Loading...
HomeMy WebLinkAbout04 NOTICE OF DEFAULT-AFFORDABLE HOME AT 14542 NEWPORT AVENUE #3AGENDA REPORT MEETING DATE: APRIL 16, 2013 TO: FROM: SUBJECT: Agenda Item 4 Reviewed: City Manager Finance Director /A JEFFREY C. PARKER, CITY MANAGER & HOUSING AUTHORITY EXECUTIVE DIRECTOR TUSTIN HOUSING AUTHORITY NOTICE OF DEFAULT — AFFORDABLE HOME LOCATED AT 14542 NEWPORT AVENUE #3 SUMMARY The Tustin Housing Authority is seeking authorization to cure a homeowner default under the City's Affordable Housing Program at the Arbor Walk development. RECOMMENDATION It is recommended the Tustin Housing Authority Commission authorize the Tustin Housing Authority to pursue the City's option to purchase the moderate income affordable housing unit at 14542 Newport Avenue #3, prior to expiration of the statutory default period (April 22, 2013) or any foreclosure sale of the subject property (on or about May 14, 2013), and also authorize the Executive Director, or his designee, to execute any required documents, as may be necessary to implement such action as recommended by the City Attorney. The price and terms will be discussed in Closed Session. FISCAL IMPACT Adequate balances exist in the Low and Moderate Income Housing Asset Fund to cure the homeowner default. After purchasing the home, the Authority will sell the home to another moderate income household and the proceeds from the sale will be deposited back into the Housing Asset Fund. BACKGROUND A Notice of Default that has been issued to the moderate income homeowner at 14542 Newport Avenue #3 (located in the Arbor Walk development) participating in the City's Affordable Housing Program. The homeowner currently has their home listed for sale. In the event that the subject homeowner is not able to sell their home prior to foreclosure, the City is at risk of losing the affordable unit. Agenda Report April 16, 2013 Page 2 Pursuant to Health and Safety Code (HSC) Sections 34176(c) and (d), the Tustin Housing Authority may perform activities and use funds in accordance with applicable housing - related provisions of the Community Redevelopment Law, including efforts to increase, maintain and preserve the community's affordable housing supply. Theformer Tustin Community Redevelopment Agency initially increased the supply of affordable housing through a long -term Affordability Assistance Loan to the developer, Olson Urban Housing, LLC, for the Arbor Walk development. The Agreement required the developer to provide ten affordable units (four very-low income and six moderate - income) within the 63 unit development with the affordability requirements secured by long term covenants for a 45 -year period. In an effort to preserve the community's affordable housing supply, it may be necessary to purchase the unit prior to losing the 45 -year affordability requirement through foreclosure. In the event the Authority purchases the unit, the Authority would actively market the property. Although the Authority does not maintain a waiting list for those interested in purchasing resale affordable units, a list of affordable units for resale is available on the City's website and the Authority would work with Neighborhood Housing Services of Orange County and other affordable housing agencies to quickly identify potential moderate income homebuyers. HSC Section 34176(d) created the Low and Moderate Income Housing Asset Fund to provide communities with an limited funding source for increasing, maintaining, and preserving the affordable housing supply. There is an adequate fund balance in the Housing Asset Fund to ensure the unit at 14542 Newport Avenue #3 remains part of the City's affordable housing supply. Given the unit is already priced at an affordable level as a result of existing restrictions, the costs associated with any exercise of the City's option rights will be far less than the cost of acquiring and replacing a unit lost to the affordable housing supply. Staff is available for any questions the Commission may have.