ADMINISTRATIVE REPORT
MEETING DATE: February 26, 2025 AGENDA CATEGORY: Deferred Business TO: Honorable Mayor and City Council
FROM: Jennifer M. Byers, Economic and Community Development Director DATE: February 10, 2025
SUBJECT: Continued Discussion Regarding Amendment No. 3 to Agreement No. 2020-255 for the Hope to Home Down Payment Assistance Program
Amendment No. 3 to Agreement No. 2020-255 with Ventura County Community Development Corporation (VCCDC) (increase maximum purchase price to limits provided by HUD; increase grant funding to $770,000; and extend term to March 1, 2027) for continued operation of the Hope to Home Down Payment Assistance Program.
RECOMMENDATION:
Staff recommends approval of the amendment.
BACKGROUND:
On January 8, 2025, staff proposed Amendment No. 3 to Agreement No. 2020-255 to extend the term of the Agreement to March 1, 2027, increase the amount of grant funding to $770,000 to provide down payment assistance to 18 eligible households, and increase the maximum purchase price to $385,700 per home. Councilmember Bob Smith made a motion to continue the item for further discussion to evaluate the rising limit of the maximum purchase price, and Council voted to defer until a future meeting date.
Staff has reviewed Council’s referral and relevant Department of Housing and Urban Development (HUD) guidelines. According to HOME regulation 24 CFR 92.254(a)(2)(iii), if a participating jurisdiction intends to use HOME funds for homebuyer assistance, the jurisdiction must annually review the HUD affordable homeownership limits. HUD provides two options to determine maximum sales price:
Option 1: Utilize HUD-published limits for HOME Homeownership Value Limits as determined for the Kern County, Bakersfield Metropolitan Statistical Area; or
Option 2: The participating jurisdiction may determine 95% of the median purchase price for the area as set forth in 24 CFR 92.254(a)(iii)(A-E).
Historically, the City utilized the sales price limits imposed by HUD (Option 1); however, in 2023 the HUD limit did not adequately reflect the local market with very few homes in that sales price range. As a result, Amendment No. 1 to Agreement No. 2020-255 set the limit based on 95% of the median purchase price for the area (Option 2). Staff evaluated both options and determined that the current HUD limit is $371,000, and the formula option is $385,700.
City staff propose utilizing Option 1, with a maximum purchase price of $371,000, as there are approximately 800 homes currently for sale in the Bakersfield area within that range. With this amendment, staff will revise the Action Plan for Fiscal Year 2024-2025 of the Consolidated Plan, using the most recent HUD-published limit for Kern County as the maximum purchase price for the VCCDC
program.
Staff recommends council approve Amendment No. 3 to Agreement No. 2020-255, to extend the term of the Agreement to March 1, 2027, increase the amount of grant to $770,000 to provide down payment assistance to at least 18 eligible households, and increase the maximum purchase price to the most recent HUD-published limit.
FISCAL IMPACT:
Funds were budgeted as part of the FY 24-25 HUD Action Plan and will result in no impact to the general fund.
COUNCIL GOAL:
Safety and Resilience
ATTACHMENT:
Amendment No. 3 to Agreement No. 2020-255