Agenda - 12-09-2014 - 6a - Laserfiche WebLink

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6 1 surrendered their home to a lender through foreclosure. Historically, CHT has re-acquired 2 property at risk of foreclosure and plans to continue this trend. 3 4 To address the issue of difficulty inselling homes, CHT has proposed that it be allowed to sell 5 homes that contain federal subsidy through the HOME program to households with an income 6 of up to 115% of the Area Median income (AMI), where permissible by US Department of 7 Housing & Urban Development (HUD) guidelines. The HOME Program imposes an affordability 8 period on projects assisted with HOME funds in order to ensure that HOME investments yield 9 affordable housing over the long term. For homebuyer projects such as the Community Home 10 Trust, thelength of the affordability period is based on the amount of HOME funds invested in 11 the property: 12 HOME FUNDS PROVIDED AFFORDABILITY PERIOD 13 <$15,0005 years 14 $15,000 -$40,00010 years 15 > $40,00015 years 16 17 However, the restrictive covenants CHT executes with the County stipulate 99 years of 18 affordability. As a result, houses that are originally sold with the assistance of HOME funds that 19 are later re-acquired by CHT must be re-sold to a family earning less than 80% AMI. Otherwise, 20 CHT must refund the HOME funds invested to the County from the proceeds of the sale. 21 22 FINANCIAL IMPACT: There is no financial impact regarding the policy allowing CHT to extend 23 a fee simple interest in properties sold. However, should the Board approve the proposed policy 24 change regarding selling homes to families above 80% AMI where the federal subsidy remains 25 in the home, this may reduce the number of low and moderately-low income families served by 26 the Orange County HOME Consortium. Notwithstanding this reduction in low income families 27 served, the affordability period as mandated by HUD would be met. 28 29 Bonnie Hammersley said there was also request by CHT for the Board to consider a 30 charter. She said she is meeting with the local managers to bring a unified recommendation to 31 the Assembly of Governments in November. 32 Commissioner Gordon asked what would be involved in the charter. 33 Bonnie Hammersley said staff islooking at the current Community Home Trust model, 34 andthey will be inviting Robert Dowling to meet with them to talk about the current model. 35 Commissioner Dorosin asked aboutthe mechanics of the changethat is being 36 requested. He asked whetherapproved change will only be effective going forward, or whether 37 it will affect homes currently being sold. 38 Robert Dowling saidthe HUD guidelines have a much shorter affordabilityperiod than 39 the 99 year restrictions CHT imposed on itself. He said the home funds and local funds have a 40 much shorter affordability period, and the longest the home funds have is 20 years. He said 41 CHT has homes that they put HOMEfunds into 12 years ago, and the HUD funds have been 42 met. He said this home nowcannot be sold to anyone above80 percentmedian income, 43 because of the self imposed 99 year restriction. He said if this proposed change is approved, 44 CHT can widen the window of buyers served. He said no more subsidiescan be put in the 45 home, but the funds put in 12 years ago can be left in, and this will allow them to serve people 46 at up to115percent of median income. 47 Commissioner Dorosin asked if the 115 percent would kick in after the 20 year required 48 HUD period elapsed. 49 Robert Dowling said that is correct.