04/04/2000 RA RPT 04 - Laserfiche WebLink

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CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor and Date: April 4, 2000 Redevelopment Agency Members Item No.: 4 Subject: Request Authorization to Implement the HOME funded portion of the Mission Village Downpayment Assistance Program and Contract With the Community Investment Corporation to Administer and Provide Technical Assistance for the Program. Background On August 26, 1997 the Redevelopment Agency ("Agency") approved suggested program guidelines for the Mission Village Down Payment Assistance Program (DPA). At that time the original concept was designed, staff believed the program g'uidelines presented to the Agency met the legal funding requirements of both federal HOME Investment Partnership requirements (24 CFR Part 92 et seq.) and California Community Redevelopment Law (Sections 33000 et seq). The Agency accordingly authorized staff to work with its legal counsel to draft the necessary documents required to implement the program. Current Issue Federal HOME guidelines have changed since the original concept was presented to the Agency. Further, after working with legal counsel and lending specialists, it became clear that it would be too complex to draft a single program and combined documents using both Redevelopment and HOME funding sources and still be in compliance with the stringent guidelines of each of these programs as originally envisioned. Staff has identified $200,000 of Redevelopment funds planned in the near and distant future available for use in a down payment assistance program, while over $3 million dollars of current and future HOME funds are planned. In addition, the RDA funded program will be committed for a specific Agency assisted new construction housing project and will be brought forward for the Agency's consideration when the project DDA is considered. The original combined program envisioned that all of the homes assisted would count towards the inclusionary housing requirement for the Downtown/Airport Redevelopment merged project area. Basically this requirement states that 15% of all new or substantially rehabilitated housing units created in a merged project area must be reserved for low income housing and 40% of this 15% must be reserved for very low income. The reservation is assured with CCR's that restrict the affordability term on the units for the number of years remaining under the merged project area's plan limit term. The original joint program assumed 30 year affordability covenants to meet this inclusionary housing requirement. Recent staff and legal research indicated that 4 of the 5 geographic areas that comprise the Merged Downtown Redevelopment project area have a plan limit until 2014. Only one area, the (4th amendment area) has a plan limit until 2024 and it is not an area that would be predominately housing and using the proyam. Since long term affordability covenants impact future resales for homeownership opportunities, staff believed it might impede the proposed program's effectiveness in the community. Since the program is to be funded only from HOME funds at this time, staff is suggesting using the HOME affordability limit requirement of 15 years. This affordability term will still meet the inclusionary housing obligation of the Agency for the Merged Downtown Redevelopment Project Area. In light of the above discoveries and discussions with legal counsel, staff is proposing to change the Mission Village Down Payment Assistance Program Guidelines for Agency consideration as outlined below: Proposed Changes Change in the Maximum Down-payment Assistance Amount: The original program allowed for loans up to $55,000 maximum. It is expected that the majority of properties participating in the program will be vacant, rental occupant-program participant or owner occupied properties in 4-1