HomeMy WebLinkAbout04 NOTICE OF DEFAULT 27 LOOK OUT LANEMEETING DATE
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SUMMARY
AGENDA REPORT
AUGUST 18. 2015
Agenda Item 4
Reviewed:
City Manager
Finance Director [V/A
JEFFREY C. PARKER, CITY MANAGER & HOUSING AUTHORITY
EXECUTIVE DIRECTOR
TUSTIN HOUSING AUTHORITY
NOTICE OF DEFAULT — AFFORDABLE HOME LOCATED AT 27
LOOK OUT LANE
The Tustin Housing Authority ("Authority") is seeking authorization to cure a homeowner
default under the City's Affordable Housing Program in the Tustin Field I development.
RECOMMENDATION
It is recommended the Tustin Housing Authority Commission authorize the Tustin
Housing Authority to pursue the City's option to purchase the low income affordable
housing unit at 27 Look Out Lane, prior to expiration of the statutory default period
(September 8, 2015) or any foreclosure sale of the subject property (on or about
September 29, 2015), 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 low income household and the proceeds from the sale will be deposited back
into the Housing Asset Fund.
ALIGNMENT WITH STRATEGIC PLAN:
Curing the homeowner default and preserving the Authority's affordable housing
inventory contributes to Goal A of the City's Strategic Plan, enhancing the vibrancy and
quality of life in all neighborhoods and areas of the community.
Agenda Report
August 18, 2015
Page 2
BACKGROUND
A Notice of Default that has been issued to the low income homeowner at 27 Look Out
Lane (Tustin Field I development) participating in the City's Affordable Housing
Program. The City is at risk of losing the affordable unit.
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. In an
effort to increase Tustin's supply of affordable housing, the City entered into a
Disposition and Development Agreement with the developer, WL HOMES, LLC, in
March 2003 for the Tustin Field I development. The Agreement required the developer
to provide 78 affordable units within the 376 unit development with the affordability
requirements secured by long term covenants for a 45 -year period.
In order 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 low income homebuyers.
HSC Section 34176(d) created the Low and Moderate Income Housing Asset Fund to
provide communities with a 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 27 Look Out Lane 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.
Jerry Craig
Economic D e ; nt ousing Manager
Tustin Housria