4 9
3 5
City of Camarillo
CITY COUNCIL POLICY
Section: Community Development Date Adopted: February 12, 2020 Last Amended:
Subject:Affordable Housing Preservation Program
Number: 7.12 Page 1 of 3
PURPOSE
To purchase existing owner-occupied affordable housing units (“unit” or “units”) with expiring Affordable Housing Agreement covenants in order to preserve the units from converting to market rate, and to update the terms of the Affordable Housing Agreements upon resale.
POLICY
Affordable Housing Preservation Program will be implemented according to the guidelines included in this policy.
A. Purchase of the Unit
1. Staff may exercise the City’s option to purchase the unit, with a real estate agent engaged for the transaction, upon receipt of the owner’s notice of intent to sell.
2. Staff will obtain City Council approval to purchase the unit.
3. The City will purchase the unit for the price calculated according to the sale price methodology outlined in the Affordable Housing Agreement for the unit that is for sale.
4. The City may purchase the unit with available affordable housing funds, including but not limited to CDBG, other grant funds, etc. The City may only use general fund money to assist with the purchase of a unit if the general fund will be repaid in full upon resale of the unit.
B. Resale of the Units
1. The City will resell the unit “as-is” without making any repairs, improvements, or modifications. However, if any repairs or improvements are needed as a condition of the buyer’s funding, staff will obtain approval from City Council prior to completing any repairs or improvements.
2. The City will resell the unit as soon as possible to reduce City’s carrying costs associated with the ownership of the unit.
Adopted February 12, 2020
Amended
Policy 7.12
3. The City will resell the unit for the price calculated according to the State housing law including California Health and Safety Code section 50052.5, section 6920 of Title 25 of the California Code of Regulations, and section 6932 of Title 25 of the California Code of Regulations.
4. For the purposes of establishing the purchase price, the following variables will be considered:
a. Down payment of five percent of purchase price.
b. 30-year mortgage interest rate level available at the time of the purchase price calculation.
c. Property tax percentage as indicated on the most recent property tax bill.
d. Customary home insurance cost for the size and type of the unit. e. Utilities estimate calculated according to the Area Housing Authority of Ventura County’s “Allowances for Tenant Furnished Utilities and Other Services” worksheet.
f. Monthly homeowner’s association dues.
g. Household size for the unit of one person per bedroom, plus one.
5. The City will be responsible for paying the City’s portion of the closing costs related to the sale of the unit. The buyer will be responsible for paying the buyer’s portion of the closing costs.
6. The City will prepare an Affordable Housing Agreement, which is to be recorded by the title company at the time of close of escrow.
C. Affordable Housing Agreement Criteria
1. The agreement will be recorded in a subordinate position to any loans on title.
2. The length of the term will be 55 years, which will reset with each future property transfer.
3. An owner must occupy the unit as the owner’s primary residence.
4. A buyer cannot be any of the following:
a. Dependent student.
b. Owner of other real property.
c. Owner of liquid assets (not including retirement funds) with a total value of greater than $100,000.
5. Maximum resale price will be calculated in accordance with section B.4.a. through B.4.g. in this policy.
5.6. For affordable units not purchased by the City, but by mutual consent of the Adopted February 12, 2020
Amended
Policy 7.12
City, Property Owner, and prospective buyer, an affordable housing agreement may be updated to meet some or all of the criteria articulated in Section C of this policy.
D. Interested Parties List and Selection of Buyers
The City will:
1. Market availability of the interested parties list to the public as needed using any of the following media outlets:
a. CityScene newsletter.
b. City website.
c. Newspaper advertisement.
d. Utility mailing insert.
e. Other outlets as determined by the City.
2. Add interested individuals to the interested parties list in the order the requests are received.
3. Contact individuals on the list in order received to verify income-eligibility, when a unit is available for purchase.
4. Remove individuals from the list if they do not meet eligibility requirements or if they opt out from moving forward with a purchase at that time. If the individuals request to remain on the list, they will be moved to the bottom at that time.
5. Request that the realtor advertise the availability of units on MLS if a buyer is not identified from the interested parties list.
E. Qualification of Buyers
The City will verify household income-eligibility using the income limits, published in section 6932 of Title 25 of the California Code of Regulations, based on the following documentation, as applicable:
1. W-2s for two prior years.
2. Tax returns for two prior years.
3. Pay stubs for 2 prior months.
4. Letters from employers.
5. Letters from Social Security Administration.
6. Letters from Department of Social Services.
7. Court documents.
8. Any other documentation needed to verify income to City’s satisfaction.