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Quarterly Housing Projects & Activities September 4, 2012 Page 3 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. At the end of the fourth quarter, there were seven new construction projects with 206 units and five homeowner rehab projects under construction. 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 fourth quarter, the principal balance was $83,041,465. This is comprised of 486 loans of which 430 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $387,976 in payments of principal and interest during the quarter: Table 2- Portfolio RPVPnijP_ Residual Receipts Payments $343,908 Amortized Loan Payments $ 44,068 Total $387,976 As part of the requirements for these funds, staff must monitor the owner-occupancy for single family homes that have received loans and the code compliance of units in rental projects with long-term affordability covenants. During the fiscal year to date, 136 letters have been sent to homeowners to verify that they continue to occupy the home as their primary residence. Four homeowners have been found not to be in compliance with their loan terms since they no longer live in the homes. The City has begun the process to obtain repayment. During the fourth quarter, staff also conducted code compliance inspections for 36 units in two projects containing a total of 152 units. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet City code requirements. Owners of buildings found not to be in compliance are given a deadline by which all repairs must be made and staff conducts re-inspections to ensure that repairs have actually been made. DEVELOPMENT PROJECTS NSP 1 Program The federal Neighborhood Stabilization Program (NSP) is intended to target and stabilize communities hardest hit with foreclosures. To date, the City has received all three NSP awards for which it was eligible. The first award (NSP 1) came through a noncompetitive process in the amount of $5,795,155. Under its terms, all grant funds must be obligated by September 5, 2010 and expended by March 26, 2013. In addition, NSP grantees must expend at least 25% of the funds on households that have very low-incomes. The City has exceeded all of these requirements. All of our NSP 1 grant funds were obligated by August of 2010 and by the end of the 19D-3