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Home My WebLink About2011-07-12 - AGENDA REPORTS - HOME PGM AGMT (2)CONSENT CALENDAR DATE: SUBJECT: DEPARTMENT: Agenda Item: 8 CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval: Item to be presented by: July 12, 2011 Erin Lay RESOLUTION APPROVING APPLICATION SUBMITTAL TO THE STATE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR FUNDING UNDER THE HOME INVESTMENT PARTNERSHIPS PROGRAM; 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 Community Development RECOMMENDED ACTION City Council adopt a resolution supporting the City of Santa Clarita's (City) application to the State of California Department of Housing and Community Development (HCD) for Home Investment Partnerships Program (HOME) funds in the amount of $700,000, authorize the acceptance of those funds, and authorize the City Manager, Assistant City Manager, or Deputy City Manager to execute any contracts, change orders, or amendments arising out of th_:s contract, subject to the approval of the City Attorney. BACKGROUND Since 2002, the City has operated the FirstHOME Program (Program). The Program provides low-interest deferred -payment second mortgage loans to be used as a down payment on a home located within City boundaries. Homes purchased through the Program can be single family or condominiums. Eligible borrowers are low- or moderate -income and cannot have owned a home in the previous three (3) years. Eligible borrowers are required to obtain their own first mortgage with payments that equal between 30% and 35% of the gross household income. The Program loan amount is determined by the gap between what the borrower can obtain in their first mortgage and the price of the home, subject to certain limitations. The Program loan is secured a by a standard Promissory Note and Deed of Trust. Payments on the Program loan are deferred until the home is sold, the title changes, the borrower ceases to reside in the property as their primary residence, or at least 30 years, whichever comes first. Loans have been provided to first-time homebuyers using a combination of proceeds from repaid loans, and awards from previous HOME grants. When FirstHOME loans are repaid, the funds are used to issue new loans (subject torcertain contractual limitations). The City currently has a portfolio of 13 FirstHOME loans with a value of over 1.8 million dollars. Applicants who live and/or work in the City of Santa Clarita are given priority. The homes purchased through the FirstHOME Program are primarily located in the Canyon Country or Newhall areas. The 1.3 families assisted through the program include a total of 45 individuals and 22 children under the age of 18 that now have permanent and stable homes. Families who worked in the City but lived in other areas have eliminated their commute, allowing more time to spend with their families. All FirstHOME borrowers are in good standing on their first mortgages. On June 1, 2011, HCD released the Notice of Funding Availability (NOFA) for HOME funds to be used in first-time homebuyer programs. The City is eligible to apply for $700,000 in funding, which would allow the FirstHOME Program to provide approximately four (4) new deferred -payment second mortgage loans to first-time homebuyers. ALTERNATIVE ACTIONS Other actions as determined by the .Cittyt ouncil. FISCAL IMPACT There is no impact to the general fund. Administrative costs to implement the FirstHOME Program are paid out of the HOME grant. ATTACHMENTS Resolution 2 RESOLUTION I I - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, APPROVING APPLICATION SUBMITTAL TO THE STATE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR FUNDING UNDER THE HOME INVESTMENT PARTNERSHIPS PROGRAM; 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 A. 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 $200. B. On June 1, 2011 the Department issued a 2011 Notice of Funding Availability announcing the availability of funds under the HOME program (the "NOFA"). C. In response to the 2011 NOFA, the City of Santa Clarita, a municipality (the "Applicant"), wishes to apply to the Department for, and receive an allocation of, HOME funds. NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as follows: SECTION 1. In response to the 2011 NOFA, the Applicant shall submit an application to the Department to participate in the HOME program and for an allocation of funds no: to exceed seven hundred thousand dollars ($700,000) for the following activities and/or programs: FirstHOME, a first-time homebuyer program, providing low-interest, deferred payment second mortgage loans to eligible low- and moderate -income households for properties located in the City of Santa Clarity SECTION 2. If the application- for funding is approved, then the Applicant hereby agrees to use the HOME funds for eligible activities in the manner presented in its application as approved by the Department in accordance with the statutes and regulations cited 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 or HUD for participation in the HOME program (collectively, the required documents). We SECTION 3. The applicant authorizes the City Manager, Assistant City Manager, or Deputy City Manager to execute, in the name of the applicant, the HOME Standard Agreement. SECTION 4. The applicant authorizes the City Manager; Assistant City Manager; Deputy City Manger; Director of Community . ,Development; Redevelopment Manager; or Housing Program Administrator to execute in the name of the applicant, all other related documents. SECTION 5. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this 12th day of July 2011. ATTEST: CITY CLERK 2 MUNSTME �i STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Kevin Tonoian, Acting City Clerk of the City of Santa Claritz., do hcreby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the 12th day of July 2011, by the following vote: AYES: COUNCILMEMBERS", NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK 3 CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) CERTIFICATION OF CITY COUNCIL RESOLUTION I, , City Clerk of the City of Santa Clarita, do hereby certify that this is a true and correct copy of the original Resolution 11- adopted by the City Council of the City of Santa Clarita, California on July 12, 2011, which is now on file in my office. Witness my hand and seal of the City of Santa Clarita, California, this 12th day of July 2011. City Clerk By Deputy City Clerk