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Home My WebLink About19D - QRTLY RPT HOUSING PROJECTSREQUEST FOR COUNCIL ACTION AUGUST 5, 2014 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES APRIL 2014 — JUNE 2014 CITY MANAG RECOMMENDED ACTION Receive and file. CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on V' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its regular meeting on July 16, 2014, by a vote of 6:0, the Community Redevelopment and Housing Commission recommended the action stated above. DISCUSSION This status report for the quarter ending on June 30, 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 total fiscal year. 19D -1 Quarterly Report Housing Division Projects and Activities (Apr — Jun 2014) August 5, 2014 Page 2 Table 1: Applications Sent Out, Received & Approved Program Inquiries Applications Sent Out Applications Received Applications Approved Q4 Total FY Q4 Total FY Q4 Total FY Q4 Total FY Single-Family Rehabilitation 25 181 20 150 4 13 1 6 Mobile Home Rehabilitation 2 35 3 28 1 4 0 2 Homeownership 66 477 56 389 7 11 3 41 Rehabilitation Loan Underwriting and Approval 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 two homeowner rehab projects out to bid, five under construction and three were completed. 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 eleven workshops which were attended by 209 individuals, the majority being Santa Ana residents. Staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by HUD. Applicants must meet established income 19D-2 Quarterly Report Housing Division Projects and Activities (Apr -- Jun 2014) August 5, 2014 Page 3 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. 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 $109,226,151. This is comprised of 448 loans of which 418 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $380,700 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, 63 owner occupancy recertification letters were mailed; 57 were returned and processed. Staff also audited files for 29 units in two projects, and conducted code compliance inspections for 48 units in two 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. 19D-3 4 Quarter Total FY Loan Payoffs $67,376 $525,168 Residual Receipts Payments $275,890 $405,423 Amortized Loan Payments $37,434 $184,947 Total $380,700.00 $1,115,538 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, 63 owner occupancy recertification letters were mailed; 57 were returned and processed. Staff also audited files for 29 units in two projects, and conducted code compliance inspections for 48 units in two 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. 19D-3 Quarterly Report Housing Division Projects and Activities (Apr — Jun 2014) August 5, 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. The acquisition of a single - family home located at 1235 S. Cypress is expected to close escrow in August 2014. Multi - Family Acquisition / Rehabilitation Projects 940 Minnie, LP completed the acquisition of a multi - family property located at 940 S. Minnie Street. The developer is currently in the process of relocating their tenants and the rehabilitation is expected to commence in the fall of 2014. Once the rehabilitation is complete, the property will yield eight affordable rental units consisting four 1- bedroom units, two 2- bedroom units and two 3- bedroom units. In -Fill Development Projects Habitat for Humanity of Orange County Four single - family dwellings are currently under construction. The dwellings located at 1314 N. Eastwood, 793, 797 and 812 Concord are expected to be completed in September 2014. The construction of five single - family dwellings at 4010 and 4110 W. Mc Fadden is expected to begin in the fall /winter of 2014. Depot at Santiago (70 -Unit Affordable Rental Housing Development) The developer has worked through planning entitlements and applied for a tax credit allocation. Construction is anticipated to begin in March 2015. 815 N. Harbor (70 -Unit Affordable Rental Housing Development) The conceptual site plan was approved. The Harbor Corridor Specific Plan is expected to be approved in September 2014. Santa Ana Station District — For Sale (25 affordable Homes) Escrow closed and the developer, City Ventures Homebuilding LLC, has completed site preparation and grading. On -site water and sewer is underway. STRATEGIC PLAN ALIGNMENT The activities covered by this report allow the City to meet Goal #5 - Community Health, Livability, Engagement & Sustainability, Objective #3 - Facilitate Diverse Housing opportunities and Support Efforts to Preserve and improve the Livability of Santa Ana Neighborhoods, 19D-4 Quarterly Report Housing Division Projects and Activities (Apr — Jun 2014) August 5, 2014 Page 5 FISCAL IMPACT There is no fiscal impact associated with this action. Shelly Lana -Bayle Housing MAY Community Development Agency SLB /kg 19D -5 19D-6