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HomeMy WebLinkAbout2008/06/17 Item 11 CITY COUNCIL AGENDA STATEMENT ~\lft- CITYOF ~CHUlA VISTA ITEM TITLE: SUBMITTED BY: REVIEWED BY: BACKGROUND June 17, 2008, Item el' RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT TO THE AGREEMENT BETWEEN THE CITY AND COMMUNITY HOUSINGWORKS TO ADD THE OPERATION OF A PILOT HOMEOVVNERSHIP PROGRAM. FOR ABANDONED FORECLOSED PROPERTIES TO THE SCOPE OF WORK, AUTHORIZING THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT, ESTABLISHING A NEW NON-CIP PROJECT, AND APPROPRIATING $300,000 OF A V AILABLE HOME INVESTMENT PARTNERSHIP FUNDS TO THAT PROJECT ASSISTANT DIRECTOR OF REDEVELOPMENT HOUSING CITY MANAGER AND..,H .'0 (~0V \.., 4/5THS VOTE: YES 0 NO D In response to the increase in vacant, bank-owned properties the City is proposing a pilot homeownership program to use targeted homeowners hip assistance for pre-approved low income buyers to buy vacant Real Estate Owned (REO) properties. The City has unallocated HOME Investment Partnership (HOME) funds available to fund this program. Last year Community HousingWorks (CHW) was selected through a Request for Proposal (RFP) process to administer the City's Downpayment and Closing Cost Assistance (DCCA) Program. This program would add an additional program to the Scope of Work, requiring an amendment to the current agreement. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed actIvIty for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA 11-1 June 17,2008, ItemL Page 2 of3 Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. Additionally, down payment assistance and associated administration are deemed exempt per the National Environmental Protection Act regulations. RECOMMENDA nON Adopt the resolution: 1) Authorizing the City Manager to execute an Amendment to an eXlstmg Consulting Services Agreement with Community HousingWorks and to add the operation of a pilot homeowners hip program for abandoned foreclosed properties, and 2) Establish a new non-CIP project for this program and appropriate $300,000 of available HOME Investment Partnership Funds BOARDS/COMMISSION RECOMMENDA nON On June 9, 2008, the Housing Advisory Commission voted (5-0) recommending Council to approve additional financial assistance ($300,000) from the City's available HOME funds for the Pilot Program for low-income First Time Home Buyers. DISCUSSION The high cost of housing and riskier underwriting standards have led to a significant increase in home foreclosures. The recent cooling in the housing market has kept many of these bank owned homes vacant, having a negative impact on the surrounding neighborhood and community as a whole. Chula Vista currently has one of the highest foreclosure rates in the County (6-15 per 1,000 homes). Also, it was estimated in recent analysis that approximately 70% of sales are distressed properties and almost 50% foreclosures. As part of a commitment to provide homeownership opportunities to its residents, the CIty offers a variety of homeowners hip assistance programs. The City's partnership with Community HousingWorks includes a continuum of educational services to serve homebuyers and existing homeowners. Tonight's action will authorize the City to include an innovative pilot program to services already offered by Community Housing Works. In general the program would provide incentive for low income families wishing to enter the homeownership market to purchase vacant foreclosed property using the outline listed below: . Community HousingWorks, and approved real estate agents would work with banks to sell foreclosed homes to pre-approved first time homebuyers. The buyers would bring a first mortgage that was affordable to their household income, the gap (up to $70,000 total) would be provided through the City's HOME funds dedicated for downpayment assistance. . 11-2 June 17,2008, Item-.1L Page 3 of 3 . The City assistance will be recorded as a silent second loan. CHW will provide home buyer education and counseling to lower income, first-time homebuyers through a Full-Cycle Lending system. . Participants interested in Chula Vista's homeowners hip programs can choose between a lower loan for an acceptable unit throughout Chula Vista, or a higher loan amount to purchase a vacant foreclosed home. The main difference of the REO program is that pre- approved buyers would be given financial incentive to invest in abandoned properties. Staff is recommending a $300,000 allocation of HOME funds for this initial pilot program and authorization to amend the existing First Time Homebuyer Agreement with Community HousingWorks. If the program is successful, staff will return for additional funding when necessary. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(l) is not applicable to this decision. FISCAL IMPACT HOME Investment Partnership funds are block grant funds available to the City for affordable housing purposes from the U.S. Department of Housing and Urban Development. Downpayment assistance loans and related administration are an eligible HOME use. The City must allocate $270,000 to a project by June 30, 2008 in order to avoid recapture. $300,000 of HOME funds will be appropriated in a new non-CIP project for this purpose, with a not to exceed amount 01'$19,000 for contractual services. ATTACHMENTS I. Amendment to Two Party Agreement Prepared by Department Amanda Mills, Redevelopment & Housing Manager. Redevelopment & Housing 11-3 /rE/v't II (![~-lZtj!JE D {!OP/ RESOLUTION NO. 2008- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT TO TI-IE AGREEMENT BETWEEN THE CITY AND COMMUNITY HOUSINGWORKS TO ADD THE OPERATION OF A PILOT 1-IOMEOWNERSI-I1P PROGRAM FOR REAL ESTATE OWNED PROPERTIES TO THE SCOPE OF WORK, AUTHORIZING THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT, ESTABLISHING A NEW NON-CIP PROJECT, AND APPROPRIATING $300,000 OF AVAILABLE HOME INVESTMENT PARTNERSHIP FUNDS TO THAT PROJECT WHEREAS, the City and Community HousingWorks entered into to an agreement, dated August 23, 2007, for Management of a First Time Homebuyer Downpayment and Closing Cost Assistance Program (the "Agreement"); and WHEREAS, pursuant to the Agreement, Community HousingWorks agreed to administer the City's HOME Investment Partnership Program funds loan program in accordance with HOME requirements including, but not limited to, underwriting loans for first-time homebuyers, servicing the loans, and providing monitoring and reporting services; and WHEREAS, Community HousingWorks offers an innovative pilot program that would provide an incentive for low-income families wishing to enter the homeownership market to purchase abandoned foreclosed property; and WHEREAS, staff wishes to add this pilot program to its scope of work under the Agreement; and WHEREAS, the City has HOME Investment Partnership funds set aside for affordable housing available to fund this program. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula Vista as follows: 1. That it approves the First Amendmcnt to the agreemcnt bctwcen the City and Community HousingWorks to add the operation of a pilot homeownership program for Real Estate Owned properties to the Scope of Work. 2. That it authorizes the City Manager to execute the First Amendment. J:\Allomey\RESO\AGREF_\1ENTS\Community Housing:works first Amcndment_ 06-17-08,doc Resolution No. 2008- Page 2 3. That it establishes a new non-CIP project and appropriates $300,000 of available HOME Investment Partnership Funds to that project. Presented by: Approved as to form by: David R. Garcia City Manager ..-r1~ ILL~ ~~ Bart C. Miesfeld Interim City Attorney JlAllomeyIRESO\AGREEMENTS\CommuniIY Housingworks First Amendment_ 06-17-08.doc RESOLUTION NO. 2008- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT TO THE AGREEMENT BETWEEN THE CITY AND COMMUNITY HOUSINGWORKS TO ADD THE OPERATION OF A PILOT HOMEOWNERSHIP PROGRAM. FOR ABANDONED FORECLOSED PROPERTIES TO THE SCOPE OF WORK, AUTHORIZING THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT, ESTABLISHING A NEW NON-CIP PROJECT, AND APPROPRIATING $300,000 OF AVAILABLE HOME INVESTMENT PARTNERSHIP FUNDS TO THAT PROJECT WHEREAS, the City and Community HousingWorks entered into to an agreement, dated August 23, 2007, for Management of a First Time Homebuyer Downpayment and Closing Cost Assistance Program (the "Agreement"); and WHEREAS, pursuant to the Agreement, Community HousingWorks agreed to administer the City's HOME Investment Partnership Program funds loan program in accordance with HOME requirements including, but not limited to, underwriting loans for first-time homebuyers, servicing the loans, and providing monitoring and reporting services; and WHEREAS, in 2007, the City Council adopted the Abandoned Residential Property Registration Program, which requires mortgage lenders to register defaulted, vacant properties with the City and begin to secure and maintain the property to the neighborhood standard, among other duties; and WHEREAS, Community HousingWorks offers an innovative pilot program that would pair up low-income families wishing to enter the homeownership market with banks owning vacant property; and WHEREAS, staff wishes to add this pilot program to its scope of work under the Agreement; and WHEREAS, the City has HOME Investment Partnership funds set aside for affordable housing available to fund this program. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula Vista as follows: I. That it approves the First Amendment to the agreement between the City and Community HousingWorks to add the operation of a pilot homeownership program for abandoned foreclosed properties to the Scope of Work. J :\A!lomey\RESOIAGREEMENTS\CommuniIY Housingworks First Amendmcnl_06.! 7.08.doc .J !'- . f Resolution No. 2008- Page 2 3. That it establishes a new non-CIP project and appropriates $300,000 of available HOME Investment Partnership Funds to that project. Presented by: Approved as to form by: David R. Garcia City Manager v~ ;Lh~ ~____ Bart C. Miesfeld - Interim City Attorney J;\.Anorney\RESO'IAGREF_\IE:--'TSlCommunily llousingworks First Amcndmenl_06-17-08,doc THE A TT ACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FOR1\1 BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL \~d~~~ Bart C. Miesfeld Interim City Attorney Dated: 6!/{!o<i! First Amendment to Agreement between City of Chula Vista and Community HousingWorks for Management of a First Time Homebuyer Downpayment and Closing Cost Assistance Program 11-6 ATTACHMENT 1 FIRST AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND COMMUNITY HOUSING WORKS For Management of a First Time Homebuyer Downpayment and Closing Costs Assistance Program RECIT ALS A. The City of Chula Vista ("City") and Community HousingWorks ("Consultant") (collectively, the "Parties") entered into to an agreement, dated August 23,2007, for Management of a First Time Homebuyer Downpayment and Closing Cost Assistance Program (the "Agreement"). B. Pursuant to that Agreement, Consultant agreed to administer the City's HOME Investment Partnership Program funds loan program in accordance with HOME requirements including, but not limited to, underwriting loans for first-time homebuyers, servicing the loans, and providing monitoring and reporting services C. Consultant offers an innovative pilot program that would provide an incentive for low-income families wishing to enter the homeownership market to purchase vacant foreclosed property. D. The City wishes to add this program to its scope of work under the Agreement. The City and Consultant agree as follows: AGREEEMNT 1. Exhibit A, Paragraph 7, General Duties, at the end of the paragraph, add the following: "Consultant shall provide management for the Pilot Homeowner Program for Real Estate Owned (REO) foreclosed properties in accordance with HOME Investment Partnership Program City requirements." 2. Exhibit A. Paragraph 8. Scope of Work and Schedule, A. Detailed Scope of Work, after the last paragraph, add the following: "Consultant shall administer the Pilot Homeowner Program for REO foreclosed properties using the similar guidelines as the City's Downpayment and Closing Cost Assistance Program. 1 11-7 Consultant shall identify first time low-income home buyers (those families earning less than 80% of the Area Median Income) that wish to purchase vacant foreclosed properties at a negotiated price. Consultant understands that $300,000 in HOME funds are available for assistance of up to $30,000 for each homebuyer purchasing an REO foreclosed property. This allocation is in addition to the original program allocation of$500,000." 3. Exhibit A, Paragraph 8. Scope of Work and Schedule, B. Date for Commencement of Consultant Services, add the following: "The Effective Date of this First Amendment is June 17,2008." 4. Exhibit A, Paragraph 8. Scope of Work and Schedule, D. Date for completion of all Consultant services, delete "July 31,2008" and replace with "June 30, 2009". Delete "This agreement may also be extended by mutual agreement for up to five years, in one- year increments." and replace with "This Agreement may be extended by mutual agreement, and upon the written approval of the City Manager, for up to four additional one-year terms." 5. Exhibit A, Paragraph 8. Scope of Work and Schedule, B.3. Compensation, add the following: "REO Program Set-Up $1,500". All other terms of the Agreement shall remain in full force and effect. [Next Page is Signature Page.] 2 11-8 SIGNATURE PAGE FIRST AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND COMMUNITY HOUSING WORKS For Management of a First Time Homebuyer Downpayment and Closing Costs Assistance Program IN WITNESS WHEREOF, City and Consultant have executed this First Amendment to the Agreement indicating that they have read and understood the First Amendment and indicate their full and complete consent to its terms: ,2008 City of Chula Vista Dated: by: David R. Garcia, City Manager Attest: Donna NOITis, Acting City Clerk Approved as to form: Bart C. Miesfield, Interim City Attomey nt & CEO Dated: Exhibit List to First Amendment to Agreement: (X) Agreement between the City of Chula Vista and Community HousingWorks dated August 23, 2007 J:\Attomt:y\ELISA\AGREEMENTS\Community HousingWorks First Am~ndment.doc 3 11-9