HomeMy WebLinkAboutAgenda Statement 1979/08/07 Item 13CiIY OF CHULA VISTA
COUNCIL AGENDA STATEMENT
Item No. 13
For meeting of 8/7/79
Approving an Agreement with the California Housing
ITEM TITLE Resolution ~Q~Finance Agency for Participation in the Home Ownership
and Home Improvement Loan Program
SUBMITTED BY Community Development Director ~~~
ITEM EXPLANATION (4/STN'S VOTE REQUIRED YES- NO X )
In April of 1979, the Council approved the submittal of an application to the
California Housing Finance Agency (CHFA) for participation in the Home Ownership
and Home Improvement Loan Program (HOHI). CHFA has notified staff that the
application has been approved and the City has been allocated approximately $2.2
million.
The HOHI program provides mortgage and rehabilitation loans to assist low and
moderate-income people purchase or improve their home by providing below market
interest rates. These rates are usually two to three percent below the current
market rates. The program is operated by CHFA through the assistance of private
lenders and the City.
To begin the program it is necessary for Council to execute the attached Tandem
Designation Agreement. This agreement provides the mechanism to initiate the
program's operations as described below. The agreement will be in effect through
July, 1980.
PROGRAM OPERATIONS
Loan Types
Under the HOHI program, four types of loans are available on single-family units
or multi-family housing of two to four units.
(continued on page 2)
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Agreement Resolutions Ordinance- Platte Notification List_
Other ENVIRONMENTAL DOCUMENT: Attached Submitted on
FINANCIAL IMPACT
It is anticipated that the financial cost to the City will be minimal. Funds that
are required may be obtained per Council direction from the local option account
of the CDBG or from the use of tax increments as imposed by the passage of AB405
(requires that u to 20% of tax increments be used for low and moderate-income
housing programs .
STAFF RECOMMENDATION
Adopt resolution. CHFA has notified staff that the program should be operational
by mid-September.
BOARD/COMMISSION RECOMMENDATION
COUNCIL ACTION __,,,.__
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Item No. ~_
For meeting of
8/7/79
Page 2
1) hortgage loans to rehabilitate and refinance.
2) Mortgage loans to purchase and rehabilitate.
3) Rehabilitation only loans.
4) Mortgage loans to purchase a new or existing single-family house
or condominium.
Income, Sales Limits and Banking
CHFA staff has established income limits and a maximum sales price of $63,000 for
a single-family house. The income limits are $16,200 fora one or two-member family,
$19,400 fora three to five-member family, and $21,000 for families of six or more.
The amount of downpayment fora CHFA loan would depend on the type of loan. On FHA
and VA guaranteed loans, the minimum downpayments are determined by those federal
agencies. Conventional loan downpayments would be determined by the lender and
could be as low as 5%. Lenders are selected through a bid process conducted by CHFA.
Past experience in the program has usually resulted in from two to ten banks parti-
cipating.
Area Designations
The loans are not available to all residents in all areas of the City as the State
has established area eligibility criteria. Those portions of the City where an
operational housing rehabilitation program is being undertaken have been designated
as a Concentrated Rehabilitation Area (CRA). This area includes census tracts 124.01,
124.02, 125.00, 126.00 and 127.00 located in the western portion of the City. The
balance of the City outside the CRA has been designated as a Mortgage Assistance Area.
Borrower Characteristics
The HOHI program is available to both owner occupants and investors. Owner occupants
who meet the income criteria are eligible for both mortgage and rehabilitation loans
in both the CRA and the Mortgage Assistance Area. Investors are eligible to rehabil-
itate properties for rental purposes in the CRA's and to purchase a single-family
home in the CRA if that home has been vacant for 90 days. All rental units are sub-
ject to a CHFA Rent Limitation Agreement which would not allow rents in excess of
HUD's Fair Market Rents. (The same criteria is being utilized in the CHIP Rental
Management Program.)
Staff Involvement
Staff involvement with the Mortgage Loans should be minimal. The selection of
financial institutions is conducted by CHFA and the loans are packaged by private
lending institutions. Staff involvement would be primarily in advertising and in-
forming citizens of the program.
The Housing Rehabilitation Loan would involve additional staff time. However, the
program could be successfully integrated into the City's current CHIP program with
minimal effort. The major staff involvement would be in assisting homeowners with
the loan applications, contractors and banks. Also, CHFA will require a quarterly
report on the status of the rehabilitation loans. Staff would recommend that these
responsibilities be assigned to the Housing Rehabilitation Consultant who would work
with Community Development staff to insure compliance with CHFA regulations.
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