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Home My WebLink AboutAgenda Report - June 19, 2013 C-26AGENDA ITEM ** V6 yOF�CITY 1 OQCOUNCIL COMMUNICATION TM ��/FORS AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Submit an Application to the State of California Department of Housing and Community Development for HOME Investment Partnerships Program Funding; and if Selected, the Execution of a Standard Agreement, any Amendments Thereto, and of any Related Documents Necessary to Participate in the HOME Investment Partnerships Program ($700,000) MEETING DATE: June 19, 2013 PREPARED BY: Community Development Department RECOMMENDED ACTION: Adopt resolution authorizing the City Manager to submit an application to the State of California Department of Housing and Community Development (HCD) for HOME Investment Partnerships (HOME) Program funding; and if selected, the execution of a Standard Agreement, any amendments thereto, and of any related documents necessary to participate in the HOME Program. BACKGROUND INFORMATION: In 2009, the City of Lodi established itself as an Entitlement Community to receive the annual federal Community Development Block Grant (CDBG) allocation directly from the U.S. Department of Housing and Urban Development (HUD). While Lodi does qualify to receive CDBG funds directly from HUD, it does not qualify to receive HOME funds directly and is therefore required to pursue funding from the State HCD, where it is pooled and made available through a competitive application process. The State HCD makes those HOME funds available for housing rehabilitation, new construction, and acquisition and rehabilitation, for both single-family and multifamily projects, and predevelopment loans by Community Housing Development Organizations (CHDOs) through an annual Notice of Funding Availability (NOFA). In 2009, Lodi applied for and was awarded $800,000 for a First Time Home Buyer (FTHB) Loan Program. That contract for funding expired on May 31, 2012. Lodi's second attempt for HOME funding for the FTHB Loan Program was unsuccessful in 2012, due to the volume of applications received and the reduced amount of funding that was available. However, HCD provides bonus points to the scoring matrix for any applications that were eligible but were denied due to lack of funding. Those additional points should increase our chances to receive funding this year. We intend to submit application for HOME Program funding for the FTHB Program activity through HCD in response to the 2013 NOFA that was released on May 1, 2013. The application period for that NOFA ends on July 8, 2013. Bartlam, City Manager Authorize HOME Application - FTHB June 19, 2013 Page 2 One modification from our previous program is that we are including both Acquisition Only and Acquisition with Rehabilitation activities. Many of the homes on the market that are available to our low- income clientele require some degree of repairs and/or renovations. As an Acquisition Only activity, buyers would not able to get into those homes through our program unless the sellers made all repairs prior to close of escrow. Having the option to do Acquisition with Rehabilitation within our program will allow us to provide more assistance to first-time homebuyers with the current market conditions. HCD Guidelines are being adapted to possibly allow a portion of the rehab funds to be provided as a grant. The maximum allocation allowed for these multi -activity HOME programs is $700,000 and the minimum is $500,000. Any jurisdiction awarded HOME funds through HCD is not allowed to apply for additional funding until it has used 50 percent of its current allocation, or the contract for funding has expired. FTHB Program Highlights Income Eligibility: Household incomes at or below 80 percent of Area Median Income (AMI), based upon the following household sizes. Source: State of California Housing and Community Development 2013 CDBG & HOME Income Levels Effective March 15, 2013 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 7 Persons 8 Persons Loan Type: Deferred (silent second) loan up to $60,000, but cannot exceed the amount of the primary loan. Interest Rate: 2 percent. Term: Loan shall be "due and payable" 30 years from close of escrow, upon transfer of the property, or when the home is no longer owner -occupied, whichever comes first. Buyer Contribution: Minimum 2 percent of the purchase price. Affordability Period: Five years — Loans up to $15,000 Ten years — Loan amount $15,000 to $39,999 Fifteen years — Loan amount $40,000 to $60,000. Qualification Req.: Must not have owned a home in the past three years. Must attend and obtain a certificate from an approved first-time homebuyer education/counseling session. Acquisition With Rehabilitation: If HOME funds are available, the buyer may use First -Time Homebuyer loan funds to make necessary repairs. All health and safety hazards and code violations must be addressed under this option. Examples of allowable expenses include, but are not limited to: foundation repair, electrical repair or rewiring, plumbing or sewer repair, roof repair or replacement, heating system installation or repair, and repair of structurally -significant damaged wood. Authorize HOME Application — FTHB June 19, 2013 Page 3 FISCAL IMPACT: Program administration and project delivery costs incurred by the City are eligible expenses reimbursed through the grant program. FUNDING AVAILABLE: HOME Program Funding through State Housing and Community Development kA -4 sz— Jordan Ayers, Deputy City Ma a er t onradt Bartlam Community Development Director KB/jw Attachment RESOLUTION NO. 2013-118 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO SUBMIT AN APPLICATION TO THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR HOME INVESTMENT PARTNERSHIPS PROGRAM FUNDING; AND IF SELECTED, THE EXECUTION OF A STANDARD AGREEMENT, ANY AMENDMENTS THERETO, AND ANY RELATED DOCUMENTS NECESSARY TO PARTICIPATE IN THE HOME INVESTMENT PARTNERSHIP PROGRAM ------------------------------------------------------------------- ------------------------------------------------------------------- WHEREAS, the California Department of Housing and Community Development (the "Department") is authorized to allocate HOME Investment Partnerships Program ("HOME") funds made available from the U.S. Department of Housing and Urban Development ("HUD"). HOME funds are to be used for the purposes set forth in Title II of the Cranston -Gonzalez National Affordable Housing Act of 1990, in federal implementing regulations set forth in Title 24 of the Code of Federal Regulations, part 92, and in Title 25 of the California Code of Regulations commencing with section 8200; and WHEREAS, on May 1, 2013, the Department issued a 2013 Notice of Funtling -- Availability announcing the availability of funds under the HOME program (the "NOFA"); and WHEREAS, in response to the 2013 NOFA, the City of Lodi, a municipal corporation, (the "Applicant"), wishes to apply to the Department for, and receive an allocation of, HOME funds. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize the City Manager, in response to the 2013 NOFA, to submit an application to the Department to participate in the HOME Program and for an allocation of funds not to exceed Seven Hundred Thousand Dollars ($700,000) for the following activities and/or programs: First-time homebuyer down payment assistance to low- and very low-income households for the purchase of qualified homes in the City of Lodi, under both Acquisition -Only and Acquisition with Rehabilitation activities. BE IT FURTHER RESOLVED, if the application for funding is approved, the Applicant hereby agrees to use HOME funds for eligible activities in the manner presented in the application as approved by the Department in accordance with the statutes and regulations stated above. The Applicant may also execute a standard agreement, any amendments thereto, and any and all other documents or instruments necessary or required by the Department for participation in the HOME program (collectively, the required documents). The Applicant authorizes the City Manager or his designee(s) to execute, in the name of the applicant, the required documents. Dated: June 19, 2013 ------------------------------------------------------------------- ------------------------------------------------------------------- I hereby certify that Resolution No. 2013-118 was passed and adopted by the Lodi City Council in a regular meeting held June 19, 2013, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Johnson, Katzakian, and Mayor Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Mounce ABSTAIN: COUNCIL MEMBERS —None LF City Clerk 2013-118