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HomeMy WebLinkAbout19D - HOUSING QRTLY RPTCITY COUNCIL MEETING DATE: NOVEMBER 15, 2016 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES JULY 2016 — SEPTEMBER 2016 (STRATEGIC PLAN NO. 5,3) / r J CITYMANAGG CLERK OF COUNCIL USE ONLY: APPROVED © As Recommended El As Amended © Ordinance on 16' Reading El Ordinance on 2nd Reading [3 Implementing Resolution ® Set Public Hearing For® CONTINUED TO FILE NUMBER Receive and file the quarterly report for Housing Division Projects and Activities July 2016 - September 2016. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on October 26, 2016, by a vote of 6:0, the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This report for the quarter ending on September 30, 2016 provides statistics for all of the affordable housing projects and activities for our Housing Division. 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 down payment assistance for first-time homebuyers and rehabilitation loans for mobile homes, single-family, multi -family, and historic homes. Inquiries are received from the public and applications are mailed out, received and approved for these programs on a continual basis. During this quarter, there was one Loan Subordination request. Table 1 shows the number of inquiries, applications sent out, received and approved by type for the quarter and the total fiscal year. 1901-1 Quarterly Report for Housing Division November 15, 2016 Page 2 Table 1: Applications Sent Out, Received & Approved Rehabilitation Loan Underwriting and Approval Progress For our rehabilitation loans, 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 for 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 loan execution, and reserves the required loan funds. During this quarter, one mobile home rehabilitation loan was funded. Rehabilitation Program Construction Progress 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 the 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 rehabilitation projects out to bid and six under construction. Downpayment Assistance Program Progress For our downpayment assistance program, staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by the U.S Department of Housing and Urban Development (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 $480,000 for a single family home or condo or $480,000 for a newly constructed condo or home. The updated maximum sales price became effective on May 2, 2016. Additionally, the property needs to be in good condition and pass an inspection. 19D-2 Inquiries Applications Applications Applications Program Sent Out Received Q1 Total Q1 Total Total Q1 —Approved Q1 Total FY FY FY FY Single -Family Rehabilitation 15 15 15 15 1 1 0 0 Mobile Home Rehabilitation 12 12 12 12 1 1 1 1 Multi -Family Rehabilitation 4 4 1 1 0 0 0 0 Historic Home Restoration 0 0 0 0 0 0 0 0 Homeownership 30 30 30 30 2 2 0 0 Rehabilitation Loan Underwriting and Approval Progress For our rehabilitation loans, 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 for 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 loan execution, and reserves the required loan funds. During this quarter, one mobile home rehabilitation loan was funded. Rehabilitation Program Construction Progress 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 the 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 rehabilitation projects out to bid and six under construction. Downpayment Assistance Program Progress For our downpayment assistance program, staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by the U.S Department of Housing and Urban Development (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 $480,000 for a single family home or condo or $480,000 for a newly constructed condo or home. The updated maximum sales price became effective on May 2, 2016. Additionally, the property needs to be in good condition and pass an inspection. 19D-2 Quarterly Report for Housing Division November 15, 2016 Page 3 During this quarter, staff conducted one down payment assistance workshop. A total of 38 people attended the workshop. In addition, one buyer was approved for an Inclusionary Housing Unit purchase at Magnolia Lane. Loan Portfolio Management & Monitoring The Housing Division is responsible for managing the residential loan portfolio. As of the end of this quarter, the principal balance was $113,201,066. This is comprised of 429 loans of which 400 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $202,081 in payments of principal and interest during the quarter. Table 2: Portfolio Revenue Source 1st Quarter Total FY Loan Payoffs $31,384 $31,384 Residual Receipts Payments $140,310 $140,310 Amortized Loan Payments $30,387 $30,387 Total $202,081 $202,081 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, 94 owner -occupancy recertification letters were mailed; 80 were returned and processed. Staff also audited files for 9 units in 9 projects, and conducted code compliance inspections for 26 units in 6 projects. Regulations require that only a sample of units 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 grounds, common areas and almost all of the inspected units were found to be in compliance at the time of initial inspection. One of the units was lacking a carbon monoxide detector which was immediately repaired and passed inspection. 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 The rehabilitation of 940 S. Minnie Street was completed during the previous fiscal year and is fully occupied. The City will process its final payment and closeout the project during the next quarter. 19D-3 Quarterly Report for Housing Division November 15, 2016 Page 4 Habitat for Humanity of Orange County Habitat for Humanity of Orange County continues the construction of five homes located at 4010 - 4026 E. McFadden Street. Once completed, the homes will be sold to qualified low- and moderate -income homebuyers. Depot at Santiago (New 70 -Unit Affordable Rental Housing Development) Construction commenced in April 2016 and the retaining walls and podium columns are about 50% complete. The entire project is expected to be completed in July 2017. Andalucia Apartments (New 70 -Unit Affordable Rental Housing Development) Rough framing, mechanical, electrical and plumbing systems are complete. Exterior finishes are about 80% complete. Interior finishes are about 50% complete. The entire project is expected to be completed in January 2017. Santa Ana Arts Collective (Adaptive Reuse for 57 Units of Affordable Rental Housing) The Developer, Meta Housing Corporation, was awarded funds through a Request for Proposal (RFP) process to acquire and develop 57 affordable rental housing units with a preference for applicants who are artists and working artist families within Santa Ana. The Developer has completed the entitlement process. The Developer was invited to submit a proposal for Affordable Housing and Sustainable Communities Program grant funds (Cap & Trade) provided by the California Strategic Growth Council. Their proposal was submitted in June 2016 and on October 11th the California Strategic Growth Council awarded $12,028,626 in funding to the Santa Ana Arts Collective and the City of Santa Ana Public Works Agency. The project was one of 25 projects awarded out of a total pool of 85 applications, and the only project awarded in Orange County. Out of two rounds of funding for this State program, this is the 2°d award received for a project in the City of Santa Ana. Guest House (Rehabilitation of 71 Units of Affordable Rental Housing) The Developer, Community Development Partners and Mercy House, was awarded HOME funds through a Request for Proposal (RFP) process to acquire and rehabilitate a former motel on First Street into 71 units of permanent supportive housing for homeless individuals. The Developer was successful in obtaining tax credits and affordable housing bonds, and is anticipated to close and start construction during this quarter. First Street Apartments (New 69 -Unit Affordable Rental Housing Development) On April 19, 2016, City Council approved an award of inclusionary housing in -lieu fees to the Developer, AMCAL Multi -Housing LLC, for the First Street Apartments project and approved a conditional loan commitment letter of $8,795,000 that will be contingent on the City's actual receipt of in -lieu fee payments of $9,695,725.60, or a portion thereof, or a cash equivalent to the in -lieu fee payments from the Heritage Village OC, LLC. 19D-4 Quarterly Report for Housing Division November 15, 2016 Page 5 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). FISCAL IMPACT There is no fiscal impact associated with this action. i Robert C.ei� z Deputy City Manager -` City Manager's Office 19D-5 19D-6