Assistance Quarterly Report for Housing Division Projects and Activities November 4, 2013 Page 2 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 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. There were four loans approved during this quarter; three rehabilitation applications are pending and two homebuyer applications were denied due to program eligibility. 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 license and insurance requirements. However, homeowners are allowed to select any contractor that 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 three homeowner rehab projects out to bid and one 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 this quarter, the principal balance was $107,097,466. This is comprised of 480 loans of which 441 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $98,703 in payments of principal and interest during the quarter: Table 2: Portfolio Revenue 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, 34 owner occupancy recertification letters were mailed; 23 were returned and processed. During this quarter, staff also conducted code compliance inspections for 23 units in three projects. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds 19F -2 First Quarter FY 13 -14 Loan Payoffs $40,464 $40,464 Residual Receipts Payments $0 $0 Amortized Loan Payments $58,239 $58,239 Total $98,703 $98,703 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, 34 owner occupancy recertification letters were mailed; 23 were returned and processed. During this quarter, staff also conducted code compliance inspections for 23 units in three projects. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds 19F -2 Quarterly Report for Housing Division Projects and Activities November 4, 2013 Page 3 and common areas such as laundry rooms to insure they also meet City code requirements. The majority of the inspected units as well as the grounds and common areas were found to be in compliance at the time of initial inspection. Some of the units had minor deficiencies including loose toilets, inoperative burners, faulty GFCI outlets, inoperative smoke alarms and carbon monoxide detectors. All of the deficiencies were repaired and the units were found to be in compliance at the time of the subsequent re- inspection. Subordinations Mortgage interest rates have increased resulting in a decline in the number of requests for subordination. During the last fiscal year there were a total of 28 requests for subordination received and approved of which 14 were in the fourth quarter. During this quarter, the City received 1 request for subordination which could not be processed because it was incomplete. Subordination requests are reviewed for conformance with City policy and granted to homeowners that were refinancing their existing first mortgage to a more favorable interest rate. Per the subordination policy, no cash is allowed to be taken. Development Projects 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 the first quarter, HUD approved a technical amendment to allow the City to close the Down Payment Assistance Program activity and move the remaining $336,860 to the Single - Family Acquisition - Rehabilitation activity. There were no properties sold during the first quarter; eight properties were sold during the last fiscal year. 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. In order 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 The City's intermediary, ANR, has been actively seeking foreclosed properties in the NSP 3 target area. During this quarter, one application was received for the sale of the property located at 1223 19F -3 Quarterly Report for Housing Division Projects and Activities November 4, 2013 Page 4 Baker Street, however it was denied due to credit criteria. The property is currently listed for sale to a qualified homebuyer. In -Fill Development Proiects The construction of Vista Del Rio, a 41 -unit handicapped - accessible affordable rental housing project located at 1600 Memory Lane is complete with the exception of a few minor problems involving the exterior lighting. The developer obtained a temporary Certificate of Occupancy and has begun leasing the units. The procurement of a final Certificate of Occupancy is expected by the beginning of November. Habitat for Humanity of Orange County has seven single- family dwellings under construction. The dwellings located at 160 E. McFadden Avenue, 1114 S. Cypress and 1121 S. Cypress Avenue are expected to be completed by the end of October; four other dwellings located at 1314 N. Eastwood, 793, 797 and 812 Concord are expected to be completed in May 2014. The home located at 1029 McLean was purchased by a qualified family and closed escrow during this quarter. The Depot at Santiago, LP is working through planning entitlements for the development of a 70- unit affordable housing project at the northeast corner of Santa Ana Blvd. and Santiago Street. City Council approved a loan agreement with 815 N. Harbor, LP for the development of a 70 -unit affordable housing project located at the southeast corner of Harbor Blvd. and Hazard Avenue, FISCAL IMPACT There is no fiscal impact associated with this action , "fAq — Nancy Fong, I P Interim Executi r Community Development Agency NF /SLB /kg Prepared by: Ray Lirette 19F -4