The URL can be used to link to this page

Home My WebLink About2013-07-24 HAC MinutesWednesday, July 24, 2013 4:00 P.M. CITY OF CHULA VISTA MINUTES HOUSING ADVISORY COMMISSION SPECIAL MEETING CITY HALL CONFERENCE ROOM C101 276 FOURTH AVENUE CALL TO ORDER /ROLL CALL — 4 :06 P.M. PRESENT: Marshall "Dawes" Hamilt, Mark Minas, Sergio Quero, Lillian Uy ABSENT: Mauricio Torre (excused) STAFF: Stacey Kurz, Senior Project Coordinator Jose Dorado, Project Coordinator 1. APPROVAL OF MINUTES 4/8/13 - Member Uy motioned to approve the minutes from the meeting of 418/93. Member Quero second the motion and all members agreed 4 -0 -0. 2. ELECTION OF NEW CHAIR AND VICE CHAIR FOR FISCAL YEAR 2013/2014 Member Quero motioned to elect Member Uy as Chair for the fiscal year. Member Minas second the motion and all members agreed 3 -0-1 with Uy abstaining. Member Minas motioned to elect Member Quero as Vice Chair for the fiscal year. Member Uy second the motion and all members agreed 3 -0 -1 with Member Quero abstaining. 3. FOR -SALE HOUSING POLICY Staff Dorado provided a summary of the staff report, Exhibit 1 and presentation, Exhibit 2. Member Quero inquired if HOA and Mello Roos were factored into housing expenses. Staff Dorado replied that is something being added and looked at more closely in the future when determining the affordable housing price since those costs can equate to several hundred dollars a month. Staff Kurz added that is also a potential negotiating point for future inclusionary housing developments. Member Minas asked for clarification on the income qualification process for the existing residents at Mar Brisa and Sedona and Staff Kurz clarified that the existing residents would not be required to income qualify or meet ratios, that was done at initial qualification and they would only be reviewed for eligibility of the second modification if they were in good standing for 12 months. She further clarified that anyone that is not in good standing now would be eligible for the same modification after 12 months of good standing. Chair Uy motioned to recommend that City Council approve the updates to Council Policy 453 -02. Vice Chair Quero second the motion and the motion carried 4 -0 -0. 4. STAFF REPORTS Project Updates: Lofts on Landis — Staff Kurz indicated that the project was approved by Planning Commission at the end of June and now the developer is waiting to find out if they will receive their tax credits. They will find out in late September and would have to pull building permits by late March if they receive them. Chair Uy asked what would happen if they are not awarded and staff Kurz replied that the developer had indicated they would wait until a year from now to apply again. Housing Advisory Commission Minutes Paste 2 of 2 ❖ Congregational Towers — Construction has begun on the rehabilitation project and will be continuing over the next year. The rehabilitation is presenting challenges in construction staging issues within the urban core along Third Avenue, but the City is working with the construction company and residents /businesses surrounding the project. 5. MEMBER'S COMMENTS None. 6. ORAL COMMUNICATIONS None. 7. ADJOURNMENT — HAC Meeting was adjourned at 5:15 p.m. when Vice Chair Quero motioned to adjourn with a secon from Chair Uy, to the next regular meeting of October 23, 2013. Recorder, St cey Kurz Exhibit 1 — For -Sale Housing Policy Update Staff Report Exhibit 2 — For -Sale Housing Policy Update Presentation L i; CITY OF CHULA VISTA ATTACHMENT 1 DRAFT MINUTES ADVISORY HOUSING SPECIAL JOINT MEETING WITH THE MOBILEHOME RENT REVIEW COMMISSION Monday, April 8, 2013 6 CITY HALL COUNCIL CHAMBERS :00 P. M. 276 FOURTH AVENUE CALL TO ORDER HAC /ROLL CALL — 6:05 P.M. PRESENT: Marshall "Dawes" Hamilt, Mark Minas, Sergio Quero (left at 7:45), Mauricio Torre, Lillian Uy ABSENT: Armida Martin Del Campo (unexcused) STAFF: Stacey Kurz, Senior Project Coordinator Jose Dorado, Project Coordinator Simon Silva, Deputy City Attorney Mandy Mills, Assistant to the City Manager Leilani Hines, Principal Project Coordinator 1. APPROVAL OF MINUTES ❖ 8/29/12 - Member Uy motioned to approve the minutes from the meeting of 8129112. Member Quero second the motion and all members agreed 5-0. 2. HOME INVESTMENT PARTNERSHIP & HOUSING AUTHORITY FUNDS LETTER OF PRE - COMMITMENT Staff Dorado provided a summary of the staff report, Exhibit 1. The presentation, Exhibit 2, indicated that Wakeland Housing and Development Corporation have requested $2M in affordable housing funds to assist in the development of a 33 -unit mixed use project at 240 Landis Avenue. Member Uy inquired if there would be on -site property management and whether this financing would affect First -Time Homebuyer (FTHB) funds. Staff Dorado indicated that on -site management would be provided and that funds are still available for FTHB activities, however buyers have been having difficulty locating foreclosures in the current market. Public Hearing was opened by Chair Minas Sam Longanecker, resident — asked if the Community Room was going to be used by both residents and Family Health Centers? Rebecca Louie from Wakeland commented that they have been discussing mutually beneficial programs that may be provided in the room. Rudy Gonzalez, resident — questioned the cost/unit subsidy. Staff Dorado replied indicating it is approximately $60,000 due to the leveraging of funds and relationship with Family Health Centers. The Public Hearing was closed by Chair Minas Member Uy recommended the existing waiting lists for other Wakeland managed properties should be notified of this property and provided preference. Rebecca Louie indicated that they could not provide preference but they could notice, they also intended to notice local businesses in the area and provide preference to Chula Vista residents and workers. Member Torre motioned to recommend that City Council approve the pre- commitment of affordable housing funding for the development. Chair Minas second the motion and the motion carried 4 -1, with Member Hamilt opposed. Mobilehome Rent Review Commission Minutes Page 2 of 3 CALL TO ORDER MHRRC /ROLL CALL — 6:25 P.M. PRESENT: Rudy Gonzalez, Don Johnson, Sam Longanecker, Marco Torres ABSENT: Steve Epsten (excused), Pat LaPierre (excused), Ramon Riesgo (excused) 3. APPROVAL OF MINUTES ❖ 1/24/13 - Member Torres motioned to approve the minutes from the meeting of 1124113. Member Longanecker second the motion and all present members agreed 4 -0. SPECIAL JOINT MEETINGS OF THE HAC & MHRRC 4. CITY STRATEGIC PLAN Staff Mills provided a presentation to the Commissions regarding the draft strategic plan for the City, reference Exhibit 2. Vice Chair Longanecker (MHRRC) asked how the goals, like public safety coincided with council action. Staff Mills indicated that the goals they saw in the presentation were rolled up from a larger more descriptive goal and often do not involve just one department. She proceeded to show an example. Chair Gonzalez (MHRRC) asked about the staff investment into these goals and whether performance goals would be tied into these. He further asked what the cost to the city was to put this together and what the financial return was. Staff Mills indicated that the city did not currently have a pay for performance in place but the plan helps to define roles and importance of the goal in the larger picture of the city. For instance public safety is often just looked at regarding Police and Fire, however recognition is not always given to others that maintain equipment or provide services that keep residents safe within the city. Vice Chair Longanecker (MHRRC) added an example of this. He had sent a letter in to the city complimenting the grounds crew at Rohr Park. The City Manager took the letter and went out to the park staff to acknowledge their work. Chair Gonzalez (MHRRC) made a point that he would like staff to be careful in describing the city as east and west. Staff Mills responded that staff often refers to he 1 -805 split because different tools are generally required on either side of the city for development and maintenance. Member Uy (HAC) added that departments can add value to goals like IT, and Share Point software was a good example of this. 5. HOUSING ELEMENT ANNUAL PROGRESS REPORT Staff Kurz provided a presentation, reference Exhibit 2, of the Housing Element goals and policies for the period of 2005 -2010. She indicated that the City was in process of adopting a new Housing Element for the period of 2013 -2020. Member Johnson (MHRRC) indicated that he had first hand experience with rehabilitation loans through the Title 25 inspection process and the consequences of not having funds available to help people that are unable to pay for repairs to meet the Title 25 requirements. He added he always looked at the loans as an investment in the people not the unit. He added that the City does have other programs such as Christmas In October that utilize volunteers and have traditionally focused on single family homes, but maybe could be replicated for mobilehomes. He also commented that maybe the City could work with the State to design units suitable for replacement in some of the smaller trailer spaces. Mobilehome Rent Review Commission Minutes Page 3 of 3 Member Uy (HAC) asked if funds could be utilized for first -time homebuyer opportunities in mobilehomes versus rehabilitation in units that may be at their useful life. Staff Kurz replied that this is something we could look into further, but there would be unique issues with this type of program. Member Torres (MHRRC) asked if income levels in parks are such to qualify residents and what percent of units are nearing their useful life. Staff Kurz replied that we do not know income levels of persons; however a large number of residents would qualify. She added that more than 50% of the units in Chula Vista are nearing useful life or an age where we would anticipate significant rehabilitation is needed. Chair Gonzalez (MHRRC) asked if staff has considered sources outside of the City and added that a bullet should be added to the strategic plan regarding. He further asked if banks have CRA credits that they need and might consider private investment. Chair Minas (HAC) indicated it is at an individual banks discretion. Penny Vaughn, President of Chula Vista Mobilehome Residents Association and GSMOL representative — Ms. Vaughn expressed that she felt the maintenance of units was more relevant than age. She indicated that financing units is an issue these days and it is expensive to move units. She expressed that any CHIP program should have loan -to -value requirements and she felt an on -call appraiser could be utilized to assist with these efforts. Chair Gonzalez and Member Johnson (MHRRC) expressed their interest in staff providing information on what incentives can be offered by the city to promote new development of mobilehome parks. Staff Hines indicated that staff is not prepared to discuss incentives to promote new mobilehome park developments this evening, but clearly there is a desire to discuss this further at upcoming meetings. 6. STAFF REPORTS None. 7. MEMBER'S COMMENTS None. 8. ORAL COMMUNICATIONS None. 9. ADJOURNMENT — HAC Meeting was adjourned at 8:00 p.m. due to lack of a quorum, when Member Uy departed, to the next regular meeting of July 24, 2013. MHRRC Meeting was adjourned at 8:03 p.m. when Member Johnson motioned to adjourn with a second from Member Torres, to the next regular meeting of July 18, 2013 Recorder, Stacey Kurz Exhibit 1 — Wakeland's Proposed 240 Landis Avenue Development Staff Report Exhibit 2 — 240 Landis Financing Presentation Exhibit 3 — City Strategic Plan Presentation Exhibit 4 — 2012 Housing Element Progress Presentation EXHIBIT 1 The City of Chula Vista Development Services Housing Division A REPORT TO THE HOUSING ADVISORY COMMISSION Item No. 2 Staff. Jose Dorado, Project Coordinator Development Services Department, Housing Division DATE: July 24, 2013 SUBJECT: Council Policy 453 -02 - RECOMMENDATION OF APPROVAL TO THE CITY OF CHULA VISTA CITY COUNCIL AN UPDATE TO COUNCIL POLICY 453- 02 RELATED TO THE DEVELOPMENT OF AFFORDABLE FOR -SALE HOUSING FOR LOW AND MODERATE INCOME BUYERS I. RECOMMENDATION That the Housing Advisory Commission recommend APPROVAL to the City of Chula Vista City Council an update to the City of Chula Vista's Affordable For -Sale Housing Policy 453 -02 that was originally adopted on December 9, 2003 and last updated September 13, 2005. II. BACKGROUND The Affordable For -Sale Housing City Council Policy 453 -02 (the "Policy ") was adopted in 2003 to provide procedures and guidelines for Developers proposing to construct affordable for -sale housing opportunities within the City. The policy outlines mechanisms to ensure affordability of the sales price, sharing of sale proceeds to continue to promote affordable homeownership programs, loan qualification, and selection of qualified buyers. To date, 32 units within Sedona at Rolling Hills Ranch and 67 units at Mar Brisa at San Miguel Ranch have been developed utilizing this Policy. Since the last amendment to the Policy in 2005, there have been drastic changes in the housing market, including a steep decline in U.S. home values and underwriting changes in the lending industry. In addition, with the elimination of State Redevelopment and the associated governing laws, some of the restrictions in the original Policy are no longer necessary or consistent with industry standards. Given the changes, revisions to the Policy are needed to ensure its continuing effectiveness for existing and future first time homeowners. Staff is proposing revisions that will allow greater flexibility to those beneficiaries of the City's For- Sale Housing Program and to encourage long term homeownership. Such revisions include restructuring of the equity share between the City and homeowner, a reduction in the length of term of the Silent Second loan, underwriting criteria and procedures for a short sales and cases of hardship. In addition, clean up revisions are proposed to provide flexibility which include the applicability of the policy to moderate for -sale products and elimination of examples and language that may change over time and become obsolete. The proposed revisions are consistent with mortgage industry standards and are in line with program policies, at the federal and state level, that July 26, 2013 Update to Council Policy 453 -02 Page 2 have been adopted for those experiencing a hardship and facing foreclosure, such as Keep Your Home California and the Home Affordable Refinance Program (HARP). Recommended Substantive Revisions to the Policy Loan Term and Equity Share The Policy requires the repayment of the Silent Second loan principal upon sale, transfer, refinance, rental or change of title on the property. Staff proposes reducing the shared equity term from the current Policy of 45 years, required under previous State Redevelopment law, to 15 years to coincide with more typical homeownership trends and the City's First Time Homebuyer Program. Proposed Table 1 of the Council Policy is revised to reflect equity share percentages between the City and the Homeowner based on the revised maximum length of the time (15 years) the Homeowner has occupied the property. Should a homeowner sell within one year, the City retains 100% ofthe equity in the property, minus the homeowner's expenses. The City's share of equity declines each year until year 15. Underwriting Criteria Staff has proposed updates to underwriting criteria to be consistent with the City's First Time Homebuyer Program and current industry underwriting standards to ensure qualified applicants are being selected for the program that will be able to sustain homeownership. Language is included to limit the use of funds gifted to the buyer. Short Sale and Hardship At the time of the adoption and the subsequent amendment to the Policy, home prices reached unprecedented double digit increases and the Policy did not reflect any potential decline in market conditions. With the significant downturn in the housing market in recent years, where home mortgages are significantly higher than market value, many homeowners are choosing to short sell or allow the property to enter into a default status. Given the existing policy term of 45 years and upside down mortgages, homeowners are provided with little incentive to maintain homeownership at the existing terms or to refinance. Staff has proposed new language to recognize short sales and financial hardships. Prior to a short sale, homeowners will be required to seek homeownership counseling. Additionally, the Development Services Director will have the ability to review existing loan documents and approve loan principal reductions in a downturned economy for homeowners in good standing and seeking refinancing to more favorable terms. The proposed language will allow for coordination with Federal, and State foreclosure prevention programs, as previously mentioned. Applicability to Existing Balanced Communities ( "Inclusionary Housing') Projects Since 2003, two developments have utilized the Policy, Sedona in Rolling Hills Ranch and Mar Brisa in San Miguel Ranch. Both projects provided affordable units through the City's Balanced Communities Policy. The City is currently working with Fannie Mae, Wells Fargo, and other parties involved in the first mortgages of these properties to address concerns regarding loan modifications and refinances. The update of the Policy will provide the Development Services Director the ability July 26, 2013 Update to Council Policy 453 -02 Paize 3 to review the City's Silent Second loan documents and appropriately apply the Policy as necessary to allow these homeowners an opportunity to seek more favorable financing terms and maintain homeownership. Moderate Income Buyers The original Policy did not have provisions for moderate- income buyers. The proposed Policy would apply the underwriting criteria and terms as low- income buyers and coincide with the approved pricing guidelines as set forth in the City's Balanced Communities Policy Guidelines. Recommended Clean Up Revisions to the Policy Purpose The Housing Element of the General Plan is updated every seven years. Therefore, goals and policies of the Housing Element are subject to change as housing needs may change over time. The revisions include the strikeout of the specific goals of the 1999 -2020 Housing Element and replacement with language that states a general goal of providing for varied housing opportunities for the diverse needs of the community. Examples The existing Policy provides specific examples (reference struck out Tables 1 -3 in Attachment 1) for loan assumptions, calculation of sales prices, and the Silent Second loan calculation. Additionally, County of San Diego Income Limits for 2005 and Housing Pricing based on these income limits serve as Attachments to the Policy. The examples and the Attachments are based on point in time information and subject to change over time and based on, market conditions. Therefore, the examples and Attachments to the Policy are being deleted. CONCLUSION The Policy revisions promote long term affordability and encourage Chula Vista's working families to take advantage of opportunities for quality housing consistent with City housing goals. Without such changes, staff anticipates it will be difficult to find future buyers of for -sale products under this Policy due to excessive restrictions of the current language and additional defaults may occur with the existing complexes implemented under the Policy. III. Attachment 1. Updated Council Policy 453 -02 ATTACHMENT 1— Updated Council Policy 453 -02 COUNCIL POLICY CITY OF CI ULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE j FOR SALE HOUSING FOR LOW - NUMBER DATE PAGE AND MODERATE- INCOME 453 -02 12 -09 -03 1 of 7 BUYERS ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 ENDED BY: Resolution No. 2005 -314, 9 -13 -05 and 2013 - 154, 08/06/2013 7 16 13 PURPOSE The Housing Element of the City's General Plan (1999-2Q,04 2Q,04 -2020) establishes goals and policies for the City to address a number of important housing related issues. One of the focus areas a gaai -is to ensure the city supports varied housing opportunities t — ►suSiRg- types and iRc-rease— herne —e, ership eppeFtupities for le-,A, FnedeFate iREen;e heysehelels. Geal 3 is te "eRSUre that an adequate and diverse housing supply is available to meet the city's existing and fytyFe Reeds". in addition Goal 4 is to ec4 rte, �Eerwe households". Te am reg sires re ident me- derate inrmm� heys helds, with at least O units for 18W iRc=eme residents and O for the diverse needs of residents including the establishment of permanent affordable housing opportunities for low- and moderate- income households. This Policy establishes the procedures and guidelines for the development of affordable for sale housing for first -time low- and moderate- income buyers, defined as households F-irrt-timto {term sha I+ oe gef neQ as an indi id�ual whom 4a-,have not had ownership interest in any property within three years from the date of application and are earning ; no more than 80% and 120 %, respectively, of the Area Median Income ( AMI „). The ^ MP.pia^ !ReeMe 'AMI), based upon household size, is determined annually by the U.S. Department of Housing and Urban Development (AttaehmeRt--14. This policy wifl— outlines the development guidelines, program requirements including underwriting criteria and the buyer selection criteria that shall pertain to any for s ale development proposed to have affordable units within the City and not otherwise regulated by other funding sources, inclusive of the City's Balanced Communities ( "Inclusionary ") Policy. COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE FOR SALE HOUSING FOR LOW- NUMBER DATE PAGE AND MODERATE - INCOME 453 -02 12 -09 -03 11-e 7 BUYERS ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005-314,9-13-05 and 2013- 154. 08- 06- 20132nnc 34 n ^ nc The Inclusionary policy requires residential development projects consisting of 50 units or more to restrict a minimum of ten percent (10 %) of the units for occupancy by and affordable to low - and moderate- income households with a minimum of 5% of the units for low - income residents. Any Developer wishing to satisfy their affordable housing obligation through the development of affordable for -sale housing within the City must adhere to the policies contained herein and the Balanced Communities Policy Guidelines. As paFt of the entitlepser;+ pFeeess, the Developer and the City will enter iRte aR A:fferdable Heusing AgreemeRt, WhiGh as iibed f- rurtheer DEVELOPMENT GUIDELINES The purpose of this policy is to provide affordable homeownership opportunities for low - income households and to ensure that upon sale of the "affordable" unit the City receives adequate funds to continue to promote affordable homeownership programs throughout the City. To that end, the two primary components of this development process include the establishment of a loan, through a Second Trust Deed, between the Homebuyer and the City and an equity share system based upon the Homebuyer's length of occupancy. The City and Developer shall be eintl , Fespensible fee +h° implementati- e� the development mechanisms as outlined below. The City's Second Loan will ensure that the unit shall be affordable to the iew -here buyer while maintaining the market value of the property. The Silent Second Loan shall be defined as a loan that does not require any payments until sale, transfer, refinance, rental or change in title of the property. City Loan Calculation The calculation of the City's second loan amount shall be based upon the establishment of the "Affordable Sales Price" and "Market Rate Price" of each type of unit, based upon number of bedrooms per unit. The City's Second Loan amount is calculated based upon the difference between the Market Rate Price (MRP) and the Affordable Sales Price (ASP). COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE FOR SALE HOUSING FOR LOW- NUMBER DATE PAGE AND MODERATE- INCOME BUYERS 453 -02 12 -09 -03 Hof 7 11ADO BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005 -314, 9 -13 -05 and 2013 -154, 08- 06- 20137005 314, n 1 nc and 2;0-1 -3- 7 16-1-3 Silent Second Loan Amount =MRP -ASP The Affordable Sales Price shall be calculated based upon a number of factors, including but not limited to - number of bedrooms per unit at 1.5 persons per bedroom, homeowner's association dues, utility allowance property tax, Mello Roos (CFDs) and any other additional costs of construction that are passed onto the buyer. This calculation is then incorporated into the formula that determines what the City's second loan amount will be. Assumptions utilized to calculate the Affordable Sales _Price will be subiect to the normal costs and fees as associated with the purchase of the particular property based upon the real estate market and negotiations between the City and Developer at the time of the development proposal The criteria included that will remain constant are the percentage of downpayment required term of the loan and the maximum housing to income ratios. Other factors may be applied and are subject to change, based upon the individual development costs. The Market Rate Price will be determined and mutually agreed upon by the City and Developer based upon current real estate comparables and market analysis at the time of development proposal. The Market Rate Price may be subject to change upon the approval of the City during the development /construction period. - - -- • - M - COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE FOR SALE HOUSING FOR LOW - NUMBER DATE PAGE AND MODERATE- INCOME l-e€� BUYERS 453 -02 12 -09 -03 ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005 -314, 9 -13 -05 and 2013 -154, 08- 06- 20MG05 314,9 , nc and 2913 T , .c 1 � inteFest Rate "0 Term of I can � Tame ! / S o�`-'ef Purchase Drive HQA Fees and Melle Rees, -, ;f nnlie �hln nth i-Q bfe-2 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF .AFFORDABLE POLICY EFFECTIVE FOR SALE HOUSING FOR LOW- NUMBER DATE PAGE AND MODERATE- INCOME $ 79,697 $ 104,697 $ 129,697 BUYERS 453 -02 12 -09 -03 11 7 of ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005 -314 9 -13 -05 and 2013 -154 08-06-20112005-314, 9 13 05 and 2013 Bedrooms Per Unit Max Aff Purchase Price Market Value of Home Second Trust Deed Amount 5 2 $ 195,303 $ 79,697 $ 104,697 $ 129,697 $ 154,697 $ 179,697 3 $ 230,073 $ 44,927 $ 69,927 $ 94,927 $ 119,927 $ 144,927 4 $ 259,9831 $ 15,017 1 $ 40,0171 $ 65,0171 $ 90,017 1 $ 115,017 Equity Share Table 4-1 illustrates the equity share percentages between the City and Homeowner based upon the length of time that the Homeowner has occupied the property. _The applicable equity share if, any plus principal shall be due upon sale, transfer, refinance, rental or change of title on the property. Should a Homeowner sell, transfer, rent or reconvey the property before one year has passed from the date of the close of escrow, the City shall retain 100% of the equity in the property, minus approved Homebuyer expenditures, including amount , of initial downpayment and approved costs of sale. Table 41 For -Sale Low- and Moderate- Income Homebuyer Equity Share Occupancy Period Homeowner E uit Ci Equity Share COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE 0% FOR SALE HOUSING FOR LOW- NUMBER DATE PAGE AND MODERATE- INCOME 10% 37- 4816 -20 3:1-e7 BUYERS 453 -02 12 -09 -03 20% ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AME NDED BY: Resolution No. 2005 -314, 9 -13 -05 and 2013 -1.54, 08- 06- 2013005 3 4 9 1� nc and 2013 {yearsmonths ShareCit uit3r-� #are 0 -121 -5 100 0/60 %74% 0% 13- 246-19 95 %5°/s60% 5% 25-3611-1-5 9001 0%-50% 10% 37- 4816 -20 85 %/o- 5, 0 15% 49- 6021 -2-5 80 %/02$%30% 20% 61- 7226 -39 _50%/51 --%-2 � 50% 73- 8431 -86 45%/- - o 10% 55°/% 85- 9646 -45 40% /o -60-% _60°/% 97 -108 35%/0- 65`%/% 65% 109 -120 30%/0 -7(}% 70 % 121 -132 25%/0 -75%la 75°/% 133 -144 20%/0403°6 80% 145 -156 15%/0$5-%!0 85% 157 -168 10%/090% 90°/% 169 -180 5%/% -- -o 95°/% Thereafter 100% 0 % OMEN • . iii •_ _ . ii iii COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE ri • FOR SALE HOUSING FOR LOW- NUMBER DATE PAGE AND MODERATE - INCOME (187,303) 11 47 BUYERS 453 -02 12 -09 -03 Homeowner's Investment - Homeowner ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005 -314, 9 -13 -05 and 2013 -154, 08 -06- 20132005 314 9 1 nc and -2013 - -7 16 13 .. J. • -. =Imio i .■ ••• - - ■ _ "111111110, • i� ■•• •• •■ ••■ - - - +. - - CNIMMIS • •• - _ ■ J, _ - Current Sales Price (4 yars later) ri • $ 500,000 ry Repayment Requirements and Conditions Sale, transfer, refinance with cash -out or for purposes of debt consolidation or renting of the property requires both repayment of the Silent Second Loan PLUS repayment of a portion of the equity based upon the length of occupancy at the time of such action. The City will subordinate its second loan if the Homeowner wishes to obtain a straight rate and term refinance (no cash out or debt consolidation). Neither the City's second loan or the equity share will be due. The ON will evaluate the Homeowner's Ratios to determine if the borrower can repav a portion of the silent second or if the new loan remains affordable for borrowers who refinance into a less loan term. EXAMPLE TABLE Current Sales Price (4 yars later) $ 500,000 1 st Loan- Homeowner $ (187,303) 2nd Loan -City $ (79,679) Homeowner's Investment - Homeowner $ 45,859 Equity $ 187,159 Times Equity Share Percentage 70.0% Equity Share (City) $ 131,011.30 TOTAL DUE TO CITY $ 210,690 TOTAL DUE TO HOMEOWNER $ 289,310 Repayment Requirements and Conditions Sale, transfer, refinance with cash -out or for purposes of debt consolidation or renting of the property requires both repayment of the Silent Second Loan PLUS repayment of a portion of the equity based upon the length of occupancy at the time of such action. The City will subordinate its second loan if the Homeowner wishes to obtain a straight rate and term refinance (no cash out or debt consolidation). Neither the City's second loan or the equity share will be due. The ON will evaluate the Homeowner's Ratios to determine if the borrower can repav a portion of the silent second or if the new loan remains affordable for borrowers who refinance into a less loan term. COUNCIL POLICY CITY OF CH L,A VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE FOR SALE HOUSING FOR LOW- NUMBER DATE PAGE AND MODERATE - INCOME 4-1 7 BUYERS 453 -02 12 -09 -03 of ADOPTED BY: Resolution No. 2003492 DATED: 12 -09 -03 AMENDED BY'7: Resolution No. 2005- 314, 9 -13 -05 and 2013 -154, 08- 06- 2013'005 314, n , � nc And _10 i 3 . Y'-1 643 Should the Homeowner wish to add an individual to the Title of the property or include the property in a Trust they must obtain City approval prior to such action. Either action may result in the loan and /or equity share becoming due and payable within 90 days of the action and shall be at the discretion of the City. Short Sale and Hardship Upon loan repayment request, if the combined first and second mortgages are below current market value of a unit the City will require homeowners to seek homeownership counseling prior to the approval of a short sale of the property. In addition these request will be reviewed on a case by case basis, City Silent Second Loan Restructuring The Director of Develooment Services may authorize a reduction in the City's Silent Second Loan Amount principal (after sale) for buyers whom are in good standing for a minimum of 6 months (on their mortgage payments, and HOA fees), undergoing a refinance, and where initial Market Rate Price has declined by more than 40% to current value, under current underwriting and industry standards. PROGRAM REQUIREMENTS The City and the Developer will ensure the development meets all of the following requirements: 1. Should subsidized financing, offsets, or incentives be proposed and obtained, the development requirements of that program or granting Agency must also be met. 2. All "affordable" units will be sold to buyers meeting both the income -based and cost -based measures of affordability. The income -based measure is the annual income at 80% and 120% of AFea Median T ^r ^m° 'AM13 based upon household size. The cost -based measure may not exceed 40% of 80% of AMI for all loans COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE POLICY EFFECTIVE FOR SALE HOUSING FOR LOW - NUMBER DATE PAGE AND MODERATE- INCOME 11 BUYERS 453 -02 12 -09 -03 -e€7 ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005 -314. 9 -13 -05 and 2011-1.54108_06 - 20132005 314, 0 1 ? �� 4 3 a 2813- 7 1643 except FHA which has a cap of 36 %. TheFefeFe, utilizing 2005 s.,,-,,., e figuFes the inc non 0 0 3. R-15 parking deviatiGns, etQ tThe units will be priced as affordable to buyers at the 70% and 110% of AMI level, but the maximum income level for qualifying households will still be at 80% of AMI for low- income and 120% for moderate- income Pricing will be set using a front end ratio of 30% for low income buyers and 36% for moderate income buyers. 4. Prospective homebuyers must be pre- qualified by the designated Lender, as determined by the Developer, in order to purchase an affordable unit, although the homebuyer may obtain his /her permanent financing from any licensed mortgage broker or lender of their choosing. Homebuyer shall notify City staff in writing of intent to use "outside" lender at least 30 days before expected escrow closing, as determined by the developer. 5. Homeowner is required to attend a qualified " Homebuyer Education Program" and provide evidence to the City of their attendance before the close of escrow. 6. The Borrower must sign a release authorizing the City to receive a copy of the buyer's 1003 (Mortgage Loan Application), Good Faith Estimate and Underwriting Transmittal Summary (1008) or similar form from Lender, which shall be forwarded to City as part of the application review process. COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE FOR SALE HOUSING FOR LOW- AND MODERATE- INCOME BUYERS POLICY NUMBER EFFECTIVE DATE PAGE 453 -02 12 -09 -03 11-e#7 ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005-314,9-13-05 and 2013-t54.08-06-20132005 314,9 , � nc and 291 1-6-13 Underwriting Requirements The City shall require that each homebuyer meet the following underwriting standards in order to be eligible for purchase of an Affordable Unit, regardless of Lender's standard or available underwriting criteria: 11. Minimum contribution by buyer of three percent (3 %) of the Purchase Price;, 2. Maximum liquid assets after downpayment and closing cost contribution not to exceed $25,000 (not including retirement accounts i.e. IRA's, 401(k), etc), 3. Non - occupant co- borrowers are not allowed, 4. Maximum total housing ratio of 36% for FHA loans and 40% for all other loans, 5. Maximum debt -to- income ratios of 41% for FHA loans and 45% for all other loans, ra n4 5-66. Minimum front -end ratio of 30% for income qualification purposes; 7. No refinancing for the purposes of cash -out or debt consolidation shall be allowed; and- b:8. Gift funds shall not exceed 10% of the affordable sales price. Lender Requirements The Developer is responsible for providing an informational packet to the Homebuyer detailing the responsibilities of all of the involved parties, including the Lender, City, Developer and Homebuyer. The Lender is required to adhere to the criteria in determining COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE FOR SALE HOUSING FOR LOW- AND MODERATE - INCOME BUYERS POLICY NUMBER EFFECTIVE DATE PAGE 453 -02 12 -09 -03 11 7 of ADOPTED BY: Resolution No. 2003492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005 -314, 9 -13 -05 and 2013 -154, 08 -06- 20132005 314, 9 1- n5 and 2013 , 7 ] 6-a-3 the Homebuyer's eligibility for an affordable for -sale unit. Appropriate documentation {as ewfliRed abeve as #;z) must be forwarded to the City by the Lender. After review and verification that the Homebuyer is qualified, the City will send an Approval Letter to the Lender confirming the Homebuyer's eligibility. BUYER SELECTION CRITERIA The Developer shall use the following criteria in order to determine priority for purchase of an affordable for -sale housing unit. Marketing of units shall be in compliance with federal and state fair housing law. A point system has been established so that applicants with a higher number of points will receive preference for units. 512oints Households which are displaced from their primary residence as a result of any of the following: (i) expiration of affordable housing covenants applicable to such residence; (ii) an action of City or Agency; (iii) closure of a mobilehome or trailer park community in which the household's residence was located; or (iv) a condominium conversion involving the household's residence. One member in the households must have resided in such housing as the primary place of residence for at least one year prior to such action or event. 3_points Households with at least one member who is working within the City of Chula Vista, as that person's principal place of full -time employment, at the time of application, 3 points Households currently residing within the boundaries of the City of Chula Vista, at the time of application. 2points Households with at least one member who is a Public Safety employee (fireman /woman and policeman /woman) or Credentialed Teacher. The individual must be working in such position as his /her full -time profession at the time of application. 1 point All other applicants who do not meet any of the above criteria. COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: DEVELOPMENT OF AFFORDABLE FOR SALE HOUSING FOR LOW- AND MODERATE- INCOME BUYERS POLICY NUMBER EFFECTIVE DATE PAGE 453 -02 12 -09 -03 11 o€-7 ADOPTED BY: Resolution No. 2003 -492 DATED: 12 -09 -03 AMENDED BY: Resolution No. 2005-314,9-13-05 and 2013 -154, 08- 06- 20132005 314,9 i nc afid -2013 In the situation where there are applicants with an equal number of points but not enough units available, secondary determining factors may be considered, including number of verifiable household members or individuals with special needs or disabilities. 1 C-- ^v'uRt"f SaR DiegG Weus t eldl r.,,-,,.,.,., Limits is EXHIBIT 2 tltr I� el �v1C .5 illb.. _..._ ..,�.,r, ..... IS, _. _.. ...:..._.__....._ _ �.z . -. . _Ill a - ...._ Low Mod�ercom Bra ors 6u�UIo _...:.....v �W�__ �.... _.� . �......_ J pe -.-- __.._....,.._.... -:.� ....i.s �� ........._..ors,.._. - ..... ..-- -- -•__ ....^ . � .:_..:.3. - - _. ..-- _,�.z.,.�_� _x :.. ,_;�= .`'- "__— a= ;_- ..— r....r._�_ ••..^:- �.�: —. —cry, jc' _r_ -:.-- N. ...... `= �...._ . ......................._.._._«. ^sue._...:..._.:, :..,•-.._.. c...._. .._.... «........- r.— ......,_... --..- ,.- �s.__•_:'' _ :^-- .......;•car -• _ __ y ml -` =_iG infer# ..�.._ . ..............— .-.:.— ate.- :•..:c ^.-_.>_�^�_ _...�.�.r.._«. ..._._5�._r_; —_a- _ -_ _ ___...._,:a ^c.�-• '_1 '.. .— h-•_. J-• t' T-.._.. I^.: v^ �..- L,:: �__..-... �.: I .,"- ,�r.^..s. ^..,�..�� «- iT.:IW ...: u,.. y. 1^.• ��«"-'« �'_. �- .,_...�..'.u.::_.'_C�'- �:.��: ImplerrrrHo��ncErnfiaas. l.._..._.• .._.... — .- ...... -.. «... === avelaprrr� aAfa�lala Foy-al _.,.. _ ; ,T -•. - -� _.___._._- ...T - -. �.— .�,. -. .. .. y:. T:— �: -•= T.,_''__— .^_:.'' ^= �= _C.' = ::i ..... may",_._,•' ousL op�M�.:• .- m ;E s -- Porx»tIar�grQmuners�s -- .= w= ;== �T= �71�ct�ar��m .- ]�LT�� e.�C -... �. T. _:C��>�: «�:°«..'.):1YCetiiiiuuCS «....- .�s'L�._+_._� «._`F.�_.�:..�..:.^i�'•��«:`� '�_. _. 7/24/13 1 *019 .lm De �tr�trnet -T -- Poc �� S �tfor- �abl�Safes �viel�irnes- - -'- =amity's Silen�-6o - — �,..... iar�- .P-- aroantages f4- �r�sur� fon t r� affsi]ity Program Low�noorxse quire twr�ttrrgRer utremenis er5e7e�c> ron'oiritytem fpr�Vlarketing of lJnits bli ena_ — -'�::aa :r sox^_ s_• ssvm ..__.,._._...._.._�_.....,_,. - �......- .......,- .�.- �_'= ,.._r_ r.._,_._n `_ . -a_, — ____ eve.lp�near Se ices :.�.. 4 - nr Sa�� Affo ell st ......_��_._ mm L -^TS csna 3 Fruis — hlfar Bn E t .lif s Royiing�Witis Rahch Mt u�rtanc ;.'�.r'a- +.`,.Yiv:!'::,-� v:....:............. ..... ,...,... vi: �i_.^- lii. u.._, r,::, u. ...__'....____.,_,.�— ,...___._— ._ .m —.: _. ... . ^- :.a...,a a•_..urv,:"w`._-a- L..�_a_: ,.,........, .._. _. —_... .._ _ :..: ��'— ��.YtY_•�.^_C.•C:L-tt _ _'C� --G^ �L,r�._..J: �3331�—•^ 5�"`v _.._,.:�.C��:.:L:_c^_u.._...__ _ — .^...�.Y:W_ •_ .inn"° ."_3xC. �2':_^ --_— ..... _.- 5�.— .00:C.._,�.•9.n__....CI_ a"'nf_•_•X _ ��T.��..::..�L^.G:i.�L'p�'^.�' L_:.IYY'r^.I:CL...�^....0 ^._ ._ ._... ..Y[_�,�..Y�::�.- �.._,li�•. .__.. ._. 7/24/13 2 EXHIBIT 2 7/24/13 �3 EXHIBIT 2 big_.. ,,.. ----- -� - _ _.....�_ _. «_..... a .� _— -� In usnary Ncsi io . nJn� lssus .:_ - . .. rig . , «_.- 1. w_....—:,• �_«.:_—. �._.- �. _- .�.,,�- ��— :,— _..._..— W_��P_�� ....__...�___..._....,... M.. mill �llaree --, _ - — T•IfSeconc� Leanrns ear 1! Drvelol meta e3°vices i7iLAQ V1Sf4 �� .....mow_ _..__.-.... T .�_.:.-- �'—.— .- -_�.= :..�._.__., _..V- ...�_..__._.__.._....i�... ....•.... _._ __ _ ..__._.__...___ «..: «..._._......__........ «.. ^ �=' ��`- `...-- __- .- ..- ...._..:... —�:Y— :•_ice_ ........ ................. - _.....:...-._,.... .:......1Vt�::.�n ^.- .:.......J. �..:.._...»_ ....._.....-- .:i.....��_:::."., .- :':.....- _fit, —T1 « - - 'Yt_: -..._� ._........«__W.._�- 5..:.. -fin ._.] = "]'^ ...�:...... -.. � ......,..._ _ ME ERNE —T. .. - .� ---- L__:.r.. ,.- r»:::- ..,_.... —_ 'a'•�c:_'.. ^ <.........- � Tom; ._:,..... ._ « ............... yam._ ......_.... -__ -- .. ......._..-._,:...:_. ........:.... ..:........_.�s_:;_:_x•_.._ar__ •..... ------ nT- '-"a "'::::_:: �:: _ ._ ?s_'x- :._,:..— 7/24/13 4 EXHIBIT 2 0 IV x y_ _ �Jrtderwrit�r�gr�eri _ _ _ -_- sue_• - -,- ��..- .,..�- :,;._,• _ ._.._..._._.._,.I�gab�lity --- .- - - - - -- �_.. _ �nlrnU -fi fr�4n � raga o .3Q _ ._.. �. mumfF -capds r-- ::.--� .ter.-_= __;•_;.�:....�r. T a•'... .__. ..., ._... mss :...`- _`- .:moo= ::cr-'.^� -.." __..- ..,,- �s,,., �..__. ^...:.... _"_: =5. -L-M-2- _ .-- �:.:�a:::r.::a= r.- ...- rv�.z- sue.. ^n_•_.- : --i.. :n:,;,...:`_ ^_� =:��_ __. ., cr.... -cry - _..r....., :• =- c.- .r....._ ,,:.- .- ....,..... _ .:. uucaa _ - y...._.�. »sue u' ._..._�. «._.... .�.. _.. ._-- -- -c:._._.......,rr_:x:r_•� ......_�_ : .gym...,.. -,�._ •'�;:'::":;::::::'.:� :' -:i:�� 7/24/13 5 EXHIBIT 2 Y - �..,_..__._� _..hoalnc�H�a`ds�P _ - ................1. ^. u'^...� ...w....�.�:�- - �......: T._.C�.u^.1— ..T.:L': is L^.. —C. "�1.•.'_x:�._.�- .:. ":�::�,- __.___ ,_.. ,.. «... u.:.�':�_.. u�_..: —w ................. _..:� — .. • Establis i chart sa#e aha -Tha k�fp llc —I -- _ L �Pp�fieolici -fo exlstlr�p�o�ects - ^JY�� _�_:.,.x.., —_- _ _- _.��. - -•�= :;_mac.,. –:;: =L �:_�..._ W • Revlew curlentlertSecondoar�s ^ ^�= -._._ .- •_. -_.� _ .-_.— _..�_ crs• =c=am— .. — —. 7/24/13 m EXHIBIT 2 7/24/13 J WN,�= ..««........ _._._._.....�._....._........._ .«...... .— ...«... «.... v..v__ .' -.' ........_ ..nn .. .. ........ ..v.: .....J._....... ...... .... «......_......•a -.__.� .._. ._emu[. .............._... . ..... �n.. v. a.._........ ...- .__- ,- �- _.�..:........n..v— ...Two- .«nS.i•I ^Tr_��Z. ^^ ]. -:... T._ ................ ..�.........:.... «.....•_��•.�• _� ....- ..^�'YL•^.. .. .... . .......... ................... wd.1.�.. .�_ ..........�.- tom....... g7� j4 .......�..�. .....«ate.. ^ t I..... L._ T .— ._-�_. .......... NE... _....... ..'�. ^ ...........:...:._..._r.. _�.._ .____�.- ......f.::._.. ^nom___:= .i.:.�� .—....... .,......._.«:.:- ...n._..r.....: _ .« ': FE .. ... ....:. -._. ......_ ...... ... 7/24/13 J