HomeMy WebLinkAbout2007-03-27 - AGENDA REPORTS - FIRSTHOME GENERAL FUND LOAN (2)Agenda Item: 6.
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Erin Moore -Lay
DATE: March 27, 2007
SUBJECT: GENERAL FUND LOAN TO THE CITY S FIRSTHOME
PROGRAM
DEPARTMENT: Community Development
RECOMMENDED ACTION
City Council approve the appropriation of a loan from the General Fund into the HOME Fund in
an amount not to exceed $25,000 for the purpose of issuing one additional deferred -payment
low-interest second mortgage loan. Amount to be determined when the loan is completed.
The City applied for and received a State HOME grant of $600,000 for the City's FirstHOME
Program. The Program offers deferred -payment low-interest second mortgage loans to
tow -income first-time homebuyers. In addition to the grant funds, the City allocated over
$250,000 in program income from repaid earthquake loans to the FirstHOME Program for a total
of over $850,000.
The State HOME grant funds and program income are used as a revolving fund to finance new
loans. Currently, the City has a loan portfolio of $933,220 in FirstHOME loans and $101,994 in
earthquake loans. As loans are paid off, the loan proceeds are used to fund new loans.
Four FirstHOME home mortgage loans were made in 2006-2007. In order for the Program to
finish a fifth FirstHOME loan, a small loan of City general funds is necessary. In addition to
making the fifth loan possible, the loan of general funds will allow for the full expenditure of the
State HOME grant funds, making the City eligible to apply for another $800,000 State HOME
grant in June 2007.
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ALTERNATIVE ACTIONS
1. Council not approve the loan of general funds
2. Other action as directed by Council
FISCAL RAPACT
The City General Fund will loan the FirstHOME Program an amount not to exceed $25,000. The
General Fund will be repaid in full upon receipt of the next repaid earthquake or FirstHOME
loan.