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Quarterly Report for Housing Division Projects and Activities March 7, 2011 Page 3 Construction Process During this phase, homeowners 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 insurance and bonding requirements. However, homeowners are allowed to select any contractor that is licensed and meets insurance and bonding 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. Multifamily projects may involve additional issues such as compliance with prevailing wage requirements and/or Davis-Bacon. As of December 31, 2010, there were 34 multifamily units and four single family units for a total of 38 units underway. Loan Portfolio Management and Monitoring The Housing Division is responsible for ensuring the integrity of the residential loan portfolio. As of the end of the second quarter, the principal balance was $74,730,818. This is comprised of 455 loans of which 395 are deferred or residual receipt payment loans. The loan portfolio generated $174,962.29 in payments of principal and interest during the first two quarters of the fiscal year. As part of the requirements for these funds, staff must monitor the owner-occupancy for single family homes that have received loans and the physical quality of units in the rental projects with long-term affordability covenants. During the first two quarters of the fiscal year, 110 letters were sent to homeowners to verify that they continue to occupy the home as their primary residence. Under the terms of the HOME program, units assisted with these funds must periodically be inspected for compliance with the City's building codes. During the first two quarters of the fiscal year, staff conducted the necessary inspections for four HOME-assisted projects containing a total of 140 units. Of the 140 units, only a sampling is required to be inspected. This quarter, 14 units were inspected and six units failed inspection. Project owners are required to make necessary repairs for all units found to be out of compliance. Development Projects 703 N. Lacy Street On January 5, 2009, the City Council and Agency approved loans to OHDC and C&C Development for acquisition and rehabilitation of a 27-unit building at 703 N. Lacy Street. Rents are restricted to extremely low- and very low-income households. Rehabilitation on this project is complete and 26 units have been leased to income qualified residents. The developer is working with its lender and tax credit equity investor to convert the construction loan to a permanent loan. The estimated conversion date is April 2011. 19D-3