HomeMy WebLinkAboutAGENDA REPORT 2002 0116 CC REG ITEM 09FGITEM '7. CT-'
MOORPARK CITY COUNCIL
AGENDA REPORT
To: Honorable City Council
From: Nancy Burns, Senior Management Analyst
Date: January 2, 2002 (CC Meeting of January 16, 2002)
Subject: CONSIDER DEDICATING COMMUNITY DEVELOPMENT BLOCK GRANT
(CDBG) FUNDS AUTHORIZED FOR AFFORDABLE HOUSING FOR
PROGRAM YEAR 1998 ($12,000) TO ADMINISTRATIVE COSTS
FOR CALHOME MOBILEHOME REHABILITATION
BACKGROUND
On June 20, 2001, Council directed staff to apply for CalHome
funds in the amount of four hundred twenty thousand dollars
($420,000) for mobilehome replacement or rehabilitation loans.
Upon the State's approval of the City's application, Council
approved revisions to the City's existing guidelines for
mobilehome rehabilitation loans. These revisions made the
City's mobilehome rehabilitation guidelines consistent with
CalHome guidelines and both funding sources could be used for
mobilehome rehabilitation loans, as needed. As the CalHome
loans are repaid, the repaid funds may be used in any eligible
program in the City for housing rehabilitation or down payment
assistance.
DISCUSSION
Typical services needed for each rehabilitation project include
appraisal; loan processing; preparation of the work write -up and
oversight of the bid process; preparation of loan documents and
construction contract(s); construction management; fund
disbursement; and various reporting requirements. A consultant
with experience administering this program has been located and
estimates these costs to be approximately two thousand dollars
($2,000) per transaction. This amount is consistent with HUD
guidelines. Some of the costs of each loan transaction can be
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Honorable City Council
Date 01/09/02
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recovered by the five per cent (5 %) service delivery fee
provided by the CalHome Program. Some remaining costs may be
paid by the borrower. However, these remaining costs may still
be a high cost to be borne by low income mobilehome owners.
Residents of Moorpark who have utilized the mobilehome
rehabilitation program and the conventional housing
rehabilitation program have paid approximately $750 in
transaction costs. The cost of City staff time has not been
recaptured. If costs to new mobilehome rehabilitation borrowers
were capped at approximately the same level that previous
borrowers have paid, another funding source would be needed.
In order to fund as many eligible loans as possible in the two -
year period of this program, consulting services have been
sought for its efficient administration. The loan costs and
charges for consulting services to set up the administration of
this program and create program documents, including monitoring
and re -use plans, are an eligible use of CDBG funds.
RECOMMENDATIONS (ROLL CALL VOTE)
1. Open public hearing, accept public testimony, and close
public hearing.
2. Authorize $12,000 in CDBG Affordable Housing funds to be
designated for CalHome mobilehome rehabilitation program
set -up and service delivery fees for approximately 12
mobilehome rehabilitation loans.
3. Limit each borrower's share of the transaction costs of a
mobilehome rehabilitation loan to the costs of appraisal
and loan processing, not to exceed $750.00.
4. Stipulate that loan costs for each CalHome mobilehome
rehabilitation loan transaction are to be paid by the
CalHome service delivery fee (5% of loan amount); borrower,
subject to a maximum amount of $750; and CDBG funds.
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