HomeMy WebLinkAboutAGENDA REPORT 2002 0206 CC REG ITEM 11BMOORPARK CITY COUNCIL b'r,:
AGENDA REPORT
To: Honorable City Council
From: Nancy Burns, Senior Management Analyst
Date: January 24, 2001 (CC Meeting of February 6, 2002)
Subject: CONSIDER APPLICATION FOR HOME FUNDS FOR FISCAL YEAR
2002/2003 FOR DOWN PAYMENT ASSISTANCE FOR FIRST TIME
BUYERS
BACKGROUND
In 1997, the City entered into an agreement for HOME funds in
the amount of fifty thousand dollars ($50,000), to be used for
housing rehabilitation loans. On April 15, 1998, the City
Council authorized the reallocation of these funds for the
purpose of down payment assistance, as other funding sources
were being used for housing rehabilitation loans. A contract
was never executed with the County for this purpose, and Council
authorized the release of the funds to the County on January 5,
2000. This allowed the funds to be used for another purpose.
DISCUSSION
Low and Very Low Income households in Moorpark face substantial
obstacles to home ownership due to factors such as the high cost
of housing and difficulty for Low Income households to save
funds for a down payment. While housing that is affordable to
low and very low income households is to be provided in most of
the market rate residential developments anticipated within the
next few years, the need is now.
A Down Payment Assistance Program could assist some low income
households in the near future to become homeowners, before
construction is completed on the anticipated affordable units.
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Honorable City Council
Date 01/24/02
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The HOME Program provides flexibility in the structure of the
assistance provided. As loans are repaid, funds may be reused
in new transactions for this same program, or another HOME -
eligible program. Both new construction as well as resale
properties are eligible, and assistance loans may be written for
five, ten or fifteen year terms. The loans may be amortized,
deferred, or a combination of the two. Properties must be deed
restricted, but can provide for an equity share of appreciated
value, captured at resale. The HOME Program requires the City
provide a twenty -five per cent (25 %) match of funds. This match
could be provided by Housing Setaside funds.
A successful application for two hundred thousand dollars
($200,000), with a City match of fifty thousand dollars
($50,000), would be sufficient for approximately six (6) loans
of forty thousand dollars ($40,000) each to low or very low
income households.
Households who have some funds available to be applied to a down
payment and have demonstrated creditworthiness probably would
need additional financial assistance from more than one source.
HOME funds could be used to the extent needed to bridge the gap
between a household's existing funds, additional funds available
from other sources, and the amount of funding needed to make a
purchase feasible.
If Council authorizes an application for HOME funds which is
successful, program guidelines will be developed for Council
approval. Staff's intention is to obtain consultant services to
manage the operations of this program for maximum efficiency.
Reasonable administrative costs for professional services are
eligible expenses under this program.
STAFF RECOMMENDATION
Authorize staff as follows:
1. To apply for HOME funds in the amount of $200,000, to be
used as Down Payment Assistance for Low and Very Low Income
First Time Home Buyers; and
2. To request the Moorpark Redevelopment Agency authorize a
twenty -five per cent (25 %) match of the total funding
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Honorable City Council
Date 01/24/02
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approved for this program, up to $50,000, in Redevelopment
Agency Tax Increment Set -Aside funds if the above
application is successful.
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