HomeMy WebLinkAbout2009/03/24 Item 4CITY COUNCIL
AGENDA STATEMENT
~~ CITY OF
--- CHULAVISfA
MARCH 24, 2009, Item ~
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE CITY MANAGER
TO EXECUTE THE FUNDING APPROVAL AGREEMENT
WITH THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT AND OTHER RELATED DOCUMENTS;
AND AUTHORIZING APPROPRIATIONS OF $2,830,072
TO FUND THE AMENDED 2008/2009 ANNUAL ACTION
PLAN FOR IMPLEMENTATION OF THE
NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
(4/STHS VOTE REQUIRED)
SUBMITTED BY: DEPUTY CIT MANAGER /DEVELOPMENT SERVICES
DIRECTO
REVIEWED BY: CITY MANAGE
4/STHS VOTE: YES ~ NO C
SUMMARY
In January 2009, the Department of Housing and Urban Development approved the City's
Draft 2008-2009 Amended Annual Action Plan which proposed three activities to be funded
with the Neighborhood Stabilization Program funds in the amount of $2,830,072. This item
will appropriate the funds to specific activities.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed project for compliance
with the National Environmental Protection Act due to the use of Federal funds, and has
deternuned that the proposed project is deemed exempt under the National Environmental
Protection Act (NEPA) Regulations.
RECOMMENDATION
Council adopt the resolution.
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Mazch 24, 2009, Item `t
Page 2 of 3
BOARDS/COMMISSION RECOMMENDATION
None.
DISCUSSION
In September 2008, HUD notified the City of Chula Vista that in addition to the annual
CDBG entitlement, the City is eligible to receive approximately $2.8M in one-time
CDBG funds through the new Neighborhood Stabilization Program (NSP). The purpose
of the NSP program is to assist cities dealing with the negative effects of abandoned and
foreclosed properties. The NSP funds may be used to purchase foreclosed or abandoned
homes/properties, rehabilitate, redevelop, resell and/or rent these homes to help stabilize
neighboring homes and neighborhoods. The funds may not be used to assist households
at risk of foreclosure.
In December 2008, the City submitted the Draft Amended Annual Action Plan to HUD
identifying how the City would obligate the funds within an 18 month period by
allocating them to the following three activities:
1. Neighborhood Stabilization Homebuyer Program ($1,547,064): The City currently
administers a Down Payment and Closing Cost Assistance Program funded through
the HOME program, limited to assisting households earning no more than 80% of the
Area Median Income (AMI). The new NSP funding will expand the existing program
and allow funds to be used by families earning up to 120% of the AMI by providing
soft second financial assistance to low- and moderate-income buyers. HUD requires
that NSP funds be utilized in "Tazgeted Areas, which aze those areas of the city in
``greatest need". This is the most effective mechanisms for stabilizing neighborhoods,
which is the purpose of these funds. These target neighborhoods include portions of
northwest and southwest Chula Vista, Eastlake, and Otay Ranch communities.
Although the targeted aeeas have been identified for use of the NSP funds, no specific
properties have been identified at this time and no particulaz properties are the subject
of this appropriation. The specific properties will be selected by the program
applicants and identified to City staff when the applications aze submitted. It will
then be the responsibility of City staff to process the applications pursuant to the
program guidelines. A summary of the program is provided as Attachment 1.
2. Rental Housing for Very Low Income Households ($1,000,000): The City will
pursue a competitive process to identify an organization and assist in the purchase
and rehabilitation of foreclosed properties with the purpose of creating permanent
rental housing opportunities for residents below 50% of the AMI. The development
partners will assist the City in identifying the best method for leveraging NSP funds
with other special needs or low income housing funding opportunities. Agency
selection, approval of a projectls, and project specific agreements will be brought for
your consideration at a later date.
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March 24, 2009, Item
Page 3 of 3
3. Administration of the NSP Program ($283,008): Adrinistration funds will be
utilized for staff costs associated with the management and administration of Chula
Vista's NSP program, including planning, regulatory compliance (e.g. monitoring,
inspections), contract administration, and fiscal management.
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found that two
conflicts exist, in that Councilmembers Castatieda and McCann have property holdings
within. 500 feet of the boundaries or within the tazget neighborhoods which aze the
subject of this action, as follows:
• Northwest Tazget Neighborhood - Castaneda
• Southwest Tazget Neighborhood -McCann
Due to the above-identified conflicts, City staff requested a written opinion from the Fair
Political Practices Commission ("FPPC") on behalf of Councilmembers Castaneda and
McCann. In response, the FPPC opined that both Councilmembers could participate in
the decision on this matter because, "it does not appear foreseeable that the decision to
appropriate HUD funds will have a material financial effect on either council member."
FISCAL IMPACT
Neighborhood Stabilization Program funds aze block grant funds available to the City for
affordable housing purposes from the U.S. Department of Housing and Urban
Development. The proposed three activities, including the staff costs associated with the
administration of the program, are all reimbursable and eligible under the Federal
Regulations. Funds totaling $2,830,072 will be appropriated to the Community
Development Block Grant (CDBG) Fund.
ATTACHMENTS
Attachment 1: Neighborhood Stabilization Homebuyer Program Homebuyer Facts
Attachment 2: Sample HUD Funding Approval and Grant Agreement
Prepared by: Angelica Davis, Project Coordinator II,
Development Services Department, Housing Division
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ATTACHMENT 1
(App/ications accepted beginning 3/16/09)
NEIGHBORHOOD STABILIZATION
FIRST-TIME HOMEBUYER PROGRAM
HOMEBUYER FACTS
WHAT IS THE NS FTHP?
On January 13, 2009 the City of Chula Vista was approved to receive 52.8M in funds from the
U.S. Department of Housing & Development (HUD) through a new Neighborhood Stabilization
Program to assist areas moss severely affected by foreclosures. A large portion of these funds
have been identified to assist first-time low- and moderate-income homebuyers with up to 570,000
in gap financing to purchase foreclosed upon properties, under the Neighborhood Stabilization First-
Time Homebuyer INS FTHB) Program. The City is contracted with Community Housing Works
ICHW) to administer the NS FTHB Program.
DOES MY HOUSEHOLD QUALIFY?
Households seeking assistance must meet all of the following criteria to be eligible:
1. All household members are first-time homebuyers (have not held an ownership interest in
residential property within the past three yearsl.
2. Total household annual income may not exceed the followina limits, as orFearuarv r3, zoos:
•,
S60,550 569,200 S77,850 586,500 S93,450 5100,350 5107,300 5114,200'
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. 544,250 S50,550 556,900 563,200 568,250 573,300 578,350 583,400 ~
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3. Upon close of escrow, you must occupy the home as your Principal Residence.
4. You must be a U.S. citizen or eligible immigrant. Legal resident aliens are eligible to apply but
must show proof of status.
5. Your households shall have sufficient income and credit-worthiness to qualify for primary
financing from a participating lender.
6. You must contribution a minimum of 3% of the total purchase price of the property.
7. Maximum liquid assets after down payment and closing cost contribution may not exceed
525,000 Inot including retirement accounts, i.e. IRA's, 4011k1, etc).
WHAT PROPERTIES ARE ELIGIBLE UNDER THE PROGRAM?
1. Properties must be located within specified NSP
Target Neighborhoods, in the City of Chula Vista.
2. Properties must be foreclosed upon single-family
homes. Manufactured/mobile homes, duplexes
triplexes or fourplexes do not qualify as eligible
properties.
3. Preference is given to properties that are less than
50 years old and may not need health & safety
repairs that exceed 524,999.
4. The maximum purchase price cannot exceed
5559,550 (effective 3/08).
5. The property owner must agree to sell the property
d f I 15 °/ b l d
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LOAN TERMS
t. The City's homebuyer assistance is recorded as a second trust deed and can provide qualifying
low-income (80% Area Median Income) families with up to S70,000 and moderate-income
1120% Area Median Income) families with up to 540,000:
2. Long-term residency is encouraged through a declining City interest in any accrued property
equity for the first 15 years.
3. No interest is charged on the loan lexcept in the case of default) and after 15 full years of
owner occupancy, only the principal remains due and payable.
1. Attend an 8 hour HUD certified homebuyer education class.
2. Submit a loan application to a CHW certified lender to pre-qualify for primary financing. They
will determine the following:
a. Pre-qualify you for a first mortgage amount;
b. Calculate income to determine eligibility for a NS FTHB loan I"gap financing"); and
c. Estimate your maximum purchase price.
3. Complete the City NS FTHB application and submit it to Community Housing Works.
a. If deemed eligible, the City will issue a 60 day pre-commitment of funds letter.
4. Work with a CHW certified realtor to find an eligible property.
a. Submit an initial offer to the seller estimating 15°~ below market value.
b. Receive a certified appraisal.
c. City will issue a "Voluntary Acquisition" form to be submitted with your purchase offer.
5. Work with your lender and CHW to move through the escrow process, including:
a. Inspect the property, if the property requires rehabilitation:
i. Submit an NS FTHB Rehabilitation application.
b. CHW will require execution and recordation of documentation to fund the City loan,
including a NS FTHB Agreement, Deed of Trust, and Promissory Note.
In addition to underwriting your City loan, CHW will be servicing your loan, including:
1. Issuing annual statements on your account;
2. Sending you annual monitoring letters to confirm occupancy of the unit; and
3. Providing payoff demands, should you desire to sell or transfer the property.
For additions/program information, to sign up for a homebuyer education c/ass, and/or to receive a
list of certified lenders and realtors, please contact Community HousingWorks at www.chworks.or_q
or call 16791 282-6647.
<<rr or cec•c.a ~~sr. ` For an application and asame/e of the documents you will sign visit the
!! ~ City of Chula Vista's Redevelopment & Housing Division web page at:
Redevelopment "_-' www.chulavistaca.pov/cvrh.
eaHausing ~
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WHAT IS THE PROCESS?
ATTACHMENT 2
FUNDING APPROVAL AND GRANT AGREEMENT FOR
NEIGHBORHOOD STABILIZATION PROGRAM (NSP) FUNDS
AS AUTHORIZED AND APPROPRIATED UNDER THE
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
(PUBLIC LAW 110-289, JULY 30, 2008)
NSP GRANTEE:
NSP GRANT NUMBER:
NSP GRANT AMOUNT:
NSP APPROVAL DATE:
City of Chula Vista
B-08-MN-06-0504
$2,830,072
MAR - 3_:
This Gran[ Agreement between the Department of Housing and Urban Development (HUD) and
City of Chula Vista (Grantee) is made pursuant to the authority of sections 2301- 2304 of the
Housing and Economic Recovery Act of 2008 (Public Law 110-289 (7uly 30, 2008)) (ERA).
The program established pursuant to section 2301-2304 is known as the "Neighborhood
Stabilization Proa~ram" or "NSP." The Notice of Allocations, Application Procedures,
Regulatory Waivers Granted to and Alternative Requirements for Redevelopment of Abandoned
and Foreclosed Homes Under the Housing and Economic Recovery Act, 2008 published at 73
FR 58330 (October 6, 2008) (Notice); HERA; the Grantee's submission for NSP assistance
(Grantee Submission); the HUD regulations at 24 CFR Part 570 (as modified by the Notice and
as now in effect and as may be amended from time to time) (Regulations); and this Funding
Approval, including any special conditions, constitute part of the Grant Agreement.
Subject to the provisions of this Grant Agreement, HUD will make NSP Gran[ Funds in the
amount of $2.830,072 available to the Grantee upon execution of this Grant Agreement by the
parties. The Grantee shall have 18 months from the date of HUD's execution of this Gmnt
Agreement to obligate the NSP Grant Amount pursuant to [he requirements of HERA and the
Notice. The Grantee shall have 48 months from the date of HUD's execution of this Grant
Agreement to expend the NSP Grant Amount pursuant to the requirements of the Notice. The
NSP Grant Funds maybe used to pay eligible costs arising from eligible uses incurred after the
NSP Approval Date provided the activities to which such costs are related are carried out in
compliance with all applicable requirements. Pre-award planning and general administrative
costs may not be paid with funding assistance except as permitted in the Notice; the Notice limits
such costs to those incurred on or after September 29, 2008. Other pre-awazd costs may not be
paid with funding assistance except as permitted by 24 CFR 570.200(h}; for purposes of NSP,
such costs are limited to those incurred on or after the date that the NSP substantial amendment
was received by HUD.
4-6
The Grantee agrees to assume all of the responsibilities for environmental review,
decisionmaking, and actions, as specified and required in regulations issued by the Secretary
pursuant to Section 104(8) of Title I of the Housing and Community Development Act, as
amended (42 U.S.C. 5304) and published in 24 CFR Part 58. The Grantee further acknowledges
its responsibility for adherence to the Grant Agreement by sub-recipient entities to which it
makes funding assistance hereunder available.
This Grant Agreement may be amended only with the prior written approval of HUD. In
considering proposed amendments to this Grant Agreement, HUD shall review, among other
things, whether the amendment is otherwise consistent with HERA, the Notice, and the
Regulations.
The Grantee may amend its Grantee Submission; however, such amendments, including
substantial amendments as defined in 24 CFR Pazt 91, will be subject ro the requirements of 24
CFR Part 91 (or any successor regulation) and any revisions HUD may make to the Notice (or
any successor Notice or regulation).
The Grantee shall at all times maintain an up-to-date copy of its Grantee Submission, including
all amendments approved by HUD, on its Internet website as required by the Notice. Further,
the Grantee shall maintain information on all drawdowns, deposits, and expenditures of grant
funds and program income under this Funding Approval and Grant Agreement and any other
records required by 24 CFR 570.506, in its files and shall make such information available fot
audit ar inspection by duly authorized representatives of HUD, HUD's Office of the Inspector
General, or the Comptroller General of the United States.
The Grantee shall submit information on performance measurement as established by the
Secretary for activities undertaken with NSP grant funds.
The Grantee is advised that providing false, fictitious or misleading information with respect to
NSP Grant Funds may result in criminal, civil or administrative prosecution under 18 USC
§1001, 18 USC §1343, 31 USC §3729, 31 USC §3801 or another applicable statute.
Close-out of this grant shall be subject to the provisions of 24 CFR 570.509 or such close-out
instructions as may hereafter be issued by HUD specifically for NSP grants.
4-7
3
This NSP Grant Agreement is binding with respect to HUD in accordance with its terms upon
the execution by HUD in the space provided above, subject to execution on behalf of the
Grantee.
The United States Department of
Housing and Urban Development
The Grantee
City of Chuta Vista
Signature of Authorized
William G. Vasquez
Name of Authorized Official
Director
Community Planning and Development
Title of Authorized Official
3 3~
Date of Sign tur
For HUD CFO Use Only
Signature of Authorized Offical
Name of Authorized Official
Title of Authorized Official
Date of Signature
95-6000690
Grantee Tax Identification Number
Balances
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RESOLUTION N0.2009-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE CITY MANAGER TO
EXECUTE THE FUNDING APPROVAL AGREEMENT
WITH THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT AND OTHER RELATED DOCUMENTS;
AND AUTHORIZING APPROPRIATIONS OF $2,830,072 TO
FUND THE AMENDED 2008/2009 ANNUAL ACTION
PLAN FOR IMPLEMENTATION OF THE
NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
WHEREAS, the City of Chula Vista will receive $2,830,072 of grant funds under the
CDBG Neighborhood Stabilization Program ("NSP"); and
WHEREAS, in January, 2009, the Department of Housing and Urban Development
("HUD") approved the City's Amended 2008-2009 Annual Action Plan containing the proposed
activities to be funded with NSP funds, including the First Time Homebuyer Downpayment and
Closing Cost Assistance Program; and
WHEREAS, the City is required to execute an agreement with HUD for use of these
funds; and
WHEREAS, the City desires to appropriate the funds received from the grant to fund
the NSP Program.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista authorizes appropriations of $2,830,072 to fund the Amended 2008-2009 Annual Action
Plan activities and authorizes the City Manager to execute an agreement with the Department of
Housing and Urban Department and other necessary related documents.
Presented by:
James D. Sandoval
City Manager
4-9
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Dated: (~ 1
Funding Approval and Grant Agreement for
Neighborhood Stabilization Program (NSP) Funds
As Authorized and Appropriated Under the
Housing and Economic Recovery Act of 2008
Public Law 110-289, July 30, 2008
4-10
FUNDING APPROVAL AND GRANT AGREEMENT FOR
NEIGHBORHOOD STABILIZATION PROGRAM (NSP) FUNDS
AS AUTHORIZED AND APPROPRIATED UNDER THE
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
(PUBLIC LAW 110-289, JULY 30, 2008)
NSP GRANTEE:
NSP GRANT NUMBER:
NSP GRANT AMOUNT:
NSP APPROVAL DATE:
City of Chula Vista
B-08-MN-06-0504
$2,830,072
MAR - 3 ~~~:-:
This Grant Agreement between the Department of Housing and Urban Development (HUD) and
City of Chula Vista (Grantee) is made pursuant to the authority of sections 2301 - 2304 of the
Housing and Economic Recovery Act of 2008 (Public Law 110-289 (July 30, 2008)) (HERA).
The program established pursuant to section 2301-2304 is known as the "Neighborhood
Stabilization Program" or "NSP." The Notice of Allocations, Application Procedures,
Regulatory Waivers Granted to and Alternative Requirements for Redevelopment of Abandoned
and Foreclosed Homes Under the Housing and Economic Recovery Act, 2008 published at 73
FR 58330 (October 6, 2008) (Notice); HERA; the Grantee's submission for NSP assistance
(Grantee Submission); the HUD regulations at 24 CFR Part 570 (as modified by the Notice and
as now in effect and as may be amended from time to time) (Regulations); and this Funding
Approval, including any special conditions, constitute part of the Grant Agreement.
Subject to the provisions of this Grant Agreement, HUD will make NSP Grant Funds in the
amount of $2,830,072 available to the Grantee upon execution of this Grant Agreement by the
parties. The Grantee shall have 18 months from the date of HUD's execution of this Grant
Agreement to obligate the NSP Grant Amount pursuant to the requirements of HERA and the
Notice. The Grantee shall have 48 months from the date of HUD's execution of this Grant
Agreement to expend the NSP Grant Amount pursuant to the requirements of the Notice. The
NSP Grant Funds may be used to pay eligible costs arising from eligible uses incurred after the
NSP Approval Date provided the activities to which such costs are related aze carried out in
compliance with all applicable requirements. Pre-awazd planning and general administrative
costs may not be paid with funding assistance except as permitted in the Notice; the Notice limits
such costs to those incurred on or after September 29, 2008. Other pre-award costs may not be
paid with funding assistance except as permitted by 24 CFR 570.200(h); for purposes of NSP,
such costs are limited to those incurred on or after the date that the NSP substantial amendment
was received by HUD.
4-11
The Grantee agrees to assume all of the responsibilities for environmental review,
decisionmaking, and actions, as specified and required in regulations issued by the Secretazy
pursuant to Section 104(g) of Title I of the Housing and Community Development Act, as
amended (42 U.S.C. 5304) and published in 24 CFR Part 58. The Grantee further acknowledges
its responsibility for adherence to the Grant Agreement by sub-recipient entities to which it
makes funding assistance hereunder available.
This Grant Agreement may be amended only with the prior written approval of HUD. In
considering proposed amendments to this Grant Agreement, HUD shall review, among other
things, whether the amendment is otherwise consistent with HERA, the Notice, and the
Regulations.
The Grantee may amend its Grantee Submission; however, such amendments, including
substantial amendments as defined in 24 CFR Part 91, will be subject to the requirements of 24
CFR Part 91 (or any successor regulation) and any revisions HUD may make to the Notice (or
any successor Notice or regulation).
The Grantee shall at all fimes maintain an up-to-date copy of its Grantee Submission, including
all amendments approved by HUD, on its Internet website as required by the Notice. Further,
the Grantee shall maintain information on all drawdowns, deposits, and expenditures of grant
funds and program income under this Funding Approval and Grant Agreement and any other
records required by 24 CFR 570.506, in its files and shall make such information available for
audit or inspection by duly authorized representatives of HUD, HUD's Office of the Inspector
General, or the Comptroller General of the United States.
The Grantee shall submit information on performance measurement as established by the
Secretary for activities undertaken with NSP grant funds.
The Grantee is advised that providing false, fictitious or misleading information with respect to
NSP Grant Funds may result in criminal, civil or administrative prosecution under 18 USC
§1001, 18 USC §1343, 31 USC §3729, 31 USC §3801 or another applicable statute.
Close-out of this grant shall be subject to the provisions of 24 CFR 570.509 or such close-out
instructions as may hereafter be issued by HUD specifically for NSP grants.
4-12
3
This NSP Grant Agreement is binding with respect to HUD in accordance with its terms upon
the execution by HUD in the space provided above, subject to execution on behalf of the
Grantee.
The United States Department of
Housing and Urban Development
Title of Authorized Official
Date of Signature
The Grantee
City of Chula Vista
Signature of Authorized Offical
Name of Authorized Official
Title of Authorized Official
Date of Signature
95-6000690
Grantee Tax Identification Number
For HUD CFO Use Only
Current Balances Increases/Decreases Endin Balance Date
4-13
Name of Authorized Official
Director
Community Planning and Development