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Home My WebLink About19D - QRTLY RPT HOUSINGREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 4, 2014 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES OCTOBER - DECEMBER 2013 CITY dAG RECOMMENDED ACTION Receive and file. DISCUSSION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 18t Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For__ CONTINUED TO FILE NUMBER This status report for the quarter ending on December 31, 2013, provides statistics for the day -to- day affordable housing activities of the City and the Community Development 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 45 different programs including homebuyer 40 down payment assistance and 35 rehabilitation loans for historic single - family, single - family and mobile homes. 30 Mobile home loans are offered as 25 forgivable grants and are used to cover the cost of essential repairs. 20 Applications are mailed out and 15 received for these programs on a continuing basis. Chart 1 shows the 10 number of applications sent out by type 5 for the quarter. Of the applications 0 sent, six been returned and are being processed. Chart 1: Applications Mailed During the Quarter 19D -1 Single Family Rehab Mobile Home Hardship Quarterly Report Housing Division Projects and Activities (Oct - Dec 2013) 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. There were five loans approved during this quarter; three rehabilitation applications are pending and one homebuyer application was denied due to program eligibility. Construction Process During this phase, homeowners receiving rehabilitation loans are guided through an open selection of contractors to complete the work on their homes. Each homeowner is given a list of contractors that have been screened by staff for license and insurance requirements. However, homeowners are allowed to select any contractor that 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. At the end of this quarter there were four rehab projects out to bid and three under construction. Loan Portfolio Management and Monitoring The Housing Division is responsible for ensuring the integrity of the residential loan portfolio. As of the end of this quarter, the principal balance was $109,260,586. This is comprised of 474 loans of which 441 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $522,824 in payments of principal and interest during the quarter: Table 2: Portfolio Revenue 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 this quarter, 32 owner occupancy recertification letters were mailed; 25 were returned and processed. 19D-2 Second Quarter FY 13 -14 Loan Payoffs $366,796 $407,260 Residual Receipts Payments $116,183 $116,183 Amortized Loan Payments $39,845 $98,084 Total $522,824 $621,527 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 this quarter, 32 owner occupancy recertification letters were mailed; 25 were returned and processed. 19D-2 Quarterly Report Housing Division Projects and Activities (Oct - Dec 2013) Page 3 Staff also audited files for 61 projects and conducted code compliance inspections for 33 units in three projects. 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. The majority of the inspected units as well as the grounds and common areas were found to be in compliance at the time of initial inspection. Some of the units had minor deficiencies including loose toilets, faulty GFCI outlets and inoperative smoke alarms. All of the deficiencies were repaired and the units were found to be in compliance at the time of the subsequent re- inspection. Subordinations Mortgage interest rates have increased resulting in a decline in the number of requests for subordination. During the last fiscal year there were a total of two requests for subordination received. One was approved and one was denied because the applicant did not qualify. Subordination requests are reviewed for conformance with City policy and granted to homeowners that were refinancing their existing first mortgage to a more favorable interest rate. Per the subordination policy, no cash is allowed to be taken. Development Projects 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. In the first quarter, HUD approved a technical amendment to allow the City to close the DPAP activity and move the remaining $336,860 to the Single - Family Acquisition - Rehabilitation activity. There were no properties acquired or sold during this quarter. 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 grant activities are: • Acquisition /Rehab /Resale -50 Percent of Area Median Income • Acquisition /Rehab /Resale -120 Percent of Area Median Income • Administration The City's intermediary ANR has been actively seeking foreclosed properties in the NSP 3 target area. During this quarter, the property located at 1223 Baker Street was sold to a qualified homebuyer. 19D-3 Quarterly Report Housing Division Projects and Activities (Oct - Dec 2013) Page 4 In -Fill Development Protects The construction of Vista Del Rio, a 41 -unit handicapped - accessible affordable rental housing project located at 1600 Memory Lane was completed and 70% of the units are leased. Habitat for Humanity of Orange County completed the construction and sold two single - family dwellings located at 160 E. McFadden Avenue and 1114 S. Cypress. The construction of a single - family dwelling located at 1121 S. Cypress was also completed and will close escrow next quarter. Four other single - family dwellings located at 1314 N. Eastwood, 793, 797 and 812 Concord are currently under construction and are expected to be completed in June 2014 The Depot at Santiago, LP is working through planning entitlements for the development of a mixed use, affordable housing project, consisting of approximately 70 units, located at the northeast corner of Santa Ana Blvd. and Santiago Street. 815 N. Harbor, LP is also working through planning entitlements for the development of an affordable housing project, consisting of approximately 70 units, located at the southeast corner of Harbor Blvd. and Hazard Avenue. FISCAL IMPACT There is no fiscal impact associated with this action. V Shelly Lay dry-Bayle Housing Manager Community Development Agency SLB /kg 19D-4