HomeMy WebLinkAbout1999-08-24 - AGENDA REPORTS - REVOLVING HOME LOAN PGM (2)AGENDA REPORT
City Manager ApprovAa
Item to be presented by: Deens
NEW BUSINESS
DATE: August 24, 1999
SUBJECT: REVOLVING HOME LOAN REHABILITATION PROGRAM
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
Direct the City Manager to implement a Housing Rehabilitation Program beginning
Fiscal Year 1999-2000.
BACKGROUND
Using funds from repaid 1994 Earthquake repair home loans ($57,000) and CDBG
dollars ($86,342), staff seeks the direction to implement a new Housing
Rehabilitation Program. Based on comments at the April 6, 1999 City Council
Study Session, the above funds were appropriated in the 1999-2000 City Budget for
this program. HUD also supports and encourages the City to implement such a
program to meet CDBG objectives. The following information represents staffs
recommended implementation of the program. The information covers who is
eligible, HUD criteria, loans and grants which will be available, application process,
and the sustainability of the program.
Income
Staff recommends applicants' incomes not to exceed 60% of the median income or
$30,780. However, if it becomes difficult to approve residents at 60%, staff would
raise limits up to the HUD maximum of 80% of median income or $41,040.
HUD Criteria
This includes providing loans and grants to owner -occupied homes to meet local code
standards and special purpose programs and reconstruction. Eligible costs include
labor and materials, replacement of principal fixtures and components, sewer and
water connections, and security devices. Eligible Santa Clarita residents could get
help for building code violations and esthetic improvements, such as paint, fencing,
basic landscaping of front yards, irrigation, and driveway replacements.
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REVOLVING HOME LOAN REHABILITATION PROGRAM
August 24, 1999 — Page 2
Grants and Loans
The program will include both grants and loans. The grants will not exceed $5,000,
and the loans will not exceed $40,000. Staff recommends 1/3 of the budget be used
to target grants for the purpose of quickly stimulating neighborhood improvement.
The loan is a second trust deed at low interest, due upon the sale or refinancing of
the property. The purpose of the loans are for projects which provide the home with
greater structural integrity. Loan approval would primarily be based on
loan -to -home -value ratios and home equity. (The value of intended improvements
would be included.)
Application Process
Applications would be accepted between October 16, 1999, and December 16, 1999,
and notifications occurring in January 2000. Print advertising on the program,
including eligibility criteria, would be used to inform residents.
Annually sustaining this program without impacting the general fund is possible.
Staff anticipates more earthquake loans will be paid off, and these funds will be
rolled back into the program. The number of loans and grants could grow in future
years assisting more low and moderate income persons if the City becomes a
preferred jurrisdiction for HUD HOME funds and if the Redevelopment Agency
grows sufficiently to generate required housing set -a -side funds. Another method to
increase assistance is to create a housing bank supported by developer fees.
Staff will seek opportunities to leverage revolving loan funds with other programs,
such as the City's two low-income homebuyer assistance programs. This could allow
low-income families to purchase affordable neighborhood "eyesore" homes and repair
them. Also staff will leverage the grants and loans with a recycled paint program
providing low-cost paint.
ALTERNATIVE ACTIONS
Not do a revolving home improvement loan/grant program, modify the CDBG
Consolidated Plan, and return Earthquake loan repayments to HUD.
2. Only do home rehabilitation loans, not including grants.
FISCAL IMPACT
The program and associated staff costs are funded by repaid earthquake home
repair loans and CDBG funds. This is a 1999-2000 budgeted item. Program costs
will not exceed the special funds available to support the program.
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