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HomeMy WebLinkAbout19D - QRTLY RPT HOUSING PROJECTS REQUEST FOR -T COUNCIL ACTION CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: JUNE 4, 2012 TITLE: APPROVED ? As Recommended QUARTERLY REPORT FOR HOUSING ? As Amended ? Ordinance on 1 s` Reading DIVISION PROJECTS AND ACTIVITIES ? Ordinance on 2nd Reading JANUARY 2012 - MARCH 2012 ? Implementing Resolution ? Set Public Hearing For CONTINUED TO FILE NUMBER CITY MANAGER RECOMMENDED ACTION Recommend that the City Council receive and file. DISCUSSION This status report for the quarter ending on March 31, 2012, provides statistics for the day-to-day affordable housing activities of the City and the Community Redevelopment Agency. The report is divided into three sections: Loan Activity, Loan Portfolio Management and Monitoring, and Development Projects. Loan Activity Applications The Housing Division offers several Chart 1: Applications Mailed different programs. The loans offered include homebuyer down payment assistance and rehabilitation loans for historic single family, single family and ~I mobile homes. Mobile home loans are offered as forgivable grants and are used to cover the cost of essential repairs. Applications are mailed out and received for these programs on a continuing basis. Chart 1 shows the Mobile e number of applications sent out by type Home during the quarter. Of the applications Hardship 6 sent, two have been returned and are being processed. 19D-1 Quarterly Report for Housing Division Projects and Activities June 4, 2012 Page 2 Loan Underwriting and Approval Process In this process, staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to determine eligibility per program guidelines. In addition, staff conducts an inspection of the unit, prepares a work write up to determine rehabilitation work to be performed, and develops a budget for the work. Due to the complex funding requirements, applicants may be in underwriting several months. The length of time in underwriting is largely determined by the applicant's timely submittal of the necessary paperwork. Once approved, staff prepares all necessary loan documents, makes arrangements for execution, and reserves the required loan funds. One homebuyer assistance loan and one mobile home hardship loan were approved during the third quarter of the fiscal year, and Table 1 provides details on these loans. Table 1: Loans Approved During the Third Quarter Address Loan Amount Loan Type 701 Park Place $20,160 Homebu er Assistance 4211 W. First Street $5,000 Homeowner Rehab Chart 2 shows the number of loans approved Chart 2. Loans Approved In FY during the fiscal year to date. 10 9 8 - Construction Process 7fi - 6 - During this phase, homeowners receiving 5 - rehabilitation loans are guided through an open 4 - selection of contractors to complete the work on 3 their homes. Each homeowner is given a list of 2 contractors that have been screened by staff for 1 insurance and bonding requirements. However, ° homeowners are allowed to select any contractor Homeowner Rehab Homebuyer Assistance that is licensed and meets these same requirements. Staff assists the 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 third quarter there were seven new construction projects which have 206 units and five homeowner rehab projects under construction. 19D-2 Quarterly Report for Housing Division Projects and Activities June 4, 2012 Page 3 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 third quarter, the principal balance was $83,784,832. This is comprised of 474 loans of which 417 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $46,826 in payments of principal and interest during the quarter: Table 2: Portfolio Revenue Residual Receipts Payments $43,198 Amortized Loan Payments $46,826 Total $90,024 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 because they no longer live in the homes, and the City has begun the process to get repayment. During the third quarter staff also conducted code compliance inspections for 77 units in twelve projects containing a total of 237 units. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to insure they also meet City code requirements. and inoperable outlets. 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 insure 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 third quarter we had already expended more than $6.7 million or 116% of its grant amount. The amount spent is greater than the grant amount because it includes program income. Finally, the City has spent $2.34 million, or 33% of all its NSP 1 funds, on projects that serve very low- income households exclusively. Currently NSP 1 is only operating with program income, and these funds will diminish over time. 19D-3 Quarterly Report for Housing Division Projects and Activities June 4, 2012 Page 4 NSP 1 includes the following four programs: Down Payment Assistance Program, Single-Family Acquisition-Rehabilitation Program, Historic/Condominium Acquisition-Rehabilitation Program and a Multifamily Acquisition-Rehabilitation Program. ANR Industries, the intermediary selected to implement homeownership programs including the Single-Family and Historic/Condominium, is responsible for the acquisition, rehabilitation, and resale of the foreclosed units. These homes are sold to families with incomes up to 120% of the area median (AMI). As of the end of the third quarter, ANR had used NSP 1 funds to acquire 35 single-family homes and condominium units for rehabilitation and resale to qualifying families. ANR has spent more than $3.3 million in NSP 1 funds and has leveraged an additional $4.5 million in private funds to make these affordable units available. Three of the families purchasing these homes also received a total of $104,243 in NSP1-funded down payment assistance loans from the City. Chart 3 shows the status of all single family properties purchased with NSP 1 funds as of the end of the third quarter. Chart 3: NSP 1-Status of All Single Family Properties 40 35 30 25 20 15 10 5 0 Acquisition Under Resale Sold Rehabilitation No NSP1 properties were sold during the third quarter. The partnership of Orange Housing Development Corporation (OHDC) and C&C Development was selected to implement the Multifamily Acquisition/Rehabilitation Program. To date, the partnership has used $1.4 million in NSP 1 funds to acquire a 14-unit multi-family property at 1410 North Durant Street. The rehabilitation is complete and the property is now occupied. The partnership also used $655,000 in NSP 1 funds to acquire two vacant parcels at 605-611 East Washington Avenue on which they will construct 36 affordable rental units. They were approved for tax credits, and have started construction. Both projects will be targeted to households at or below 50% of AMI. 19D-4 Quarterly Report for Housing Division Projects and Activities June 4, 2012 Page 5 NSP 2 Program The City's second award (NSP 2) for $10 million was received through a highly competitive process in which only 15 local government agencies were successful. Most awards were made to nonprofit consortiums. Under the terms of this award, there is no obligation deadline to meet; however, there is an expenditure deadline. Fifty percent of the funds must be expended by February 11, 2012, and the remainder by February 11, 2013. As of the end of the third quarter, the City had expended $8.5 million or 85% of its funds. The most current federal reports show that only 5 percent of NSP2 grantees have spent 75 Chart 4: NSP 2-Status of All Single Family Properties percent or more of their funds. NSP 2 implements 30 three programs: Down 25 Payment Assistance Program, Single-Family 20 Acquisition-Rehabilitation Program, and a Multifamily 15 Acquisition-Rehabilitation Program. ANR has spent 10 more than $4.8 million in NSP 2 funds and has 5 leveraged an additional $4.8 0 million in private funds to make these affordable units Acquisition Under Rehab Resale Sold available. One of the families purchasing an NSP2 home received a down payment assistance loan from the City, and a second down payment assistance loan was made to a family purchasing a home that ANR did not acquire. A total of $63,140 in NSP2 funds have been used for down payment assistance loans. Chart 4 shows the status of all properties purchased by ANR with NSP 2 funds as of the end of the third quarter. Tables 4, 5, and 6 provide additional detail. Table 4: NSP2 Properties Under Rehabilitation Address Projected Completion Date 2032 S. Artesia 07/12/2012 Table 5: NSP2 Single Family Properties Available for Sale Address Affordability Level 323 E. Chestnut Moderate 410 Wakeham Moderate 1119 W. 5 Moderate 19D-5 Quarterly Report for Housing Division Projects and Activities June 4, 2012 Page 6 Table 6: NSP 2 Single Family Properties Sold During the Third Quarter Property Address Silent 2" Income Level 2106 S. Baker $10,000 Moderate 927 W. Berkeley $10,000 Moderate 1340 S. Douglas $10,000 Moderate The partnership of Orange Housing Development Corporation (OHDC) and C&C Development was also selected to implement the NSP2 Multifamily Acquisition/Rehabilitation Program. To date, the partnership has used $4.29 million in NSP 2 funds to acquire a 26-unit multi-family property at 326 S. Garnsey Street. Once completed, 25 of the units will be rented to very low-income families at affordable rents. The remaining unit will be reserved for the onsite manager. All 26 units offer two bedrooms. NSP 3 Program The U.S. Department of Housing and Urban Development (HUD) has allocated the amount of $1,464,113 in NSP 3 funds to the City of Santa Ana. To receive these funds the City adopted a substantial amendment to its Annual Action Plan, and submitted it to HUD on February 28, 2011. The amendment was approved, and the City signed a grant agreement with HUD on March 10, 2011. The City will implement the following programs with these funds: • Acquisition/Rehab/Resale-50 Percent of Area Median Income • Acquisition/Rehab/Resale-120 Percent of Area Median Income • Administration In order to facilitate implementation of the first two programs, the City released a Request for Proposals (RFP) for intermediaries on February 28, 2011. The RFP solicited the services of an individual or firm qualified to acquire, rehabilitate, and resell foreclosed and abandoned single family homes in accordance with NSP3 regulations. ANR Homes, Inc. was selected to receive the contract, and it was approved by City Council on June 20, 2011. As required by regulations, comprehensive detailed quarterly reports on all the City's NSP Programs are posted on the City's website at http://www.santa-ana.org/cda/NSP.asp. In-fill Development Projects Habitat for Humanity of Orange County closed escrow on February 23, 2012 on the first of 17 parcels with their property at 717 E. Third Street. Construction is currently underway. Escrows on other sites are expected to close in the near future. OHDC and C & C Development have begun construction of multi-family housing on the sites located at 217, 219 & 435, 437 South Birch Street, 2034 & 2038 North Bush Street, and 605-611 E. Washington. 19D-6 Quarterly Report for Housing Division Projects and Activities June 4, 2012 Page 7 Station District The Station District Apartment Homes Phase I will include 74 units of large family affordable rental housing which are currently under construction and expected for completion in March 2013. Phase II is under construction and is anticipated to be completed by March 2013 as well. It will include an additional 40 units of large family affordable rental housing involving a combination of new construction (25 units) and rehabilitation of existing residential structures (15 units). In addition, a third phase of for sale housing, to be developed by City Ventures, will include approximately 24 units of large family homes, with the first component of 8 townhomes expected to commence by the end of the year. FISCAL IMPACT There is no fiscal impact associated with this action. Nancy T. Ed rds Interim Exec ive Director Community Development Agency NTE/SLB/TG/lo Prepared by: Terry Gilbreth 19D-7 i 19D-8