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Home My WebLink About19D - QUARTERLY REPORT DIV PROJREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 7, 2017 TITLE: QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES JULY 2017 — SEPTEMBER 2017 (STRATEGIC PLAN NO. 5,3) RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: 01IJ- 971vo: ❑ As Recommended ❑ As Amended ❑ Ordinance on 1a Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Receive and file the Quarterly Report for Housing Division Projects and Activities for the period of July 2017 — September 2017. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on October 25, 2017, by a vote of 4:0 (De Leon, Ramos and Santana absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This report for the quarter ending ,on September 30, 2017 provides statistics for all of the affordable housing projects and activities for the Housing Division. The report is divided into three sections: Loan Activity, Loan Portfolio Management and Monitoring, Affordable Housing Funds and Commitments, 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. 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 for Housing Division November 7, 2017 Page 2 Table 1: Aoolications Sent Out. Received & Anoroved Program Inquiries Applications Sent Out Applications Received Applications A roved Q1 Total Q1 Total Q1 Total Q1 FY FY FY Total FY Single -Family Rehabilitation 32 32 25 25 5 5 1 1 Mobile Home Rehabilitation 30 30 25 25 3 3 0 0 Multi -Family Rehabilitation 0 0 0 1 0 0 0 0 Historic Home Restoration 1 1 1 1 0 0 0 0 Homeownership 75 75 64 64, 1 1 0 0 Rehabilitation Loan Underwriting and Approval Progress For the 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 single family rehabilitation loan was approved and one inclusionary housing purchase at City Ventures was approved. During this quarter, staff attended the Artesia Pilar and Flower Park Neighborhood Association meeting to promote the Single Family Rehabilitation Loan Program. 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 with the evaluation of bids and selection of a contractor. Staff also monitors the construction work, approves payments to contractors, and tracks expenditures to ensure compliance with the loan agreement and program guidelines. At the end of this quarter, there were two (2) homeowner rehabilitation projects out to bid and four (4) under construction. Downuayment Assistance Program Progress For the 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 $499,000 for a single family home or condo. The updated maximum sales price became effective on March 1, 2017. Additionally, the property needs to be in good condition and pass an inspection. 19D-2 Quarterly Report for Housing Division November 7, 2017 Page 3 During this quarter, staff conducted one (1) down payment assistance workshop at Santa Ana College in which a total of 15 people attended. City staff also conducts weekly presentations to potential first-time buyers at City Ventures. 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 $121,159,038. This is comprised of 413 loans of which 389 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $196,768 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 of single family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 66 owner -occupancy recertification letters were mailed and 58 were returned and processed. Staff also audited files for 5 projects and conducted building code compliance inspections for 12 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 all of the inspected units were found to be in compliance at the time of initial inspection. Available Funds for Affordable Housing Development Projects The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency manages multiple sources of local, state and federal funds to promote and facilitate the development of affordable housing. As of September 30, 2017, a total of $2,194,192 is available for affordable housing development. Exhibit 1 provides a summary of the funds available as of the end of this quarter. 19D-3 Funding Sources HOME CDBG Redevelopment NSP CaIHOME Loan Payoffs $16,194 $0 $0 $42,189 $0 Residual Receipts $19,702 $0 $54,882 $29,849 $0 Payments Amortized Loan $5,018 $5,136 $21,798 $2,000 $0 Payments Total For Q1 $40,914 $6,136 $76,680 $74,038 $0 Monitoring As part of the requirements for these funds, staff must monitor the owner -occupancy of single family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 66 owner -occupancy recertification letters were mailed and 58 were returned and processed. Staff also audited files for 5 projects and conducted building code compliance inspections for 12 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 all of the inspected units were found to be in compliance at the time of initial inspection. Available Funds for Affordable Housing Development Projects The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency manages multiple sources of local, state and federal funds to promote and facilitate the development of affordable housing. As of September 30, 2017, a total of $2,194,192 is available for affordable housing development. Exhibit 1 provides a summary of the funds available as of the end of this quarter. 19D-3 Quarterly Report for Housing Division November 7, 2017 Page 4 Housing Opportunity Ordinance All in -lieu fees, penalties and other monies collected pursuant to the Housing Opportunity Ordinance, including interest, are deposited into the Inclusionary Housing Fund. Since inception, the Inclusionary Housing Fund has generated $7,851,002.25 to be used for the development of housing affordable to low and moderate income households, with a reasonable amount spent on administrative or related expenses associated with the administration of the Housing Opportunity Ordinance. To date, the Inclusionary Housing Fund has invested $6,075,000 towards the development of 107 affordable rental housing units in the City. In regards to affordable ownership housing units, a total of 23 inclusionary affordable homes have been produced and/or are under construction as a result of our Housing Opportunity Ordinance. Projects under Development NSP 1, 2 and 3 Programs The City will begin the final closeout of the NSP 1, 2, and 3 Programs and will reallocate the final program balance to the Community Development Block Grant (CDBG) Program. For Sale Infill Housing (4010 - 4026 E. McFadden Street) • Developer: Habitat for Humanity of Orange County • Description: Acquisition and new construction project comprised of five (5) affordable single- family homes to be sold to qualified low- to moderate -income buyers. • City Funds: Land provided by the Redevelopment Agency • Status: Project is currently under construction and on target for completion by December 2017. Depot at Santiago (923 N. Santiago Street) • Developer: C & C Development • Description: Acquisition, demolition and new construction project comprised of 69 affordable rental units, 1 manger's unit, a 3,000 SF community room, and 8,500 SF of retail space. • City Funds: HOME ($2,634,566), CDBG ($365,434) • Update: Construction commenced in April 2016 and is about 80% complete. Project is on target for completion in December 2017. The Orchard (2151 E. First Street) • Developer: Community Development Partners with Mercy House as the service provider • Description: Acquisition and rehabilitation of former motel yielding 71 units of affordable permanent supportive housing with wrap-around supportive services for chronically homeless individuals in the City of Santa Ana, and 1 manager's unit. • City Funds: HOME ($1,199,869), 71 HUD Project -Based Vouchers ($7,895,194) • Update: Construction commenced in January 2017 and is approximately 75% complete. Project is on target for completion in November 2017. 19D-4 Quarterly Report for Housing Division November 7, 2017 Page 5 Santa Ana Arts Collective (1666 N. Main Street) • Developer: Meta Housing Corporation • Description: Acquisition, adaptive reuse and new construction project comprised of 57 affordable rental units designated for professional artists of all disciplines, and 1 manager's unit. • City Funds: Inclusionary Housing ($4,775,000), HOME ($2,219,760), CDBG ($500,000) • Update: Construction commenced on July 28, 2017 and the project is approximately 5% complete. Staff is working with the developer and property management company on the tenant selection policies and procedures. First Street Apartments (1440 E. First Street) • Developer: AMCAL Multi -Housing, LLC. • Description: Demolition and new construction of an affordable multifamily apartment complex consisting of 68 units of rental housing serving very -low and extremely -low income families, and 1 manager's unit. • City Funds: Housing Successor Agency ($8,522,740) • Update: On September 20, 2017, the California Tax Credit Allocation Committee awarded the project $1,469,342 in Low -Income Housing Tax Credits. Santa Ana Veterans Village (3312 W. First Street) • Developer: Jamboree Housing Corporation with Step Up on Second as the service provider • Description: New construction of an affordable multifamily apartment complex consisting of 75 units of permanent supportive housing with wrap-around supportive services for HUD-VASH eligible homeless veterans in the City of Santa Ana and 1 manager's unit. • City Funds: 75 HUD-VASH Project -Based Vouchers ($11,489,000), HOME ($353,962) • Update: Developer's application for 9% Low -Income Housing Tax Credits was not successful; staff is working with the developer to secure other sources of financing; developer will reapply the next round. Aqua Housing (317 E. 17th Street) • Developer: Community Development Partners with Mercy House as the service provider • Description: Acquisition, demolition and new construction of a former motel yielding 56 units of affordable permanent supportive housing with wrap-around supportive services for chronically homeless individuals in the City of Santa Ana and 1 manager's unit. • City Funds: 56 Project -Based Vouchers ($9,237,900) • Update: Developer's application for 9% Low -Income Housing Tax Credits was not successful; staff is working with the developer to secure other sources of financing. Tiny Tim Plaza (2223 West 5th Street) • Developer: Community Development Partners. • Description: New construction of an affordable multifamily apartment complex consisting of 51 units of rental housing serving very -low and extremely -low income families, and 1 manager's unit. • City Funds: Inclusionary Housing ($1,300,000), Housing Successor Agency ($4,700,000) 19D-5 Quarterly Report for Housing Division November 7, 2017 Page 6 • Update: Developer is currently pursuing other sources of financing to fill an estimated financial gap of approximately $11.7 million; staff is working with the developer to secure other sources of financing. 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. a✓vD �` , ' i Robert M. Zur Sch i de Interim Executive Di ctor Community Development Agency Exhibit: 1. Available Funds for Affordable Housing Development Projects 19D-6 Exhibit 1 Available Funds for Affordable Housing Development Projects As of September 30, 2017 Housing Successor Agency (Housing Authority) $13,920,230 Cash on Hand ($8,522,740) First Street Apartments Pre -Commitment Loan ' ($4,700,000) Tiny Tim Plaza Conditional Pre -Commitment Loan ' ($278,725) Habitat for Humanity Disposition and Development Agreement ($250,000) Administrative Costs Allowance ` $168,765 Available Funds Inclusionary Housing Funds $2,975,863 Cash on Hand ($472,651) Santa Ana Arts Collective Project Costs a ($1,300,000) Tiny Tim Plaza Conditional Pre -Commitment Loan ($134,713) Administrative Costs Allowance (CDA/PBA) $1,068,499 Available Funds HOME Program $1,648,273 Funds to Drawdown ($353,963) Santa Ana Veterans Village Pre -Commitment Loan $1,294,310 Available Funds to Drawdown CDBG Program (Acquisition/Rehabilitation Projects Only) $1,474,191 Funds to Drawdown ($500,000) Santa Ana Arts Collective Pre -Commitment Loan $974,191 Available Funds to Drawdown $3,505,765 Total Available Funds 1 Approved by City Councll/Housing Authority on June 20, 2017. 2 The Housing Successor Agency relies an available cash to fund the monitoring and compliance functions related to the former Redevelopment Agenuys housing loans. a Only includes the project costs; $4.810 in loans approved by City Council paid on July 26, 2017. < Approved by City Council on February 7. 2017. 1901-7 29A-4