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Home My WebLink About19E - QRTLY RPT HOUSINGREQUEST FOR COUNCIL ACTION ^urvn CITY COUNCIL MEETING DATE: AUGUST 4, 2015 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES APRIL 2015 —JUNE 2015 (STRATEGIC /'4� �NO. 5,3) W �. &Yt}2p5• C ITY MANAGER RECOMMENDED ACTION Receive and file. CLERK OF COUNCIL USE ONLY: 011000: ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on a Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on July 8, 2015, by a vote of 4:0 (Sandoval absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION The status report for the quarter ending on June 30, 2015 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. During this quarter, staff reviewed and processed four Loan Subordination requests. 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 Sent Out Applications Received Applications App roved 04 Total FY 04 Total FY Q4 Total FY Q4 Total FY Single-Family Rehabilitation 28 147 21 85 8 18 2 9 Mobile Home Rehabilitation 4 14 4 8 3 5 2 4 Homeownershl 52 374 38 201 4 18 31 12 19E -1 Quarterly Report Housing Division Projects and Activities (April — June 2015) 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 to selection of contractors to complete the work on their homes. contractors that have been screened by staff for license and homeowners are allowed to select any contractor that meet assists the homeowners in selection of a contractor, monito payments to contractors, and tracks expenditures to ensure t At the end of this quarter, there were three homeowner ret under construction, and two were completed. Homeownership Marketing and Approval Process ans are guided through an open Each homeowner is given a list of insurance requirements. However, s these same requirements. Staff rs the construction work, approves hey do not exceed available funds. iabilltation projects out to .bid, four During this quarter, staff represented the City of Santa Ana at the HOPE Now Homebuyer Fair and presented and Mobile Home rehabilitation loan informational session at the Quiet Village Mobile Home Park which was attended by 27 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 $466,000 for a single family home or condo or $560,000 for a newly constructed condo or home. The updated maximum sales price became effective in April 13, 2015. 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 $112,534,247. This is comprised of 439 19E -2 Quarterly Report Housing Division Projects and Activities (April — June 2015) Page 3 loans of which 417 are deferred or residual receipt payment loans. As shown In Table 2, the loan portfolio generated $457,029 in payments of principal and interest during the quarter. 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, 45 owner occupancy recertification letters were mailed; 38 were returned and processed. Staff also audited files for 17 units in 5 projects, and conducted code compliance inspections for 57 units in 17 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 the rehabilitation was completed in March 2015. The home is currently on for sale for qualified homebuyers whose income is at or below 120% of the area median income. Multi- Family Acquisition /Rehabilitation Projects 940 Minnie, LP completed the acquisition of a multl- family property located at 940 S. Minnie Street. The developer has completed the process of relocating their tenants and the construction bid. Rehabilitation work started during this quarter and is currently underway. Once the 19E -3 4 Quarter Total FY Loan Payoffs $32,977 $429,049 Residual Receipts Payments $390,809 $529,469 Amortized Loan Payments $33,243 $140,685 Total $457,029 $1,089,203 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, 45 owner occupancy recertification letters were mailed; 38 were returned and processed. Staff also audited files for 17 units in 5 projects, and conducted code compliance inspections for 57 units in 17 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 the rehabilitation was completed in March 2015. The home is currently on for sale for qualified homebuyers whose income is at or below 120% of the area median income. Multi- Family Acquisition /Rehabilitation Projects 940 Minnie, LP completed the acquisition of a multl- family property located at 940 S. Minnie Street. The developer has completed the process of relocating their tenants and the construction bid. Rehabilitation work started during this quarter and is currently underway. Once the 19E -3 Quarterly Report Housing Division Projects and Activities (April — June 2015) Page 4 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. In -Fill Development Projects Habitat for Humanity of Orange County completed the construction of one single - family dwelling located at 1314 N. Eastwood Avenue. The property is currently for sale for a qualified homebuyer whose income is at or below 120% of the area median income. 793 Concord Street was sold to a qualified homebuyer at the end of the quarter. Habitat for Humanity of Orange County continues 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 and the City was successful in receiving funds from the Strategic Growth Council's Affordable Housing and Sustainable Communities (AHSC), otherwise known as Cap & Trade funds. These funds are a result of the first round of applications for affordable housing projects and active transportation. The Developer has applied for the second round of 9% Tax Credits on July 1, 2015. 815 N. Harbor (70 -Unit Affordable Rental Housing Development) The Developer was successful in obtaining 4% Tax Credits. Construction is anticipated to begin in the next quarter. 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. Executive Director /) k--' Community Develoopent Agency 19E -4