HomeMy WebLinkAboutR30-Economic Development Agency CITY OF SAN BERNARDINO OR1bi YE=A L
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: Homebuyer Assistance Program ( HAP
Interim Executive Director ("HAP")
Quarterly Report — January 1, 2010 through
March 31,2010
DATE: May 28,2010
Synopsis of Previous Commission/Council/Committee Action(s):
On May 20, 2010, Redevelopment Committee Members Johnson, Brinker and Vasquez unanimously voted to recommend that
the Community Development Commission consider to receive and file this Quarterly Report.
Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission of the City of San Bernardino receive and file the Quarterly
Report of the Homebuyer Assistance Program activities for the Redevelopment Agency of the City of San
Bernardino
Contact Person(s): Carey K.Jenkins
Phone: (909)663-1044
Project Area(s): All
Ward(s): All
Supporting Data Attached: 0 Staff Report ❑ Resolution(s)0 Agreement(s)/Contract(s)0 Map(s) 0 Letter(s)
FUNDING REQUIREMENTS: Amount: $ -0-
Source: N/A
Budget Authority: N/A
f
Signature: IA , , y;
tai
______ j
Emil A.Marzullo,I Fiscal Review:
xecutive Director Lori P. e
ry> erim Admi s ative Services Director
Commission/Council Notes:
P.\Agendas\Comm Dev Commission\CDC 2010\06-21-10 HAP Qtr Report SR.docx
COMMISSION MEETING AGENDA
Meeting Date: 06/21/2010
Agenda Item Number: /130
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
HOMEBUYER ASSISTANCE PROGRAM("HAP") QUARTERLY REPORT—JANUARY 1,
2010 THROUGH MARCH 31,2010
BACKGROUND:
On October 17, 1994, the Community Development Commission of the City of San Bernardino
("Commission") approved the Mortgage Assistance Program ("MAP") which made available a limited
number of deferred payment second mortgages, in amounts up to 10% of the purchase price for single-
family detached homes as assistance towards down payments for income qualified homebuyers.
On October 5, 1998, the Commission authorized the modification of the MAP to allow the Executive
Director, under extenuating circumstances, the authority to approve up to 20% in mortgage assistance.
Certain operational definitions were also clarified. The general public had the perception that this
program was to provide first mortgages rather than down payment assistance. Therefore, the name
was subsequently changed to the Homebuyer Assistance Program ("HAP"), which it is presently
known.
In 2007, the median sales price of a single-family residence in the City of San Bernardino ("City") was
$375,000. The increase in home sale prices made it extremely difficult for low- to moderate-income
buyers to purchase a home at an affordable housing cost as required by State Law. Therefore, on June
4, 2007, the Commission authorized down payment assistance for an amount up to a maximum of 30%
of the purchase price to fill the gap on a case-by-case basis.
Soon after this approved increase, the San Bernardino housing market experienced an extensive
correction. In many neighborhoods, housing prices plummeted by as much as 60% of their value. At
its core, the significant drop in property values was fueled by low-interest rates, subprime loans and the
rampant speculation this caused in the housing market. In essence, there was too much money chasing
too few deals causing otherwise suspect financings to be done. It could be argued that no one, not
even the federal government, could have stopped this wave of excessive speculation once it started and
had reached its height. As a result, the City is currently dealing with the aftermath of this major
housing correction and the economic dislocation it has caused.
CURRENT ISSUE:
Presently, the Agency has a total of 14 approved lenders who have been trained by Agency Staff to
determine program eligibility and work with the borrowers as they qualify for their first mortgage.
Annual Training for any new lender wishing to participate is scheduled for June 2010. Thus far, 11
potential new lenders have expressed interest.
Assisting prospective buyers is the Neighborhood Housing Service of the Inland Empire ("NHSIE")
who markets the HAP Program at its homebuyer education courses, as well as community resource
fairs throughout the Inland Empire. For example, on March 27, 2010, NHSIE participated in two
P\Agendas\Comm Dev Commission\CDC 2010\06-21-10 HAP Qtr Report SR.docx
COMMISSION MEETING AGENDA
Meeting Date: 06/21/2010
Agenda Item Number: ,�3O
Economic Development Agency Staff Report
HAP Quarterly Report
Page 2
events: the first was the City of Highland Citrus Festival that drew over 50 families to the NHSIE
information booth where Agency Staff was able to promote the City's HAP Program. The second
event was hosted by NHSIE and named The Pathway to Homeownership that was held in the City of
Redlands. In attendance were approximately 56 prospective buyers that received information on the
City's HAP Program. Between January 1, 2010 and March 31, 2010, NHSIE educated 160 people, 33
of those were existing residents of San Bernardino.
During the third quarter covering the period of January 1, 2010 through March 31, 2010, the Agency
expended $103,445.00 in low-to-moderate income housing funds for its HAP Program. The total
private investment which includes borrower cash investment and first mortgage loan was $834,518.00.
This is equivalent to a private investment of approximately$8 for every$1 invested by the Agency. A
total of 7 first-time homebuyers utilized the HAP assistance to purchase homes throughout the City.
Of the 7 homes purchased by first time home buyers, 4 were bank owned properties representing 57%
of all homes acquired utilizing Agency assistance during the reporting period.
HAP PROGRAM TOTALS
Reporting Period Number of HAP Private
Homes HAP Amount Sales Price
Investment
Third Quarter 7 $103,445.00 $834,518.00 $1,115,000.00 _
The following table provides statistical information for the 7 homes acquired during this most recent
quarter.
1 HAP PROGRAM AVERAGES
Number of
Reporting Period HAP House Size Household
Homes
Income HAP Amount Sales Price
Third Quarter 7 3 $50,751.80 $14,777.86 $159,285.71
The following two tables identify the Project Areas and Wards, of the year to date through March 31,
2010, where HAP activity has occurred. This information is also reflected in the attached maps
(Attachment"A" and Attachment `B").
HAP PROGRAM LOCATIONS BY PROJECT AREA
Project Area #of Units HAP Amount % of Total (A I.rox.)-1
State College 3 $83,645.00 8%
IVDA 9 $386,770.00 36.9%
Outside Project Area 18 $578,080.00 55.1%
55.1/o
Total
30 $1,048,495.00 0 - - _
100.0/o
P.\Agendas\Comm Dev Commission\CDC 2010\06-21-10 HAP Qtr Report SR.docx
COMMISSION MEETING AGENDA
Meeting Date: 06/21/2010
Agenda Item Number: /f,30
Economic Development Agency Staff Report
HAP Quarterly Report
Page 3
1 HAP PROGRAM LOCATIONS BY WARD
Wards #of Units HAP Amount % of Total (Approx.)
1 1 $9,000.00 1%
2 0
0 0.0%
3
0 0 0.0%
4 1 $26,500.00 2%
5 12 $472,145.00 45/6 3
$60,400.00 6%
7 13 $480,450.00 jj 0,450.00 46% f
46/o
Total 30
l $1,048,495.00 1 100.0%
Program Statistics
For the year to date, covering July 1, 2009 through March 31, 2010, the Agency expended
$1,048,495.00 in low and moderate income housing funds ("low-mod funds") for its Homebuyer
Assistance Program. The total private investment which includes borrower cash investment and first
mortgage loan money was $5,220,991.00. Of the 30 homes purchased by first-time homebuyers, 17
were bank-owned units or 57% of the total. This is consistent with the Agency's policy goal of creating
more home owners in the City as it has assisted a total of 30 new households to obtain a home thus far
in FY 2009-2010.
L HAP PROGRAM TOTALS
Reporting Period Number of HAP Private
Homes HAP Amount Sales Price
YTD 30 $1,048,495.00 $5,220,991.00 $6,127,850.00
HAP PROGRAM AVERAGES
Number of
Reporting Period HAP House Size Household
Homes
Income HAP Amount Sales Price
YTD 30 3 $57,425.03 $34,949.83 $211,305.17
According to the California Association of Realtors, the median price of an existing, single-family
detached home in the City during March 2010 was $87,250.00, a 9.1% increase from the revised
$80,000 median home price for March 2009. The County median price of an existing, single-family
detached home for March 2010 was $151,000.00, a 0.7% increase from December 2009 levels of
$150,000.00. For the year to date the average household size participating in the HAP Program is a
family of approximately 3 and the average household income during the same period was $50,751.80.
In managing the Agency's HAP Program, Agency Staff often review similar programs in other cities.
This is done to gauge whether the Agency's program is competitive with those of other cities and
conversely to determine if the Agency's program is too generous relative to what other jurisdictions
are providing. It also serves to provide Agency Staff with feedback on how to best market the
P:\Agendas\Comm Dev Commission\CDC 2010\06-21-10 HAP Qtr Report SR.docx
COMMISSION MEETING AGENDA
Meeting Date: 06/21/2010
Agenda Item Number: e30
•
Economic Development Agency Staff Report
HAP Quarterly Report
Page 4
Agency's program and to better understand the motivations that lead prospective home buyers to
purchase in San Bernardino. The following is a brief survey of the down payment assistance programs
offered by nearby jurisdictions.
Highland
Fontana
Ontario
Upland
City % of Down Payment
10%
10% or$35,000 maximum assistance
6% (maximum home price $362,790.00)
30% or$160,000.00 maximum assistance
Victorville $20,000 maximum assistance
San Bernardino County Minimum of 3% of urchase
p price, and a
maximum of$54,000.00
Based on current market conditions, the Agency has administratively reduced the amount of down
payment assistance back to the original program amount of 10%. It is anticipated that for the
remainder of the fiscal year, the 10% cap will be sufficient to close transactions and that no
adjustments to the down payment amount will be required. Furthermore, any need for future down
payment assistance cap adjustments will be monitored by Agency Staff with recommendations brought
before the Commission should the market change and a great or lesser amount of Agency subsidy can
be demonstrated.
ENVIRONMENTAL IMPACT:
This item does not meet the definition of a "project" under Section 15378 of the California
Environmental Quality Act (CEQA) and therefore there is no environmental impact.
FISCAL IMPACT:
There is no impact to the City's General Fund. The Agency's approved FY 2009-2010 Budget calls
for an allocation of$3,490,000 in housing set-aside funds to support HAP activities. As of March 31,
2010, there were $2,441,505.00 remaining for HAP activities which would be available for draw down
through June 30, 2010.
Account Budgeted Amount: $0 Balance as of: May 28, 2010
Balance after approval of this item: $0
RECOMMENDATION:
That the Community Development Commission adopt the Motion.
604r
t,
_-a
Emil A. Marzu erim Executive Director
P\Agendas\Comm Dev Commission\CDC 2010\06-21.10 HAP Qtr Report SR.docx COMMISSION MEETING AGENDA
Meeting Date: 06/21/2010
Agenda Item Number: Jl,30
ATTACHMENT "A"
City of San Bernardino - Homebu erAssistance y Sites
January 1 , 2010 through March 31 , 2010
* HomebuyerAssistance Sites Project
J I I D-CENTRAL CITY-WEST H-SOUTH VALLE
Annexation 3067 ' x,t A-CENTRAL CITY-MEADOWBROOK I DD-CENTRAL CITY-EAST I 1 J-UPTOWN
See Footnote 1 I I B-CENTRAL CITY-NORTH .„ E-STATE COLLEGE
r � � I I K-MT VERNON
[ ___ County Areas
[_____I , BB-CENTRAL CITY-SOUTH I I F-NORTHWEST I I L-40TH STREET
City Limits I I C-SOUTHEAST
® G-TRI-CITY
iF3 -boR-
44411k,
A, Footnote 1:
cn
Annexation 3067(6 Parts)have been challenged in
the pending Huke versus LAFCO City case,which
r` was filed in court on February 25,2010.
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WIIIII 1417 p 9 H 1- J ,� _, �O FOOTHILL BLVD iii d -tr. tlk
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RIALTO AVE .x j .�, - �. p ' -..
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A
to /II''
Ward Number HAP Amount
1 1 -
10 LUGONIA AVE
$9,000.00
5
/0 2 $36,645.00 Project Number HAP Amount
6 2 $28,800.00
7 2 "°°- Outside Project Area 6
$29,000.00 m State College 1 $14,6450.00
Total 7 $
$ Q445: m
I 1 Ficonomic I)ciclopmcnt ten.)„
ATTACHMENT "B"
City of San Bernardino - Homebuyer Si
CSites
July 1 , 2009 through March 31 , 2010
* Homebuyer Assistance Sites Project D-CENTRAL CITY-WEST H-SOUTH VALLE
Annexation 3067 ' ;'} A-CENTRAL CITY-MEADOWBROOK 1 DD-CENTRAL CITY-EAST J-UPTOWN
r , See Footnote 1 B-CENTRAL CITY-NORTH E-STATE COLLEGE K-MT VERNON
County Areas eP'./4'441. BB-CENTRAL CITY-SOUTH F-NORTHWEST L-40TH STREET
r r .
[_____I City Limits C-SOUTHEAST ` G-TRI-CITY
't OR
Footnote 1:
cn �Q Annexation 3067(6 Parts)have been challenged in
A the pending Fluke versus LAFCO City case,which
was filed in court on February 25,2010.
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—I'MILL ST c9 N
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Ward Number HAP Amount •`' ;. _�� ��
1 1 a , _u.
$9,000.00 AIRP 000,, 10 ONIA AV
I, �..r
4 1 $26,500.00 "-a — Imo''..
5 12 $472,145.00 4 Project Are Nurrlber t 1A n outrt
6 3 $60,400.00 -.-I. State College 3 $83,645.00
7 13 $480,450.00 A IVDA 9 R ,770.00
o
Outside Project Area 18 $57808000
Total 30 $1048,495.00 _
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