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HomeMy WebLinkAbout19D - QRTLY RPT HOUSING DIVISIONCITY COUNCIL MEETING DATE: FEBRUARY 7, 2017 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES OCTOBER 2016 — DECEMBER 2016 (STRATEGIC PLAN NO. 5,3) r' CITY MANAGER i il Ll L ■ a , CLERK OF COUNCIL USE ONLY: _ 2200 a, © As Recommended © As Amended ❑ Ordinance on I" Reading El Ordinance on 2nd Reading El Implementing Resolution [ Set Public Hearing For, CONTINUED TO FILE NUMBER Receive and file the quarterly report for Housing Division Projects and Activities for the period of October 2016 — December 2016. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on January 25, 2017, by a vote of 6:0, the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This report for the quarter ending on December 31, 2016 provides statistics for all of the affordable housing projects and activities for our Housing Division. 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 down payment assistance for first -time homebuyers and rehabilitation loans for mobile homes, single - family, multi - family, and historic homes. Inquiries are received from the public and applications are mailed out, received and approved for these programs on a continual basis. During this quarter, there were three 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. 19D -1 Quarterly Report for Housing Division February 7, 2017 Page 2 Table 1: Applications Sent Out, Received & Approved Rehabilitation Loan Underwriting and Approval Progress For our rehabilitation loans, 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 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 loan execution, and reserves the required loan funds. During this quarter, one mobile home rehabilitation loan was approved and one mobile home was sold to a qualifying family. The mobile home was acquired by the City when the original owner, a participant in the City's mobile home replacement program, passed away and had no beneficieries. In addition, the Single Family Rehabilitation Loan Program was featured on a Telemundo news segment in November. Rehabilitation Program Construction Progress 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 the 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 and seven under construction. Downpayment Assistance Program Progress For our downpayment assistance program, 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 19D-2 Inquiries Applications Applications Applications Program Sent Out Received Approved Q2 Total Q2 Total Q2 Total Q2 Total FY FY FY FY Single-Family Rehabilitation 15 30 20 35 1 2 0 0 Mobile Home Rehabilitation 12 26 15 27 2 3 1 2 Multi - Family Rehabilitation 2 6 0 1 0 0 0 0 Historic Home Restoration 0 0 2 2 0 0 0 0 Homeownership 30 30 30 1 30 0 2 0 0 Rehabilitation Loan Underwriting and Approval Progress For our rehabilitation loans, 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 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 loan execution, and reserves the required loan funds. During this quarter, one mobile home rehabilitation loan was approved and one mobile home was sold to a qualifying family. The mobile home was acquired by the City when the original owner, a participant in the City's mobile home replacement program, passed away and had no beneficieries. In addition, the Single Family Rehabilitation Loan Program was featured on a Telemundo news segment in November. Rehabilitation Program Construction Progress 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 the 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 and seven under construction. Downpayment Assistance Program Progress For our downpayment assistance program, 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 19D-2 Quarterly Report for Housing Division February 7, 2017 Page 3 maximum sales price of $480,000 for a single family home or condo or $480,000 for a newly constructed condo or home. The updated maximum sales price became effective on May 2, 2016. Additionally, the property needs to be in good condition and pass an inspection. During this quarter, staff conducted one down payment assistance workshop. A total of eight people attended the workshop. Loan Portfolio Management & Monitoring The Housing Division is responsible for managing the residential loan portfolio. As of the end of this quarter, the principal balance was $112,960,740. This is comprised of 424 loans of which 400 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $266,065 in payments of principal and interest during the quarter. Table 2: Portfolio Revenue Source 2nd Quarter Total FY Loan Payoffs $64,985 $96,369 Residual Receipts Payments $161,382 $301,692 Amortized Loan Payments $39,698 $70,085 Total $266,065 $468,146 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, 75 owner - occupancy recertification letters were mailed; 63 were returned and processed. Staff also audited files for 128 units in 40 projects, and conducted code compliance inspections for 30 units in 3 projects. Regulations require that only a sample of units 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 grounds, common areas and almost all of the inspected units were found to be in compliance at the time of initial inspection. Two smoke alarms, one carbon monoxide detector and one wall heater were inoperable. All of the deficiencies were immediately repaired and passed inspection. Development Projects NSP 1, 11 and 111 Programs The City's intermediaries, ANR Industries, Orange Housing Development Corporation, and C &C Development, continue to look for eligible properties for this program. 19D-3 Quarterly Report for Housing Division February 7, 2017 Page 4 Habitat for Humanity of Orange County Permits for the construction of five homes located at 4010 - 4026 E. McFadden Street were issued in November and construction commenced in December. Once completed, the homes will be sold to qualified low- and moderate - income homebuyers. Depot at Santiago (New 70 -Unit Affordable Rental Housing Development) Construction commenced in April 2016 and the retaining walls and podium columns are nearly complete. The project is expected to be completed in the Fall of 2017. Andalucia Apartments (New 70 -Unit Affordable Rental Housing Development) The exterior of all of the buildings is complete and the unit interiors are about 75% complete. The site work is still underway. The project is expected to be completed by the beginning of March 2017. Santa Ana Arts Collective (Adaptive Reuse for 57 Units of Affordable Rental Housing) The Developer, Meta Housing Corporation, was awarded funds through a Request for Proposal (RFP) process to acquire and develop 57 affordable rental housing units with a preference for applicants who are artists and working artist families within Santa Ana. The Developer has completed the entitlement process. The project was awarded and accepted 9% Tax Credits in December 2016. On December 14, 2016, the City received a letter from Meta Housing Corporation requesting the City to commit $3.1 million in additional City funds to fill a shortfall they are projecting for their financing due to the unanticipated nationwide fluctuation in the Low - Income Housing Tax Credit equity market. Staff is currently researching this request and will bring forward a recommendation at a later date. The Orchard (Rehabilitation of 71 Units of Affordable Rental Housing) The Developer, Community Development Partners and Mercy House, was awarded funds through two Request for Proposal (RFP) processes to acquire and rehabilitate a former motel on First Street into 71 units of permanent supportive housing for homeless individuals. The Developer was successful in obtaining tax credits and affordable housing bonds, and is anticipated to start construction during this quarter. First Street Apartments (New 69 -Unit Affordable Rental Housing Development) On April 19, 2016, City Council approved an award of inclusionary housing in -lieu fees to the Developer, AMCAL Multi- Housing LLC, for the First Street Apartments project and approved a conditional loan commitment letter of $8,795,000 that will be contingent on the City's actual receipt of in -lieu fee payments of $9,695,725.60, or a portion thereof, or a cash equivalent to the in -lieu fee payments from the Heritage Village OC, LLC. On December 20, 2016, City Council approved a pre- commitment letter of $6,195,000 in Housing Successor Agency funds to AMCAL Multi- Housing for the project to bridge $2,600,000 of inclusionary housing in -lieu fees anticipated to be received from Heritage Village for the first phase. 19D-4 Quarterly Report for Housing Division February 7, 2017 Page 5 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. Deputy City Manager City Manager's Office 19D -5 19D-6