HomeMy WebLinkAbout19D - HOUSING QRTLY RPTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
FEBRUARY 16, 2016
TITLE:
QUARTERLY REPORT FOR HOUSING
DIVISION PROJECTS AND ACTIVITIES
(OCTOBER 2015 — DECEMBER 2015)
(STRATEGIC PLAN NO. 5,3)
CITY MANAGER
RECOMMENDED ACTION
Receive and file.
CLERK OF COUNCIL USE ONLY:
F-ITURT100TWX
❑ As Recommended
❑ As Amended
❑ Ordinance on 1" Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION
At its regular meeting on January 13, 2016, by a vote of 4:0 (Gomez absent), the Community
Redevelopment and Housing Commission approved the recommended action.
DISCUSSION
The status report for the quarter ending on December 31, 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, there were no 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.
1901-1
Quarterly Report Housing Division Projects and Activities (October — December 2015)
February 16, 2016
Page 2
Table 1: Applications Sent Out, Received & Approved
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 two homeowner rehabilitation projects out to bid, six under
construction, and two were completed.
Homeownership Approval Process
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.
19D-2
Inquiries
Applications
Applications
Applications
Program
Sent Out
Received
A roved
Q2
Total
Q2
Total
Q2
Total
Q2
Total
FY
FY
FY
FY
Single-Family Rehabilitation
25
55
25
51
3
10
0
0
Mobile Home Rehabilitation
20
36
20
32
6
8
1
1
Multi-Family Rehabilitation
1
3
0
0
0
0
0
0
Historic Home Restoration
1
2
0
1
0
0
1
2
Homeownership
30
66
30
62
5
10
1
6
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 two homeowner rehabilitation projects out to bid, six under
construction, and two were completed.
Homeownership Approval Process
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.
19D-2
Quarterly Report Housing Division Projects and Activities (October — December 2015)
February 16, 2016
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 $111,379,789. This is comprised of 431
loans of which 405 are deferred or residual receipt payment loans. As shown in Table 2, the loan
portfolio generated $185,578 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, 56 owner occupancy recertification letters
were mailed, and of those, 34 were returned and processed.
Staff also audited files for 69 units in 55 projects, and conducted code compliance inspections for
42 units in four 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, and
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.
Multi - Family Acquisition/ Rehabilitation Projects
The rehabilitation of 940 S. Minnie Street was completed during this fiscal year and is now fully
occupied.
19D-3
2" Quarter
Total FY
Loan Payoffs
$19,075
$1,421,965
Residual Receipts Payments
$128,038
$128,038
Amortized Loan Payments
$38,465
$73,035
Total
$185,578
$1,623,038
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, 56 owner occupancy recertification letters
were mailed, and of those, 34 were returned and processed.
Staff also audited files for 69 units in 55 projects, and conducted code compliance inspections for
42 units in four 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, and
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.
Multi - Family Acquisition/ Rehabilitation Projects
The rehabilitation of 940 S. Minnie Street was completed during this fiscal year and is now fully
occupied.
19D-3
Quarterly Report Housing Division Projects and Activities (October — December 2015)
February 16, 2018
Page 4
In -Fill Development Projects
Habitat for Humanity of Orange County completed the construction of two new single - family
homes at 4106 and 4110 W. McFadden Street and is currently working with qualified buyers for
each of the properties.
Depot at Santiago (New 70•Unit Affordable Rental Mousing Development)
The developer is working on completing the entitlement process and construction is anticipated to
begin in early 2016.
Andalucia Apartments (New 70 -Unit Affordable Rental Housing Development)
Construction is progressing in accordance with the approved contract and is expected to be
completed in December of 2016.
Santa Ana Arts Collective (Adaptive Rouse of Affordable Rental Housing)
Meta Housing Corporation, the "Developer ", was awarded funds through a Request for Proposal
(RFP) process to acquire and develop 57 affordable rental housing units with a preference for
low-income artist households. The developer is in the entitlement process and working on their
application for Low - Income Housing Tax Credits and Affordable Housing and Sustainable
Communities (AHSC) Program funds.
STRATEGIC PLAN ALIGNMENT
The activities covered by this report allows the City to meet Goal #5 - Community Health,
Livability, Engagement & Sustainabllity, 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.
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Executive _rector
Community Development Agency
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19D-4