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Irene M. Mayorga Loan Agreement <br />October 18, 2010 <br />Page 2 <br />Irene Mayorga, the homeowner at 601 E. 20th Street (Exhibit 1) has applied for a rehabilitation <br />loan. Once staff inspected the property, it became apparent that the loan would exceed our <br />program maximum. The homeowner had previously begun construction on the home, but the <br />contractor abandoned the job leaving a partially demolished home with faulty and incomplete <br />repairs. The owner obtained bids from five licensed contractors. Based on the bids received, a <br />loan amount of $135,000 is believed to be sufficient to pay for all repairs and provide for sufficient <br />contingency to cover unanticipated repairs. The proposed loan will be funded with $60,000 in <br />CalHome and $75,000 in CDBG funds with 1.5% interest. The homeowner has a very high credit <br />score; however, due to their income level, loan payments will be deferred for a period of five <br />years. At that time, staff will review the household income to determine if payments can be <br />made. The after rehabilitation loan-to-value ratio is 87 percent which meets program guidelines. <br />Since the loan amount exceeds program guidelines, City Council approval of the loan agreement <br />(Exhibit 2) is required. <br />ENVIRONMENTAL IMPACT <br />Under the provisions of the National Environmental Policy Act (NEPA) and the California <br />Environmental Quality Act (CEQA), the proposed project is exempt from further review. <br />Categorical Exemption No. ER 2010-126 will be filed for this project. <br />FISCAL IMPACT <br />Community Development Block Grant funds are available in the CDBG Single Family <br />Rehabilitation Loans account (no. 135-18782-69152). Upon approval of the appropriation <br />adjustment, CalHome funds will be available in the CalHome Program account (no. 14318763- <br />69152). <br />Cynthia J. Nelson <br />Deputy City Manager for Development <br />Services <br />Community Development Agency <br />CJN/SLB/TG/mlr <br />Exhibits: 1. Map <br />2. Agreement <br />APPROVED AS TO FUNDS AND ACCOUNTS: <br />Francisco Gutierrez <br />Executive Director <br />Finance & Management Services Agency <br />20A-2