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HomeMy WebLinkAbout80B - NEIGHBORHOOD STABLIZATION PROGRAMREQUEST FOR COUNCIL/ AGENCY ACTION MEETING DATE: NOVEMBER 17, 2008 TITLE: FEDERAL NEIGHBORHOOD STABILIZATION PROGRAM ,/ '~ ~ '~ -- CITY MANAGER EXECUTIVE DIRECTOR RECOMMENDED ACTION CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Re~commerided ^ As Amended ^ Ordinance on 1st Reading ^ Ordinance on 2nd Reading ^ Implementing Resolution ^ Set Public He<~ring For CONTINUED TO FILE NUMBER 1. Approve a substantial amendment to the 2008-2009 Annual Action Plan and authorize its submittal to the U.S. Department of Housing and Urban Development. 2. Authorize the City Manager to execute a Neighborhood Stabilization Program application for grant funds in the amount of $5,795,155. 3. Approve an Appropriation Adjustment recognizing $5,795,155 in Neighborhood Stabilization Program grant funds and appropriating the same. 4. Adopt Neighborhood Stabilization Program guidelines. 5. Authorize the issuance of a Request for Proposals for program intermediaries. 6. Authorize the City Manager, or his designee, to negotiate and enter into any necessary contracts and/or agreements to implement the Downpayment Assistance Program. 7. Adopt a resolution establishing the Bank Owned Property Maintenance Program. 80B-1 Federal NSP November 17, 2008 Page 2 COMMUNITY REDEVELOPMENT AGENCY ACTION 1. Adopt Neighborhood Stabilization Program Mortgage Assistance Program. 2. Authorize the Executive Director to execute all documents relating thereto. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its Regular Meeting of November 4, 2008, by a vote of 5:0 (Reyna absent), the Community Redevelopment and Housing Commission approved the following: Recommended that the City Council: 1. Approve a substantial amendment and authorize its submittal to Urban Development. to the 2008-2009 Annual Action Plan the U.S. Department of Housing and 2. Authorize the City Manager to execute a Neighborhood Stabilization Program application for grant funds in the amount of $5,795,151. 3. Approve an Appropriation Adjustment recognizing $5,795,151 in Neighborhood Stabilization Program grant funds and appropriating the same. 4. Adopt Neighborhood Stabilization Program guidelines, including that military veterans and disabled persons, along with those who live and work in the City, be given priority; that open space be considered as a priority option under Program 5; and that the category of the number of households to be assisted by income be amended. 5. Authorize the issuance of a Request for Proposals for program intermediaries. 6. Authorize the City Manager, or his designee, to negotiate and enter into any necessary contracts and/or agreements to implement the Downpayment Assistance Program. Recommended that the Community Redevelopment Agency: 1. Adopt Neighborhood Stabilization Program Mortgage Assistance Program. 80B-2 Federal NSP November 17, 2008 Page 3 2. Authorize the Executive Director to execute all documents relating thereto. DISCUSSION The Housing and Economic Recovery Act of 2008 (HERA) appropriated $4 billion to be distributed to states and localities for the redevelopment of abandoned and foreclosed homes. The grant program funded through this appropriation is referred to as the Neighborhood Stabilization Program (NSP). Under the terms of the funding distribution formula established by the U. S. Department of Housing and Urban Development (HUD), Santa Ana has been allocated $5,795,151. The purpose of the program is to stabilize neighborhoods that have been impacted by foreclosed or abandoned properties. Congress did not want this program to be perceived as a bank bailout; therefore, HUD is requiring that the overall portfolio of acquisitions be discounted 15 percent of the appraised value. These funds may not be used to assist homeowners to avoid foreclosure; rather, the property must have gone through a foreclosure action, or has been abandoned. HUD based its calculation for the distribution of NSP funds on the number and percent of foreclosures, subprime mortgage loans and default or delinquencies in a given area. The funds must be contractually obligated within 18 months of approval of the application. Currently, Santa Ana has approximately 1,464 foreclosed properties and 1,126 properties with a Notice of Default. The data indicates that the areas of greatest need for single-family structures are aggregated in the central core of the City (Exhibit 1). On the other hand, the areas of greatest need for condominiums are concentrated in outlying census tracts. The regulations identify five allowable programmatic uses for the purchase of foreclosed or abandoned homes. 1. Establishment of financing mechanisms such as soft seconds and shared equity loans. 2. Purchase and rehabilitation for the purpose of selling, renting or redeveloping. 3. Establishment of a land bank for the purpose of assembling, managing and ultimately disposing of vacant land in a manner that 80B-3 Federal NSP November 17, 2008 Page 4 will help stabilize neighborhoods redevelopment of urban land. 4. Demolition of blighted structures. and encourage re-use or 5. Redevelopment of demolished or vacant properties to be used for a public purpose and/or new construction. Funds may be used to benefit households with incomes up to 120 percent of area median income, but a minimum of 25 percent of these funds, or $1,448,787, must be spent on activities benefitting very low-income households (50 percent AMI). In order to receive its funds, the City must adopt a Substantial Amendment to its 2008-2009 Consolidated Plan Annual Action Plan (Exhibit 2). The Annual Action Plan is the document whereby the City formally applies to HUD for its annual federal grant allocations (CDBG, HOME, ESG, and HOPWA) and describes how those grant funds will be used. The proposed NSP programs, budgets, target goals and locations are listed below. The program guidelines are identified in Exhibit 3. Prog. Program Budget Goal Location No. (# of Homes) 1 Downpayment Assistance Priority Program $400,000 20 Area Acquisition and 2 Rehabilitation - Priority Single Family Homes $2,015,636 40 Area Acquisition and 3 Rehabilitation - Condominiums and Historic Homes $700,000 10 Citywide Acquisition and 4 Rehabilitation - Rental Housing $1,800,000 24 Citywide CDBG rJ Eligible Redevelopment $300, 000 1 Census Tracts n/a Admin $579,515 n/a n/a Total NSP Grant $5,795,151 80B-4 Federal NSP November 17, 2008 Page 5 Further, a Redevelopment Agency funded Mortgage Assistance Program is proposed in the form of a silent second in order to create more affordable units and provide additional incentives for the homebuyer. The guidelines of the loan program are described in Exhibit 3. The Downpayment Assistance Program (Program No. 1) is intended for those properties that are foreclosed or abandoned but do not need rehabilitation. This program will be managed by City staff who will work directly with the interested and eligible homebuyer and or realtors. The activities related to Program Nos. 2, 3 and 4 will be undertaken by either non-profit or for-profit intermediaries. The entities will be procured through a Request for Proposal (RFP) that will be distributed to a broad range of consultants, non-profits, developers, etc. The purpose of the RFP is to solicit and select intermediaries to provide the complete range of services that will be necessary for the successful implementation of Programs 2 and 3. They will be selected based on their experience, resources and financial capacity to effectively rehabilitate and sell properties to eligible homebuyers. In an effort to leverage the NSP funds, the intermediaries will be required to have a line of credit available for the acquisition component. While it is foreseeable that one entity may have all these qualifications, the City will also accept partnerships between entities to meet the required services. The intermediaries selected to implement the Rental Program (Program No. 4) will need to demonstrate their capacity and experience in the acquisition, rehabilitation and long-term management of affordable rental housing. In addition, they must have experience in leveraging existing state and federal funds for affordable housing. Those selected will be the best qualified to implement the program within the legislated timeframe. The Rental Properties Program will meet the very low-income (50 percent Area Median Income) obligation. It is anticipated that up to three intermediaries will be initially selected in order to ensure timely implementation of the program. Thresholds will be identified for funding commitments to be made within relatively short time periods (say six months) from contract execution. Should they be unable to perform, then the City will have the ability to terminate those contracts and select a new intermediary that has been pre-qualified through the RFP process. We believe this to be the most expeditious way in which to commit the program funds and achieve the best results for the neighborhood where the property is located. The 80B-5 Federal NSP November 17, 2008 Page 6 RFP will be issued shortly after City Council approval of this action, and the recommended intermediaries will be presented for consideration in early 2009 once we receive confirmation from HUD that they have approved the program application. The Redevelopment Program (Program foreclosed or abandoned properties or other open space, or for redeye with NSP and CDBG requirements. itself, a subsequent action will be Redevelopment Agency. No. 5) allows the City to acquire suitable to be redeveloped as parks lopment purposes that are consistent Should such an opportunity present presented to the City Council and/or To further stabilize neighborhoods that have been negatively impacted by foreclosed properties, the City is implementing an additional program authorized through state legislation. SB 1137, which went into effect a few months ago, is designed to help homeowners whose homes are at risk of foreclosure. One small part of SB 1137 allows cities to administratively fine a bank up to $1,000 per day for failure to maintain residential property acquired through foreclosure. SB 1137 defines "failure to maintain" as: o failure to maintain exterior of building, including but not limited to, excessive foliage growth that diminishes the value of surrounding properties, o failure to take action to prevent trespassers or squatters from remaining on the property, or o failure to take action to prevent mosquito larvae from growing in standing water or other conditions that create a public nuisance. SB 1137 requires the City to give the bank 30 days notice to correct its violations (less if the violation relates to health and safety). If the violation is not corrected, the City can fine the bank up to $1,000 per day until the violation is remedied. The bank is entitled to an administrative hearing on the amount of the fine. A public notice was published on November 1, 2008, in the Orange County Register, La Opinion and Nguoi Viet News indicating that the draft Neighborhood Stabilization Program substantial amendment is available for review for the required fifteen days. In addition, it was posted on the City's website. ~:~i Federal NSP November 17, 2008 Page 7 FISCAL IMPACT By submitting this substantial amendment to its 2008-2009 Annual Action Plan and grant agreement, the City of Santa Ana will be eligible to receive up to $5,795,151 in grant funds from the U.S. Department of Housing and Urban Development. Funds for the Mortgage Assistance Program are available in the Tax Increment Housing Set-Aside Fund in the amount of $1,450,000 (account no. 507-936-6951). APPROVED AS TO FUNDS AND ACCOUNTS: ~~~ Shelly Landry-Bayle Housing Manager Community Development Agency Francisco Gutierrez ~~ Executive Director Finance & Management Services Agency CJN/SLB/mlr 111'708 JT CC-CRA Federal NSP 80B-7 NSP Priority Area Copyright 2008. All Rights Reserved Exhibit 1 GpS10M a~ QJ 9t ~ ~ ~N o.eo _~'_ r ~i~ NEIGHBORHOOD STABILIZATION PROGRAM GUIDELINES Program Level of Terms Max. Loan Location Affordability 1 Down Payment Assistance 80 %AMI - • 30 year deferred payment loan; 0% Interest Up to the lesser Program 120% AMI • Due upon sale of 10% of sales Priority Area price or $40,000 2 Acquisition and Rehabilitation - 80 %AMI - Terms for Intermediaries - n/a Single Family Homes 120% AMI • Deferred loan payable at sale; 0% interest • Sales price o Low: 30% of 65%AMI (max. HH income 80%AMI) o Moderate: 30% of 100%AMI (max. HH income 80 - 120%AMI) • Lease to own option Priority Area Terms for Homebuyers - Difference • Eligible Homebuyers between FMV o Low: up to 80% AMI and affordable o Moderate: 80% to 120% AMI sales price • Silent Second; 3% interest rate principle only due after 45 years • 45 year Recapture/resale restrictions 3 Acquisition and Rehabilitation - 80 %AMI - Same as Acquisition and Rehabilitation -Single Family Same as Program Condominiums and Historic 120% AMI Homes Program No. 2 Citywide Homes 4 Acquisition and Rehabilitation - 30 %AMI - • 55 years affordability restrictions n/a Rental Housing 50% AMI • 0% interest rate Citywide • Rents affordable to households earning between 30%-50% AMI 5 Redevelopment n/a n/a n/a CDBG Eligible Census Tracts Definitions: AMI =Area Median Income HH =Household FMV =Fair Market Value EXHIBIT 3 DRAFT Neighborhood Stabilization Program Substantial Amendment FY 2008-2009 Prepared by City of Santa Ana Community Development Agency EXHIBIT 2 80B-10 DRAFT NSP GRANT SUBMISSION TEMPLATE & CHECKLIST NSP grant allocations can be requested by submitting a paper NSP Substantial Amendment or a form under the Disaster Recovery Grant Reporting (DRGR) system. This template sets forth the suggested format for grantees under the NSP Program. A complete submission contains the information requested below, including: (1) The NSP Substantial Amendment (attached below) (2) Signed and Dated Certifications (attached below) (3) Signed and Dated SF-424. Grantees should also attach a completed NSP Substantial Amendment Checklist to ensure completeness and efficiency of review (attached below). 80B-11 DRAFT THE NSP SUBSTANTIAL AMENDMENT Jurisdiction(s): City of Santa Ana, CA NSP Contact Person: Shelly Landry-Bayle Address:20 Civic Center Plaza, M-37 Jurisdiction Web Address: Santa Ana, CA 92701 http://www.santa-ana.org/cda/default.asp Telephone (714) 667-2287 Fax: (714) 667-2225 Email: SLandry-Bayle@santa-ana.org A. AREAS OF GREATEST NEED Provide summary needs data identifying the geographic areas of greatest need in the grantee's jurisdiction. Response: The NSP Program requires that jurisdictions give priority emphasis to areas of greatest need, including those: with the greatest percentage of foreclosures; with the highest percentage of subprime mortgages; and those likely to face a significant rise in the rate of home foreclosures. In order to meet this requirement, staff obtained city-wide data on residential properties, owner-occupied residential properties, foreclosures, subprime mortgages, and recorded notices of default from databases maintained by professional real estate firms. All data was collected in October of 2008. The total number of foreclosures, subprime mortgages, and notices'ofdefault were identified for each census tract. Each total number was divided by the number of single family structures in that particular census.. tract to get apercentage. For example: ~~}~CL~ t~ t7~Si?T;tF~ }'~ .=it."t~S Each census tract was then assigned a ranking number for each of its categories according to its corresponding percentage. An average was taken of each census tract's three ranking numbers and an overall ranking number was assigned based on that average ranking number. Census tracts were then sorted by overall ranking number to determine their relative risk of increased rate of foreclosures or abandoned residences. The relative frequency of recorded Notices of Default was deemed by the City to be a reliable predictar of future foreclosures and so serves to meet HUD's requirement that the likelihood of significant. future increases in foreclosure be taken into account. The three attached maps shows the distribution of foreclosed properties, those with subprime mortgages and the City's priority needs areas. Condominium units were excluded from this analysis because they are disproportionately impacted by foreclosure, and are concentrated in a relatively small number of outlying census tracts. Condominiums represent approximately 9 percent of the City's residential units while single family residences represent approximately 45 percent. Including them in the analysis would have had the effect of virtually eliminating a significant percentage of single family residences from coverage by the City's programs. Conversely, historically significant homes are small in number and widely scattered, but have a particular importance to the City's cultural life. The City will create a separate program 2 80B-12 DRAFT for condominium units and historically significant homes to insure that NSP funds can be used to acquire and rehabilitate such residential units. 3 80B-13 NSP Priority Area f; ,.. ~ { Legend ~~ ~ ~,.La x7,r e::~ ,.... Priority Area £ ~,. .,~,,,~,~„~,. CCrISUS Trails 0 ~ -.a { ~ rxr nan m .~ tuQ ~D ~ - k tx~ ~.« rat r., a 6 naw ~~ ~~ _ mr ~.~ i .; ~,. ~zrr +zrm 4 taut ~aat taw ~i eau taw ~ 6 on - _ was i rar ws t r. Rat nc~r :rk.c:a tar.« w.Q } t iellQ co wx~ x.~ G ttan ~~ ~ ~ ~+ twa ti +n 6 M'a ` ~ nast ~ F!S! 1 rx~~ a _.,,,,~~ rw,n _ ra» user... ,, '~Y, t1YM tN ~{ / ,~ 4. Q~~~~. 1 NIIN Copyright 2006. M Rights Reserved 4 80B-14 Foreclosures (Single Family, Multiple Family, 8~ Condominiums) f'~ • ~r~,., Legend ~-. r S~x~e Famiy Residence :'"rta aws,r n~.r ' t ~ AAuttiple Famiy Residence ~ ~. .ti i'f h ~. ~~ ~•• ti • ~,~, ~w.~ ~ Condominium L_- • . ~•a';:,r` ~ • ~ •~ • ~,-. r 1 i~~~ • r• ?;~ j ~ • • ~• -. ~ •' as . ~ Z r' ~rF ~ • . . ~ • r ~ ~ A •• • f ~ r • • ~ • • ~ ~ f ~ • w • r r 1 r • ~. S •• ~ ~ ~ ` • ;4 111 ~ • • w ~ ~• : i 1 1? S' ~ •• • • • ~ • I i .T d • - ., :u..3z~1 J •1 (~ r •f • r ~ ~ ~ .• ~ • • ~ •~ -i i 'lti r h '~ S a• . •• r sree~ f •.. • ' j • •• ~ f4 ••~~i •• • •~ ~a 4 • ~ m ws~ w• • • ~ p ~ ! Mr~ ~ • r ~. • • j •++ •~ • •• •f ~ • • ~ • • • N . • _ a ~ • a . • ~ • f r • ~ ~••: a w a w • •• ~ i x • -~• ~~ K w - S ! ~_ ~ • •~ i • • w..nnwr a.n • i 4 ~ .:r w:~m:. air " :, • • • ~ 6 • ~~'4e. ~ IV ~~` I `!~! _ ,i O.Gf f.56 t.00 NINE CopyriyM 200i.14~ Rgh~ Reserved 5 80B-15 Subprime Loans (Single Family Residence 8~ Condominiums `,, ,~, ; f f Legendrutaaa:.,r ai.n • + •• ~ ~j •r. f; • • • ~ • ~• • ••~ ~ SIr1tJ~C F81TMry RCSIdEx1C6 ~ '• f~y • • a •* • • a +• c,~auaw.• • ~ • • ~ COr1dOr1161M~T1 '. •Tlrl , • + `'~ : ~ ~• • + j • • r , ' • • ~ • • •ti ~• • •i r ~ •• ~ r ~ : ~ • ~ ~• • a a • • • a • . ' . • • + ^~ • ~ I ^• ~•• ~ • • • • • ~ . ~ ' • • • • • • • • S • •• i ~ ~• • a/ Z • ~ • ^ ~ssr M • ~ • ii ti ~-~ ~~ • • .. • • • .. ~ + L + •• 1 ~• ~• • w ~ i . ar: :rrt ~ ~ • • ~ + a • r •a • • • = • ^ • •• f M •••r$ • • r • r ~ t~ • Z ~ ~ •i •~ • ti ~• ~ r 1 • • • • • •~ ~ ~ • ~ s ~ • ~ • • •` •.• co wz~ x; 7 • a • •^ • • • ~ ~ • • ~ r + • • t 4 ~ 6 a • • ~ •t ~+ ~ • : ~ t r . • • r , v WULTrA snm - • ~ • • • ~ ~ n •• 1 • 9. r,:' I V y V~ 1r qq '~~ 0.00 0.50 1.60 ~i' Copyright 2004. A0 Riphts Reserved 6 80B-16 DRAFT B. DISTRIB UTION AND USES OF FUNDS Provide a narrative describing how the distribution and uses of the grantee's NSP funds will meet the requirements of Section 2301(c)(2) of HERA that funds be distributed to the areas of greatest need, including those with the greatest percentage of home foreclosures, with the highest percentage of homes financed by a subprime mortgage related loan, and identified by the grantee as likely to face a significant rise in the rate of home foreclosures. Note: The grantee's narrative must address these three stipulated need categories in the NSP statute, but the grantee may also consider other need categories. Response: As listed and described later in this Substantial Amendment, the City of Santa Ana is proposing to create and implement six programs using NSP funds. The table below shows the amounts of NSP funds to be budgeted for each of the six programs. Prog. No. Program Budget Location 1 Downpayment Assistance Program $400,000 Priority Area 2 Acquisition and Rehabilitation= Single Family Homes $2,015,636 Priority Area Acquisition and Rehabilitation - 3 Condominiums and Historic .Homes $700,000 Citywide 4 Acquisition and Rehabilitation - Rental Housing $1,800,000 Citywide CDBG 5 Eligible Census Redevelopment $300,000 Tracts 6 Admin $579,515 n/a Total: $5,795,151 For Programs two, three, and four, the City and the intermediaries it selects to help implement these programs will obligate NSP funds exclusively for residences located in census tracts identified by the City as its areas of greatest need. These programs will be undertaken by either non-profit or for-profit intermediaries. Entities will be procured through a Request for Proposal (RFP) process that will be distributed to a broad range of consultants, non-profits, developers, and others with significant skills in the administration of housing programs. For programs two and three, successful candidates will be those with the experience, resources and financial capacity necessary to buy, 7 80B-17 DRAFT rehabilitate and sell residential properties to income qualified homebuyers. In order to leverage the NSP funds, the successful candidates will be required to have established lines of credit they can utilize for the acquisition component of the programs. For program four, rental housing acquisition and rehabilitation, the successful candidates will be those with significant experience in the acquisition, rehabilitation and long-term management of affordable rental housing. In addition, they will have a demonstrated record of success in obtaining and using multiple funding sources for affordable rental projects. This program will be used by the City to meet its very low-income obligation under NSP regulations. In order to incentivize intermediaries to move as quickly as passible, the City anticipates selecting more than one intermediary for each of these three programs. Selected intermediaries will be given limited periods of time, perhaps no more than six months, to obligate program funds. Should they fail to meet their deadlines, their NSP fund reservations maybe cancelled and transferred quickly to other, prequalified intermediaries. The City believes this approach is essential to meeting the eighteen month deadline for obligating NSP funds. Program 1 Through program one the City will make no interest rate, down payment loans available to households at or below 120 percent of area median income. These loans will be deferred for thirty years. They will be due and payable at that time or such time that the home is sold. The maximum loan amount will be 10 percent of the sales price or $40,000, whichever amount is lower. Borrowers. will be required to prequalify for conventional first mortgage loans, and loan amounts. will be restricted to the amount necessary to purchase the home. This program will' be managed by City staff who will work directly with interested homebuyers and realtors. Program 2 The second program, Acquisition and Rehabilitation of Foreclosed Single Family Homes, wi1F seek to facilitate acquisition and rehabilitation of abandoned or foreclosed homes and their sale to low- and moderate-income households through intermediaries selected through the RFP process, as stated above. This program will be primarily operated in the City's priority areas. Program 3 The third program,-Acquisition and Rehabilitation of Condominium Units and Historically Significant Homes, will be operated on a citywide basis. Condominiums represent approximately 9 percent of the City's residential units while single family residences represent approximately 45 percent. Including them in the needs analysis would have had the effect of virtually eliminating single family residences from coverage by the City's programs. Conversely, historically significant homes are small in number and widely scattered, but have a particular importance to the City's cultural life. The City will create a separate program for condominium units and historically significant homes to insure that NSP funds can be used to acquire and rehabilitate such residential units. 8 80B-18 DRAFT Program 4 The fourth program seeks to use NSP funds to acquire and rehabilitate foreclosed or abandoned rental housing. After acquisition and rehabilitation, such housing will offer code compliant units, all of which will be restricted to very low-income households at rents affordable to such households. There is a citywide shortage of rental units that are both code compliant and affordable to very low-income households, and a scarcity of rental properties available for sale that can be used to reduce this shortage. As a consequence the City has determined that the special need area for this program is citywide, and it will operate this program on a citywide basis. Program 5 The fifth program seeks to acquire properties suitable for redevelopment as public facilities or new construction that will serve areas in which at least 51 percent of the population are of low or moderate income. This program will be operated exclusively within the City's CDGB eligible census tracts that also meet NSP requirements. Program 6 The sixth program covers the City's use of the 10 percent of NSP funds set aside for administration. 9 80B-19 DRAFT C. Definitions and Descriptions (1) Definition of "blighted structure" in context of state or local law. Response: In accordance with Section 33031 of the California Redevelopment Law, the City of Santa Ana will define blighted structures in the following way: Buildings in which it is unsafe or unhealthy for persons to live or work. These conditions maybe caused by serious building code violations, serious dilapidation and deterioration caused by long-term neglect, construction that is vulnerable to serious damage from seismic or geologic hazards, and faulty or inadequate water or sewer utilities. (2) Definition of "affordable rents." Note: Grantees may use the definition they have adopted for their CDBG program but should review their existing definition to ensure compliance with NSP program -specific requirements such as continued affordability. Response: For purposes of the NSP Program, the City of Santa Ana will define affordable rents in a manner consistent with the requirements of the federal HOME Program for very low income rents: A rent that does not exceed 30 percent of the adjusted monthly income of a family whose annual. income equals 50 percent of the median"income for the area as determined by the U.S. Department' of Urban Development, with adjustments for household size and numbers of bedrooms in the unit. Such rents must be reduced in accordance with a reasonable allowance for tenant paid utilities. (3) Describe how. the grantee will ensure'continued affordability for NSP assisted housing. Response: As a condition for the receipt of NSP funds for either owner occupied or rental housing units, the City of Santa Ana'wll require recordation of deeds of trust and of enforceable covenants stipulating both the necessary period of affordability, and also reporting requirements that will enable the City to determine if the affordability requirements are being met. For rental property the required period of affordability will be fifty five years and will run with the land` for that period. For owner occupied property the required period of affordability will be thirty or forty five years depending on the program utilized. (4) Describe housing rehabilitation standards that will apply to NSP assisted activities. Response: NSP assisted housing will be brought into compliance with all applicable codes, standards and regulations (local, state and federal), including the Municipal Code of the City of Santa Ana, the 2007 California Building Codes, and the Section 8 Minimum Housing Quality Standards developed by HUD. 10 80B-20 DRAFT Lead-based paint hazards will be evaluated, controlled and disclosed in accordance with the guidelines developed by HUD with the assistance and input of the CDC, EPA and OSHA. Homes that are over fifty years old will be evaluated for their historic significance in a manner consistent with federal laws. If the home is historic, improvements will comply with all applicable historic rehabilitation standards. D. LOWINCOME TARGETING Identify the estimated amount of funds appropriated or otherwise made available under the NSP to be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50 percent of area median income: $1,800,000. Note: At least 25% of funds must be used for housing individuals and families whose incomes do not exceed 50 percent of area median income. Response: The City of Santa Ana will budget $1,800,000 for its Program 4: Acquisition and Rehabilitation of Foreclosed or Abandoned Rental Property. This Program will exclusively serve households with income at or below 50 percent of area median. The City's total grantamount willbe $5,795,151, and the Program budget of $1.8 million equals 31% of that total. E. ACQUISITIONS & RELOCATION' Indicate' whether grantee. intends to demolish or convert any low- and moderate-income dwelling units (i.e., <80p/o of area median income). If so, include: ~ The number of low- and moderate-income dwelling units-i.e., < 80% of area median'ncome-reasonably expected to be demolished or converted as a direct result ofNSP-assisted activities. • The number of NSP affordable housing units made available to low- ,moderate-, and middle-income households-i.e., <_ 120% of area median income- reasonably expected to be produced by activity and income level as provided for in DRGR, by each NSP activity providing such housing (including a proposed time schedule for commencement and completion). • The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income. Response: The City does not intend to demolish or convert any occupied dwelling units. It will take action solely on vacant and foreclosed properties. NSP guidelines specifically exempt 11 80B-21 DRAFT NSP funded projects from the one for one replacement requirements that would otherwise apply. F. PUBLIC COMMENT On November 1, 2008 the draft Substantial Amendment and SF424 were made available to the public on the City's website at the following web address: http://www.santa- ana.org/cda/default.asp. Additionally, the documents were made available at the following four locations: Housing Department, 20 Civic Center Plaza, 3rd Floor; Community Development Agency, 20 Civic Center Plaza, 6`" Floor, Office of the Clerk of the Council, 20 Civic Center Plaza, Room 809, and the Main Public Library, 26 Civic Center Plaza, Santa Ana, California. Availability of the documents and of the City Council's intent to take action on November 17, 2008 was made known by publication on November 1, 2008 in the Orange County Register, a newspaper of general circulation. Publication in La`Opinion and Nguoi Viet, newspapers published in Spanish and Vietnamese respectively, occurred on November 4, 2008. This was the earliest date possible. Provide a summary of public comments received to the proposed NSP Substantial Amendment. Response: To be inserted at a later date 12 80B-22 DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Program 1: Down Payment Assistance to Buyers of Foreclosed or Abandoned Single Family Residences (2) Activity Type: (include NSP eligible use & CDBG eligible activity) NSP Eligible Use: Financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties (HERA, 2301(c)(3)(A). CDGB Eligible: Direct homeownership assistance (24 CFR 570.201(n)) Activity (3) National Objective: (Must be a national objective benefiting low, moderate and middle income persons, as defined in the NSP Notice-i.e:,''_< 120% of area median income). LMMH: Homeownership assistance providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income. (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to income-qualified persons; and whether funds used for this activity will be used to meet the low income housing requirement for those below 50% of area median income. Through this activity the City will make no interest rate, `down payment loans available to households at or'below 120 percent of area. median income. These loans will be deferred for thirty years. They will be due and payable at that time or such time that the home is sold. The maximum loan amount will be 10 percent of the sales price or $40,000, whichever amount is lower. Borrowers will be required to prequalify for conventional first mortgage loans, and loan amounts ~~~ill be restricted to the amount necessary to purchase the home. This program will be managed by City staff who will work directly with interested homebuyers: and realtors. As demonstrated in Section A-of the Substantial Amendment, abandoned and foreclosed upon homes are found in most of the City's census tracts. However, the City will insure targeting through its strategy of defining the top twenty of its census tracts in terms of their risk of abandonment or foreclosure, as its priority areas. The City will insure that this activity benefits income qualified households by limiting eligibility to those with incomes at or below 120 percent of area median income. Given the significant upfront and long term costs associated with homeownership the City does not anticipate that this program will serve any very low-income households, and it will not deed restrict any homes purchased through this program to occupancy by very low- income households. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) 13 80B-23 DRAFT The program will be operated exclusively within the City's priority areas as described in Section A of this Substantial Amendment. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median. income and below, 51-80 percent, and 81-120 percent). Total number of units to be assisted: 20. Assumes average down payment assistance loan of $20,000. Households to be assisted by income category: Below 50 percent of area median income: 0 Between 50 percent and 80 percent of area median income: 3 Between 80 percent and 120 percent of area median income: 17 Total households to be assisted: 20 (7) Total Budget: (Include public and private components) NSP Funds: $400,000 Private Mortgage Funds: $4,600,000. Assumes $20,000 average down' payment assistance loan, $250,000 average purchase price. Other potential funding sources include $325,046 in HOME Program ADDI funds. (8) Responsible Organization: The City of Santa Ana Community Development Agency, Housing Division, has extensive experience managing affordable housing. funds. and programs. The Division has expertise in the areas of housing rehabilitation,' finance, development, rental assistance and grant management. Ms. Shelly Landry-Bayle Housing Manager Community Development Agency of the City of Santa Ana 20 Civic Center Plaza, M-37 Santa Ana, CA 92701 Telephone: (714) 667-2287 Facsimile (714) 667-2225 Email: SLandry-bayle@santa-ana.org (9) Projected Start Date: February 1, 2009 or such other date upon which grant funds are received by the City of Santa Ana (10) Projected End Date: January 31, 2014 (5 years) (11) Specific Activity Requirements For acquisition activities, include discount rate: • The required discount rate for all home purchases will be consistent with the regulatory requirement. 14 80B-24 DRAFT For financing activities, include: • Range of interest rates The interest rate will be zero. For housing related activities, include: • Duration or term of assistance; The term of the City's loans will be thirty year deferred. • Tenure ofbeneficiaries-rental or homeownership; • Tenure will be homeownership. • A description of how the design of the activity will ensure continued affordability. The City will use a recapture mechanism to encourage long term tenure and affordability. Borrowers who sell their homes at fair market value to non-income qualified households will be required to repay the City's loan in its entirety. 15 80B-25 DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Program 2: Acquisition and Rehabilitation of Foreclosed Single Family Homes (2) Activity Type: (include NSP eligible use &CDBG eligible activity) NSP Eligible Uses: Financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties (HERA,2301 (c)(3)(A) CDBG: 24 CFR 570.201 (a) Acquisition, 201(b) Disposition, 201(i) Relocation, 201(n) Direct homeownership assistance; 202 Eligible rehabilitation and preservation activities for homes. (3) National Obtective: (Must be a national objective benefiting low, moderate and middle income persons, as defined in the NSP Notice-i.e., < 120% of area median income). LMMH -Expected to benefit primarily low, moderate and middle income (50 percent to 120 percent of area median) purchaser-occupants. (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to income-qualified persons; and whether funds used for this activity will be used to meet the low income housing requirement for those below 50% of area median income. This program will he operated by contracted intermediaries selected through a Request for Proposals (RFP) process. These intermediaries will use NSP funds, or ideally other funds available to them, to acquire and rehabilitate foreclosed or abandoned single family residences. Upon completion the homes will be marketed and sold to households with incomes at or below 120 percent of the area median. Sales prices will be established for both. low- and moderate-income households, and in accordance with the methodology established by the California Health and Safety Code with modifications designed to increase their affordability. For homesiloffered for sale to low-income households, the affordable sales price will be based on 30 percent of the monthly income of a household at 65 percent of area median. For homes offered for sale to moderate-and middle-income households, the sales price will be base on 30 percent of the monthly income of a household at 100 percent of area median income. For those receiving such assistance, continued affordability will be assured through forty five year deed restrictions and promissory notes requiring repayment of the difference between the sales price and the fair market value. Additionally, the loans will carry 3 percent interest rates, which interest rate will be forgivable over the forty five years. The City will insure that this activity benefits income qualified households by limiting eligibility to those with incomes at or below 120 percent of area median income. Given the significant upfront and long term costs associated with homeownership the City does not anticipate that this program will serve any very low-income households, and it will not deed restrict any homes purchased through this program to occupancy by very low- 16 80B-26 DRAFT income households. Should these homes prove hard to sell, the intermediaries will be able to offer them to income qualified households on a lease to own basis. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) The program will be operated exclusively within the City's priority areas as described in Section A of this Substantial Amendment. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, 51-80 percent, and 81-120 percent): Number of units expected to be assisted: 40. Based on the assumption that NSP cost per unit will be approximately $50,000. Households to be assisted by income category: Below 50 percent of area median income: 0 Between 50 percent and 80 percent of area median income 10 Between 80 percent and 120 percent of area median income 30 Total households to be assisted: 40 (7) Total Budget: (Include public and private components),- NSP Funds: $2,015,636 Private Mortgage Funds: $9,200,000. Assumes $250,000 average purchase price and $20,000 average down payment. Redevelopment Agency Tax Increment Set-aside Funds: $1,125,000 (8) Responsible Organization: The City ofSanta Ana Community Development Agency, Housing Division, has extensive experience managing affordable housing funds and programs. The Division has expertise in the areas of housing rehabilitation, finance, development, rental assistance and grant management. Ms. Shelly Landry-Bayle Housing Manager Community Development Agency of the City of Santa Ana 20 Civic Center Plaza, M-37 Santa Ana, CA 92701 Telephone: (714) 667-2237 Facsimile: (714) 667-2225 Email: SLandr ~~bayle(a,santa-ana.org (9) Projected Start Date: February 1, 2009 or such other date upon which grant funds are received by the City of Santa Ana. (10) Protected End Date: January 31, 2014 17 80B-27 DRAFT (11) Specific Activity Requirements For acquisition activities, include: • Discount rate. The required discount rate for all home purchases will be consistent with the HUD regulatory requirement. For financing activities, include: • Range of interest rates. The loans will carry three percent interest rates forgivable over the forty five year period. For housing related activities, include: • Tenure ofbeneficiaries--rental or homeownership; Tenure will be homeownership • Duration or term of assistance; Term of the City's trust deed will be forty five years • A description of how the design of the activity will ensure continued affordability. The City will use recorded trust deeds to ensure continued affordability. 18 80B-28 DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Program 3: Acquisition and Rehabilitation of Foreclosed Condominium Units and Historically Significant Single Family Homes (2) Activity Type: (include NSP eligible use &CDBG eligible activity) NSP Eligible Uses: Financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential.. properties (HERA,2301 CDBG: 24 CFR 570.201 (a) Acquisition, 201(b} Disposition, 201(i) Relocation, 201(n) Direct homeownership assistance; 202 Eligible rehabilitation and preservation activities for homes. (3) National Objective: (Must be a national objective benefiting low; moderate and middle income persons, as defined in the NSP Notice-i.e., < 120% of area median income). LMMH -Expected to benefit primarily moderate and middle income (50 percent to 120 percent of area median) purchaser-occupants. (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to income-qualified persons; and whether funds used for this activity will be used to meet the low income housing requirement for those below 50% of area median income. This program will be operated by contracted intermediaries selected through a Request for Proposals process. These intermediaries will use NSP funds, or ideally other funds available to them, to acquire and rehabilitate foreclosed or abandoned condominium units and historically significant homes. Upon completion the homes will be marketed and sold to households with incomes at or below 120 percent of the area median. Sales prices will be established for both low- and moderate-income households, and in accordance with the methodology established by the California Health and Safety Code with modifications designed to increase their affordability. For homes offered for sale to low income households,'the affordable sales price will be based on 30 percent of the monthly income of a household at 65 percent of area median. For homes offered for sale to moderate-and middle-income households, the sales price will be base on 30 percent of the monthly income of a household at 100 percent of area median. For those receiving such assistance, continued affordability will be assured through forty five year deed restrictions and promissory notes requiring repayment of the difference between the sales price and the fair market value. Additionally, the loans will carry 3 percent interest rates, which interest rate will be forgivable over the forty five years. Should these homes prove hard to sell, the intermediaries will be able to offer them to income qualified households on a lease to own basis. 19 80B-29 DRAFT The City will insure that this activity benefits income qualified households by limiting eligibility to those with incomes at or below 120 percent of area median income. Given the significant upfront and long term costs associated with homeownership the City does not anticipate that this program will serve any very low-income households, and it will not deed restrict any homes purchased through this program to occupancy by very low- income households. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) For reasons described in Section A of this Substantial Amendment, condominiums were excluded from the City's analysis of its Areas of Greatest Need. Additionally, historically significant homes are widely scattered, but are an important contributor to the City's cultural life. As a consequence the City will offer this program on a citywide basis to insure that both types of housing can be acquired and rehabilitated with NSP funds. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, 51-80 percent, and 81-120 percent): Number of units expected to be assisted: 10. Based on the assumption that NSP cost per unit will be approximately $70,000.. Households to be assisted by income category: Below 50 percent of area median income: 0 Between 50 percent and 80 percent of area median' income 3 Between 80 percent and 120 percent of area median income 7 Total households to be assisted: 10 (7) Total Budget: (Include public and private components) NSP Funds: $700,000 Private Mortgage Funds: $2,300,000 Assumes $250,000 average purchase price and;$20,000 average down payment. (8) Responsible Organization: The City of Santa Ana Community Development Agency, Housing Division, has extensive experience managing affordable housing funds and programs. The Division has expertise in the areas of housing rehabilitation, finance, development, rental assistance and grant management. Ms. Shelly Landry-Bayle Housing Manager Community Development Agency of the City of Santa Ana 20 Civic Center Plaza, M-37 Santa Ana, CA 92701 Telephone: (714) 667-2287 Facsimile: (714) 667-2225 Email: SLandry-bayle(a~santa-ana.or~ 20 80B-30 DRAF (9) Projected Start Date: February 1, 2009 or such other date upon which grant funds are received by the City of Santa Ana. (10) Projected End Date: January 31, 2014 (11) Specific Activity Requirements: For acquisition activities, include: • Discount rate. The required discount rate for all home purchases will be consistent with the HUD regulatory requirement. For financing activities, include: • Range of interest rates. The loans will carry 3 percent interest rates forgivable over the forty five year period. For housing related activities, include: • Duration or term of assistance; Term of the City's trust deed will be.forty five years • Tenure ofbeneficiaries--rental or homeownership, Tenure will be homeownership • A description of how the design of the activity will ensure continued affordability. The City will use recorded trust deeds to ensure continued affordability. 21 80B-31 DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Program 4: Acquisition and Rehabilitation of Foreclosed or Abandoned Rental Housing Units (2) Activity Type: (include NSP eligible use &CDBG eligible activity) NSP Eligible Use: Financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties (HERA, 2301(c)(3)(A). CDBG: 24 CFR 570.201 (a) Acquisition, 201(b) Disposition, 201(i) Relocation, 201(n) Direct homeownership assistance; 202 Eligible rehabilitation and preservation activities for homes. (3) National Objective: (Must be a national objective benefiting low, moderate and middle income persons, as defined in the NSP Noticei.e., < 120% of area median income). LMMH: Expected to exclusively benefit households at or below 50'percent of area median (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to income-qualified persons; and whether funds used for this activity will be used to meet the low income housingxequirement for those below 50% of area median income. The City will operate this program on a citywide basis through contracted intermediaries who will possess demonstrated capacity to acquire, rehabilitate, operate and maintain rental housing units restricted to very low-income tenants. NSP funds will be used in conjunction with other private and/or public funds for this purpose. The City will use this activity to meet the low-income housing requirement for those below 50 percent of area median income. Long term affordability will be insured by recordation of a City deed of trust; loan agreement and,regulatory agreement stipulating the amount of the NSP loan and requiring a fifty five year period of affordability for households between 30 percent and 50 percent of area median income for all NSP assisted units. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) Based on its current Consolidated Five Year Plan and its draft Housing Element, the City of Santa Ana has deterniined that there is a citywide shortage of rental housing available and affordable to households at or below 50 percent of area median income. As a consequence the City will operate this program on a citywide basis. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, 51-80 percent, and 81-120 percent): Households to be assisted with NSP funds by income category: Below 50 percent of area median income: 24 Between 50 percent and 80 percent of area median income 0 22 80B-32 DRAFT Between 80 percent and 120 percent of area median income 0 Total households to be assisted: 24 (7) Total Budget: (Include public and private components) NSP: $1,800,000 Other potential sources include private loans, multifamily mortgage revenue bonds, federal low income housing tax credits, State of California Multifamily Housing Program funds, and City of Santa Ana Community Redevelopment Agency tax increment set-aside funds. (8) Responsible Organization: The City of Santa Ana Community Development Agency, Housing Division, has extensive experience managing affordable housing funds and programs. The Division has expertise in the areas of housing rehabilitation, finance, development, rental assistance and grant management. Ms. Shelly Landry-~Bayle Housing Manager Community Development Agency of the City of Santa Ana 20 Civic Center Plaza, M-37 Santa Ana, CA 92701 Telephone: (71.4) 667-2287 Facsimile: (714) 667-2225 Email: SLandry-bayle~a santa-ana.org (9) Projected Start Date: February 1, 2009 or such other date upon which grant funds are received by the City of SantaAna. (10) Projected End Date: January 31, 2014 (11) Specific Activit~quirement: For acquisition activities, include: • Discount rate: The required discount rate for all purchases will be consistent with the HUD regulatory requirement. For financing activities, include: • Range of interest rates: Range of interest rates will be 0 percent to 3 percent annually depending on anticipated project revenue and expenses. For housing related activities, include: • Duration or term of assistance; Fifty five years • Tenure ofbeneficiaries--rental or homeownership; Rental • A description of how the design of the activity will ensure continued affordability. Recordation of trust deeds, loan agreements and regulatory agreements securing the NSP funds and mandating fifty five years of affordability. 23 80B-33 DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Program 5: Acquisition of Foreclosed Properties for Redevelopment (2) Activity Type: (include NSP eligible use &CDBG eligible activity) NSP Eligible Use: Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon in order to redevelop. (HERA, 2301(c)(3)(B). CDGB: 24 CFR 570.201(a) Acquisition, 201 (b) Disposition, 201 (c) Public facilities and improvements, 201 (i) Relocation; 204 Community based development organizations. (3) National Objective: (Must be a national objective benefiting low, moderate and middle income persons, as defined in the NSP Notice-i.e., < 120% of area median income). LMMA: Benefitting all residents of a primarily residential area in which at least 51 percent of the residents have incomes at or below 120 percent of area median; and/or LMMH: Benefitting low, moderate and middle income (0 percent to 120 percent of area median) renters or homebuyers if redeveloped as residential (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to`income-qualified persons; and whether funds used for this activity will be used to meet the low income housing requirement for those below 50% of area median income. The purpose of this program is to acquire properties suitable to be redeveloped as (a) public facilities or (b) new housing construction within the framework of a redevelopment plan. Improvements are likely to be demolished if not suitable for rehabilitation. Properties acquired and redeveloped as parks or open space will be retained by the City and operated by the Department of Parks, Recreation and Community Service. Properties to be redeveloped by the Redevelopment Agency will be disposed of for residential or non-residential use under a land disposition and development agreement. The agreement will restrict the use of the property to meet NSP and CDBG eligible uses and a CDBG national objective. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) The activity will be carried out in census tracts eligible as LMMA areas for NSP (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, 51-80 percent, and 81-120 percent): Number of units expected to be assisted: two properties acquired 24 80B-34 DRAFT Household Incomes: If developed for housing, incomes will be consistent with NSP requirements. (7) Total Budget: (Include public and private components) NSP funds: $300,000 Other funds: Unknown (8) Responsible Organization: The City of Santa Ana Community Development Agency, Housing Division, has extensive experience managing affordable housing funds and programs. The Division has expertise in the areas of housing rehabilitation, finance, development, rental assistance and grant management. Ms. Shelly Landry-Bayle Housing Manager Community Development Agency of the City of Santa Ana 20 Civic Center Plaza, M-37 Santa Ana, CA 92701 Telephone:. (714) 667-2287 Facsimile: (714} 667-2225 Email: SLandry-bayle(a~santa-ana.org (9) Projected Start Date: February 1, 2009 or such'other date upon which grant funds are received by the City of Santa Ana. (10) Projected End Date: January 31 2014 (11) St~ecific Activity Requirements: For acquisition activities, include: • Discount rate The required discount rate for all purchases will be consistent with the 'HUD regulatory requirement. For financing activities, include: • Range of interest rates: Not applicable for public facilities. If developed for housing, the range of interest rates will be 0 percent to 3 percent. For housing related activities, include: • Tenure ofbeneficiaries--rental or homeownership; Maybe either if developed for residential use. Duration or term of assistance; If owned by the City duration will be in perpetuity. If transferred, forty five year minimum term for homeownership, fifty five years for rental. A description of how the design of the activity will ensure continued affordability. 25 80B-35 DRAFT If owned by the City, by selection of a LMMA area location. If transferred to private ownership, by the terms of the land disposition and development agreement and a recorded regulatory agreement. 26 80B-36 DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Administration of NSP Program (2) Activity Type: (include NSP eligible use &CDBG eligible activity) Administration and Planning Costs HERA Section 2301(c)(3) CDBG: 24 CFR 570.205 and 206 (3) National Objective: (Must be a national objective benefiting low, moderate and middle income persons, as defined in the NSP Notice-i.e., < 120% of area median income). National objective is not applicable to administrative costs. (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to income-qualified persons; and whether funds used for this activity will be used to meet the low income housing requirement for those below 50% of area median income. This activity will encompass administrative activities necessary to planning and implementation of the City's NSP funded programs. (5) Location Description: (Description may',include specific addresses, blocks or neighborhoods to the extent known.) The City of Santa Ana'will be the lead entity. (6) Performance Measures: (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels. of households. that are 50 percent of area median income and below, 51-80 percent, and 8`1-120 percent): Not Applicable for Administration (7) Total Budget: (Include public'and private components) NSP: $579,515 (8) Responsible Organization: The City of Santa Ana Community Development Agency, Housing Division, has extensive experience managing affordable housing funds and programs. The Division has expertise in the areas of housing rehabilitation, finance, development, rental assistance and grant management. Ms. Shelly Landry-Bayle Housing Manager Community Development Agency of the City of Santa Ana 20 Civic Center Plaza, M-37 Santa Ana, CA 92701 Telephone: (714) 667-2287 Facsimile: (714) 667-2225 Email: SLandry-bayle(c~santa-ana.or~ 27 80B-37 DRAFT (9) Projected Start Date: February 1, 2009 or such other date upon which grant funds are received by the City of Santa Ana. (10) Projected End Date: January 31, 2014 (11) Specific Activity Requirements For acquisition activities, include: • Discount rate. Not Applicable For financing activities, include: • Range of interest rates. Not applicable For housing related activities, include: • Tenure ofbeneficiaries--rental or homeownership. Not applicable; • Duration or term of assistance; Not applicable • A description of how the design of the activity will ensure continued affordability. Not applicable 28 80B-38 DRAFT CERTIFICATIONS (1) Affirmatively furthering fair housing. The jurisdiction will affirmatively further fair housing, which means that it will conduct an analysis to identify impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard. (2) Anti-lobbying. The jurisdiction will comply with restrictions on lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part. (3) Authority of Jurisdiction. The jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations and other program requirements. (4) Consistency with Plan. The housing activities to be undertaken with NSP funds are consistent with its consolidated plan, which means that NSP funds will be used to meet the congressionally identified needs of abandoned and foreclosed homes in the targeted area set forth in the grantee's substantial amendment. (5) Acquisition and relocation. The jurisdiction will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601}, and implementing regulations at 49 CFR part 24, except as those provisions are modified by the Notice for the NSP program published by HUD. (6) Section 3. The jurisdiction will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and',implementing regulations at 24 CFR part 135. (7) Citizen Participation. The jurisdiction is in full compliance and following a detailed citizen participation plan that satisfies the requirements of Sections 24 CFR 91.105 or 91.115, as modified by NSP requirements. (8) Following Plan. The jurisdiction is following a current consolidated plan (or Comprehensive Housing Affordability Strategy) that has been approved by HUD. (9) Use of funds in 18 months. The jurisdiction will comply with Title III of Division B of the Housing and Economic Recovery Act of 2008 by using, as defined in the NSP Notice, all of its grant funds within 18 months of receipt of the grant. (10) Use NSP funds <_ 120 of AMI. The jurisdiction will comply with the requirement that all of the NSP funds made available to it will be used with respect to individuals and families whose incomes do not exceed 120 percent of area median income. 29 80B-39 DRAFT (11) Assessments. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108 loan guaranteed funds, by assessing any amount against properties owned and occupied by persons of low- and moderate-income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if NSP funds are used to pay the proportion of a fee or assessment attributable to the capital costs of public improvements (assisted in part with NSP funds) financed from other revenue sources, an assessment or charge maybe made against the property with respect to the public improvements financed by a source other than CDBG funds. In addition, with respect to properties owned and occupied by moderate- income (but not low-income) families, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than NSP funds if the jurisdiction certifies that it lacks NSP or CDBG funds to cover the assessment. (12) Excessive Force. The jurisdiction certifies that it has adopted and is enforcing: (1) a policy prohibiting the use of excessive force bylaw enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and (2) a policy of enforcing applicable State and local laws against physically barring entrance to or exit from, a facility or location that is the subject of such non-violent civil rights demonstrations within its jurisdiction. (13) Compliance with anti-discrimination laws. The NSP grant will be conducted and administered in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), the Fair Housing Act (42 U.S.C. 3601.-3619), and implementing regulations. (14) Compliance with lead-based paint procedures. The activities concerning lead- based paint will comply with the requirements of part 35, subparts A, B, J, K, and R of this title. (15) Compliance with Taws. The jurisdiction will comply with applicable laws. November 17, 2008 Signature/Authorized Official Date City Manager Title 30 80B-40 DRAFT NSP Substantial Amendment Checklist For the purposes of expediting review, HUD asks that applicants submit the following checklist along with the NSP Substantial Amendment and SF-424. of an 1V~Y Action Ylan substantial Amendment Jurisdiction(s): City of Santa Ana NSP Contact Person: Shelly Landry-Bayle Lead Agency: Community Development Address: 20 Civic Center Plaza, M37 Jurisdiction Web Address: Santa Ana, CA 92701 http://www.santa-ana.org/cda/default.asp Telephone: (714) 667-2287 (URL where NSP Substantial Amendment Fax: (714) 667-2225 materials are posted) Email:SLandry-Bayle@Santa-Ana.org The elements in the substantial amendment required for the Neighborhood Stabilization Program are: A. AREAS OF GREATEST NEED Does the submission include summary needs data identifying the geographic areas of greatest need in the grantee's jurisdiction? Yes® No^. Verification found on page 2-6. B. DISTRIB UTION AND USES OF FUNDS Does the submission contain a narrative describing how the distribution and uses of the grantee's NSP funds will meet the requirements of Section 2301(c)(2) of HERA that funds be distributed to the areas of greatest need, including those with the greatest percentage of home foreclosures,.. with the highest percentage of homes financed by a subprime mortgage related loan, and identified by the grantee as likely to face a significant rise in the rate. of home foreclosures?. Yes No^. Verification found on page 7-9 . Note: The grantee's narrative must address the three stipulated need categories in the NSP statute, but the grantee may also consider other need categories. C. DEFINITIONS AND DESCRIPTIONS For the purposes of the NSP, do the narratives include: • a definition of "blighted structure" in the context of state or local law, Yes® No^. Verification found on page 10 • a definition of "affordable rents," Yes® No^. Verification found on page 10 a description of how the grantee will ensure continued affordability for NSP assisted housing, Yes® No^. Verification found on page 10 31 80B-41 DRAFT • a description of housing rehabilitation standards that will apply to NSP assisted activities? Yes® No^. Verification found on page 10-11 D. LOW INCOME TARGETING • Has the grantee described how it will meet the statutory requirement that at least 25% of funds must be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals and families whose incomes do not exceed 50% of area median income? Yes® No^. Verification found on page 11 • Has the grantee identified how the estimated amount of funds appropriated or otherwise made available will be used to purchase and redevelop abandoned or foreclosed upon homes or residential_properties for housing individuals or families whose incomes do not exceed SO% of area median income? Yes® No^. Verification found on page 11 Amount budgeted = $1'.;800,000 E. ACQUISITIONS c~ RELOCATION Does grantee plan to demolish or convert any low- and moderate-income dwelling units? Yes^ No®. (If no, continue to next. heading} Verification found on page If so, does the substantial amendment include: • The number of low- and moderate-income dwelling units-i.e., <_ 80% of area median income-reasonably expected to be demolished or converted as a direct result ofNSP-assisted activities? Yes^ ' No^. Verification found on page The number of NSp affordable housing units made available to low- ,moderate-, and middle-income households:-i.e., <_ 120% of area median income reasonably expected to be produced by activity and income level as provided for in DRGR, by each NSP activity providing such housing (including a proposed time schedule for commencement and completion)? Yes^ No^. Verification found on page • The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income? Yes^ No^. Verification found on page F. PUBLIC COMMENT PERIOD Was the proposed action plan amendment published via the grantee jurisdiction's usual methods and on the Internet for no less than 15 calendar days of public comment? Yes® No^. Verification found on page 12 32 80B-42 DRAFT Is there a summary of citizen comments included in the final amendment? Yes® No^ Verification found on page 12 G. INFORMATION BYACTI VITY Does the submission contain information by activity describing how the grantee will use the funds, identifying: • eligible use of funds under NSP, Yes® No^. Verification found on page 13,16,19,22,24,27 • correlated eligible activity under CDBG, Yes® No^. Verification found on page 13,16,19,22,24,27 • the areas of greatest need addressed by the activity or activities, Yes® No^. Verification found on page 13-14,17,20,22,24,27 • expected benefit to income-qualified'persons or households or areas, Yes® No^. Verification found on page 14,17,20,22,24,27 • does the applicant indicate which activities will count toward the statutory requirement that at least 25% of funds must be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals and families whose incomes do not exceed 50% of area median income? Yes® No^. Verification found on page 22 • appropriate performance measures for the activity, Yes No^. Verification found on page 22 • `amount of funds budgeted for the activity, Yes® No^. Verification found on page 23 • the name, location and contact information for the entity that will carry out the activity, Yes No^. Verification found on page 23 • expected start and end dates of the activity? Yes® No^. Verification found on page 23 • If the activity includes acquisition of real property, the discount required for acquisition of foreclosed upon properties, Yes® No^. Verification found on page 23 • If the activity provides financing, the range of interest rates (if any), Yes® No^. Verification found on page 23 33 80B-43 DRAFT • If the activity provides housing, duration or term of assistance, Yes® No^. Verification found on page 23 • tenure of beneficiaries (e.g., rental or homeownership), Yes® No^. Verification found on page 23 • does it ensure continued affordability? Yes® No^. Verification found on page 23 H. CERTIFICATIONS The following certifications are complete and accurate: (1) Affirmatively furthering fair housing Yes® No^ (2) Anti-lobbying Yes® No^ (3) Authority of Jurisdiction Yes® No^ (4) Consistency with Plan Yes® No^ (5) Acquisition and relocation Yes No^ (6) Section 3 Yes No^ (7) Citizen Participation Yes® - No^ (8) Following Plan Yes® No^ (9) Use of funds in 18 months Yes® No^ (10) Use NSP funds <_ 120 of AMI Yes® No^ (11) No recovery of capital costs thru special assessments Yes® No^ (12) Excessive Force Yes® No^ (13) Compliance with anti-discrimination Laws Yes® No^ (14) Compliance with lead-based. paint procedures Yes® No^ (15) Compliance with laws Yes® No^ 34 80B-44 bk:11 /10/08 RESOLUTION NO. 2008-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING A PROCEDURE TO ASSESS CIVIL FINES AND PENALTIES FOR THE FAILURE TO MAINTAIN VACANT RESIDENTIAL PROPERTY AFTER FORECLOSURE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. SB 1137, an emergency bill signed into law earlier this year, is designed to address concerns relating to the increase of foreclosures of single family homes throughout California. B. One concern addressed by the Legislature in SB 1137 is the failure to maintain vacant residential property by out-of-town financial institutions who acquire title to homes through foreclosure. C. In adopting SB 1137, legislative reports quoted findings that orphaned homes quickly fall into disrepair, their deterioration sometimes hastened by vandals who trash the interiors, lighting fires and ripping out wiring and pipes to sell for scrap. In some communities, the Legislature found that squatters or drug dealers may move in to these orphaned homes. D. The Legislature also found that the impact of foreclosed homes goes far beyond the defaulting homeowner, as neighbors and entire communities confront a potential spreading blight. The Legislature found that vacant residences deprive cities of tax revenue and can cost them thousands to maintain. The Legislature quoted from a 2001 Temple University study which found that in Philadelphia simply being within 150 feet of an abandoned property knocked $7,600 off a home's value. E. SB 1137 requires financial institutions who acquire homes through foreclosure to maintain the vacant foreclosed residential properties in conformance with City codes. F. SB 1137, by adding section 2929.3 to the California Civil Code, gives cities the power to impose civil fines and penalties of up to $1,000 per day if the new owner, who acquired a home through foreclosure, fails to 80B-45 Resolution No. 2008-XXX n...,..,. ~ ,.c ~ maintain the home. Prior to imposing fines or penalties, SB 1137 requires the city to give the owner a notice of the claimed violation, including a description of the conditions giving rise to the claim, and opportunity to remedy the violation at least 14 days prior to imposing those fines and penalties, and allows for a hearing and opportunity to contest any fines or penalties. G. Under SB 1137, "failure to maintain" a home acquired through foreclosures means failure to adequately care for the property, such as, permitting excessive foliage growth that diminishes the value of surrounding properties, failing to take action to prevent trespassers or squatters from remaining on the property, and failing to take action to prevent growth of mosquito larva in standing water such as swimming pools. H. Section 1-13 of the Santa Ana Municipal Code ("Code") provides that any violation of the provisions of the Code constitute a public nuisance. Each of the items referenced in SB 1137 and this resolution constitute violations of the provisions of the Code. Section 2. The City shall, in conformance with the provisions of Civil Code section 2929.3, establish and maintain a process to impose civil fines and penalties pursuant to the terms and conditions of that section. All fines and penalties shall include the City's reasonable and necessary costs of imposing the fines and penalties. Section 3. The City shall pursue all remedies provided at law, under its charter or state statute, to secure payment of said civil fines and penalties imposed on owners pursuant to Civil Code section 2929.3, including civil judgments, liens recorded against the property to be paid upon its subsequent sale, and/or liens imposed pursuant to Government Code section 54988 and other applicable state laws which are collected at the same time and in the same manner as property taxes are collected. Section 4. This terms and provisions of this resolution shall remain in effect only until January 1, 2013, and as of that date this resolution shall be repealed, unless a later enacted statute of the California Legislature, that is enacted before January 1, 2013, deletes or extends the January 1, 2013 date for the repeal of Civil Code section 2929.3. In such case, this resolution shall continue in full force and effect for the same period as does Civil Code section 2929.3, or a successor statute, and no longer. Section 5. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. Resolution No. 2008-XXX $10B-46 n..,.., n ,.c ~ ADOPTED this day of 2008. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney By: Benjamin Kaufman Chief Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT Councilmembers Councilmembers Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2007-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana 80B-47 Resolution No. 2008-XXX n.,,.,. ~ ,.r ~ 80B-48