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Quarterly Report for Housing Division Projects and Activities <br />June 20, 2011 <br />Page 3 <br />Construction Process <br />During this phase, homeowners receiving rehabilitation loans are guided through an open selection <br />of contractors to complete the work on their homes. Each homeowner is given a list of contractors <br />that have been screened by staff for insurance and bonding requirements. However, homeowners <br />are allowed to select any contractor that is licensed and meets these same requirements. Staff <br />assists the homeowners in selection of a contractor, monitors the construction work, approves <br />payments to contractors, and tracks expenditures to ensure they do not exceed available funds. <br />Multifamily projects may involve additional issues such as compliance with prevailing wage <br />requirements and/or Davis-Bacon. At the end of the third quarter, there were 34 multifamily units <br />and four single family units for a total of 38 units underway. <br />Loan Portfolio Management and Monitoring <br />The Housing Division is responsible for ensuring the integrity of the residential loan portfolio. As of <br />the end of the third quarter, the principal balance was $75,826,468. This is comprised of 460 loans <br />of which 401 are deferred or residual receipt payment loans. As shown in Table 2, the loan <br />portfolio generated $489,894 in payments of principal and interest during the first three quarters of <br />the fiscal year: <br />Table 2: Portfolio Revenue <br />Loan Payoffs $179,213 <br />Residual Receipts Pa ments $149,713 <br />Amortized Loan Payments $160,968 <br />Total $489,894 <br />As part of the requirements for these funds, staff must monitor the owner-occupancy for single <br />family homes that have received loans and the code compliance of units in rental projects with <br />long-term affordability covenants. During the first three quarters of the fiscal year, 110 letters were <br />sent to homeowners to verify that they continue to occupy the home as their primary residence. <br />During the same three quarter period, staff conducted code compliance inspections for 15 HOME- <br />assisted projects containing a total of 273 units. Of these units, only a sampling is required to be <br />inspected. This quarter, 45 units were inspected and seven units failed. Project owners are <br />required to make necessary repairs for all units found to be out of compliance, and all seven failed <br />units were brought into compliance within two weeks after the initial inspection. <br />19C-3