29C - AMENDMENTS ADD FORECLOSED HOMES

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FORECLOSED HOMES ACQUISITION PROGRAM Introduction The City of Santa Ana seeks to ensure that its neighborhoods are attractive and well maintained. To that end, the City has applied for and received $10 million in federal Neighborhood Stabilization Program 2 (NSP2) grant funds. These funds may only be used for the acquisition, rehabilitation and resale of foreclosed-upon residential properties located in the City's NSP2 target area (Attachment 1). This Foreclosed Homes Acquisition Program (Program) was created to utilize federal HOME Program and Community Development Block Grant Program funds to supplement the NSP funds. Similar to NSP2, the purpose of the Program is to facilitate acquisition, rehabilitation and resale of foreclosed and abandoned homes and to operate in compliance with the requirements of the NSP2 Program. Existing contracts and procedures established by the City for implementation of its NSP2 grant will also be maintained. When necessary, and when circumstances allow, HOME or CDBG funds allocated for this program may be used in conjunction with NSP funds. In the event of any conflict between NSP regulations and the City's procedures and HOME regulations, the more restrictive will prevail. With certain exceptions called out and treated in the governing statutes, NSP funds have the same regulatory requirements as CDBG. Eligible Use of Funds HOME and CDBG funds may be used to meet the costs of acquisition, rehabilitation, soft costs and developer fees associated with these transactions. Eligible Properties Vacant and foreclosed residential units or parcels suitable for residential development that are located in the target area established by the City for its NSP2 grant are eligible for this Program. When HOME funds are used, the HOME investment per unit shall not exceed the maximum per unit subsidy limit as periodically published by the U. S. Department of Housing and Urban Development (HUD). Whenever HOME funds are used, the value of the property after rehabilitation may not exceed 95% of the area median purchase price for that type of housing. The after-rehabilitation value estimate will be completed prior to investment of the HOME funds. In accordance with NSP requirements, homes must be acquired from the foreclosing party at a minimum discount of 1 % off the as-is appraised value. Eligible Homebuyers To be eligible whenever HOME or CDBG funds are used alone or in conjunction with NSP funds to facilitate the activity, the purchasing household must qualify as low- income. The City will use Section 8 procedures for evaluating household compliance with applicable HOME or CDGB income limits. Effective December 1, 2011, maximum household incomes as adjusted for household size were as follows: Exhibit 1 29C-5