HomeMy WebLinkAbout14 BEGIN FUNDS HCD 05-01-06
AGENDA REPORT
MEETING DATE: May 1, 2006
TO: WilLIAM A. HUSTON, CITY MANAGER
FROM: REDEVELOPMENT AGENCY STAFF
SUBJECT: APPLICATION FOR BUILDING EQUITY AND GROWTH IN NEIGHBORHOODS
(BEGIN) FUNDS FROM THE CALIFORNIA DEPARTMENT OF HOUSING AND
COMMUNITY DEVELOPMENT
SUMMARY
Agency approval is requested for the submission of an application for Building Equity
and Growth in Neighborhoods (BEGIN) funds from the California Department of
Housing and Community Development.
RECOMMENDATION
It is recommended that the Tustin City Council 1.) adopt Resolution 06-055, approving the
submission of three applications to the California Department of Housing and Community
Development (HCD) for Building Equity and Growth in Neighborhoods funds and
authorizing the City Manager to sign the application for the February 2006 Notice of
Funding Availability (NOFA) and 2.) if the application for funding is approved, the funds will
be used to assist very-low and low-income homebuyers at the Columbus Square
development with down payment assistance and closing costs.
FISCAL IMPACT
This action will have no fiscal impact on the City at this time.
BACKGROUND/DISCUSSION
The Building Equity and Growth in Neighborhoods (BEGIN) Program was established
pursuant to Chapter 14.5, Sections 50860 through 50866 of Part 2 of Division 31, Health
and Safety Code and funded through Proposition 46, the Housing and Emergency Shelter
Trust Fund Act of 2002. The BEGIN Program is a homeownership program designed to
make grants to qualifying cities or counties that provide incentives or reduce or remove
regulatory barriers for housing developments.
William A. Huston
Authorization BEGIN Program Application
May 1, 2006
Page 2
In February of 2006, HCD issued a NOFA for $27 Million in BEGIN funds. Lennar Homes,
the developer of Cambridge Lane, Camden Place and the senior units within the
Columbus Square development would like to take advantage of the program funding to
further assist the very-low and low-income seniors and families wishing to purchase a
home.
The program allows assistance up to $30,000 per unit in the form of a 30-year, deferred
second mortgage with 1-3% simple interest. The funding as proposed by the developer
would provide 10% of the affordable purchase price as down payment and approximately
$3,000 in closing costs per unit.
The BEGIN funding will be in addition to the assistance provided by the City to bridge the
gap between the market price of the home and the affordable sales price.
The chart below illustrates the proposed BEGIN funding assistance based on the City
receiving approximately 7% ($1.8M) of the total funding available.
Very-Low Low Total
Senior Units 18 30 48
Camden Place 11 28 39
Cambridge Lane 14 36 50
Total 43 94 137*
* 52% of the total affordable units available in Columbus Square
This table will be adjusted based upon actual funding and with approval from staff.
The program will require staff to perform the following administrative duties:
. Prepare and submit separate application for each project
. Marketing of the program
. Establish loan underwriting criteria and standards, and certification of each
borrower's ability to repay the loans including income verification, credit verification,
and establishment of front-end and back-end ratios
. Disbursement of funds for each homebuyer
. Annual loan servicing and monitoring of units
. Maintenance of BEGIN Program Fund Account
In order to promote Work Force Housing and assist current residents achieve their dream
of homeownership, the City will require the developer to establish a priority system for
applicants that currently work or reside in the City of Tustin.
William A. Huston
Authorization BEGIN Program Application
May 1, 2006
Page 3
Staff will be available at the City Council meeting to answer any questions the City
Council may have.
Christine Shingleton
Assistant City Manag
Kimberly cAllen
Redevelopment Project Manager
Attachment
S:RDAICCreportIBEGINAgenda Report 05-01-06.doc
RESOLUTION NO. 06-055
A RESOLUTION OF THE TUSTIN CITY COUNCIL AUTHORIZING THE
CITY MANAGER TO APPLY FOR BUILDING EQUITY AND GROWTH
IN NEIGHBORHOODS (BEGIN) FUNDS FROM THE CALIFORNIA
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
The TUSTIN CITY COUNCIL DOES HEREBY RESOLVE as follows:
I. The Tustin City Council finds and determines as follows:
A. The City of Tustin wishes to apply for and receive an allocation of funds through the
BEGIN Program; and
B. The California Department of Housing and Community Development (hereinafter
referred to as "HCD") has issued a Notice of Funding Availability ("NOFA") for the
BEGIN proaram established by Chapter 14.5. Sections 50860 throuah 50866 of
Part 2 of Division 31 of the Health and Safety Code (the "statute"). Pursuant to the
statute, HCD is authorized to approve funding allocations utilizing monies made
available by the State Legislature to the BEGIN program, subject to the terms and
conditions of the statute and the BEGIN Program Guidelines adopted and
amended by HCD on 02/14/2006; and
C. The City of Tustin wishes to submit applications to obtain from HCD an allocation
of BEGIN funds in the amount of $1 ,836,100
NOW, THEREFORE, the City Council of the City of Tustin resolves as follows:
1. The City of Tustin shall submit to HCD, applications to participate in the BEGIN
Program in response to the NOFA issued on February 16, 2006, which will request
a funding allocation for the following projects:
Senior Units (Columbus Square) - Tustin Legacy
Cambridge Lane - Tustin Legacy
Camden Place - Tustin Legacy
Total
$535,000
$714,000
$587,100
$1,836,100
2. If the application for funding is approved, the City of Tustin agrees to use the
BEGIN Program funds for eligible activities in the manner presented in the
application as approved by HCD and in accordance with the program guidelines
sited above. It may also execute any and all other instruments necessary or
required by HCD for participation in the BEGIN Program.
3. The City of Tustin authorizes the City Manager to execute in the name of the City of
Tustin, the application, the Standard Agreement, and all other documents required
by HCD for participation in the BEGIN Program, and any amendments thereto.
4. The City of Tustin will establish a priority system for current residents and persons
employed in the City of Tustin.
Resolution No. 06-055
Page 2
PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on the 1st day of
May 2006.
DOUG DAVERT, Mayor
PAMELA STOKER
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is five; that the above and foregoing Resolution No. 06-055 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 1st day
of May 2006, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
CITY CLERK