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Home My WebLink About19C - QRTLY RPT HOUSING PROJECTSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: FEBRUARY 17, 2015 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES OCTOBER 2014 — DECEMBER 2014 {STRATEGIC PLAN NO. 5,3) CITY MANAGEA RECOMMENDED ACTION Receive and file. CLERK OF COUNCIL USE ONLY: 0119ROWC11 ❑ As Recommended ❑ As Amended ❑ Ordinance on 1st Reading ❑ Ordinance on 2n' Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER DISCUSSION The status report for the quarter ending on December 31, 2014 provides statistics for the day -to- day affordable housing activities. 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. Inquiries are received from the public and applications are mailed out and received for these programs on a continuing basis. Table 1 shows the number of inquiries, applications sent out, received and approved by type for the quarter and the total fiscal year. Table 1: Applications Sent Out, Received & Approved Program Inquiries Applications Applications Applications Sent Out Received A proved Q2 Total Q2 Total Q2 I Total Q2 Total FY FY I FY FY Single-Family Rehabilitation 12 4 22 4 5 3 5 Mobile Home Rehabilitation Homeownership 2 232 [1-87 1 3 128 0 —41 1 7 1 2 2 4 li 19C -1 Quarterly Report Housing Division Projects and Activities (Oct — Dec 2014) Page 2 Rehabilitation Loan Underwriting and Approval Process Staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to ensure compliance with program guidelines and requirements established by the funding source. In addition, staff conducts an inspection of the property, 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. 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 rehabilitation projects out to bid, four under construction, and two were completed. Homeownership Marketing and Approval Process During this quarter, staff presented three workshops which were attended by 108 individuals, the majority being Santa Ana residents. Staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by the U.S Department of Housing and Urban Development (HUD). Applicants must meet established income requirements, complete an eight -hour pre - purchase counseling program from a HUD - approved agency, be pre - qualified for a first mortgage and have a minimum of three percent of the purchase price from their own savings. Other HUD requirements apply, including a current maximum sales price of $390,000 for an existing single family home or condo or $443,000 for a newly constructed condo or home. Additionally, the property needs to be in good condition and pass an inspection by staff. Loan Portfolio Management & 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 $110,233,735. This is comprised of 439 loans of which 417 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $189,311 in payments of principal and interest during the quarter. 19C -2 Quarterly Report Housing Division Projects and Activities (Oct — Dec 2014) Page 3 Table 2: Portfolio Revenue Monitoring 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, 36 owner occupancy recertification letters were mailed; 20 were returned and processed, Staff also audited files for 96 units in 40 projects, and conducted code compliance inspections for 42 units in 8 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 municipal 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 observable 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. Development Projects NSP 1, 2 and 3 Programs The City's intermediaries, ANR Industries, Orange Housing Development Corporation, and C &C Development, continue to look for eligible properties. The acquisition of a single - family home located at 1235 S. Cypress closed escrow In August 2014 and rehabilitation is underway. Multi - Family Acquisition / Rehabilitation Projects 940 Minnie, LP completed the acquisition of a multi - family property located at 940 S. Minnie Street. The developer is currently in the process of relocating their tenants and is out to bid. Rehabilitation is expected to commence in March of 2015. Once the rehabilitation is complete, the property will yield eight affordable rental units consisting of 4 one - bedroom units, 2 two - bedroom units and 2 three - bedroom units. 19C -3 2" Quarter Total ry Loan Payoffs $21,416 $356,085 Residual Receipts Payments $138,660 $138,660 Amortized Loan Payments $29,235 $74,191 Total $189,311 $568,936 Monitoring 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, 36 owner occupancy recertification letters were mailed; 20 were returned and processed, Staff also audited files for 96 units in 40 projects, and conducted code compliance inspections for 42 units in 8 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 municipal 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 observable 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. Development Projects NSP 1, 2 and 3 Programs The City's intermediaries, ANR Industries, Orange Housing Development Corporation, and C &C Development, continue to look for eligible properties. The acquisition of a single - family home located at 1235 S. Cypress closed escrow In August 2014 and rehabilitation is underway. Multi - Family Acquisition / Rehabilitation Projects 940 Minnie, LP completed the acquisition of a multi - family property located at 940 S. Minnie Street. The developer is currently in the process of relocating their tenants and is out to bid. Rehabilitation is expected to commence in March of 2015. Once the rehabilitation is complete, the property will yield eight affordable rental units consisting of 4 one - bedroom units, 2 two - bedroom units and 2 three - bedroom units. 19C -3 Quarterly Report Housing Division Projects and Activities (Oct — Dec 2014) Page 4 In -Fill Development Projects Habitat for Humanity of Orange County completed the construction of two single- family dwellings located at 797 and 812 Concord Street. The completion of two homes located at 793 Concord Street and 1314 N. Eastwood Avenue is expected in January 2015 and February 2015, respectively. 797 Concord Street was sold to a qualified homebuyer with escrow closing January 2015. Habitat for Humanity of Orange County also commenced the construction of two single - family homes located at 4106 and 4110 W. McFadden Street. Depot at Santiago (70 -Unit Affordable Rental Housing Development) The developer has worked through planning entitlements and applied for a tax credit allocation. Construction is anticipated to begin in April 2015. 895 N. Harbor (70 -Unit Affordable Rental Housing Development) The conceptual site plan was approved. The Harbor Corridor Specific Plan was approved and the developer is finalizing their budget. Santa Ana Station District — For Sale (25 affordable Homes) Construction of the homes is approximately 90% complete. The developer, City Ventures Homebuilding LLC, expects to have all of the homes completed and sold by the end of February 2015. STRATEGIC PLAN ALIGNMENT The activities covered by this report allow the City to meet Goal #5 Community Health, Livability, Engagement & Sustainability, Objective #3 (Facilitate Diverse Housing opportunities and Support Efforts to Preserve and improve the Livability of Santa Ana Neighborhoods). FISCAL IMPACT There is no fiscal impact associated with this action. wwwk�� Kelly Reencts Executive Director Community Development Agency KWSS /rl /sb 19C -4