03-16-2004 CC RPT 08 - Laserfiche WebLink

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People Serving People CITY OF RIVERSIDE AGENCY MEMORANDUM Riverside Al~AmedcaCity HONORABLE MAYOR AND AGENCY MEMBERS DATE: March 16, 2004 ITEM NO: 8 SUBJECT: REQUEST TO CHANGE COMMUNITY DEVELOPMENT BLOCK GRANT REGULAR LOAN #15 125 TO DEFERRED LOAN FOR PROPERTY LOCATED AT 8897 AMBER STREET (92503) BACKGROUND: On June 21,2003, Charles Winemiller, homeowner of 8897 Amber Street ("Properly") in the Ramona area, sought rehabilitation assistance to make needed home repairs. Mr. Winemiller received approval on December 16, 2003 from Agency for a $40,000 Community Development Block Grant (CDBG) Rehabilitation Regular Loan. Mr. Winemiller has not yet signed the Regular Loan Agreement, Promissory Note, and the Long Form Deed of Trust and Assignment of Rents so the Project rehabilitation has not begun. The Property rehabilitation includes painting the exterior of the home; stuccoing columns atthe front of the house; replacing the roof, windows, entry doors, garage door, and hot water heater cabinet doors; bringing three (3) patios and hot water heater up to code; up-grading electrical; and installing fencing, switches for ceiling fans in bedrooms, and central air and heat. CURRENT ISSUE: Mr. Winemiller has recently been laid off from Parkview Hospital. His income has decreased from 57% ($21,640) of County Median Income ("CMl") to 31% ($11,700). With an income that has been cut in half, Mr. Winemiller will find it difficult making his loan payments. He has requested the City to change his Regular Loan to a Deferred Loan, which would be paid in full upon the sale of the Property. The three percent (3%) annual interest will still accrue until the Property is sold. Under the CDBG Housing Rehabilitation Program Guidelines, to quality for a deferred loan an individual must earn less than 50% ($19,000) of the CMl or has more than 40% of their income going towards housing expenses. Mr. Winemiller meets the deferred loan criteria since his income is less than 50% of the CMl. FISCAL IMPACT: Repay loan at sale or transfer of Property, versus incrementally. There is no impact to the General Fund. ALTERNATIVES: The Agency may choose not to change Mr. Winemiller's Regular Loan to a Deferred Loan Agreement, which would eliminate the only alternative way for Mr. Winemiller to participate in the program. 8-1