HomeMy WebLinkAbout19I - QRTLY RPT HOUSING DIVISIONREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
MAY 2, 2017
TITLE:
QUARTERLY REPORT FOR HOUSING
DIVISION PROJECTS AND ACTIVITIES
JANUARY 2017 — MARCH 2017
{STRATEGIC PLAN NO. 5,3)
ACING CIT Y-MA NAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
:-•;• o
❑ As Recommended
❑ As Amended
❑ Ordinance on 1" Reading
❑ Ordinance on 2i0 Reading
❑ 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
January 2017 — March 2017.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION
At its regular meeting on April 26, 2017, by a vote of 5:0 (A. Cano absent), the Community
Redevelopment and Housing Commission approved the recommended action.
DISCUSSION
This report for the quarter ending on March 31, 2017 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, Affordable Housing Funds and
Commitments, 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 staff attended the
Wilshire Square Homeowners' Association Meeting to promote the City's Rehabilitation Loan
Program. Two Loan Subordination requests were processed during this quarter. Table 1 shows
the number of inquiries, applications sent out, received and approved by type for the quarter and
the total fiscal year.
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Quarterly Report for Housing Division
May 2, 2017
Page 2
Table 1: Applications Sent Out, Received & Approved
Program
Inquiries
Applications
Sent Out
Applications
Received
Applications
Approved
Q3
Total
FY
Q3
Total
FY
Q3
Total
FY
Q3
Total
FY
Single-Family Rehabilitation
12
42
15
50
1
3
0
0
Mobile Home Rehabilitation
10
36
12
39
2
5
0
2
Multi-Family Rehabilitation
1
7
0
1
0
0
0
0
Historic Home Restoration
1
1
0
2
0
0
0
0
Homeownership
72
97
27
92
0
8
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.
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 was one homeowner rehabilitation project out to bid and five
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
maximum sales price of $499,000 for a single family home or condo or $499,000 for a newly
constructed condo or home. The updated maximum sales price became effective on March 1,
2017. Additionally, the property needs to be in good condition and pass an inspection.
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Quarterly Report for Housing Division
May 2, 2017
Page 3
During this quarter, staff conducted three down payment assistance workshops. A total of 250
people attended the workshops. On an annual basis, $200,000 in Community Development
Block Grant funds are made available for down payment assistance.
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 $114,144,048. This is comprised of 425 loans of which
401 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio
generated $140,335 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 and 37 were returned and processed.
Staff also audited files for 21 projects, and conducted code compliance inspections for 136 units
in 8 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. Three smoke alarms and one
carbon monoxide detector were inoperative. Additionally, two toilets were loose and two burners
would not ignite properly. All of the deficiencies were immediately repaired and passed a re-
inspection.
Affordable Funds for Affordable Housing Development Projects
The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency
manages multiple sources of local, state and federal funds to promote and facilitate the
development of affordable housing. As of March 31, 2017, a total of $18,661,468 is available for
affordable housing development. Exhibit 3 provides a summary of the funds available as of the
end of this quarter.
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Funding Sources
HOME
CDBG
Tax Increment
NSP
Loan Payoffs
$0
$86,924
$0
$11,548
Residual Receipts Payments
$0
$0
$0
$0
Amortized Loan Payments
$7,414
$12,574
$21,875
$0
Total For Q3
$7,414
$99,498
$21,875
$11,548
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 and 37 were returned and processed.
Staff also audited files for 21 projects, and conducted code compliance inspections for 136 units
in 8 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. Three smoke alarms and one
carbon monoxide detector were inoperative. Additionally, two toilets were loose and two burners
would not ignite properly. All of the deficiencies were immediately repaired and passed a re-
inspection.
Affordable Funds for Affordable Housing Development Projects
The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency
manages multiple sources of local, state and federal funds to promote and facilitate the
development of affordable housing. As of March 31, 2017, a total of $18,661,468 is available for
affordable housing development. Exhibit 3 provides a summary of the funds available as of the
end of this quarter.
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Quarterly Report for Housing Division
May 2, 2017
Page 4
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 for this program.
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 first floor framing is underway. The project is
expected to be completed in November of 2017.
Andalucia Apartments (New 70 -Unit Affordable Rental Housing Development)
Construction was completed in March and qualified tenants started moving in shortly thereafter.
The project is expected to be fully occupied by the end of April.
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 Proposals (RFP) processes to acquire and rehabilitate a former motel on
First Street into 71 units of permanent supportive housing for homeless individuals. Construction
commenced in January and is approximately 10% complete.
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 Proposals
(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. As an alternative, Meta Housing Corporation
submitted an application to the State of California Tax Credit Allocation Committee (TCAC) for a
proposed hybrid 4 %/9% model to reduce their financing gap. On April 13, TCAC formally
declined the request for additional credits under the hybrid Low Income Housing Tax Credit
(LIHTC) structure. Staff is currently researching the request from December 14, 2016 and will
bring forward a recommendation at a later date.
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
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Quarterly Report for Housing Division
May 2, 2017
Page 5
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, to develop 69 affordable rental housing
units. The City received a request from the Heritage Village to fund the project with alternative
funds. Staff is currently researching the request. The developer is currently preparing to submit
an application for 9% Low- Income Housing Tax Credits on June 28, 2017.
Santa Ana Veterans' Village (New 75 -Unit Permanent Supportive Housing Development)
Following a Request for Proposals (RFP) process, on April 4, 2017, the Housing Authority
approved a proposal for 75 Housing and Urban Development Veterans Affairs Supportive
Housing (HUD -VASH) Project -Based Vouchers for Permanent Supportive Housing to be used at
Santa Ana Veteran's Village located at 3312 West 1st Street. The new construction project
consists of a seventy -five (75) affordable multi - family unit apartment complex and will be made
available at affordable rents to HUD -VASH eligible homeless veterans for a term of fifty -five (55)
years. The developer is currently preparing to submit an application for 9% Low- Income Housing
Tax Credits on June 28, 2017.
Aqua Housing (New 58 -Unit Permanent Supportive Housing Development)
Following a Request for Proposals (RFP) process, on April 4, 2017, the Housing Authority
approved a proposal for 25 Project -Based Vouchers for Permanent Supportive Housing to be
used at Aqua Housing located at 317 E. 17th Street. The project is an acquisition, demolition and
new construction project on the site of an existing motel (Aqua Motel) that currently serves short -
term residents. The budget includes relocation assistance for eligible residents. The new
construction project consists of a fifty -eight (58) affordable multi - family unit apartment complex
and will be made available at affordable rents to chronically homeless individuals for a term of
fifty -five (55) years. The developer is currently preparing to submit an application for 9% Low -
Income Housing Tax Credits on June 28, 2017.
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 Mir
City Manager's Office
Exhibit: 1. Available Funds for Affordable Housing Development Projects
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Exhibit 1
Available Funds for Affordable Housing Development Projects
As of March 31, 2017
Housing Successor Agency (Housing Authority)
$14,602,716 Cash on Hand
($789,853) Reconciling amount (ROPS Projects)
($338,032) Habitat for Humanity Disposition and Development Agreement
($250,000) Administrative Costs Allowance 1
$13,224,831 Available Funds
Incluslonary Housing Funds
$6,625,980 Cash on Hand 2
($2,061,381) Santa Ana Arts Collective Pre - Commitment Loan & Associated Project Costs 3
($98,594) Administrative Costs Allowance (CDA/PBA)
$4,466,005 Available Funds ( *Excludes $9,695,725.60 anticipated from Heritage Village)
HOME Program
$2,923,410 Funds to Drawdown
($2,260,000) Santa Ana Arts Collective Pre - Commitment Loan
($332,778) Community Housing Development Organizations (CHDO) Set -Aside G
$330,632 Available Funds to Drawdown
CDBG Program (Acquisition /Rehabilitation Projects Only) 5
$1,140,000 Funds to Drawdown
($500,000) Santa Ana Arts Collective Pre - Commitment Loan
$640,000 Available Funds to Drawdown
$ 18,661,468 Total Available Funds
Tha Housing Successor Agency relies on available cash to fund the monitoring and compliance functions related to the former Rodevekes ent Agencys housing leans.
' Includes $757,600 payment from the Venti na Walk project (1606 W. 181 Sl received in March 2017.
° Pre4oan amount is $1,675,000,
^
The $332,778Includes funds currently available as noted In the February 7, 2017 City Council Agenda Item 26C, An additional $171,771.60 Is estimated in future funding.
° All unencumbered funds at fiscal year end are expected to be rolled over to the Unappropriated Balance for CDBG Capital Projects In FY 17116.
Exhibit 1
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