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Quarterly Report Housing Division <br />Projects and Activities (Jan — Mar 2014) <br />June 3, 2014 <br />Page 2 <br />Rehabilitation Loan Underwritinq and ADDroval Process <br />Staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to <br />ensure compliance with program guidelines and requirements established by the funding source. <br />In addition, staff conducts an inspection of the property, prepares a work write up to determine <br />rehabilitation work to be performed, and develops a budget for the work. Due to the complex <br />funding requirements, applicants may be in underwriting several months. The length of time in <br />underwriting is largely determined by the applicant's timely submittal of the necessary paperwork. <br />Once approved, staff prepares all necessary loan documents, makes arrangements for <br />execution, and reserves the required loan funds. <br />Construction Process <br />During this phase, homeowners receiving rehabilitation loans are guided through an open <br />selection of contractors to complete the work on their homes. Each homeowner is given a list of <br />contractors that have been screened by staff for license and insurance requirements. However, <br />homeowners are allowed to select any contractor that 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 />At the end of this quarter, there were three homeowner rehab projects out to bid and five under <br />construction. <br />Homeownership Marketing and Approval Process <br />In January, the City began marketing a new down - payment assistance program. Outreach <br />included: Councilmember Sarmiento's newsletter, water bill insert, Nixie press release, Miniondas <br />newspaper article, interview with Orange County Register, contact with community partners and <br />Homebuyer Counseling Centers. Staff presented six workshops which were attended by 147 <br />individuals, the majority being Santa Ana residents. The first workshop was covered by <br />Telemundo and NBC news broadcasts. <br />Staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program <br />guidelines and requirements established by HUD. Applicants must meet established income <br />requirements, complete an eight -hour pre - purchase counseling program from a HUD - approved <br />agency, be pre - qualified for a first mortgage and have a minimum of three percent of the <br />purchase price from their own savings. Other HUD requirements apply, including a current <br />maximum sales price of $390,000 for a single family home or condo or $443,000 for a newly <br />constructed condo or home. Additionally, the property needs to be in good condition and pass an <br />inspection by staff. Staff received a significant interest in the program and is anticipating an <br />increase in the number of applications received and approved over the next few months. <br />19C -2 <br />