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HomeMy WebLinkAbout2008-436 1 2 3 4 5 6 7 RESOLUTION NO. 2008-416 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A SUBSTANTIAL AMENDMENT TO THE CONSOLIDATED ANNUAL ACTION PLAN FOR FISCAL YEAR 2008-2009; AND AUTHORIZING THE CITY MANAGER OR IDS DESIGNEE TO EXECUTE, ON BEHALF OF THE CITY, SUCH DOCUMENTS AS REQUESTED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO EFFECTUATE THE SUPPLEMENTAL APPROPRIATION 8 WHEREAS, in Fiscal Year 2008-2009 the City of San Bernardino, California (the "City'), is 9 entitled to receive $8.4 million from the United States Department of Housing and Urban 10 Development ("HUD") under the Neighborhood Stabilization Program ("NSP") for the purpose of 11 redeveloping abandoned and foreclosed homes and residential properties as authorized under Title 12 III Division B of the Housing and Economic Recovery Act ("HERA") of 2008; and 13 WHEREAS, the NSP is subject to certain statutory and regulatory provisions governing the 14 Community Development Block Grant ("CDBG") program as necessitated by HERA; and 15 WHEREAS, the City, as a direct recipient of CDBG funds has submitted to HUD and HUD 16 has approved a Consolidated Plan for Fiscal Years 2005-2010 and a Consolidated Annual Action 17 Plan for Fiscal Year 2008-2009 (the "Action Plan"); and 18 WHEREAS, HUD considers NSP Grant Funds to be a supplemental appropriation ofCDBG 19 Funds requiring a substantial amendment to the Action Plan; and 20 WHEREAS, the City is required by the NSP to prepare and submit a substantial amendment 21 to the annual Action Plan by December 1, 2008, in accordance with the consolidated plan 22 procedures for a substantial amendment under the annual CDBG program; and 23 WHEREAS, the City has provided citizens adequate opportunity to review and comment on 24 the proposed substantial amendment to the annual Action Plan as required by BUD's alternative 25 requirements to 42 U.S.C. 5304(a)(2) under the NSP that waive the requirements of Sections 26 91.105(k) and 91.1l5(i) to the extent necessary to allow a grantee to provide no fewer than fifteen 27 (15) calendar days for citizen comment; and 28 1 P:\Agendas\ResolutionslResolutions\2008\II-17-08 Substantial Amendment. ~a1 Action PIan FYOS-09 Mec Reso.doe 11-/7 O\? /13 2008-436 1 WHEREAS, the City seeks to redevelop abandoned and foreclosed homes and residential 2 properties to address the significant costs that foreclosure activity imposes on local municipalities 3 and neighborhoods within the City. 4 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 5 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 6 FOLLOWS: 7 Section 1. That the Mayor and Common Council hereby approves the Substantial 8 Amendment to the Consolidated Annual Action Plan for Fiscal Year 2008-2009 to include a 9 supplemental appropriation in the amount of $8.4 million under the Neighborhood Stabilization 10 Program for the purpose of the redevelopment of abandoned and foreclosed homes and residential 11 properties. A copy of the Substantial Amendment is attached hereto as Exhibit I and by this 12 reference made a part hereof as though set forth herein at length. 13 Section 2. That the City Manager, or his designee, is authorized to execute and submit to 14 HUD the appropriate applications, agreements and ancillary documents necessary to implement the 15 NSP as said applications, agreements and ancillary documents that are prepared and herein 16 approved, a copy of which are on file with the City Clerk, and are incorporated herein by reference 17 as though fully set forth at length. 18 Section 3. This Resolution shall take effect upon its adoption and execution in the manner 19 as required by the City Charter. 20 1/1 21 1// 22 1/1 23 1/1 24 1/1 25 1/1 26 1/1 27 1/1 28 1/1 2 P:\Agendas\l<<.solutions\Resolutions\20OS\II-I7-OS Substantial Amendment - Annual Action Plan FY08.09 Mec Reso.doc 1 2 3 4 5 6 2008-436 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING A SUBSTANTIAL AMENDMENT TO THE CONSOLIDATED ANNUAL ACTION PLAN FOR FISCAL YEAR 2008-2009; AND AUTHORIZING THE CITY MANAGER OR IDS DESIGNEE TO EXECUTE, ON BEHALF OF THE CITY, SUCH DOCUMENTS AS REQUESTED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO EFFECTUATE THE SUPPLEMENTAL APPROPRIATION I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a joint regular 17th day of November, 2008, by the following vote to wit: 8 thereof, held on the 9 Council Members: 10 ESTRADA 11 BAXTER 12 BRINKER 13 DERRY 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 18 19 20 21 22 23 24 meeting Aves x Abstain Absent Navs x ---1L x x x x ~k,~ Racli G. Clark, City Clerk / f/Nday of November ,2008. The foregoing Resolution is hereby approved this Approved as to Form: 25 .e 26 James F. Penman, City Attorney 27 28 3 P:\Agendas\Resolutions\Resolutions\2008\11.I7..oS Substantial Amendment. Annual Action Plan FYOS-09 MCC Reso.doe EXHIBIT 1 CITY OF SAN BERNARDINO Neighborhood Stabilization Program Substantial Amendment to the Fiscal Year 2008-2009 Action Plan November 17,2008 P:\Agendas\Agtnda Attachments\Exhibits\2008\11-17-08 Neighborhood Stabilization Program (Exhibit I),doc EXHIBIT 1 City of San Bernardino Neighborhood Stabilization Program Substantial Amendment to the Fiscal Year 2008-2009 Action Plan Table of Contents Introduction...................................................................................................... ..3 A. Areas of Greatest Need...... ............ ...... ......... ............... ...............................4 B. Distribution and Uses of Funds............... ............ ...... ............... ............ ...... ..5 C. Definitions and Descriptions... ............ ......... ...... ...... ...... ............................ ..7 D. Low Income Targeting......... ............... ...... ......... ...... ......... ..........................8 E. Acquisitions & Relocation............................................................................. 8 F. Public Comment... ......... ............ ............ ...... ............ ...... .................. ...... ...9 Activities (1) Down Payment Assistance .......................................................................10 (2) Housing Opportunities for Households At or Below 50% AMI........................... .12 (3) Acquisition, Rehabilitation and Resale ........................................................ 13 (4) Acquisition, Demolition and Redevelopment..................................................14 (5) Administration........................................................................... ................15 2 P:\Agendu\Agenda AttachmentslExhibits\200S\II-17-0tl Neighborbood Stabilization Program (Exhibit I).doc EXHIBIT 1 Citv of San Bernardino Neighborhood Stabilization Program Substantial Amendment to the Fiscal Year 2008-2009 Action Plan City of San Bernardino NSP Contact Carey K. Jenkins, Director of Housing and Community Development San Bemardino Economic Development Agency 201 North "E" Street, Suite 301 San Bemardino, CA 92401 Tel: (909) 663-1044' Fax: (909) 888-9413 Email: cjenkins@sbrda.org www.sbrda.org INTRODUCTION In response to the national rise in subprime mortgage foreclosures and the significant costs that foreclosures impose on local municipalities and neighboring homeowners, Congress authorized $3.92 billion for the redevelopment of abandoned and foreclosed homes and residential properties under Title III of the Housing and Economic recovery Act of 2008 (HERA). The funds are administered by the United States Department Housing and Urban Development (HUD) under a new entitlement grant program referred to as the Neighborhood Stabilization Program (NSP). Under the NSP, the City of San Bernardino ("San Bemardino" or "City") was allocated $8.4 million. Allocations were made by HUD based on qualifying grantees' (1) number of and percentage of home foreclosures, (2) number of and percentage of homes financed by a subprime mortgage related loan, and (3) number of and percentage of homes in default or delinquency. For San Bemardino, HUD determined the City has a local foreclosure rate of 11.8%, the second highest rate among general local governments in California. The percentage of homeowners holding subprime mortgage loans within the city ranges between 16.8% and 59% with an overall average of 42.7%, and the percentage of homes at risk of foreclosure ranges between 7.6% and 14.4% with an overall average for the City of 11.7%. To receive NSP funding, San Bernardino is required to submit to HUD a Substantial Amendment to the Consolidated Annual Action Plan for Fiscal Year 2008-2009 ("Substantial Amendment") by December 1, 2008. This Substantial Amendment is required because NSP grants are treated as a supplemental appropriation of CDBG funds for the undertaking of activities that were not budgeted in the current year Action Plan. The Substantial Amendment includes a needs analysis identifying the geographic areas of greatest need within the City, and the proposed distribution and use of NSP funds. Sources of information used include data derived and employed by HUD to determine its needs 3 P:\Agendu\AgemI. AttachmeDt,\Exhibits\2008\11-17-o8 NeighboJbood Stabilization Program (Exhibit I).doc EXHIBIT 1 assessment in allocating NSP funds, 2006 U.S. Census information, foreclosure information provided by RealtyTrac, and internal GIS data. A.AR~soFGREAresTNEED One of the most dramatic changes in financial services over the last few years has been the expansion of mortgage products. In addition to the conventional fixed-rate 3D-year loan, lenders now offer a number of other mortgage products such as "interest-only" mortgages that allow a borrower to pay only the interest for the first few years of the loan and "payment option" adjustable-rate mortgages (ARMs) that include flexible payment options for the borrower. These types of mortgages are often combined with second-lien mortgages and allow reduced documentation of creditworthiness. In 2006, these so called "nontraditional" mortgages accounted for more than one-third of all mortgage loans compared to 2% six years earlier. While these mortgage products can benefit some consumers, data shows that these loans are usually marketed to less sophisticated buyers or those who may not otherwise qualify for more traditional mortgage loans. These loans eventually become unaffordable to the consumer and result in default and foreclosure. Between 1994 and 2006 the annual dollar volume of subprime loans issued across the United States grew from $35 billion to more than $600 billion, and their share of home loan originations increased from 4.5% to 20% (Inside Mortgage Finance, 2007)1. In 2006 the Federal Reserve Board found that in minority areas approximately 46.6% of the home loans issued were high- priced or sub-prime loans compared to 21.7% in non-minority communities. In San Bernardino, with a minority population of 57.5%2, approximately 42.7% of existing home mortgage loans are high-cost loans according to HUD's data. However, the rate is as high as 59% in certain areas ofthe City. HUD data indicates the foreclosure rate in the City of San Bernardino is 11.8%; it is the second highest rate among municipalities within California. The data is based on the following: (1) the change in home values as of June 2008 compared to 2000; (2) the percentage of high cost (or subprime) mortgage loans made between 2004 and 2006; and (3) the unemployment rate as of June 2008. Additional data provided by RealtyTrac, an Irvine based company that tracks foreclosures nationwide, indicates there are currently over 3,500 foreclosed upon homes in San Bernardino. RealtyTrac was able to provide Assessor Parcel Numbers (APNs) for 3,109 of these properties. Of this number, 2,264 foreclosed upon properties were identified and plotted within City boundaries. Based on this more conservative figure of 2,264, the percentage of homes that have been foreclosed upon ranges from a low of 8.1 % in Ward 3 to a high of 21.3% in Ward 2. The first column of Table 1 and the map designated Exhibit 1 show the distribution of foreclosures throughout the City on a ward-by-ward basis. Further analysis of HUD's data at the tract and block group level reveals a clearer assessment of the foreclosure crisis within the City. Table 1 shows the rate of subprime mortgages within the City averages 42.7%. This varies by ward from an average low of 34.1 % in Ward 5 to a high of 51.6% in Ward 2. However, the percentage of subprime mortgage loans ranges from a 1 Referenced by Chainnan Ben S. Bernanke in his speech at the National Community Reinvestment Coalition Annual Meeting, Washington, D.C, 3/14/2008. 2 U.S. Census Bureau, 2006 American Community Survey. 4 P:\Agendas\Agenda Attacbments\Exhibits\2008\11-17-08 Neighborhood Stabiliution Program (Exlubit I).doc EXHIBIT 1 low of 16.8% in Ward 4 to a high of 59% in Ward 1. The projected rate of foreclosures within the next 18 months averages 11.7% throughout the City, and averages between a low of 10.4% in Ward 5 to a high of 13.2% in Ward 2. And, again, in some areas of the City, the projection can be much higher as in Ward 1 where the projected foreclosure rate is as high as 14.4%. For the City overall, HUD's foreclosure and abandonment risk is high. Table 1 Percentage of Average Foreclosure - is-Month Projected Foreclosed Subprime Mortgages Abandonment Risk Homes by Ward (% of Homest (Scale 1-10. Foreclosure Rate Ward3 Range 10=worst) (% of homes) Average 51.3% 10 13.1% 13.8% 1 Range 34.8% - 59.0% 8 -10 10.5% ~ 14.4% Average 51.6% 10 13.2% 21.3% 2 Range 45.4% - 56.6% 9 -10 12.2% -14% Average 39.9% 9 11.3% 8.1% 3 Range 25% - 51.7% 8 -10 8.9% -13.2% Average 34.9% 8 10.5% 9.5% 4 Range 16.8% - 46.9% 4 -10 7.6% -12.4% 15.7% Average 34.1% 9 10.4% 5 Range 22.5% - 39.2% 8-9 8.5% -11.2% Average 43.5% 9 11.8% 15.5% 6 Range 22.5% - 55.1 % 8 -10 8.5% -13.7% 16.1% Average 42.9% 9 11.8% 7 Range 35.9% . 49.4% 9 -10 10.7% -12.8% 11.8%' Average 42.7% 9 11.7% Citywide Range 16.8% - 59% 4-10 7.6% -14.4% B. DISTRIBUTION AND USES OF FUNDS The data collected thus far clearly indicates the foreclosure crisis is occurring in practicaliy every residential neighborhood within San Bernardino. Grantee, therefore, recommends that NSP funds be made available on a citywide basis, and has identified five (5) separate programs with which to deploy the grant that include the following: 1. Down Payment Assistance: This program sets aside $920,000 of NSP funds for use as a financing mechanism to ensure affordability for individuals and families purchasing NSP assisted residential properties. Assistance will be provided in the form of down payment assistance to individuals and families whose household income does not exceed 120% of the AMI. It is estimated that structuring the use of the NSP funds in this manner will be leveraged with an additional amount equal to approximately $4,600,000 in private first trust deed funds. Presently, Grantee provides up to 20% of the acquisition cost of a single family home to first time home buyers whose household income does not exceed 120% of the AMI. Funds for the existing program are currently derived from Redevelopment Agency housing set aside 3 Generated by the City of San Bernardino Geographic Information System based on 2.264 units identified by RealtyTrac as of 11/0512008. 4 HUD User Data for NSP by census tract was aggregated for each Ward. , Based on HUD User Data used to make NSP allocations. 5 P:\Agcnda5\Agcnda Anachmcnts\Elthibitsl2008\11-17'()8 Neighborhood Stabilization Program (Exhibit I).doc EXHIBIT 1 dollars. The program would be augmented by incorporating NSP funds into the down payment (up to 50% of the needed subsidy) and the requirement for a first time home buyer would be waived. The Redevelopment Agency's standard 45-year affordability covenant would apply. 2. Housing Opportunities for Households at or below 50% AMI: This program allocates $2,100,000 of NSP funds to the Notice of Funding Availability (NOFA) recently issued by the Agency for the provision of affordable housing. This complies with the NSP requirement that at least 25% of the grant, in this case $2,100,000, be allocated to address the housing needs of individuals and households whose income does not exceed 50% of the AMI and maximizes the projected benefit of the NOFA. It is anticipated that the NSP funds for this component will be leveraged by an additional amount upwards of $10,500,000 in private capital. The recently released NOFA invites the development community to, among other things, identify specific multifamily housing projects with a history of public service calls, documented conditions associated with poor management and those sites that are generally considered a blighting influence on the surrounding community. Developers submitting projects with these specifications would have the opportunity to compete for a portion of Grantee funds to acquire, rehabilitate and manage such properties under a new professional management agreement. In response to the NSP, the Grantee also added the opportunity for the development community to compete for these funds to acquire and rehabilitate similar properties provided they had been foreclosed upon or abandoned under the definitions identified in Section II A of HERA and would be purchased at discount of between 5% and 15% of appraised value. 3. Acquisition, Rehabilitation and Resale: This program allocates $3,700,000 of NSP funds for the acquiSition and rehabilitation of single-family homes through participating intermediaries, such as builder/developer contractors. These intermediaries will be retained through a Request for Production/Qualifications (RFP) process and will be vetted by Agency staff with recommendations submitted to the Council. The RFP process will begin in January of 2009. It is anticipated that the NSP funds allocated under this component will attract an additional $18,500,000 in private first trust deed capital. Upon rehabilitation, the homes will be made available for purchase to qualifying households whose incomes do not exceed 120% of the AMI. Key qualifying points of the RFP would include, but not be limited to: (1) experience in the last five years of rehabilitating single family housing structures; (2) reference letters from as many as three separate municipal jurisdictions attesting to the amount and quality of rehabilitation work completed; and (3) demonstrated ability to provide the financial resources to rehabilitate multiple properties simultaneously with the expectation of reimbursement upon close of escrow. All requirements including, but not limited to, those associated with the 120% the AMI ceiling and the purchase discount would be maintained for each acquisition. 4. Acquisition, Demolition and Redevelopment: This program is designed to address abandoned or foreclosed upon residential units in physical conditions too costly for rehabilitation. With a budget of $920,000, this program will allow for the acquisition, demolition and future redevelopment of the site. Grantee anticipates these program funds will be leveraged with an additional amount equal to approximately $4,600,000 in private development capital for future infill developments on these various sites. 6 P:\A.gendas\Agenda Anachments\Exhibil$\2008\11-17-08 Neighbortlood Stabilization Program (Exhibit I),doc 'I EXHIBIT 1 Grantee would consult with the City's Building Official regarding the structural soundness of the property and, if deemed appropriate, demolition would occur. Plans to develop the parcel as an in-fill unit or units would commence as soon as the local housing market begins to stabilize. Several redevelopment options would be considered. One option would be to redevelop the site utilizing modular housing thus ensuring quality building products and a rapid turn around. Other options might include selling the parcel to a non-profit such as Habitat for Humanity for a reduced price to help subsidize their next new construction project or another non-profit expert in special needs housing. 5. Administration: Administration of the program will not exceed 10% of the NSP grant and 10% of program income. It is the expectation of Grantee to team up with other local jurisdictions that have been awarded NSP funds to collaborate on such program components as jointly paying for home buyer education courses, conducting joint procurement activities with regards to identifying and contracting with builderldeveloper intermediaries and negotiating bulk sale opportunities with various lenders with large pools of REO properties. C. DEFINITIONS AND DESCRIPTIONS Bliahted Structure: The City of San Bernardino uses the State of California's definition of blight as found at California Health and Safety Code Sections 33030 and 33031. Affordable Rents: For NSP assisted rental activity, "affordable rents" shall be defined as 30% of the household's adjusted income, less utility allowances as adopted by the County of San Bernardino Housing Authority for the Section 8 program, as appropriate. HUD's Fair Market Rent Schedule for the Riverside-San Bernardino-Ontario metropolitan area will be used. Should any gap be present, funds for this gap will be required from other sources of funding. To ensure continued affordability of NSP assisted rental housing, the program will include an annual certification of occupancy including adequate verifiable documentation of income pertaining to each member of the qualifying household. In addition, Grantee will impose affordability covenants for a period of fifty-five (55) years through a deed restriction. This is consistent with other multifamily and senior housing developments the Grantee has subsidized in the past under California Redevelopment Law. To ensure continued affordability of NSP assisted ownership housing, the program will impose affordability covenants for a term not to exceed forty-five (45) years, commensurate with the source of program funding and consistent with the Grantees existing down payment assistance program. This will be enforced through deed restrictions and will also require annual certification of owner occupancy and documentation to support proof of occupancy. This is consistent with the City's existing home buyer down payment assistance program and is consistent with both California Redevelopment Law and the State of California CalHome Program. NSP assisted rehabilitation activities will be conducted in accordance with all local, state, and federal codes, statutes, and regulations and/or homeowner association or mobile home park rules, and historic preservation requirements, as applicable, and will include modern, green building and energy-efficiency improvements consistent with California Green Building 7 P:\Agendu\Agenda AttachmenU\ExhibiU\2008\11.17..{18 Neighborhood Stabilization Prognm (Exhibit I),doc EXHIBIT 1 Standards Code, as incorporated in Part 11 of the California Code of Regulations, Title 24, also known as the California Building Standards Code. D. Low INCOME TARGETING At least $2,100,000 or 25% of the total award, under the NSP will be allocated to the Grantee's recently released NOFA. Grantee has released a NOFA inviting the development community to, among other things, identify specific multifamily housing projects with a history of public service calls, documented conditions associated with poor management and those sites that are generally considered to be a blighting influence on the surrounding community. Developers submitting projects with these specifications would have the opportunity to compete for a portion of Grantee funds to acquire, rehabilitate and manage such properties under a new professional management agreement. In response to the NSP, Grantee also added the opportunity for the development community to compete for these funds to acquire and rehabilitate similar properties provided they had been foreclosed upon or abandoned under the definitions identified in Section II A of HERA and would be purchased at discount of between 5% and 15% of appraised value. In the event Grantee receives no adequate response for the use of NSP funds from the development community under its NOFA, Grantee will then issue a specific solicitation to providers of housing to special needs groups including, but not limited to, the developmentally disabled, the homeless in need of transitional housing and senior citizens. E. ACQUISITIONS & RELOCATION Grantee will generate preliminary title reports on those properties it intends to acquire looking for, among other things, any deed restrictions associated with affordability. Should there be deed restrictions, Grantee will arrange for those restrictions to remain after the structure is rehabilitated and new occupants for the property are identified. In the unlikely event the Grantee identifies a property that is beyond repair that must be demolished that also has affordability covenants tied to it, the City will make note of this. Next, Grantee will either: (1) attempt to replace the demolished structure with a new structure on the same site with affordability covenants that are at least as restrictive as the original, or (2) identify a different residential site to apply those affordability covenants. Based on current estimates, Grantee anticipates demolishing or converting no greater than 20 dwelling units that currently benefit households at or below 80% of the AMI as a direct result of NSP-assisted activities. 8 P:\Agendas\Agenda AttachmenlslExhibits\200S\11-17-08 Neighborhood Subilintion Program (Elthibit I)_doc "1 EXHIBIT 1 Maximum Household Income 50% AMI Activity Expected Housing Units Proposed to be Produced CommencementlComoletion Acquisition/rehabilitation of One year from approval of multifamily properties amendment by HUD/One year through Grantee NOFA 100 after initiation of construction process andlor rehabilitation Maximum Household Income 120% AMI Activity Expected Housing Units Proposed to be Produced CommencementlCompletion Acquisitionlrehabilitation and 90 days from approval of 200 amendment by HUD/4 years resale of single family homes from the initial HUD approved amendment Acquisition/demolition of 120 days from approval of 50 amendment by HUD/4 years single family homes from the initial HUD approved amendment 90 days from approval of Mortgage down payment 50 amendment by HUD/4 years assistance from the initial HUD approved amendment Total Housing Units 400 Expected F. PUBLIC COMMENT A summary of public comments received to the proposed NSP Substantial Amendment will be added after the public hearing on November 17, 2008. 9 P:\Agendn\Agenda Attachments\Exhibits\2008\11-17-08 Neighborhood Stabiliution Program (Exhibit I) doc EXHIBIT 1 Down Payment Assistance (1) Activitv Name: Financing Mechanism for Down Payment Assistance for Households Under 120% of the AMI (2) Activitv Tvpe: CDBG Activity: Direct Homeownership Assistance NSP Eligible Use: Financing Mechanism (3) National Obiective: Benefit to individuals and families whose household income does not exceed 120% of the AMI. (4) Proiected Start Date: April 15, 2009 (5) Proiected End Date: January 15, 2013 (6) Responsible Orqanization: City of San Bernardino Economic Development Agency 201 North 'E" Street, Suite 301 San Bernardino, CA 92401-9413 (909) 663-1044 Attn.: Carey K. Jenkins, Director of Housing and Community Development (7) Location Description: Citywide (8) Activitv Description: This activity will benefit individuals and families whose incomes do not exceed 120% of AMI to purchase a home within the City which is currently experiencing one of the highest foreclosure and abandonment rates in the state of California. This activity will provide a one-time benefit of homeownership to qualifying individuals and families. The duration of the term of assistance is a moment in time at the point of escrow closing as the activity consists of down payment assistance exclusively for home buyers whose incomes do not exceed 120% of the AMI. Program participants will be required to enter into an affordability covenant that will be tied the property for a term not to exceed forty-five (45) years, commensurate with the source of program funding and consistent with the Grantees existing down payment assistance program and is in compliance with California redevelopment law and the State of California CalHome Program. Initial acquisition will average at least 15% below a current appraised value. The sales price will be no greater the total investment on the property by the City (including acquisition, rehabilitation, and associated program delivery costs). 10 P:\AgendaslAgendll. Attacliments\Exhibiu\2008\11-17-08 Neighborhood Stabilization Program (Exhibit 1) doc l EXHIBIT 1 (9) Total BudQet: $ 920,000 (Estimated NSP allocation) $4,600,000 (Estimated public and private funds) (10) Performance Measures: Number of units sold to individuals and families whose income does not exceed 120% of the AMI. 11 P:~nd&$lAgenda AttathmenulExhibi15I2008\11-17-08 Neighborhood Stabilization Program (Exhibit I)doc EXHIBIT 1 Housin!l Opportunities for Households At or Below 50% AMI (1) Activitv Name: Rental Housing Opportunities for Households at 50% of the AMI (2) Activitv Tvpe: CDBG Activity: Acquisition and Rehabilitation NSP Eligible Use: Purchase and rehabilitation of foreclosed upon or abandoned homes and residential properties in order to rent. (3) National Obiective: Benefit to individuals and families whose household income does not exceed 50% of the AMI. (4) Proiected Start Date: April 15, 2010 (5) Proiected End Date: December 31, 2011 (6) Responsible Orqanization: City of San Bernardino Economic Development Agency 201 North "E" Street, Suite 301 San Bernardino, CA 92401-9413 (909) 663-1044 Attn: Carey K. Jenkins Director of Housing and Community Development (7) Location Description: Citywide (8) Activitv Description: This activity is for acquisition/rehabilitation/rental, specifically to provide affordable rental opportunities for households earning less than 50% of the AMI. Rents charged will be no greater than the Fair Market Rents, as published by HUD. Household rent cannot exceed 30% of the household's monthly income, less appropriate utility allowances. Should a gap exist, a subsidy from another source must be identified. I. Total Budqe!: $ 2,100,000 (Estimated NSP allocation) $10,500,000 (Estimated public and private funds) J. Performance Measures Number of rental housing units produced for individuals and families whose income does not exceed 50% of the AMI. 12 P:\Agendu\Agenda AttachmcnulExhibiu\2008\11-17"()& Neighborhood Stabiliution Program (Exhibit I),doc EXHIBIT 1 ACQuisition. Rehabilitation and Resale (1) Activitv Name: Acquisition, Rehabilitation and Resale of Single Family Homes (2) Activitv Tvpe: CDBG Activity: Acquisition and rehabilitation NSP Eligible Use: Purchase and rehabilitation of foreclosed upon or abandoned homes for resale. (3) National Obiective: Benefit to individuals and families whose household income does not exceed 120% of the AM I. (4) Proiected Start Date: April 15, 2009 (5) Proiected End Date: January 15, 2013 (6) Responsible Orqanization: City of San Bernardino Economic Development Agency 201 North "E" Street, Suite 301 San Bernardino, CA 92401-9413 (909) 663-1044 Attn.: Carey K. Jenkins, Director of Housing and Community Development (7) Location Description: Citywide (8) Activitv Description: This activity is for acquisitionlrehabilitationlresale to qualifying income eligible homebuyers. The tenure of the beneficiaries is home ownership; the duration of the assistance will be dependent on the household's debt capacity. Should there be an affordability gap, some portion of the City's original investment of acquisition and/or rehabilitation funds would remain in the property as a "silent second" to be repaid upon change in title or status as owner-occupied housing. The property would have an affordability covenant recorded against it for a term not to exceed forty-five (45) years, commensurate with the source of program funding and consistent with the Grantees existing down payment assistance program and in compliance with California redevelopment law and the State of California CalHome Program. As with other assisted single family units through the City's rehabilitation programs and down-payment assistance programs, continued affordability is ensured through an annual monitoring process. The sales prices will be no greater than the total investment by the city (including acquisition, rehabilitation, and associated program delivery costs). I. Total Budqet: $ 3,700,000 (Estimated NSP Allocation) $18,500,000 (Estimated public and private funds) J. Performance Measures: Number of foreclosed upon or abandoned properties acquired, rehabilitated and resold to qualified home buyers. 13 P:\Ageooas\Agenda AttachmenlS\Exhibiu\2008\11-)7.()8 Neighborhood Stabiliution Program (Exhibit I).doc EXHIBIT 1 ACQuisition. Demolition and Redevelopment (1) Activity Name: Acquisition/Demolition/Redevelopment (2) Activity Type: CDBG Activity: Acquisition/Rehabilitation/Resale NSP Eligible Use: Acquisition/Demolition (3) National Obiective: Benefit to individuals and families whose household income does not exceed 120% of the AMI. (4) Proiected Start Date: April 15, 2009 April 15, 2013 (5) Proiected End Date: (6) Responsible Oraanization: City of San Bernardino Economic Development Agency 201 North "E" Street, Suite 301 San Bernardino, CA 92401-9413 (909) 663-1044 Attn.: Carey K. Jenkins, Director of Housing and Community Development (7) Location Description: Citywide (8) Activity Description: This activity is for acquisition/demolition/redevelopment of foreclosed, abandoned single family properties that would require more funds to rehabilitate than to demolish and eventually rebuild. After consultation with the City's Building Official, a determination would be made to demolish the structure instead of attempting rehabilitate it. The property would then be made available to housing providers to plan the redevelopment of the property as soon as feasible. Redevelopment may include sale of the property at current fair market value, or below current fair market value, or partnership with a non-profit agency. I. Total Budaet: $ 920,000 (Estimated NSP allocation) $4,600,000 (Estimated public and private funds) J. Performance Measures: Number of foreclosed or abandoned housing units acquired, rehabilitated or demolished for the income levels of households not exceeding 120% of the AMI. 14 P:\Agendas\Agenda Att&chmtntslExhibiu\200&\11.11-08 Neighborhood Stabilization Program (Exhibit I) doc EXHIBIT 1 Administration (1) Activitv Name: Administration (2) Activitv Tvpe: CDBG Activity: Administration NSP Eligible Use: Administration (3) National Obiective: Benefit to individuals and families whose household income does not exceed 120% of the AMI. (4) Proiected Start Date: September 29, 2008 (5) Proiected End Date: April 15, 2013 (6) Responsible Orqanization: City of San Bernardino Economic Development Agency 201 North 'E" Street, Suite 301 San Bernardino, CA 92401-9413 (909) 663-1044 Attn.: Carey K. Jenkins, Director of Housing and Community Development (7) Location Description: The City of San Bernardino Economic Development Agency will be the lead agency - 201 North "E' Street, Suite 301, San Bernardino, CA 92401. (8) Activitv Description: Administration of the NSP grant. I. Total Budqet: $800,000 J. Performance Measures: Not applicable for program administration. 15 P:\Agendas\Agenda Anac::hments\Exhibitsl1008\1 I-I 7..Qlj Neighborhood Stabilization Program (Exhibit I),doc EXHIBIT 2 (Map of Foreclosed Properties) City of San Bernardino Number of Foreclosed Properties as of November 05, 2008 t CD .... . . , '. .r. : ... : . Legend D Ward 1 (312 Properties) (13.8%) D Ward 2 (483 Properties) (21.3%) D Ward 3 (183 Properties) (8.1%) D Ward 4 (216 Properties) (9.5%) W Ward 5 (356 Properties) (15.7%) D Ward 6 (350 Properties) (15.5%) D Ward 7 (364 Properties) (16.1%) Total: 2,264 Properties WeE , Number of foreclosures is based on 2,264 units identified by Real Trac as of 11/0512008