HomeMy WebLinkAbout2005-04-12 - AGENDA REPORTS - HOME INVESTESTMENT GRANT AWARD (2)Agenda Item: 9
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval: 44:::�4e_
Item to be presented by: Dennis Luppens
DATE: April 12, 2005
SUBJECT: ACCEPTANCE OF $600,000 HOME INVESTMENT
PARTNERSHIP PROGRAM GRANT AWARD
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council direct the City Manager to enter into an agreement with the State of California,
Department of Housing and Community Development to implement a first-time home buyer
program. Increase revenue account 102-5223 by $600,000, and appropriate $600,000 to
expenditure account 2711-8001. Appropriate $132,338 from HOME Fund Balance to account
2711-8001.
BACKGROUND
In November 2004, the City Council authorized Administrative Services staff to submit an
application for Home Investment Partnership funds to the State of California, Housing and
Community Services Department. Six hundred thousand dollars was awarded to the City to
continue the successful first-time homebuyer program, FirstHOME. This program provides low -
and moderate -income first-time homebuyers with downpayment assistance in the form of a
low-interest, deferred -payment second mortgage.
The City's General Plan Housing Element, Community Development Block Grant (CDBG)
Consolidated Plan, and the CDBG Analysis of Impediments tor Fair Housing Choice all
specifically identify operating a homeownership program as a City goal. President Bush has also
identified homeownership as one of his highest priorities. In his Strengthening America
Initiative, which he outlined during the recent State of the Union Address, he proposed a
significant increase in the budget for HOME Investment Partnership, the funding source for
FirstHOME. In addition, Governor Schwarzenegger has also expressed his support of
government programs which promote homeownership.
APPROVED
FirstHOME is an important tool in providing homeownership opportunites in Santa Clarita,
where the median home price is $496,000. Programs of this type are common among cities in
Southern California, where the increase in the cost of homeownership in recent years has
dramatically outpaced the increase in earning power for the average family. Glendale, Pasadena,
Thousand Oaks, and Simi Valley all operate similar first-time homebuyer programs. Funds for
these programs are drawn from a variety of sources, and the amount of assistance provided by
Santa Clarita's FirstHOME Program is neither the highest or lowest of the surrounding areas. In
Simi Valley, the typical package of deferred loans provided are 60% higher than in Santa Clarita.
For families earning at or below the Los Angeles median family income, programs available
through the private sector often do not provide sufficient assistance to purchase a modest home
in Santa Clarita or any other part of Southern California. Typical private sector mortgage
assistance programs provide small reductions in first and second mortgage interest rates, small
deferred -payment second mortgages, adjustable rate loans, and interest only loans. It is difficult
for these programs to provide enough assistance to bridge the gap between the cost of
homeownership and the reasonable housing costs for the average family.
ALTERNATIVE ACTIONS
1) Not approve the acceptance of HOME funds.
2) Other actions as directed by the City Council.
FISCAL MPACT
No impact to the General Fund. The HOME grant covers loan costs and administrative costs.
ATTACHMENTS
First -Time Homebuyer Thank You Letters (2)
First -Time Homebuyer Program Comparison Chart
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R E C E I V E D
JAN 2 12004
FINANCE DIVISION 27620 Susan Beth Way
CITY OF SANTA CLARITP Unit H
Santa Clarita, CA 913 50
January 19', 2004
City of Santa Clarita
c/o Dennis Luppens and Erin Moore -Lay
23 920 Valencia Boulevard
Suite 300
Santa Clarita, CA 91355
Dear City of Santa Clarita,
It was back in May of last year that my husband and I seriously considered moving from
our apartment in Newhall. We had desired to buy a home but the costs in buying a home locally
seemed out of our reach financially. Then, one afternoon in July after getting the mail, I read the
city of Santa Clarita's newsletter brochure and spotted the article on the First Time Home Buyer
Program. I noticed that the picture in the article was of a couple standing in front of the same
condominium complex that my husband and I thought might be a great place for us to live. I read
the article a few times to grasp the idea of this program and found it too good to believe. I went
to the website and downloaded the information for further reading and to convince . my husband
that we had a possible option available to us.
Amazingly, that option stayed open for us. We qualified for the First Time Home Buyer
Program! We weren't so sure it would happen but through the carefully guided help of Santa
Clarita's Grant Technician Erin Moore -Lay and our mortgage broker Ken Roelofson of Pacific
Republic, we closed on our first home in October 2003. We moved into New Horizons
condominium complex in Saugus and we enjoy it immensely!
Although this letter is late in coming to you, we want to profusely thank you for making it
possible for us to buy our first home in Santa Clarita. We know that it would not have been
possible without the City's help, and we tell people that too.1 Our Christmas letter home to our
friends indicated the tremendous help you provided for us and we often tell people who are
looking for a home to look into Santa Clarita's programs. It is so special to us to be living locally
where we have rooted ourselves for the past five years. We look forward to continuing to live in
Santa Clarita and in our new home.
With much thanks,
Billy and, Tena Cannon
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