HomeMy WebLinkAbout2004-09-14 - AGENDA REPORTS - FUNDING FIRST TIME HOMEBUYER (2)Agenda Item: _7
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Dennis Luppens
DATE: September 14, 2004
SUBJECT: RESOLUTION TO SUBMIT APPLICATION FOR 2004-2005
STATE HOME FUNDING FOR FIRSTHOME, THE CITY'S
FIRST-TIME HOMEBUYER PROGRAM
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council adopt resolution supporting the City's application for HOME funds in the amount of
$600,000, and authorize the City Manager or designee to execute any contracts, change orders, or
amendments arising out of this program, subject to City Attorney approval.
BACKGROUND
For the last two years, the City has operated a successful first-time homebuyer program called
FirstHOME. FirstHOME provides low- to moderate -income homebuyers with a
deferred -payment, low-interest second mortgage loan, which is used to make a down payment on
a home in Santa Clarita. The original FirstHOME loans were made using proceeds from repaid
1994 earthquake rehabilitation loans. The FirstHOME program has a current balance of
$147,000 and a pending application which will use $100,000 by November 2004. In order to
continue the program, additional funding is needed.
The State of California Department of Housing and Community Development has released a
Notice of Funding Availability (NOFA) for first-time homebuyer funds. The City is eligible to
apply for $600,000 in funding, which would allow FirstHOME to ftind a minimum of six new
deferred -payment second mortgages for low- to moderate -income homebuyers.
ALTERNATIVE ACTIONS
Not apply for State HOME funds.
Adop1ed:f=,ac/_o-7
FISCAL IMPACT
There is no General Fund impact. Administrative costs to implement the FirstHOME program
are paid out of the grant.
ATTACHMENTS
Resolution
Homebuyer Profile
Resolution to Applyfor HOME Funds
Agenda Item Attachment
The Homebuyer
The profile of a successful City FirstHOME candidate:
• a current resident, family of four
• income approximately $45,000 per year
• good credit, low debt
• purchasing a two-bedroom, two -bath condominium
• purchase price in the $225,000 to $250,000 range
• qualified for a maximum first mortgage of $150,000
An example of the funding for this family is below:
Costs
Purchase Price
Closing Costs
Financing
$239,000
$ 5,255
Total Home Cost $244,255
First Mortgage
Buyers 2% Cash Contribution
FirstHOME 2 nd Mortgage
Total
$150,000
$ 4,780
$ 89,475
$244,255
Previous FirstHOME Loans
In 2003 and 2004, four similar loans were provided: one in Saugus, two in Valencia, and
one in Canyon Country.