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Home My WebLink About19C - QRTLY RPT FOR HOUSINGREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 3, 2014 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES JANUARY 2014 — MARCH 2014 CITY MAN R RECOMMENDED ACTION Receive and file. DISCUSSION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on t' Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO FILE NUMBER This status report for the quarter ending on March 31, 2014 provides statistics for the day -to -day affordable housing activities. 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 different programs including homebuyer down payment assistance and rehabilitation loans for historic single - family, single - family and mobile homes. Inquiries are received from the public and applications are mailed out and received for these programs on a continuing basis. Table 1 shows the number of inquiries, applications sent out, received and approved by type for the quarter and the fiscal year to date. Table 1: Applications Sent Out, Received & Approved Program Inquiries Applications Sent Out Applications Received Applications Approved Q3 FYTD Q3 FYTD Q3 FYTD Q3 FYTD Single-Family Rehabilitation 40 156 38 130 2 9 1 5 Mobile Home Rehabilitation 9 33 7 25 1 4 1 1 Homeownership 381 411 309 333 4 4 1 1 19C -1 Quarterly Report Housing Division Projects and Activities (Jan — Mar 2014) June 3, 2014 Page 2 Rehabilitation Loan Underwritinq and ADDroval Process Staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to ensure compliance with program guidelines and requirements established by the funding source. In addition, staff conducts an inspection of the property, 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. 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 three homeowner rehab projects out to bid and five under construction. Homeownership Marketing and Approval Process In January, the City began marketing a new down - payment assistance program. Outreach included: Councilmember Sarmiento's newsletter, water bill insert, Nixie press release, Miniondas newspaper article, interview with Orange County Register, contact with community partners and Homebuyer Counseling Centers. Staff presented six workshops which were attended by 147 individuals, the majority being Santa Ana residents. The first workshop was covered by Telemundo and NBC news broadcasts. Staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by HUD. Applicants must meet established income requirements, complete an eight -hour pre - purchase counseling program from a HUD - approved agency, be pre - qualified for a first mortgage and have a minimum of three percent of the purchase price from their own savings. Other HUD requirements apply, including a current maximum sales price of $390,000 for a single family home or condo or $443,000 for a newly constructed condo or home. Additionally, the property needs to be in good condition and pass an inspection by staff. Staff received a significant interest in the program and is anticipating an increase in the number of applications received and approved over the next few months. 19C -2 Quarterly Report Housing Division Projects and Activities (Jan — Mar 2014) June 3, 2014 Page 3 Loan Portfolio Management & 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 $109,316,176. This is comprised of 466 loans of which 432 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $113,311 in payments of principal and interest during the quarter: Table 2: Portfolio Revenue Monitoring 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, 71 owner occupancy recertification letters were mailed; 65 were returned and processed. Staff also audited files for 30 units in one project, and conducted code compliance inspections for 111 units in eight projects. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet municipal 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, inoperative burners, faulty GFCI outlets, inoperative smoke alarms, and carbon monoxide detectors. All of the deficiencies were repaired and the units were found to be in compliance at the time of the subsequent re- inspection. Subordinations Staff received and evaluated three requests for subordination. Two were 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. 19C -3 Third Quarter FYTD Loan Payoffs $50,532 $457,792 Residual Receipts Payments $13,350 $129,533 Amortized Loan Payments $49,429 $147,513 Total $113,311 $734,838 Monitoring 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, 71 owner occupancy recertification letters were mailed; 65 were returned and processed. Staff also audited files for 30 units in one project, and conducted code compliance inspections for 111 units in eight projects. Regulations require that only a sample be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet municipal 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, inoperative burners, faulty GFCI outlets, inoperative smoke alarms, and carbon monoxide detectors. All of the deficiencies were repaired and the units were found to be in compliance at the time of the subsequent re- inspection. Subordinations Staff received and evaluated three requests for subordination. Two were 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. 19C -3 Quarterly Report Housing Division Projects and Activities (Jan — Mar 2014) June 3, 2014 Page 4 Development Projects NSP 1.2 and 3 Programs The City's intermediaries, ANR Industries, Orange Housing Development Corporation, and C &C Development, continue to look for eligible properties. Multi - Family Acquisition / Rehabilitation Projects City Council approved a loan agreement with 940 Minnie, LP for the acquisition and rehabilitation of a ten -unit apartment building located at 940 S. Minnie Street. Escrow is expected to close next quarter. In -Fill Development Proiects Habitat for Humanity of Orange County has four single - family dwellings currently under construction. The dwellings located at 1314 N. Eastwood, 793, 797 and 812 Concord are expected to be completed in July 2014. 1121 S. Cypress was purchased by a qualified family and closed escrow during this quarter. The Depot at Santiago, LP is working through planning entitlements for the development of a 70- unit affordable housing project at the northeast comer of Santa Ana Blvd. and Santiago Street. City Council approved a loan agreement with 815 N. Harbor, LP for the development of a 70 -unit affordable housing project located at the southeast corner of Harbor Blvd. and Hazard Avenue. FISCAL IMPACT There is no fiscal impact associated with this action. Shelly La ry-Bayle Housing Manager Community Development Agency SLB /kg 19C -4