29C - AMENDMENTS ADD FORECLOSED HOMES

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2010-2011 and 2011-2012 Annual Action Plan Substantial Amendments and ANR Agreement Amendment May 7, 2012 Page 2 DISCUSSION Since 2009, the City of Santa Ana has applied for and received more than $17 million in federal Neighborhood Stabilization Program (NSP) grant funds through three different applications. The purpose of NSP is to help preserve neighborhoods by eliminating the blight associated with the foreclosure and abandonment of residential properties. As of March 1, 2012, the City has successfully utilized the NSP funds to facilitate acquisition, rehabilitation and resale of 53 single- family homes and condominiums and has provided seven down payment assistance loans. Additionally, funds were provided to also facilitate the purchase of a foreclosed vacant lot on which a new 36 unit apartment building is being constructed, and the acquisition of two foreclosed multifamily buildings with a total of 40 units. As part of the application and the award of NSP2 funds, a minimum production goal of 100 units was required. Due to higher unforeseen acquisition and rehabilitation costs, additional funds will be required for the City to achieve that goal. The proposed Foreclosed Homes Acquisition Program (Exhibit 1) has been designed to augment the current NSP efforts and will ensure achievement of the 100 unit goal. The program will be operated in the Target Geography Area established for the NSP2 grant. This new program will be operated in accordance with existing NSP2 guidelines. The only exception from NSP requirements relates to household incomes and resale restrictions. Resale of homes purchased through the new program will be restricted to households with incomes at or below 80% of the area median (AMI) as determined by the U. S. Department of Housing and Urban Development. Current NSP programs allow up to 120% AMI. As of December 1, 2011, maximum household incomes as adjusted for household size were as follows: Household Size Income Level Household Size Income Level One $53,950 Five $83,250 Two $61,650 Six $89,400 Three $69,350 Seven $95,550 Four $77,050 Eight $101,750 Maximum sales prices will be restricted to ensure affordability to such households. As of December 1, 2011, those prices were as follows: One Bedrm Two Bedrm Three Bedrm Four Bedrm Five Bedrm Household Size 2 Persons 3 Persons 4 Persons Five Persons Six Persons Low $164,200 $184,000 $199,300 $213,400 $228,100 Finally, to the extent participating households want to sell their homes, they will be required to resell them to other low income families at an affordable sale price. This resale restriction will remain for a period of fifteen years after the transfer of title to the purchasing family. 29C-2