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Item 29 - Fiscal Year 2022-2023 Annual Action Plan and Budgets for CDBG, HOME and ESG Programs
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Item 29 - Fiscal Year 2022-2023 Annual Action Plan and Budgets for CDBG, HOME and ESG Programs
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Clerk of the Council
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29
Date
4/19/2022
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<br />City of Santa Ana - 65 - 2022 Annual Action Plan <br /> <br />HOME Investment Partnership Program (HOME) <br />Reference 24 CFR 91.220(l)(2) <br />1. A description of other forms of investment being used beyond those identified in Section 92.205 is as <br />follows: <br />The City of Santa Ana does not use HOME funds in any other manner other than those described in <br />Section 92.205(b). <br /> <br />2. A description of the guidelines that will be used for resale or recapture of HOME funds when used for <br />homebuyer activities as required in 92.254, is as follows: <br />The City incorporates a recapture requirement into written agreements and long-term affordability <br />covenants for homebuyer assistance activities administered by the City as required by 24 CFR <br />92.254. For any homebuyer assistance activity implemented by subrecipients or CHDOs, this <br />recapture requirement shall also be used. <br />HOME affordability requirements are imposed based on the amount of direct HOME subsidy <br />pursuant to HUD regulations as follows: <br />Assistance under $15,000: 5-year affordability period <br />Assistance between $15,000 - $40,000: 10-year affordability period <br />Assistance over $40,000: 15-year affordability period <br />The amount subject to recapture is the direct HOME subsidy received by the homebuyer. Direct <br />HOME subsidy includes the HOME investment that enabled the homebuyer to purchase the <br />property. This includes down payment assistance, closing costs, or other HOME assistance <br />provided directly to the homebuyer and/or the difference between the fair market value of the <br />property (as determined by appraisal) and a reduced sales price attributable to HOME development <br />assistance. <br />The recapture provision ensures that the entire amount of the City's direct HOME subsidy to <br />homebuyers is recaptured if the housing does not continue to be the principal residence of the <br />family for the duration of the applicable period of affordability (e.g., the home is sold, the home is <br />foreclosed, the assisted owner is no longer residing in the assisted residence, or for any other <br />breach of the agreement with the City). The HOME-assisted homebuyer may sell their unit at any <br />time during the period of affordability, to any willing buyer, and at the price the market will bear. The <br />recapture provision requires that the City’s direct HOME subsidy and any interest due under the <br />HOME loan (that has not previously been repaid) is returned to the City from net proceeds first, <br />subject to the limitation that if there are no net proceeds or the net proceeds are insufficient to repay <br />the HOME investment due, the City may only recapture the net proceeds, if any. Net proceeds are <br />defined as the sales price minus superior loan repayment (other than HOME funds), and any <br />closing costs. <br />In the event of a mortgage default, a provision in the written agreement and long-term affordability <br />covenant stipulates that the City has the right of first refusal before foreclosure and may use <br />EXHIBIT 1
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