02-19-2002 RA RPT 05 - Laserfiche WebLink

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CITY OF RIVERSIDE People Se~ing People HONORABLE MAYOR, CITY COUNCIL AND AGENCY MEMBERS DATE: February 19, 2002 ITEM NO: 5 SUBJECT: CALHOME PROGRAM: TERMINATION OF AGREEMENT BET~NEEN THE, CITY, REDEVELOPMENT AGENCY, AND RHDC; AND EXECUTION OF A CALHOME AGREEMENT BETWEEN THE CITY AND RHDC BACKGROUND: On July 24, 2001 the City of Riverside and the Redevelopment Agency of the City of Riverside approved a joint item executing an Agreement between the Redevelopment Agency of the City of Riverside ("Agency"), the City of Riverside ("City"), and the Riverside Housing Development Corporation ("RHDC") for the operation of the CalHome First Time Homebuyer's Mortgage Assistance Program. This program loans up to $20,000 of mortgage assistance to households earning 80% or less of the County Median Income, and is funded through the State of California Department of Housing and Community Development ("HCD"). In January 2002 HCD informed staff that the agreement executed in July was not in accordance with the CalHome program requirements because it authorized the Agency, not the City, to administer the program and be the beneficiary on the CalHome loans. This arrangement is unacceptable because it was the City that applied for the CalHome funds and the City that entered into an Agreement with the State for the administration of the program. HCD has required that the Agreement be re-written to so that the City and RHDC are the only parties involved in the administration of the program. A Mutual Termination Agreement between the Agency, the City and RHDC is attached as Exhibit A. The redraffed CalHome Agreement between the City and RHDC is attached as Exhibit B. We are currently requesting that the Council and Agency terminate the existing CalHome Agreement between the City, the Agency, and RHDC and authorize the execution of a new CalHome Agreement between the City and RHDC. Aside from the change in parties, the new agreement is identical to the existing one. FISCAL IMPACT: There is no new fiscal impact for the implementation of these recommendations. All CalHome loan repayments will still be kept in a City reuse account and used for further loans, just as in the existing Agreement. ALTERNATIVES: The City Council and Redevelopment Agency could choose not to terminate the existing agreement and execute the new agreement, however this would prevent the City from implementing the CalHome Mortgage Assistance program. 5-1