is a current and immediate threat to the public health, safety, or welfare, and that adherence to existing standards, requirements, and permitting procedures in conflict with this ordinance would result in that threat to public health, safety, or welfare.
WHEREAS, adoption of this interim ordinance is not a project under the California Environmental Quality Act (CEQA) pursuant to California Government Code Section s 65852.28(e), 65913.4.5(b) and Section 66499.41(i) relating to implementation of Senate Bill No. 684 (2023).
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CAMPBELL DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1 (PURPOSE). This Ordinance establishes interim exceptions, clarifications, and amendments to the City of Campbell’s Subdivision Ordinance and Zoning Code to allow proposed housing developments as specified by California Government Code Section s 65852.28, 65913.4.5, and 66499.41, as established by Senate Bill No. 684 (2023).
SECTION 2 (APPLICABILITY). Section 3 (State Law), Section 5 (Administration), Section 6 (General Eligibility ), Section 7 (Application Process), and Section 8 (Exceptions to Requirements) of this Ordinance shall be applicable only to proposed housing development projects that apply for a permit from the City of Campbell under the streamlined, ministerial review process established pursuant to Sections 65852.28, 65913.4.5, and 66499.41 of the California Government Code.
SECTION 3 (STATE LAW ). This Ordinance is intended to implement a ll provisions of Sections 65852.28, 65913.4.5, and 66499.41 of the California Government Code, which shall govern the implementation of this Ordinance . Nothing contained in this Ordinance shall be construed to supersede any requirement of the law including, but not limited to, site eligibility, density, affordability, and all applicable site development and design requirements.
SECTION 4 (SUPERSEDE). The provisions of this Ordinance shall supersede and take precedence over any inconsistent provision of the Campbell Municipal Code to that extent necessary to effectuate the provisions of this Ordinance for the duration of its effectiveness.
SECTION 5 (ADMINISTRATION). This Ordinance shall be administered by the Community Development Director, who is hereby authorized to develop forms, policies, and regulations for the implementation of this Ordinance and interpret its provisions to achieve compliance with state law. Where a disagreement with the Community Development Director's application of this Ordinance occurs, the procedures for an Interpretation provided in Section 21.20.030 (Procedures for Interpretations) of the Zoning Code shall be followed, including the provisions for an appeal.
SECTION 6 (GENERAL ELIGIBILITY). This section serves to clarify which sites are eligible for the streamlined, ministerial review process established pursuant to Sections 65852.28, 65913.4.5, and 66499.41 of the California Government Code.
A. Site Eligibility. The following criteria serve to clarify provisions of state law used to determine site eligibility.
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1. Land Use Designation . Properties with the following General Plan land use designations, and all sites with a multi -family residential zoning designation, shall be eligible sites:
a. Low-Medium Density Residential (8-16 Units / Gr. Acre) b. Medium Density Residential (18-25 Units / Gr. Acre)
c. Medium-High Density Residential (26-33 Units / Gr. Acre) d. High Density Residential (34-45 Units / Gr. Acre)
e. Mobile Home Park (8-16 Units / Gr. Acre
f. Professional Office Mixed Use (8-16 Units / Gr. Acre) g. Neighborhood Commercial Mixed-Use (18-25 Units / Gr. Acre) h. Medium-High Density Mixed-Use (26-33 Units / Gr. Acre) i. Central Business Mixed-Use (26-33 Units / Gr. Acre)
j. General Commercial Mixed-Use (26-33 Units / Gr. Acre) k. High Density Mixed-Use (34-45 Units / Gr. Acre)
l. Commercial-Corridor Mixed-Use (45-60 Units / Gr. Acre) m. Transit-Oriented Mixed-Use (57-75 Units / Gr. Acre)
2. Legal Parcel. Parcels no larger than five (5) acres which ha ve been legally created in compliance with the Subdivision Map Act (Government Code Section 66410 et seq.) and the Subdivision Ordinance, as applicable at the time the parcel was created. The City Engineer may require a certificate of compliance to verify conformance with this requirement.
3. Historic Property. Parcels that are not listed on the City of Campbell Historic Resource Inventory, as defined by Chapter 21.33 (Historic Preservation).
SECTION 7 (APPLICATION PROCESS ). This section serves to provide exceptions and clarifications to local permit processes to comply with prevailing state statues and streamline the processing of qualifying projects consistent with the objectives of state law.
A. Permits Required. No other permit, or modification of any other permit, shall be required other than as specified below:
1. Zoning Clearance Application. A zoning clearance application, including the required application materials and fees, shall be filed with the Community Development Department in compliance with Chapter 21.38 (Application Filing, Processing and Fees) of the Zoning Code. A zoning clearance application may only be found complete if it satisfies the requirements of this Chapter and other applicable sections of the Campbell Municipal Code.
2. Tentative Parcel Map or Tentative Subdivision Map Application. When the project includes a subdivision, the applicant shall include the required application materials and fees for a Tentative Parcel Map when involving four or fewer lots or condominium units, and a Tentative Subdivision Map when involving five or more lots or condominium units concurrently with the application for a zoning clearance . T he Tentative Parcel Map or Tentative
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Subdivision Map shall be reviewed by the city engineer as a ministerial action without discretionary review or a hearing.
3. Parcel Map or Final Map Application. Following the approval of a Tentative Parcel Map or Tentative Subdivision Map, the applicant shall include all of the required application materials and fees for a Parcel Map when implementing a Tentative Parcel Map , and a Final Map when implementing a Tentative Subdivision Map. The Parcel Map or Final Map shall be reviewed by the city engineer as a ministerial action without discretionary review or a hearing.
4. Building Permits. No demolition, grading, or construction shall be permitted without first receiving approval of a building permit. Further, the following procedural requirements shall apply:
a. Submittal. Issuance of a zoning clearance shall be required prior to acceptance of an application for a building permit(s).
b. Issuance. No building permit shall be issued until a tentative map has been approved.
c. Building Permit Final. No building permit final, certificate of occupancy, or temporary certificate of occupancy shall be granted until a Parcel Map or Final Map has been recorded.
SECTION 8 (EXCEPTIONS TO REQUIREMENTS). This section serves to provide exceptions and adjustments to standards and requirements to comply with prevailing state statues and streamline the processing of qualifying projects consistent with the objectives of state law.
A. Exceptions to Requirements.
1. Exceptions to Multi-Family Development and Design Standards (MFDDS).
Housing development projects shall be alleviated from all requirements pertaining to Chapter 3 (Zones), Chapter 5 (Building Types), Chapter 6 (Specific to Frontage Types), Chapter 7 (Architectural Standards) and Chapter 8 (Specific to Large Sites), within the Multi-Family Development and Design Standards (MFDDS), except as follows:
a. Chapter 3, Section 3.020.7 (Design Sites), where the term “design sites” is used, the term shall instead refer to the new parcel(s) proposed by the housing development project.
b. Within each form-based zone section of Chapter 3, (Sections 3.030 through 3.090), the following specific subsections shall remain applicable:
(1) Building Form (subsection '4')
(2) Building Placement (subsection '5,' Setback)
(3) Encroachments (subsection '6')
(4) Parking (subsection '7')
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2. Exceptions to Parking. One parking stall per primary dwelling unit shall be required, except for proposed housing developments located on parcels within one-half mile walking distance of either a public transportation stop or one block of a car share vehic le operating in accordance with California Vehicle Code Section 22507.1.
3. Exceptions to Subdivision Ordinance. Housing development projects shall be alleviated from the following:
a. Minimum Lot Size. In no event shall a new parcel be less than six hundred (600) square feet in lot area.
b. Number of parcels. The proposed subdivision shall result in ten (10) or fewer parcels, unless otherwise designated for internal circulation, open space, or common area use.
c. Number of Remaining Units. Each parcel created through subdivision under Section 66499.41 of the Government Code shall contain at least one dwelling unit on each resulting parcel that does not already contain an existing legally permitted residential structure or is reserved for internal circulation, open space, or common area.
4. Adjustments to Standards. To the least extent necessary to comply with state law, adjustments to otherwise applicable site development and design standards shall be granted according to the following order of priority until the physical constraint(s) to are resolved, provided that if an exception does not remove a physical constraint, the exception shall not be granted. a. Reduction of the garage entry setback/minimum driveway depth to allow a minimum of twenty-five feet;
b. Reduction of the street side setback to allow a minimum setback of 4 feet except to ensure adequate site visibility for pedestrian and vehicular safety, consistent with Figures 3-1 and 3-2 of Section
21.18.060 (Fences, walls, lattice and screens);
c. Reduction of the front setback to allow a minimum setback of five feet; d. Increase to the maximum height as to allow one additional story than would otherwise be allowed; then
e. Reduction or elimination of any other standard not otherwise identified.
SECTION 9 (SUBDIVISION STANDARDS). Chapter 21.13 (Subdivision Standards) of the Campbell Municipal Code is hereby added to read as follows:
20.13.010 Purpose.
This Chapter establishes standards for subdivision of properties in Campbell.
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20.13.010 Applicability.
The requirements of this Chapter shall apply to all subdivisions, including parcel maps and final maps. No subdivision, except as provided for by Chapter 20.14 (Urban Lot Splits), shall be approved except when meeting the requirements of this section.
20.13.020 Site Access.
All lots created by a subdivision shall have frontage upon a street dedicated as a public street, provided that the community development director may approve not more than one lot without such required frontage on a public street, hereinafter referred to as "rear lot," under the following conditions:
A. The front lot shall meet all of the requirements of the zoning district within which it is located.
B. The rear lot shall meet all of the requirements of the zoning district within which it is located and, in addition, shall have an area which exceeds the lot area requirement by ten percent exclusive of any access to a public street.
C. Access to the public street for a rear lot shall not be over an easement but over land under the same ownership as that of rear lot; such access shall have a minimum width of fifteen feet and shall have a paved way not less than ten feet in width.
D. The creation of a rear lot would be consistent with all applicable specific plans and/or area plans.
20.13.030 - Exception to Site Access Requirement.
The applicable approving body may approve a subdivision which creates lots which do not have frontage on a public street when all of the following requirements are satisfied:
A. The subdivision is zoned to allow multi -family development multi -family residential uses.
B. Permanent vehicular and pedestrian access is assured through recordation of reciprocal ingress/egress easements for all parcels within the subdivision boundary, including access rights for all property owners, guests, employees, clients and customers of al l business entities or tenants lawfully located within the subdivision boundary; and
C. Each independent parcel is self-sufficient in terms of parking requirements to serve the existing or proposed uses on the parcel unless off -site parking is assured through permanent parking easements located nearby (within three hundred feet of the building's or center's public entrance) on adjoining parcels; and
D. Utility connections are located within easements benefitting the independent parcels which exist or are proposed within the subdivision; and
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E. Where available, the utility company serving the property shall be responsible for maintaining all utility lines and related infrastructure up to the individual services or laterals. Beyond this point, the property owner is responsible for all maintenance of the utility infrastructure.
F. Homeowner’s Association.
1. Where a homeowner’s association is established, the following requirements shall apply.
a. Prior to issuance of a building permit(s) or recordation of the Parcel Map of Final Map, whichever occurs first, the property owners shall sign and record Covenants, Conditions and Restrictions (CC&Rs) which shall:
(1) Ensure the joint maintenance of reciprocal rights of way and utilities within common easements, unless such utilities are maintained by the respective service provider.
(2) Obligate the joint development and maintenance of landscaping improvements along the public street perimeter encompassing all parcels within the subdivision boundaries.
2. Where a homeowner association is not established, the following standards shall apply:
a. All impervious surfaces outside of a building roofline or building envelope, shall be constructed with pervious materials (pervious pavers, pervious concrete) designed to fully meet the stormwater treatment requirements consistent with Chapter 14.02 (Storm water Pollution Control).
b. Prior to approval of the Parcel Map or Final Map, the property shall be annexed into the City’s Community Facilities District No. 2 to provide maintenance of stormwater treatment facilities placed in the public right-of-way.
G. Prior to issuance of a building permit(s) or recordation of a subdivision map, whichever occurs first, the property owners shall sign and record a “Covenants for the Operation and Maintenance of Stormwater Facilities” and submit a Stormwater Management Plan to the satisfaction of the City Engineer, which shall obligate the property owner and successors in interest to preserve and ma intain the stormwater facility and allow for periodic inspections by City employees.
H. In instances when more than one of the proposed parcels will remain under one ownership, the above easements and/or covenants shall be placed in escrow and recorded simultaneously with any transfer of ownership of any of the affected parcels, at no cost to the city.
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SECTION 10 (ACTION ON TENTATIVE PARCEL MAPS). Section 20.16.035 (Exception to access requirement.) of the Campbell Municipal Code is hereby amended to read as follows with underlining (underlining) indicating new text and strikeouts (strikeouts) indicating deleted text.
20.16.030 Action on tentative parcel maps.
The community development director shall approve or deny an application to subdivide lands into four or fewer lots. Applications therefore shall be accepted only upon payment of a fee in an amount prescribed by resolution of the City Council.
Before approval or conditional approval may be given, such subdivision must be considered by the city engineer.
All conditions required by the city engineer shall be incorporated in the community development director's conditional approval and findings. Denial by the city engineer shall require denial of the tentative map.
All lots created by such subdivision shall have frontage upon a street dedicated as a public street, provided that the community development director may approve not more than one lot without such required frontage on a public street, hereinafter referred to as "rear lot," under the following conditions:
(1) The front lot shall meet all of the requirements of the zoning district within which it is located.
(2) The rear lot shall meet all of the requirements of the zoning district within which it is located and, in addition, shall have an area which exceeds the lot area requirement by ten percent exclusive of any access to a public street. (3) Access to the public street for a rear lot shall not be over an easement but over land under the same ownership as that of rear lot; such access shall have a minimum width of fifteen feet and shall have a paved way not less than ten feet in width.
(4) The creation of a rear lot would be consistent with all applicable specific plans and/or area plans.
The community development director shall have authority in granting such application to impose such conditions as are deemed necessary to protect the best interests of the surrounding property or neighborhood consistent with the general purpose and intent of this title, including, but not limited to, adequate provisions for fire protection, easements for public utilities and improvements of all proposed streets to the standard prescribed in Title 11 or such lesser standards as may be approved by the community development director.
Before such subdivision is approved, the applicant shall pay all unpaid county and municipal taxes except taxes not yet payable.
A denial of such application may be appealed by the applicant to the planning commission within ten days after the mailing of notice of the decision of the community development director to the applicant at the address shown on the application.
The appeal shall be in writing, shall be filed with the secretary of the planning commission, shall generally set forth the grounds of appeal and shall be accompanied by a
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filing fee in accord with the schedule of fees as established by the City Council, no part of which is refundable.
Where the planning commission or decision-making body grants approval subject to conditions, said conditions shall be fulfilled within twenty-four months after the decision of the planning commission or decision-making body for a housing development project, or within such time as the planning commission may prescribe for a nonresidential project.
SECTION 11 (EXCEPTION TO ACCESS REQUIREMENT). Section 20.16.035 (Exception to access requirement.) of the Campbell Municipal Code is hereby repealed.
SECTION 12 (SEVERABILITY). If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Ordinance. The City Council hereby declares that it would have passed this interim ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ord inance would be subsequently declared invalid or unconstitutional.
SECTION 13 (REPEAL). If Senate Bill No. 684 (2023) is repealed or otherwise rescinded by the California State Legislature or by the People of the State of California, this Ordinance shall cease to be in effect.
SECTION 14 (PUBLICATION). The City Clerk shall cause this interim ordinance to be published at least once in a newspaper of general circulation within 15 days after its adoption in accordance with Government Code Section 36933.
SECTION 15 (EFFECTIVENESS). This Ordinance shall become effective on June 18, 2024, and remain effective for a period of 45 days, unless subsequently extended by the City Council.
PASSED AND ADOPTED this _____ day of ____________, 2024 by the following roll call vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
APPROVED:
Susan M. Landry, Mayor
ATTEST:
Andrea Sanders, City Clerk
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Ordinance No. _____
BEING AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CAMPBELL ADOPTING URGENCY MEASURES TO IMPLEMENT SENATE BILL NO. 4 (FILE NO. PLN-2024-69)
WHEREAS, on October 11, 2023, the Governor of the State California signed into law Senate Bill No. 4 (Wiener), " An act to add and repeal Section 65913.16 of the Government Code, relating to housing.," which generally requires that a housing development project that meets specified requirements be a use by right upon the request of an applicant who submits an application for streamlined approval, on any land owned by an independent institution of higher education or religious institution on or before January 1, 20 24, if the development satisfies specified criteria, including that the development is not adjoined to any site where more than one-third of the square footage on the site is dedicated to industrial use. The bill also imposes streamlining requirements, pro hibits the local agency from imposing certain standards and requirements, and authorizes the development to include ancillary uses on the ground floor of the development, as specified.
WHEREAS, certain standards, requirements, and permitting procedures of the City of Campbell Municipal Code, are inconsistent with the provisions authorized by Senate Bill No. 4 (2023).
WHEREAS, the provisions of Senate Bill No. 4 (2023) shall be in effect on July 1, 2024, and without locally codified standards, requirements, and implementation procedures, the law presents a current and immediate threat to the public peace, health, safety, and welfare, in that certain existing standards, requirements, and permitting procedures of the City of Campbell Municipal Code are in conflict with Senate Bill No. 4 (2023) and could create confusion and hinder the type of housing development and activities the law authorizes.
WHEREAS, pursuant to Section 65858 of the Government Code and Section
21.60.090 of the Campbell Municipal Code, the City Council may take appropriate action to adopt urgency measures as an interim ordinance.
WHEREAS, pursuant to Section 65852.21(j) and Section 66411.7(n) of the Government Code, a local agency may adopt an ordinance to implement Senate Bill No. 4 (2023).
WHEREAS, this interim ordinance serves to establish standards, requirements, and permitting procedures to allow for orderly housing development and activities authorized by Senate Bill No. 4 (2023) while protecting the public peace, health, safety, or welfare in the City of Campbell.
WHEREAS, it is not the intent of this Ordinance to adopt permanent standards , requirements, or permitting procedures . The City Council reserves the right to adopt permanent standards, requirements, and permitting procedures consistent with Senate Bill No. 4 (2023) that will supersede those contained in this interim ordinance.
WHEREAS, it is not the intent of this Ordinance to deny or delay the approval of
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housing development projects that are in compliance with Senate Bill No. 4 (2023).
WHEREAS, considering the foregoing findings, the City Council further finds that there is a current and immediate threat to the public health, safety, or welfare, and that adherence to existing standards, requirements, and permitting procedures in conflict with this ordinance would result in that threat to public health, safety, or welfare.
WHEREAS, adoption of this interim ordinance is not a project under the California Environmental Quality Act (CEQA) pursuant to California Government Code Section 65852.21(j) and Section 66411.7(n) relating to implementation of Senate Bill No. 4 (2023).
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CAMPBELL DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1 (PURPOSE): This Ordinance establishes interim exceptions to the General Plan & Zoning Code to allow proposed housing developments as specified by California Government Code Section 65913.16, as established by Senate Bill No. 4 (2023) . The provisions of this interim ordinance shall supersede any other provision to the contrary in the Zoning Code or Subdivision Code. Zoning standards and design review standards provided for in the Zoning Code that are not affected by this interim ordinance shall remain in effect.
SECTION 2 (APPLICABILITY) : This Ordinance is applicable only to proposed housing development projects that apply for a permit from the City of Campbell under the streamlined, ministerial review process established pursuant to Section 65913.16 of the California Government Code. Owners of real property or their representatives may continue to exercise rights for property development in conformance with the Zoning Code.
SECTION 3 (STATE LAW): This ordinance shall implement all provisions of Section 65913.16 of the California Government Code including, but not limited to, statutes pertaining to definitions, permit process, property eligibility, affordability, allowable density, development standards, uses, unit replacement, prevailing wage, parking, and affordability, which shall govern the implementation of this ordinance.
SECTION 4 (AUTHORITY): This Ordinance shall b e administered by the Community Development Director, who is hereby authorized to develop forms, policies, and regulations for the implementation of this Ordinance. Where a disagreement with the Community Development Director's application of this Ordinance occurs, the procedures for an Interpretation provided in Section 21.020.030 (Procedures for Interpretations) of the Zoning Code shall be followed, including the provisions for an appeal.
SECTION 5 (CLARIFICATIONS & AMENDMENTS): This section serves to provide clarifications and amendments to local permit processes, standards, and requirements in order to comply with prevailing state statues and streamline the processing of qualifying projects under California Government Code Section 65913.16 consistent with the objectives of state law.
A. Application Process
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1. Application Type. Qualifying housing development projects, a s well any eligible ancillary uses when limited to the ground floor of the development by zone, shall be reviewed ministerially by the community development director through consideration of a zoning clearance in compliance with Chapter 21.40 (Zoning clearances) of the Zoning Code.
2. Application Filing. A zoning clearance application for a proposed housing development, including the required application materials and fees, shall be filed with the Community Development Department in compliance with Chapter
21.38 (Application Filing, Processing and Fees) of the Zoning Code.
3. Building Permits. Issuance of a zoning clearance shall be required prior to acceptance of an application for a building permit(s) for the proposed housing development.
4. Approval. Before approving a zoning clearance, the Community Development Director must make the following findings based on evidence in the record:
a. The housing development is eligible for streamlined ministerial review pursuant to Section 65913.16 of the California Government Code. b. The proposed housing development would not have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5 of the Government Code, upon public health and safety or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact. c. If the application includes a request for a density bonus, incentive, waiver or modification, that the requirements for density bonuses and/or other incentives that are specified in Chapter 20.20 (Density Bonus and Other Housing Incentives) have been or will be met.
d. If the application is subject to, or elects to exercise the provisions of, an overlay/combining district, that the requirements of the applicable overlay district(s) specified in Chapter 21.14 (Overlay/Combining Districts) have been or will be met.
5. Appeals. As specified by Chapter 21.62 (Appeals) of the Zoning Code, zoning clearances are ministerial and are not subject to an appeal.
B. City Requirements
1. General. Except as otherwise provided in this section , housing development projects shall meet all applicable requirements including, but not limited to, requirements of the General Plan and all objective site, design, and construction standards included in Title 6 (Health and Sanitation), Title 11 (Streets and Sidewalks), Title 14 (Sewers), Title 17 (Fire Protection), Title 18 (Building Codes and Regulations), Title 20 (Subdivision and Land Development), a nd Title 21 (Zoning) of the Campbell Municipal Code . Housing development projects shall also comply with all requirements included in applicable planning approvals, or
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otherwise adopted by the City Council, and all administrative regulations adopted pursuant to the implementation of this Ordinance.
2. Definitions. Except as otherwise provided in this section, the definitions of terms specified by California Government Code Section 65913.16 shall prevail over any local definitions of the same terms.
3. Exceptions to General Plan
a. Density: Notwithstanding the density ranges established by the General Plan Land Use Designation of the property, or any restriction imposed by a site -specific overlay limiting the maximum developable acres for residential use by the General Plan, the following criteria shall apply:
(1) If located in a zone that allows residential uses: The greater of the density allowed by the land use designation or 30 units/acre. (2) If located in a zone that does not allow residential uses: The greater of the density allowed on an adjoining parcel or 40 units/acre.
4. Exceptions to Zoning Code
a. Building Height: The maximum allowable height may be increased by the greater of one-story above the maximum building height allowed on the parcel or the maximum building height allowed on an adjoining parcel.
b. Parking Requirements: The total number of parking spaces required for the proposed housing development project shall be the lesser of the number of parking spaces required by the Zoning Code or one space per unit. Except as provided by Section 5.B. 3.c.(2), no parking shall be required for any component of project if either of the following is true:
(1) The parcel is located within one -half mile walking distance of public transit, either a high -quality transit corridor or a major transit stop as defined in subdivision (b) of Section 21155 of the Public Resources Code.
(2) There is a car share vehicle located within one block of the parcel.
c. Primary Uses: Religious institutional use s, or any use that was previously existing and legally permitted, shall be permitted by right when all of the following criteria are met:
(1) The total square footage of nonresidential space on the site does not exceed the amount previously existing or permitted in a conditional use permit.
(2) The total parking requirement for nonresidential space on the site does not exceed the lesser of the amount existing or of the amount required by a conditional use permit.
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(3) The new uses abide by the same operational conditions as contained in the previous conditional use permit.
d. Ancillary Uses: The following ancillary uses shall be uses permitted by right on the ground floor of the following zones:
(1) In single-family zones: Childcare centers and facilities operated by community-based organizations.
(2) In all o ther zones: Commercial uses permitted without an Administrative Conditional Use Permit, Conditional Use Permit, or other discretionary permit.
SECTION 7 (SEVERABILITY): If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Ordinance. The City Council hereby declares that it would have passed this interim ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 8 (STATE LAW). Any provision of this Ordinance which is inconsistent with Senate Bill No. 4 (2023) shall be interpreted in a manner as to achieve compliance with state law.
The provisions of this Ordinance shall supersede and take precedence over any inconsistent provision of the Campbell Municipal Code to that extent necessary to effect the provisions of this Ordinance for the duration of its effectiveness.
SECTION 9 (REPEAL): If Senate Bill No. 4 is repealed or otherwise rescinded by the California State Legislature or by the People of the State of California , this Ordinance shall cease to be in effect.
SECTION 10 (PUBLICATION): The City Clerk shall cause this interim ordinance to be published at least once in a newspaper of general circulation within 15 days after its adoption in accordance with Government Code Section 36933.
SECTION 11 (EFFECTIVENESS): This Ordinance shall become effective on June 25, 2024 for a period of 45 days, unless extended by the City Council.
PASSED AND ADOPTED this _____ day of ____________, 2024 by the following roll call vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
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APPROVED:
Susan M. Landry, Mayor
ATTEST:
Andrea Sanders, City Clerk
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Attachment: SB 4 - Interim Ordinance (Interim Ordinances (SB 4 and SB 684)) SB 684 - Streamlined App. Processes
(Gov. Code 65852.28, 65913.4.5, & 66499.41)
SB 684 (2023) entitled, “Streamlined Approval Processes: Development projects of 10 or fewer residential units on urban lots under 5 acres”, will require the City to ministerially consider (without a public hearing) applications for projects that meet the following criteria:
• Property Requirements:
o The lot is not larger than 5 acres;
o The lot is zoned for multifamily residential development; o The lot is substantially surrounded by qualified urban uses; o The lot has not exercised the Ellis Act in the past 15-years; and o The lot is not in a flood zone, fire hazard area, earthquake zone, etc.
• Project Requirements:
o Results in ≤ 10 lots
o Results in ≤ 10 units
o Does not demolish or alter any of the following housing types:
▪ Units restricted to low, very-low, extremely low-income levels; ▪ Units subject to any form of local rent or price control; or ▪ Units occupied by tenants within the past 5 years.
• Density Requirements:
o May result in ≤ 30 units/acre; and
o Based on Designation as a Housing Opportunity Site:
▪ If designated: The project will result in at least as many total units and as many low- and very low-income units as projected by the Housing Element for the parcel.
▪ If not designated: The project will result in at least as many units as the maximum allowable density for the parcel.
• Development Standard Requirements:
o Meets all applicable objective standards that do not:
o Prohibit the creation of lots that are 600 sq. ft. or larger. o Impose floor area ratio standards less than any of the following:
▪ 3-7 units: 1.0 FAR
▪ 8 to 10 units: 1.25 FAR
o Impose minimum parking requirements that exceed the following:
▪ 1 space per unit; or
▪ 0 spaces per unit (when located within ½ mile of major transit stop or high-quality transit corridor, or within one block of a car share vehicle) o Impose setbacks inconsistent with the following:
▪ Side or rear setbacks >4 feet from the original lot line(s) ▪ Any setback between buildings except as required in the California Building Code
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Attachment: SB 684 Summary (Interim Ordinances (SB 4 and SB 684)) SB 4 - Housing on Faith & Higher Ed. Lands Act
(Gov. Code section 65913.16)
SB 4 (2023), entitled the “Housing on Faith and Higher Education Lands Act” will require the City to ministerially consider (without a public hearing) applications for projects that meet the following criteria:
• Property Requirements:
o Located on land owned on or before January 1, 2024, by a “qualifying” faith - based or higher educational institution.
• Project Requirements:
o 100% affordable (Up to 20% moderate with the remainder reserved for lower income; excepting manager unit)
• Density Requirements:
o If located in a zone that allows residential uses:
▪ The greater of the density allowed by the land use designation or 30 units/acre.
o If located in a zone that does not allow residential uses:
▪ The greater of the density allowed on an adjoining parcel or 40 units/acre.
• Development Standard Requirements:
▪ Building Height: The greater of one-story above the maximum building height allowed on the parcel or the maximum building height allowed on an adjoining parcel.
• Use Requirements:
o Proposes residential uses; and/or
o Ancillary uses on the ground floor of the following zones:
• Single-Family Zones: Childcare centers and facilities operated by community-based organizations.
• Other Zones: Commercial uses permitted without a Conditional Use Permit
• Additional Requirements:
o Housing Crisis Act unit replacement requirements apply o Location restrictions near industrial uses
o Site must meet SB 35 requirements
o Must pay prevailing wage
o Must satisfy parking requirements at outlined in the bill o Streamlining (shortened review process for determination of consistency and design review)
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Attachment: SB 4 Summary (Interim Ordinances (SB 4 and SB 684)) Campbell Planning Commission Meeting Minutes – May 14, 2024 Page 5 of 7
Commissioners were in favor of change Planning Commission meeting start time.
SARC will start at 6:30 pm if short items, but if there are additional items then it will start at 6:00 pm to accommodate items.
Motion: Upon motion by Commissioner Krey, seconded by Commissioner Kamkar, the Planning Commission motioned to approve Reso. No 4707 determining that the Planning Commission of the City of Campbell adjust the meeting time from 7:30pm to 7:00pm for regularly scheduled meetings, by the following roll call:
AYES: Krey, Buchbinder, Kamkar, Zisser, Majewski
NOES: None
ABSENT: Fields, Ostrowski
ABSTAIN: None
STUDY SESSION
6. Housing Legislation Update
Study Session to discuss key legislation and case law pertaining to the development of housing projects.
Recommended Action : That the Planning Commission receive the report and seek clarification from staff as necessary.
Senior Planner Stephen Rose presented a Study Session which served to provide an overview of recently adopted state legislation and published court decisions that affect how the City plans for and regulates new housing development proposals.
Senior Planner Stephen Rose presented recent cases affecting state density bonus law, including Schreiber v. City of Los Angeles which established that density bonus applicants are not required to demonstrate that “concessions or incentives” will lead to actual cost reductions, and Bankers Hill 150 v. City of San Diego which established that density bonus projects are entitled to waive development standards, even objective standards, that would prevent a project from being built “as designed”. The discussion on the use of concessions and waivers was supported by a series of case study examples.
Senior Planner Stephen Rose then presented an overview of SB 684 (2023) which requires the City to ministerially consider (without a public hearing) applications for projects that result in 10 or fewer residential units and lots on properties zoned for multi -family development when meeting specified requirements.
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Attachment: May 14, 2024 - Planning Commission Meeting Minutes (Interim Ordinances (SB 4 and SB 684)) Campbell Planning Commission Meeting Minutes – May 14, 2024 Page 6 of 7
Senior Planner Stephen Rose then presented an overview of SB 4 (2023) which requires the City to ministerially consider (without a public hearing) applications for projects on land owned by qualifying faith -based or higher educational institutions when meeting specified requirements.
Senior Planner Stephen Rose concluded the presentation indicating that because SB 684 (2023) and SB 4 (2023) go into effect on July 1, 2024, staff intends to return with an Interim (“Urgency”) Ordinance for adoption by the City Council in June, until such time more permanent standards can be considered as part of a more comprehensive update to the City’s adopted Multi-Family Development and Design Standards.
Director Eastwood clarified for the commission that if a Developer comes in and in says that they have a design and the City’s standards do not conform to it , then they can request all kinds of waivers so that City’s standards conform to applicant’s design. They will be able to use as many waivers as they want.
Chair Zisser briefly closed public hearing for a short r ecess. Chair Zisser opened public hearing.
REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR
Director Eastwood informed the Commissioners that there is an opportunity to attend the California Chapter APA Conference in Riverside on September 28, 2024.
Commissioners who attended the Planning Commissioners Academy were reminded to submit receipts for their expenses due to their attendance.
Senior Planner Rose is assisting with a State Award application There will be a training on the State’s Levine Act related to financial disclosures and form 700.
The Building Division has hired a Plan Check Examiner
The Housing Division is going through its final steps of hiring an Unhoused Specialist The Robson Homes Project was approved.
The Cresleigh project is also moving forward.
ADJOURNMENT
Adjourned meeting at 9:23 p.m. to the next Regular Planning Commission Meeting on Tuesday, May 14, 2024, in the City Hall Council Chambers, 70 North First Street, Campbell, California and via telecommunication.
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Attachment: May 14, 2024 - Planning Commission Meeting Minutes (Interim Ordinances (SB 4 and SB 684)) City
Council
Report
TITLE: Approval of Special Event Permit for the Historic Downtown Campbell Car Show and Permit Fee Waiver (Resolution/Roll Call to Vote)
RECOMMENDED ACTION
That the City Council (1) adopt a resolution approving a Downtown Special Event Permit for the Downtown Campbell Business Association (DCBA)’s Historic Downtown Campbell Car Show; and (2) adopt a resolution granting a waiver of City permit fees related to the Historic Downtown Campbell Car Show.
BACKGROUND
Downtown Special Event Permit
In March 2024, the Downtown Campbell Business Association (DCBA), a non -profit organization, submitted an application for a Downtown Special Event Permit to hold its second annual “Historic Downtown Campbell Car Show” (Car Show) on Saturday, June 29, 2024.
DCBA’s Car Show is being promoted as a family friendly event free to all members of the public, offering live music, a raffle with prizes, event T -shirts for sale, and a total of 275 classic cars competing for trophies in seven prize categories, including “Best In Show.” Each person wanting to display their vehicle and participate in the car show competition must pay a fee of $65.00 per vehicle. The event is estimated to bring approximately 3,500 people to the Downtown Campbell area and increase patronage of its local businesses. It will also be one of DCBA’s fund-raising events this year.
To facilitate their event, DCBA is requesting the City of Campbell (City) close E. Campbell Avenue, between Railway Avenue and Third Street, as more fully laid out in DCBA’s application and map (Attachments C & D). DCBA is also requesting the use of three public parking lots as additional staging areas for vehicles: one at the northwest corner of Orchard City Drive and S. First Street (45 S. First Street Parking); one behind the Water Tower Kitchen (36 S. First Street Parking) ; and one adjacent to Blue Line Pizza (415 E. Campbell Avenue Parking ). The closure of these locations would begin at 10:00 p.m. on Friday, June 28, and end by 4:00 p.m. on Saturday June
29. Item: 14
Category: NEW BUSINESS
Meeting Date: June 18, 2024
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Historic Downtown Campbell Car Show Page 2 of 5
The DCBA has also requested that its member businesses who currently hold licenses from the California Department of Alcoholic Beverage Control (ABC) be permitted to sell off-site beer and wine for the event, with proceeds from any sales remaining with the individual business.
Permit Fee Waiver
The cost that would be charged to the DCBA for a Downtown Special Event Permit would be equal to the City’s cost of closing the above locations and allowing the DCBA to hold its event in Downtown Campbell. This cost is estimated at $11,897 and includes Downtown Special Event Permit application processing fees, the cost for Public Works and Police Department personnel to prepare the public right of way for the event, and, because public streets will be closed for the event and alcoholic beverages will be sold for off -site consumption, the cost for Police Department sworn personnel to staff the event.
The DCBA is requesting the City grant a waiver of 50% of these costs; or, that the City charge the DCBA no more than $5,000 for the permit, whichever is less.
DISCUSSION
Following the DCBA’s submission of its application, the Police Department met with the DCBA to discuss the proposed event footprint and security measures needed. The City Manager’s office also had discussions with DCBA regarding its request for relief from the City’s permit fees to cover the cost of holding the event in Downtown Campbell.
Downtown Special Event Permit
In accordance with the City’s Downtown Special Event Policy, all events that require downtown street closures, have a significant impact on public facilities, or require a significant amount of City staff support are considered “Special Events.” Special Events, in turn, require a Downtown Special Event Permit from the City. More specifically, the Downtown Special Event Policy (Permit Policy) provides, in relevant part:
“It is the intent of the City to allow a limited number of outdoor public events for the general economic benefit of the City's business community, cultural enrichment and/or promotion of the City. This policy provides a process for permitting special civic, cultural, and fundraising events using public property including streets, sidewalks, City owned property or other public rights-of-way.” In addition, general guidelines noted in the Permit Policy provide:
• The event must contribute to the economic enhancement, cultural enrichment and/or promotion of the City.
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Historic Downtown Campbell Car Show Page 3 of 5
• The event must not severely disrupt normal business and residential traffic patterns.
• The proposed site must be suitable for the event, with consideration given to adequate space, traffic flow, parking, electricity, health and safety requirements, and impact on the site.
• The Organizer must pay for all City services as required by City Council Policy. • The alcohol sales will be by permit only.
The DCBA’s Car Show took place last year in Downtown Campbell and according to the DCBA, the event was family -oriented, well attended, and drew business to the downtown. The event included over a hundred and fifty classic cars on display and competing for awards, and live music was offered for the enjoyment of all attending.
Overall, the Car Show provided cultural enrichment, promoted the City, and enhanced the City’s economy. The DCBA is proposing that this year’s event will have the same impact this year.
Additionally, through its work with City staff, the DCBA has been able to ensure that the event is held in a suitable location; does not severely disrupt normal business or residential traffic; operates in a manner that avoids health and safety hazards; and includes sufficient Police Department sworn personnel to provide proper traffic control, and security, and to ensure the orderly conduct of organizers and visitors alike. For these reasons, staff recommends the City Council approve the DCBA’s request for a Downtown Special Event Permit to hold its Car Show in the public right of way in Downtown Campbell on Saturday, June 29, 2024.
Permit Fee Waiver
The City’s Downtown Special Event Fee Waiver Policy (Fee Waiver Policy) allows the City Council to waive 25% of the permit application processing fees and 25% of staffing fees related to the issuance of a Downtown Special Event Permit if the organizer of the event:
• Provides an itemized financial statement showing direct costs for event expenses and revenue for which the fee waiver is requested, and a profit or loss sheet for the previous operating year, comparing the projected budget with the actual budget showing the net profit or loss;
• Has a proposed budget on file, which projects a break -even or profitable event, when calculated using the fee waiver requested;
• Provides documentation that the event will generate less than $100,000 in net revenue (based on financial statements from the prior year’s event); and • Has no outstanding debts payable to the City of Campbell...
In May and June of 2024, the DCBA shared the following with City staff:
• Profit and loss information for the previous year’s event. 14 Packet Pg. 248
Historic Downtown Campbell Car Show Page 4 of 5
• Information supporting projected costs for event expenses and event revenue for which the fee waiver is being requested.
• Information supporting a projected break -even or profitable event, when calculated using the fee waiver requested.
• Information supporting that the event will generate less than $100,000 in net revenue; and
• Information confirming the DCBA had no outstanding debts with the City of Campbell.
Based on the information the DCBA shared, the DCBA has met all the requirements to support a waiver of 25% of the fees associated with the City ’s issuance of a Downtown Special Event Permit. As the total City cost for this year’s event is estimated at $11,897, a standard fee waiver of 25% would result in a discount to the DCBA of $2,974.25, leaving a balance owed to the City of $8,922.75. A waiver of 50% of the permit fees would mean a discount to the DCBA of an estimated $5,948.50. A waiver providing that the DCBA would cover no more than $5,000 of the City’s total cost would mean a discount to the DCBA of an estimated $6,897 in fees.
In line with the City’s Fee Waiver Policy, staff recommends that the City Council approve a 25% waiver of fees related to the Car Show; making the DCBA responsible for covering approximately $8,992.75 of the cost that will be incurred by the City.
The City’s Fee Waiver Policy does not contemplate a waiver in excess of 25% of the cost, nor does it contemplate a “no more than” cap on fees due to the City. Therefore, the City Council would need to take action outside of its own Fee Waiver Policy to approve either of these approaches.
FISCAL IMPACT
The total City cost for this year’s upcoming Car Show event is estimated at $11,897. A standard fee waiver of 25% would result in a loss to the City of an estimated $2,974.25 in fees. A fee waiver of 50% would result in a loss to the City of an estimated $5,948.50 in fees. A fee waiver with a not to exceed amount of $5,000 would result in a loss to the City of an estimated $6,897 in fees.
ALTERNATIVES
1. Do not approve the request for a Downtown Special Event Permit.
2. Do not approve the fee waiver requested by the DCBA.
3. Provide other direction to staff.
Prepared by:
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Angelique Gaeta, Assistant City Manager
Historic Downtown Campbell Car Show Page 5 of 5
Approved by:
Brian Loventhal, City Manager
Attachment:
a. Resolution DCBA Car Show Downtown Special Event Permit b. Resolution DCBA Car Show Fee Waiver
c. 2024 Car Show Application
d. 2024 Car Show Map
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RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAMPBELL
AUTHORIZING THE ISSUANCE OF A DOWNTOWN SPECIAL EVENT
PERMIT TO THE DOWNTOWN CAMPBELL BUSINESS ASSOCIATION FOR
THE HISTORIC DOWNTOWN CAMPBELL CAR SHOW
WHEREAS, in March 2024, the Downtown Campbell Business Association (DCBA) applied to the City of Campbell (City) for a Downtown Special Event Permit (Permit) that would allow the DCBA to hold its Historic Downtown Campbell Car Show (Car Show) in Downtown Campbell on June 29, 2024; and
WHEREAS, the City’s Downtown Special Event Policy (Permit Policy) provides general guidelines, as follows:
• The event must contribute to the economic enhancement, cultural enrichment and/or promotion of the City.
• The event must not severely disrupt normal business and residential traffic patterns.
• The proposed site must be suitable for the event, with consideration given to adequate space, traffic flow, parking, electricity, health and safety requirements, and impact on the site.
• The Organizer must pay for all City services as required by City Council Policy.
• The alcohol sales will be by permit only; and
WHEREAS, the Car Show took place in Downtown Campbell last year with over 150 classic cars on display and competing for awards and live music being offered for all to enjoy; and
WHEREAS, the Car Show provided cultural enrichment; promoted the City; and enhanced the City’s economy; and
WHEREAS, through its work with City staff, the DCBA has been able to ensure that this year’s event will be held in a suitable location; will not severely disrupt normal business or residential traffic; will operate in a manner that avoids health and safety hazards; and will include sufficient Police Department personnel to provide proper traffic control, and security, and to ensure the orderly conduct of organizers and visitors alike; and
WHEREAS, the City Council has determined that based on the information the DCBA provided, the Car Show meets all the requirements to support the issuance of a Downtown Special Event Permit;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Campbell does hereby authorize the issuance of a Downtown Special Event Permit for the DCBA’s Historic Downtown Campbell Car Show on June 29, 2024, subject to all applicable City policies and procedures and any additional conditions set forth by the City related to the event.
PASSED AND ADOPTED this 18th day of June, 2024 by the following roll call
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Attachment: Resolution DCBA Car Show Downtown Special Event Permit (Historic Downtown Campbell Car Show) vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
APPROVED:
________________________
Susan M. Landry, Mayor
ATTEST:
_______________________
Andrea Sanders, City Clerk
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Attachment: Resolution DCBA Car Show Downtown Special Event Permit (Historic Downtown Campbell Car Show) RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAMPBELL
GRANTING A WAIVER OF CITY FEES RELATED TO THE DOWNTOWN
CAMPBELL BUSINESS ASSOCIATION’S
HISTORIC DOWNTOWN CAMPBELL CAR SHOW
WHEREAS, on June 18 , 2024, the City Council approved the Downtown Campbell Business Association (DCBA)’s application for a Downtown Spe cial Event Permit (Permit) that would allow the DCBA to hold its Historic Downtown Campbell Car Show (Car Show) in the public right of way in Downtown Campbell on Saturday June 29, 2024; and
WHEREAS, the City’s cost of allowing the DCBA to hold its event in the public right of way in Downtown Campbell is estimated at approximately $11,897; and
WHEREAS, the City’s cost includes Downtown Special Event Permit application processing fees; the cost for Public Works personnel to prepare the public right of way for the event; and, because public streets will be closed for the event and alcoholic beverages will be sold for off -site consumption , the cost for Police Department sworn personnel to staff the event; and
WHEREAS, the DCBA requested the City grant a waiver of 50% of these fees or charge the DCBA only $5,000 in fees; and
WHEREAS, the City’s Downtown Special Event Fee Waiver Policy allows the City Council to waive 25% of the permit application processing fees and 25% of staffing fees related to the issuance of a Downtown Special Event Permit; and
WHEREAS, based on the information the DCBA submitted to the City, the DCBA has met all the requirements to support a waiver of 25% of the related fees; and
WHEREAS, t he City’s Fee Waiver Policy does not contemplate a waiver in excess of 25% of the cost to the City to allow for an event to be held in Downtown Campbell;
NOW, THEREFORE, BE IT RESOLVED that in line with the City’s Downtown Special Event Permit Fee Waiver Policy, the City Council of the City of Campbell does hereby grant to the DCBA a 25% waiver of fees related to its Historic Downtown Campbell Car Show ; making the DCBA responsible for covering approximately $8,922.75 in costs incurred by the City.
PASSED AND ADOPTED this 18th day of June, 2024 by the following roll call vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
APPROVED:
________________________
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Attachment: Resolution DCBA Car Show Fee Waiver (Historic Downtown Campbell Car Show) Susan M. Landry, Mayor
ATTEST:
_______________________
Andrea Sanders, City Clerk
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Attachment: Resolution DCBA Car Show Fee Waiver (Historic Downtown Campbell Car Show)
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Attachment: 2024 Car Show Application (Historic Downtown Campbell Car Show)
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Attachment: 2024 Car Show Application (Historic Downtown Campbell Car Show)
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Attachment: 2024 Car Show Application (Historic Downtown Campbell Car Show)
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Attachment: 2024 Car Show Map (Historic Downtown Campbell Car Show) City
Council
Report
TITLE: Update on the Below -Market Rate Housing Program Activities Over the Past Year and Consider the Adoption of a Resolution Dispensing with the Bidding Procedures, Approving a Consultant Services Agreement with HouseKeys, Inc and Authorizing the City Manager Execute the Agreement(Resolution/Roll Call Vote)
RECOMMENDED ACTION
It is recommended that the City Council adopt a Resolution dispensing with the bidding procedures specified in CMC Section 3.20.050, approving a one -year Consultant Services Agreement (expiring June 30, 2025) with HouseKeys, Inc., to serve as the City’s Below -Market Rate Program Administrator and authorizing the City Manager to execute the agreement.
BACKGROUND
In June 2016, the City of Campbell hired HouseKeys, Inc. to serve as the City’s Below Market Rate (BMR) Housing Program Administrator. The contract has been renewed annually since that time and the current contract terminates on June 30, 2024.
DISCUSSION
The purpose of this meeting is to provide an update on the Below -Market Rate (BMR) housing program activities over the past year, consider the renewal of Housekeys, Inc. contract including a decrease in the flat rate program administration fee (15% decrease; $205,000 to $175,000).
BELOW-MARKET RATE HOUSING PROGRAM UPDATE
The City’s Below -Market Rate (BMR) housing program oversees and manages housing units and loans that must be made affordable under various programs, including Campbell’s Inclusionary Housing Ordinance and State Density Bonus Law.
The program facilitates tenant placement, provides education on requirements, and ensures compliance with affordable housing regulations by owners, tenants, and developers.
For the BMR ownership and rental program, HouseKeys, Inc. continues to provide support for applicant service requests, conduct introductory homebuyer education/training workshops and orientation classes (conducted online), prepare income qualifications, coordinate complete and accurate document transmittals, prepare Item: 15
Category: NEW BUSINESS
Meeting Date: June 18, 2024
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BMR Housing Program Update and HouseKeys Consultant Services Agreement Page 2 of 7 and record agreements and other legal documents, and prepare and ensure timely delivery of all necessary escrow documents.
In support of the BMR program, HouseKeys, Inc. also continues to conduct annual BMR compliance monitoring, maintain a list of eligible and qualified BMR homebuyers, maintain a list of approved loan officers and lending operations, act as transaction coordinator for all real estate transactions, and provide annual updates to the County on the resale value of all BMR homes.
HouseKeys also investigates potential BMR compliance issues and processes enforcement procedures in accordance with the most recently approved guidelines and Council direction. Given that the last set of BMR Guidelines was approved in 2018 (Attachment D – BMR Guidelines; established by Resolution No. 12375), HouseKeys will work with staff to provide an update in the 2024-2025 Fiscal Year.
BMR Rental Program : The BMR rental program currently includes 51 rental units 1 spread across five (5) apartment developments: Alvin’s Corner (Hamilton Ave.), Merrill Gardens (Winchester Blvd.), Revere (Bascom Ave.), St. Anton (Railway Ave.), and Winchester Station (Winchester Blvd.).
The total number of rental program applicants for the last year more than doubled compared with FY 2023 (403 Applicants for 5 vacancies vs. 996 for 8 vacancies). Using expanded applicant communication and more streamlined processes, the 4 -person multi-family rental team, established in Summer 2022, was able to fill opportunities at a faster rate.
Rental Opportunity Drawings : In FYE 2024, HouseKeys facilitated eight opportunity drawings (lotteries) for the rental program which are summarized below:
# Index Project Name Unit Type # Of Applications
1 400 Residence at
Railways
Very Low – 1 Bedroom 175
2 397 Alvin’s Corners Low – Studio 161
3 453 Merrill Gardens Very Low – 2 Bedroom 44
4 507 Merrill Gardens Very Low – 1 Bedroom 21
5 502 Winchester Station Very Low – 2 Bedroom 402
6 548 Merrill Gardens Very Low – Studio 29
7 430 Merrill Gardens Very Low – 1 Bedroom 22
8 541 Revere Very Low – 2 Bedroom 142
Total Applications 996
No rental units were added or removed from the program in the past year.
1 Campbell is also home to a number of affordable rental developments that do not have oversight by the City or the BMR Administrator (Avalon, Corinthian, El Parador, San Tomas Gardens, Rincon Gardens, Sharmon Palms, Wesley Manor), although HouseKeys does collect data on some of these programs (e.g., Avalon, San Tomas Gardens and Sharmon Palms). 15 Packet Pg. 260
BMR Housing Program Update and HouseKeys Consultant Services Agreement Page 3 of 7 Rental Program Summary:
➢ 8 vacancies that drew in 996 applications.
➢ Current/Certification in process – 51 units
➢ One (1) active enforcement case
BMR Homeowner Program : The BMR ownership program currently includes 86 units spread across 17 developments, including: Oak Tree Circle (added in 2023), Orchard Grove, Grant Street, Ainsley Place, Campbell Manor, Heritage Place, Park Town Place, Sonata Place, George Court, Hamilton Square, North Second Street, Maravilla, Penny Lane, Palomar, Cottage Place, Madison, and Town 38. Units included in the homeowner program either have resale restrictions 2, City financing (loans), or a combination of resale restrictions and City financing. All units are annually certified by HouseKeys including six (6) that are managed by Habitat for Humanity. While no ownership units were added to the program in the past year, one unit was removed having fulfilled its loan obligation.
Ownership Opportunity Drawings : In FYE 2024, HouseKeys facilitated two drawings (lotteries) for the homeowner program which are summarized below:
# Index Project Name Unit Type # Of Applications
1 344 Oak Tree Circle (New) Very Low – 4 Bedroom 153
2 369 Oak Tree Circle (New) Very Low – 4 Bedroom 119
Total Applications 272
Service Requests: In FYE 2024, HouseKeys received seven (7) service requests from residents seeking general assistance, questions about remodeling procedures, refinancing and the resale of units within the program.
General Remodel Refinance Resale Total
Ticket Count 2 1 1 3 7
Homeowner Program Summary:
➢ Oak Tree Circle brought 2 new units into the program (272 Applicants). ➢ Moved Annual Certifications Online for the first time. Recertifications to be completed by August 2024.
Loan Program: HouseKeys also manages the City’s affordable housing revolving loan program which once served to support eligible low -income housing residents (i.e. downpayment assistance) and to buy -down the affordability and construction costs of new housing units to make the units available to lower-income households.
Management of the loan program includes processing and underwriting refinance requests, calculating all pay -off demands, preparing, and processing all loan 2 Resale restrictions include term limits (i.e., 25, 30, 35, or 45-year term limits) and affordability limits (i.e. low, moderate). 15 Packet Pg. 261
BMR Housing Program Update and HouseKeys Consultant Services Agreement Page 4 of 7 documents, issuing required disclosures and tax forms, and collecting pay -off of first - time homebuyer loans issued by the City when loans were actively being provided to Campbell residents. The loan program also includes coordination with the City Finance Department to complete reports to the State for funds awarded to the City (e.g., BEGIN funds).
In 2024, the City of Campbell had $7.7 million in outstanding loans consisting of $3.5 million invested into the Maravilla development, $2.3 million in BEGIN loans, $1.4 million in the rehabilitation loans, and $532,000 in first time home buyer loans. From these loans (as well as cash holdings) the City received approximately $30,000 in annual interest payments and excess sales proceeds in addition to a loan payoff in the amount of $400,000. All loans in the portfolio are considered ‘current’ since there ar e no performing notes (notes with monthly amortizing payments made by the borrower).
Principal and interest are generally due at time of sale or default and are not paid on a monthly or annual basis.
Compliance Program : HouseKeys continues monitoring, compliance management, and enforcement activities under the 2018 Council -Approved Guidelines (reference Attachment D – BMR Guidelines; established by CC Resolution 12375) for renters and homeowners residing in the Below Market Rate units.
Rental Program Compliance : The rental team attempted to move all compliance online and work directly with tenants. However, the rental team found that the characteristics of residents in the City’s Affordable Rental Program (e.g., computer access, internet usage) led to difficulty, and property management company staff were not able to provide meaningful assistance to tenants. To complete the 2024 certifications, the rental team has utilized the support of the property management staff directly, to distribute tenant notifications and collect tenant files. The HouseKeys tech nical team has set up each property management team with only portal access to upload on the tenant’s behalf. This effort began in April 2024 and an update will be provided to staff in the quarterly report ending September 30, 2024.
Homeownership Program Compliance : In 2023, HouseKeys implemented a change to allow homeowners to upload compliance forms online, which led to a very quick response from several homeowners, though some were incomplete. The homeownership team continues to work through multiple cycles of mailers to bring remaining units into compliance and will update staff on progress in the quarterly report ending September 30, 2024.
FINDINGS TO CONTINUE CONTRACT SERVICES WITH HOUSEKEYS
The purchasing procedures outlined in the City’s Municipal Code (CMC) Section
3.20.050 state that purchases and contract for ‘supplies, services, and equipment of estimated fair market value greater than fifty thousand dollars’ shall be made according to specified bidding procedures. CMC Section 3.20.030 provides that the bidding procedures may be dispensed with when any one of eight potential circumstances are found to exist. In consideration of the subject proposal, the Council may find the 15 Packet Pg. 262
BMR Housing Program Update and HouseKeys Consultant Services Agreement Page 5 of 7 following circumstances in bold to apply to two of the required findings (staff comments in italics):
(1)The city seeks the special services, consultation or advice in financial, economic, accounting, engineering, legal, administrative or other matters from persons specially trained, experienced and competent to perform the special services required;
As the City’s current and long -term BMR Housing Program Administrator, HouseKeys has unique background and knowledge of City’s BMR Housing Program, policy documents, agreements, and cases under active management. This experience makes them uniquely experienced and suited to perform the special services required.
(5)The City Council, by a majority vote, determines that it is in the best interest of the public to dispense with the requirements of Section
3.20.050, in which case the City Council shall prescribe the appropriate method of purchase.
In consideration of the unique background and knowledge HouseKeys has developed over the past eight years administering the City’s BMR Program, and necessity to execute a contract in a timely manner to avoid a disruption in services, it may be found to be in the best interest of the public to dispense with the requirements of Section 3.20.050 and enter sole-source negotiation of services with HouseKeys.
As only one of eight potential circumstances need to apply to dispense with the bidding procedures, where two have been identified, the Council may dispense with the formal bidding procedures.
SERVICE AGREEMENT AMENDMENTS
As part of the 2024 service agreement, two amendments have been proposed.
The first amendment removes the provision in the agreement that the Consultant may retain outside legal counsel to assist with legal matters. Instead, any litigation related to the BMR program will be assumed in house by the City Attorney’s Office.
The second amendment is related to the first and reflects a decrease in the program administration fee from $205,000 to $175,000 (15% decrease). This decrease is in relation to HouseKeys no longer retaining outside legal counsel to assist with legal matters on behalf of the City.
FISCAL IMPACT
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BMR Housing Program Update and HouseKeys Consultant Services Agreement Page 6 of 7 The $175,000 Program Administration Fee included in the Proposed Scope of Services and Fee Schedule would be paid out of the Housing Assistance fund 3 created after the dissolution of the City’s Redevelopment Agency. $175,000 is also shown in the Proposed FY 24/25 Budget under the Housing Assistance fund. The fund has adequate reserves to cover the cost of the contract and earns approximately $80,000 a year from interest on loan payments and cash holdings as well from surplus payments/excess sale proceeds.
HouseKeys Transaction Fees
HouseKeys also collects transaction fees which are paid for by developers and program participants– at no cost to the City. Accounting for all fees collected in FYE 2024 and the proposed flat rate fee for FY24/25, the total value of the contract is approximately $185,223 as summarized in the table below.
Description Fee Billed To Collected
Program Administration Fee $175,000 City $175,000
Loan Processing Transaction Fee $1,250 per
transaction
Owner/Lender $0
New BMR Sales Transaction Fee 3% of sales price Buyer (via Sales Price) $10,223 BMR Resale 6% of new sales price Buyer (via Sales Price) $0 Acquisition Rehab Ownership Fee 5% of price for each Homeowner (via Sales Price)
$0
Refinance Fee $500 per Transaction Homeowner $0
Rental Unit Process (New Units) $1,500 per Unit Developer $0 Annual Compliance Per Unit $500 per Unit Developer $0
Project-Level Review No Fee No Fee $0
Tenant-Level Review No Fee up to 10% No Fee $0
Projects Outside Scope $250.00 City $0
Gross Total
(including City share of loan processing fees)
$185,223
(Less) City Share of Loan
Processing Transaction Fee
$0
Net Proceeds to HouseKeys $185,223
While program expenditures will be satisfied by existing funding sources for several more years, the program will eventually require the use of new revenue sources , as previously discussed in the February 20, 2024 Council Study Session.
ALTERNATIVES
3 Created following the dissolution of the redevelopment agency, Fund 233 is a successor agency fund which has restrictions on its use.
Generally, the fund may be used for monitoring and preserving affordability covenants, administrative costs, homeless prevention, and development of affordable housing. The services offered by HouseKeys is consistent with the fund restrictions. 15 Packet Pg. 264
BMR Housing Program Update and HouseKeys Consultant Services Agreement Page 7 of 7
1. Request a modified BMR Administrator Service Agreement (e.g., scope of work, budget, duration) to be returned to the City Council. If this alternative is pursued, a temporary interruption in services will occur as the contract is set to expire on June 30, 2024 – prior to the next City Council meeting (July 16, 2024).
2. Do not renew the BMR Administrator contract and consider alternatives to how the City manages Campbell’s housing programs, such as hiring in -house staff, a different consultant, or developing partnerships with other agencies.
3. Do not dispense with the bidding procedures, directing staff to return to Council with a Draft Request for Proposals for BMR Administration Services.
Prepared by:
Eloiza Murillo-Garcia, Housing Program
Manager
Reviewed by:
Rob Eastwood, Community
Development Director
Approved by:
Brian Loventhal, City Manager
Attachment:
a. Draft Resolution
b. Proposed Consultant Service Agreement (FY24-25)
c. Proposed Consultant Services Agreement (FY24-25) (redlines) d. BMR Guidelines; established by CC Res. 12375
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RESOLUTION NO. ______________
BEING A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CAMPBELL DISPENSING WITH THE BIDDING PROCEDURES AND
AUTHORIZING THE CITY MANAGER TO EXECUTE THE BELOW
MARKET RATE HOUSING PROGRAM ADMINISTRATOR
PROFESSIONAL SERVICES AGREEMENT WITH HOUSEKEYS, INC.
WHEREAS, in June of 2016, the City Council selected HouseKeys to serve as the City’s Below Market Rate (BMR) Housing Program Administrator and authorized the City Manager to execute a professional services agreement; and WHEREAS, the professional services agreement with HouseKeys has been annually renewed since that time; and
WHEREAS, on June 20, 2023, the Council authorized the City Manager to execute a one-year contract with HouseKeys , Inc. to administer the City’s Below Market Rate Program; and
WHEREAS, the current one-year contract is set to expire on June 30, 2024; and WHEREAS, the cost of the Program is partially subsidized through the Administrator’s collection of transaction fees charged to program participants (e.g., developers, applicants, homeowners, rental tenants, and lenders); and WHEREAS, the City Council held a public meeting and a pproved the scope of work and proposed fee schedule as set forth as Attachment B to the City Council Staff Report dated June 18, 2024; and
WHEREAS, the purchasing procedures outlined in the City’s Municipal Code (CMC) Section 3.20.050 state that purchases and contract for ‘supplies, services, and equipment of estimated fair market value greater than fifty thousand dollars’ shall be made according to specified bidding procedures; and
WHEREAS, the flat rate administration fee for services to be provided by HouseKeys are $175,000 and HouseKeys also collects transition fees which are paid for by program participants; and
WHEREAS, CMC Section 3.20.030 provides that the bidding procedures may be dispensed with when any one of eight potential circumstances are found to exist; and WHEREAS, the City Council has found the following two circumstances from CMC
3.20.030 to exist, thereby warranting the bidding procedures to be dispensed with:
• The city seeks the special services, consultation or advice in financial, economic, accounting, engineering, legal, administrative or other matters from persons specially trained, experienced and competent to perform the special services required;
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• The City Council, by a majority vote, determines that it is in the best interest of the public to dispense with the requirements of Section 3.20.050, in which case the City Council shall prescribe the appropriate method of purchase.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Campbell hereby dispenses with the bidding procedures specified in CMC Section 3.20.050 and authorizes the City Manager to execute a 12 month (expiring June 30, 20 25) Professional Service Agreement with HouseKeys, Inc . in substantially the form and content set forth as Attachment B to the City Council Staff Report dated June 18, 2024.
PASSED AND ADOPTED this ___ day of _______, 2024, by the following roll call vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
APPROVED:_________________________
Susan M. Landry, Mayor
ATTEST:
Andrea Sanders, City Clerk
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CITY OF CAMPBELL
CONSULTANT SERVICES AGREEMENT
This Agreement is entered into at Campbell, California on the 30 th day of June, 2024, by and between the CITY OF CAMPBELL (hereinafter referred to as "City") and HouseKeys Inc., a California Corporation (hereinafter referred to as "Consultant").
WHEREAS, City desires to obtain consulting services for the purpose of Below Market Rate Housing Program Administration; and
WHEREAS, Consultant represents that it has the expertise, means, and ability to perform said Below Market Rate Housing Program Administration.
NOW, THEREFORE, in consideration of each other's mutual promises, Consultant and City agree as follows:
1. DUTIES OF CONSULTANT
1.1 Consultant agrees to perform services as set forth in Exhibit A - Scope of Services, attached hereto and incorporated herein by reference, and which shall be interpreted together and in harmony with this Agreement. In the event of any conflict between Exhibit A and this Agreement, this Agreement shall govern, control, and take precedence.
1.2 Consultant’s project manager will meet with the City’s project coordinator prior to commencement of the project to establish a clear understanding of the working relationships, authorities, and management philosophy of City as it relates to this Agreement.
1.3 Consultant, working with the City, will gather available existing information concerning the project, and shall review documents as necessary for compliance with the project’s objectives.
1.4 In performance of this Agreement by Consulta nt, time will be of the essence.
1.5 Notwithstanding Section 1.4, Consultant shall not be responsible for delay caused by activities or factors beyond Consultant’s reasonable control, including delays or by reason of strikes, work slow-downs or stoppages, or force majeure.
1.6 Consultant agrees to perform this Agreement in accordance with the highest degree of skill and expertise exercised by members of Consultant’s profession working on similar projects under similar circumstances.
1.7 Consultant shall cooperate in good faith with City in all aspects of the performance of this Agreement.
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1.8 In the course of the performance of this Agreement, Consultant shall act in the City’s best interest as it relates to the project.
1.9 The designated project manager for Consultant shall be Julius Nyanda . The Consultant’s project manager shall have all the necessary authority to direct technical and professional work within the scope of the Agreement and shall serve as the principal point of contact with the City and the City’s project coordinator. The authorized principal of Consultant executing this Agreement for the Consultant shall have authority to make decisions regarding changes in services, termination and other matters related to the performance of this agreement on behalf of Consultant.
1.10 The Consultant (and its employees, agents, representatives, and subconsultants), in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of the City. The City shall not direct the work and means for accomplishment of the services and work to be performed hereunder. The City, however, retains the right to require that work performed by Consultant meet specific standards consistent with the requirements of this Agreement without regard to the manner and means of accomplishment thereof.
Subcontractors shall assume all of the rights, obligations and liabilities, applicable to it as an independent contractor hereunder. Consultant represents and warrants that it (i) is fully experienced and properly qualified to perform the class of work and services provided for herein, (ii) has the financial capability and shall finance its own operations required for the performance of the work and services and (iii) is properly equipped and organized to perform the work and services in a competent, timely and proper manner in accordance with the requirements of this Agreement.
1.11 This Agreement contains provisions that permit mutually acceptable changes in the scope, character or complexity of the work if such changes become desirable or necessary as the work progresses. Adjustments to the basis of payment and to the time for performance of the work, if any, shall be established by a written contract amendment (approved and executed by the City) to accommodate the changes in work.
2. DUTIES OF CITY
2.1 City shall furnish to Consultant all available and pertinent data and information requested by Consultant to facilitate the preparation of the documents called for in this Agreement.
Consultant shall be entitled to reasonably rely on all such information.
2.2 City shall provide contract administration services. City shall notify Consultant of required administrative procedures and shall name representatives, if any, authorized to act in its behalf.
2.3 City shall review documents submitted by Consultant and shall render decisions pertaining thereto as promptly as reasonably possible.
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3. COMPENSATION
3.1 For the full performance of the services described herein by Consultant, City agrees to compensate Consultant for all services and direct costs associated with the performance of the project in an amount not to exceed $175,000 paid in monthly installments of $14,583.33 per month, as follows:
a. Once each month, Consultant shall submit for payment by City, an itemized invoice for services performed during the previous billing period. The invoice shall describe the services rendered and the title of the item of work and shall list labor hours by personnel classification.
Said invoice shall be based on all labor and direct expense charges made for work performed on the project. Labor charges shall be in accordance with the fee schedule found in Exhibit A of this Agreement. City shall pay Consultant for services rendered and approved by the City within 30 days from the date the itemized invoice is received by the City , subject to the maximum not to exceed amount specified above and the City’s right to object. Failure to provide an itemized invoice for services performed during the previous billing period may result in delays in processing the invoice.
b. Direct costs are those outside costs incurred on or directly for the project and substantiated with invoices for the charges. Direct expenses include printing, reproduction, and delivery charges.
3.2 If Consultant incurs other costs which are not specifically covered by the terms of this Agreement, but which are necessary for performance of Consultant’s duties, City may approve payment for said costs if authorized in writing by the City in advance.
3.3 City may order changes in the scope or character of services in writing, including decreasing the amount of Consultant’s services. In the event that the work is decreased, Consultant is entitled to full compensation for all services performed and expenses incurred prior to receipt of notice of change. Under no conditions shall Consultant make any changes to the work, either as additions or deductions, without the prior written order of the City. In the event, that the City determines that a change to the work or services from that specified in this Agreement is required, the contract time and/or actual costs reimbursable by the City for the project may be adjusted by contract amendment or change order to accommodate the changed work. The maximum not to exceed total amount specified in this Article 3 (Compensation) shall not be exceeded, unless authorized by written contract amendment or change order, approved and executed by the City.
Consultant shall obtain prior written approval for a revised fee sche dule from the City before exceeding such fee schedule.
3.4 In no event, will the Consultant be reimbursed for any costs or expenses at any rates that exceed the rates for set forth in the fee schedule found in Exhibit B.
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4. SUBCONSULTANTS
4.1 Consultant may not subcontract any services required under this Agreement without the prior written consent of the City.
4.2 Consultant shall be responsible to City for the performance of any and all subconsultants who perform work under this contract, and any acts of negligence or misconduct on their part. Consultant is solely responsible for all payments due to subconsultants.
4.3 Nothing contained herein or otherwise shall require Consultant to obtain written approval by the City for the performance of certain duties under this Agreement by Consultant’s related entities, including HouseKeys Services Corporation, a California corpor ation for brokerage and lending services and HouseKeys Resource and Education Center, Inc., a California public benefit corporation, for housing and property acquisition and redevelopment activity in connection with this Agreement. Furthermore, Consultant ’s related entities shall not be considered subconsultants under this Agreement.
5. OWNERSHIP OF DOCUMENTS AND MATERIALS
All original drawings, documents, papers, data, materials, photographs, negatives and other work products prepared by the Consultant and/ or its subconsultants in the performance of the services encompassed in this Agreement (whether in printed or electronic format) (“project-related documents and materials) shall be the property of the City and may be used on this project without the consent of the Consultant or its subcontractors. City acknowledges that such drawings, documents, and other items are instruments of professional services intended for use only on the subject project. Consultant agrees that all copyrights which arise from creation of the Project - related documents and materials pursuant to this Agreement shall be vested in the City and waives and relinquishes all claims to copyright or other intellectual property rights in favor of the City.
Upon the completion or termination of this Agreement for any reason, the City shall be entitled to receive, and Consultant shall promptly provide to the City upon request, all finished and unfinished project-related documents and materials, produced or gathered by or on behalf of Consultant that are in Consultant’s possession, custody or control. Consultant may retain copies of said documents and materials for its files. In the event of termination, any dispute regarding compensation or damages shall not hinder, prevent, or otherwise impact the City’s right to promptly receive and use such documents and materials which are the sole and exclusive property of the City.
6. TERMINATION
Notwithstanding any other provision of this Agreement, City may terminate this Agreement at any time, with or without cause, in its sole discretion, by giving notice in writing to Consultant of such termination. In the event of termination, the Consultant shall have the right and obligation to promptly assemble the work then in progress for the purpose of completing the work and delivering all materials and documents to the City.
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6.1. Termination Without Cause. To ensure a seamless transition and facilitate the recovery of fees earned for services rendered, a minimum notice period of six months shall be observed for any termination without cause. The Consultant shall be entitled to rece ive compensation for the services rendered and fees earned up until the termination date in accordance with the payment provisions set forth in Section 3.1.
6.2 Termination With Cause. In the event of termination for cause, the Consultant need be compensated only to the extent required by law.
7. AUDIT AND INSPECTION
Consultant shall permit authorized representatives of City to inspect and audit all data and records relating to its performance under this Agreement for a period of three years following acceptance of the final study.
8. EQUAL EMPLOYMENT OPPORTUNITY
Consultant agrees to refrain from discriminatory employment practices on the basis of race, religious creed, color, sex, national origin, handicap, sexual orientation, or ancestry of any employee of, or applicant for employment with, such Consultant or subcontractor.
9. INSURANCE AND INDEMNIFICATION
9.1 The parties acknowledge that this Agreement does not involve any design professional services from the Consultant.
With respect to all matters , Consultant agrees to indemnify, defend (with counsel reasonably satisfactory to the CITY) and hold harmless the CITY, its officers, officials, directors, agents representatives, volunteers, and employees to the fullest extent allowed by law from any and all claims, actions, causes of action, losses, damages, liabilities and costs of every nature, including but not limited to all claims, actions, causes of action, losses, damages, liabilities for property damage, bodily injury, or death, and all costs of defending any claim, caused by or arising out of, or alleged to have been caused by or arise out of, in whole or in part, Consultant’s performance under this Agreement, except for any claims, actions, causes of action, losses, damages, costs or liabilities proximately caused by:
(a) Consultant ministerially carrying out the express written direction of the City involving no discretion on the part of the Consultant;
(b) The sole negligence or willful misconduct of City.
City shall not be liable for acts of Consultant in performing services described herein.
In no event shall this section be construed to require indemnification by the Consultant to a greater extent than permitted under the public policy of the State of California; and in the event that this
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contract is subject to California Civil Code section 2782(b), the foregoing indemnity provisions shall not apply to any liability for the active negligence of the City.
Nothing contained in this provision shall be construed as relieving the Consultant from any obligation to provide indemnity or defense that was undertaken pursuant to any prior contract between the parties.
The defense and indemnity provisions obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by the insurance obligations contained in this Agreement. The foregoing indemnity provisions are intended to fully allocate the parties’ r isk of liability to third- parties; and there shall be no rights to indemnity or contribution, in law or equity or otherwise between the parties that are not set forth in this section. Consultant waives all rights to subrogation for any matters covered by t he provisions of this section. Consultant’s responsibility for such defense and indemnity obligations as set forth in this section shall survive the termination or completion of this Agreement for the full period of time allowed by law.
9.2 Consultant shall maintain insurance conforming to the following specifications to the fullest amount allowed by law for a minimum of two years following the termination or completion of this Agreement:
A. Types of Coverage
The policies shall afford the following types of coverage:
1. Commercial General Liability;
2. Automotive;
3. Workers’ Compensation and Employer Liability; and
4. Professional Liability and/or Errors and Omissions
B. Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. For Commercial General Liability: Insurance Services Office (ISO) CGL Form 00 01 11 85; and
2. For Automotive Liability: ISO CA 00 01 06 92 including symbol 1(any auto); and
3. For Workers’ Compensation: insurance as required by the Labor Code of the State of California and Employer's Liability insurance; and
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4. For Professional Liability and/or Errors and Omissions: insurance covering negligence committed by or on behalf of Consultant in rendering services to City.
C. Minimum Limits of Insurance
Consultant shall maintain limits no less than:
1. General Liability: $1,000,000 combined single limit per occurrence for bodily, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage.
3. Workers’ Compensation and Employer's Liability: Workers’ Compensation limits as required by the Labor Code of the State of California and Employer's Liability limits of $1,000,000 per accident.
4. Professional Liability and/or Errors and Omissions: $1,000,000 per claim and $2,000,000 in the annual aggregate.
The limits of insurance required in this A greement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City (as agreed to in this Agreement) before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.
D. Deductible and Self-Insured Retention
Any deductibles or self-insured retention must be declared to and approved by the City, and shall not reduce the limits of liability. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retention as respects the City, its agents, officers, attorneys, employees, officials and volunteers; or the Consultant shall procure a bond guarantee ing payment of losses related to investigations, claim administration, and defense expenses. Policies containing any self -insured retention provision shall provide or be endorsed to provide that the self -insured retention may be satisfied by either the named insured or the City.
E. Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
1. General Liability and Automobile Liability Coverage:
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a. The City, its agents, officers, attorneys, employees, officials and volunteers are to be covered as additional insureds as respects: liability arising out of this Agreement performed by or on behalf of the Consultant, products and completed operations of the Consultant, premises owned, occupied or used by the Consultant, or automobiles owned, leased, hired or borrowed by the Consultant. It is a requirement of this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits set forth in this Agreement shall be available to the City as an additional insured. Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage limits specified in this Agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured, whichever is affords greater coverage. b. The Consultant's insurance coverage shall be primary insurance as respects the City, its agents, officers, attorneys, employees, officials and volunteers.
Any insurance or self -insurance maintained by the City, its agents, officers, attorneys, employees, officials and volunteers shall be excess of the Consultant's insurance and shall not contribute with it.
c. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its agents, officers, attorneys, employees, officials, and volunteers.
d. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability.
2. Workers’ Compensation and Employer’s Liability Coverage: The insurer shall agree to waive all rights of subrogation against the City, its agents, officers, attorneys, employees, officials, and volunteers for losses arising from work performed by the Consultant for the City.
3. All Coverages: Any unintentional failure to comply with reporting provisions of the policies shall not affect coverage provided to the City; and unless otherwise approved by the City, e ach insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days prior written notice by regular mail has been given to the City, or ten (10) days for cancellation for non-payment of premium.
E. Suspension or Cancellation
If any of the coverages required by this Agreement should be suspended, voided, cancelled or reduced in coverage during the term of this Agreement, Consultant shall immediately notify City and replace such coverage with another policy meeting the requirements of this
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Agreement.
F. Subcontractors
Consultant agrees that any and all contracts with subcontractors for performance of any matter under this Agreement shall require the subcontractors to comply with the same indemnity and insurance requirements set forth in this Agreement to the extent that they appl y to the scope of the subcontractors’ work. Subcontractors are to be bound to contractor and to City in the same manner and to the same extent as the Consultant is bound to City under this Agreement.
Subcontractors shall further agree to include these same provisions with any sub-subcontractor. A copy of this Agreement will be furnished to the subcontractor on request. The Consultant shall require all subcontractors to provide a valid certificate of insurance and the required endorsements included in the Agreement prior to commencing any work, and will provide proof of compliance to the City.
G. Acceptability of Insurers
Without limiting Consultant's indemnification provided hereunder, the policies of insurance listed in Article 9.2 of this Agreement are to be issued by an issuer with a current A.M.
Best Rating of A:V and who is authorized to transact business in the State of California, unless otherwise approved by the City.
H. Verification of Coverage
Consultant shall furnish the City with endorsements and certificates of insurance evidencing coverage required by this clause. The certificates for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates are to be on forms acceptable to the City. Where required by statue, forms approved by the Insurance Commissioner are to be submitted . All certificates are to be received and approved by the City before work commences.
10. MISCELLANEOUS
10.1 This Agreement shall be binding on the heirs, executors, assigns and successors of Consultant.
10.2 Neither party may assign this Agreement, or any portion hereof, without the prior written consent of the other.
10.3 This Agreement shall not be construed to alter, affect, or waive any lien or stop notice rights, which Consultant may have for the performance of services pursuant to this Agreement.
10.4 Neither party’s waiver of any term, condition or covenant, or breach of any term, condition or covenant shall be construed as the waiver of any other term, condition or covenant or waiver of the breach of any other term, condition or covenant.
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10.5 This Agreement contains the entire Agreement between City and Consultant relating to the project and the provision of services to the project. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are of no force or effect.
Subsequent modifications to this Agreement shall be in writing and signed by both City and Consultant.
10.6 If any term, condition or covenant of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement shall be valid and binding on City and Consultant.
10.7 This Agreement shall be governed and construed in accordance with the laws of the State of California.
10.8 This Agreement may be executed in counterparts and will be binding as executed.
10.9 All changes or amendments to this Agreement must be in writing and approved by all parties.
10.10 The term of this Agreement shall commence upon execution of the Agreement and terminate on June 30, 20 24. Any extension of the Agreement shall be mutually agreed upon in writing and shall require an amendment to the Agreement signed by both parties.
10.11 Consultant owes the City a duty of undivided loyalty in performing the work and services under this Agreement, including, but not limited to, the obligation to refrain from having economic interests and/or participating in activities that conflict with the City’s interests in respect to the work and/or services and project. The Consultant shall list current clients who may have a financial interest in the outcome of this Agreement. The Consultant hereby certifies that it does not now have, nor shall it acquire any financial or business interest that would conflict with the performance of services under this agreement. Consultant shall not make or participate in making or in any way attempt to use Consultant’s position to influence a governmental decision in which Consultant knows or has reason to know Consultant has a direct or indirect financial interest other than the compensation promised by this Agreement. Consultant will immediately advise the City if Consultant learns of a financial interest of Consultant's during the term of this Agreement.
10.12 This Agreement is entered into, and to be performed in Santa Clara County, California, and any action arising out of or related to this Agreement shall be maintained in a court of appropriate jurisdiction in Santa Clara County, California.
11. NOTICES
Notices required under this Agreement may be delivered by first class mail addressed to the appropriate party at one of the following addresses:
CITY: City of Campbell
Attention: City Manager
70 North First Street
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Campbell, CA 95008
CONSULTANT: HouseKeys Inc.
Attn.: Julius Nyanda
409 Tennant Station Ste. 495
Morgan Hill, CA 95037
Having read and understood the foregoing Agreement, the undersigned parties agree to be bound hereby:
CONSULTANT
By: ____________________________________________
Julius Nyanda
CEO, HouseKeys Inc.
CITY OF CAMPBELL
By: _____________________________________________
Brian Loventhal
City Manager
Exhibit A – Scope of Services
Exhibit B – Fee Schedule
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BMR ADMINISTRATOR - HOUSEKEYS
The Scope of Work details the roles and responsibilities of the City and Consultant. The Schedule starts from the date the contract is fully executed by both parties.
1. Consultant will administer the program and assure BMR Deed Restrictions are recorded and followed by all parties as applicable for each property.
2. Consultant will provide off site support for service requests . Orientations and workshops will be held in the City of Campbell.
3. Consultant will update BMR guidelines and program materials annually in conjunction with City staff to reflect the Consultant’s administrative process for BMR Administration including, but not limited to: applications, program pamphlets, resale calculations, buyer selection process, sale and resale of units, refinancing requests, collection of City fees and other applicable fees, and default monitoring/resolution process.
4. Consultant shall prepare updates to the BMR Owner/Application Participation Guide (to add a reference to the pricing procedures , repair requirements, and clarify recertification requirements ) and BMR Rental Application/Participation Guide ( to clarify the maximum number of occupants allowed in a studio unit, clarify recertification requirements, and include options for participants to exceed-income limits) for future consideration by the Council by December 31, 2024.
5. Consultant will maintain a BMR program website presence that will link to the City’s housing website.
6. Consultant will conduct annual recertification / monitoring of rental and ownership below market rate program units providing 30 days to submit recertification packages.
7. Consultant shall update pricing guides for below -market rate rental and homeownership units annually within 30 days of publication of annual income limits by the California Department of Housing and Community Development (HCD).
8. Consultant and the City have agreed to the following mutually acceptable performance measures for BMR program administration. These measures shall be
included in the quarterly BMR summary report.
a. General Inquiries: Respond within 48 business hours. b. Loan Requests: Respond within 48 business hours. Complete requests within reasonable time, with weekly status updates for outstanding requests. c. Orientations: Minimum 6 per year, with more as needed for new opportunities. d. Rental Vacancies: Fill vacancies within 60 days.
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e. Follow up letters sent at 60 and 90 days after the initial request for recertification packages before beginning enforcement procedures. f. Eligibility List: Maintain a minimum buyer-to-property ratio of 5:1. g. Application ID issuance: Issue upon receipt of request. h. City/Consultant Coordination: Consultant shall schedule a regular monthly coordination meeting with City staff.
9. Consultant shall maintain the City’s existing records, databases, and files through a file retention and management system for the program. All electronic records will be considered work products that are property of the City of Campbell. The Consultant shall update the City’s records quarterly to ensure a coordinated seamless record- keeping process. Database access shall be provided to City staff directly involved in the BMR program administration. The database shall include the following at a minimum:
a. For each BMR / RDA Development (new and existing):
1) A list of all BMR / RDA units in the development
2) The date of the BMR / RDA developer agreement
3) BMR / RDA units lost, including date, reason for loss, initial sales price, resale price, and actions taken
b. For each owner unit (new and existing):
1) The address for each ownership unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current owner of record
4) The expiration date of the owner agreement
5) The last date of recertification
6) The recertification status (updated annually)
7) The original sales price
8) The current resale restriction price
9) Dates of owner turn-over, as applicable
c. For each renter unit (new and existing):
1) The unit number for each rental unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current tenant of record
4) The last date of recertification
5) The recertification status (updated annually)
d. For each affordable housing loan:
1) The type of loan (e.g., RDA, BEGIN, FTHB, etc.)
2) The address associated with the loan
3) The current owner of record (this should be the loan recipient)
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4) The amount, term, and due date of the loan
5) dates of payoff and interest collected, as applicable 6) dates of refinance/subordination, as applicable
7) dates of write-off and amount, as applicable
e. Other information as requested and mutually agreed to.
10. Consultant shall provide a quarterly BMR summary report to the City on the following dates and with the following information, consistent with task #8 and #9:
Q1 (July – Sept): End of October
Q2 (Oct – Dec): End of January
Q3 (Jan – March): End of April
Q4 (April – June): End of July
a. Performance Measures (see task #8)
b. For each owner unit (new and existing):
1) The address for each ownership unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current owner of record
4) The last date of recertification and current recertification status
c. For each renter unit (new and existing):
1) The unit number for each rental unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current tenant of record
4) The last date of recertification and current recertification status
d. For each affordable housing loan:
1) The type of loan (e.g., RDA, BEGIN, FTHB, etc.)
2) The address associated with the loan
3) The current owner of record (this should be the loan recipient) 4) The amount, term, and due date of the loan
5) Dates of payoff and interest collected, as applicable 6) Dates of refinance/subordination, as applicable
7) Dates of write-off and amount, as applicable
e. Current list of defaults and pending defaults
1) Actions taken to date
2) Next steps, including dates
f. In-lieu fees collected, if applicable
g. Other information as requested and mutually agreed to
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11. Consultant will provide the applicants with the following services:
a. Conducting income qualifications including review of assets, income, verifications of employment and all other necessary approvals to ensure qualification for the City loans.
b. Making minor revisions to the City’s existing program materials and legal documents.
c. Underwriting loan applications in accordance with program requirements. d. Preparing all loan documents, overseeing proper execution thereof, and conducting final loan approval reviews.
e. Ensuring timely delivery of all necessary documents into escrow, and preparing escrow demands and funding requests.
f. Overall management and implementation of specific program policies, including required reporting.
g. Preparation of program materials by revising the City’s current documents. h. Calculating all pay off demands and issuing any disclosures and tax forms as required by State and/or Federal Law.
i. Calculating the resale value of all BMR homes as requested annually by the County.
j. Work with City staff to ensure a seamless and coordinated development of documents as it relates to the BMR Program, including the RDO application process where BMR units are included, reviewing developer agreements, and ensuring that BMR requirements are outlined in an Affordable Housing Agreement and any subsequent amendments to the development documentation.
12. Consultant shall act as transaction coordinator for all real estate transactions and will provide the City with a fee schedule. Consultant will charge BMR re-sale transaction fees in line with applicable recorded Deed Restrictions. Consultant will charge the developer transaction coordination fees in accordance with the Affordable Housing Agreement pertaining to the subject development project.
13. Consultant will coordinate document transmittals between buyers, homeowners, developers, and City as needed. Consultant will be responsible for ensuring all documents submitted for City signatures are complete and accurate. Consultant will be responsible for making any necessary corrections to documents.
14. Consultant shall work alongside Staff to conduct monitoring to annually evaluate BMR owners’ & renters’ compliance with the terms and conditions of the BMR recorded deed restrictions and program guidelines including the following:
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a. Mailing monitoring letters to all the BMR units.
b. Reviewing in conjunction with City staff, City or County Assessor data to assist in the process (e.g., water utility bills, property records). c. Review City’s preliminary monitoring list to identify follow up actions required. d. Meet with City staff to develop guidelines for acceptable default remedies (e.g., allowing rental of BMR units for hardship cases).
15. Consultant shall work alongside Staff to investigate and identify cure for potential BMR defaults including:
a. Conduct follow up of those BMR owners who do not submit their compliance documentation.
b. Reviewing information from calls from BMR neighbors and interested parties. c. Conduct reasonable follow-up investigation to assess potential BMR defaults including unit site visits.
d. Scheduled appointments with BMR owners.
e. For confirmed defaults, provide owners with list of actions needed to remedy the default and conduct follow-up to monitoring compliance. f. Maintaining log of actions taken to remedy the defaults. g. For those defaults in which the owners choose to not remedy the situation within a reasonable amount of time, Consultant will meet with City staff to determine the course of action to pursue. City authorization will be sought for any legal action taken.
h. City will provide a list of any current BMR defaults and actions taken to date.
16. Consultant shall conduct introductory Home Buyer Education/Training classes – HomeBuyer Orientation Classes prior to BMR application
17. Consultant shall build and maintain a group of local (live or work in the City of Campbell) qualified and eligible BMR homebuyers at a minimum Buyer-to-Property ratio of 5:1
18. Consultant will partner with the City to create City legal templates for documents required for
signature by the BMR participants. Consultant shall supply documents that are typically used in Santa Clara County for residential real estate transactions (e.g. purchase and sale, disclosure acknowledgements, addendums, etc.)
19. Consultant will maintain a list of approved loan officers and lending operations eligible to provide mortgage lending for purchase and refinance transactions
20. Consultant will review individual BMR restrictions for terms and requirements as
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needed including shared equity programs, down payment assistance loans and any resale restriction agreements.
21. Consultant will prepare City staff reports related to the BMR program, including the following:
a. Contract Renewal and Program Update Report | Draft d ue to City staff:
March 31, 2025.
b. Compliance Program Update Report | Draft due to City staff: August 31, 2025.
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Description Fee1 Fee Cap / Max Billed To
Program Administration $175,000 / year ($14,583.33/ month) City Loan Processing
Transaction Fee
$1,250.00 per
transaction2
$1,250.00 per
transaction Owner / Lender
New BMR Sales
Transaction Fee
3% of
Sales Price
Maximum
$18,000.00
Buyer (via
Sales Price)
BMR Resale (compliant)
Transaction Fee
6% of
New Sales Price
Maximum
$36,000.00
Buyer (via
Sales Price)
Acquisition (default) and
BMR Resale / Rehab
Transaction Fee
5% of Resale
Restriction Price
plus 5% of
New Sales Price
Maximum
$60,000.00
Buyer (via
Sales Price)
Application I.D.
Issuance No fee No fee n/a
Participant I.D.
Issuance No fee No fee n/a
Opportunity Drawing
(Lottery) Entry Fee $25.00 $25.00 Applicant
Application Fee $75.00 $75.00 Applicant
Billing Rate for Projects
Outside of Contract Scope $250.00 / hour $250.00 / hour City
1 Fees may be lower pursuant to the relevant executed Agreement (e.g., developer agreement, owner resale restriction agreement, promissory note, etc.)
2 25% of the $1,250 loan processing fee ($312.50) paid by the owner/lender will be transferred to the City for administration and internal processing of the subordination / payoff request.
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CITY OF CAMPBELL
CONSULTANT SERVICES AGREEMENT
This Agreement is entered into at Campbell, Califor nia on the 30 th day of June, 202 43, by and between the CITY OF CAMPBELL (hereinafter referred to as "City") and HouseKeys Inc., a California Corporation (hereinafter referred to as "Consultant").
WHEREAS, City desires to obtain consulting services for the purpose of Below Market Rate Housing Program Administration; and
WHEREAS, Consultant represents that it has the expe rtise, means, and ability to perform said Below Market Rate Housing Program Administration.
NOW, THEREFORE, in consideration of each other's mu tual promises, Consultant and City agree as follows:
1. DUTIES OF CONSULTANT
1.1 Consultant agrees to perform services as set fo rth in Exhibit A - Scope of Services, attached hereto and incorporated herein by reference, and which shall be interpreted together and in harmony with this Agreement. In the event of any conflict between Exhibit A and this Agreement, this Agreement shall govern, control, and take precedence.
1.2 Consultant’s project manager will meet with the City’s project coordinator prior to commencement of the project to establish a clear un derstanding of the working relationships, authorities, and management philosophy of City as it relates to this Agreement.
1.3 Consultant, working with the City, will gather available existing information concerning the project, and shall review documents as necessary for compliance with the project’s objectives.
1.4 In performance of this Agreement by Consultant, time will be of the essence.
1.5 Notwithstanding Section 1.4, Consultant shall not be responsible for delay caused by activities or factors beyond Consultant’s reason able control, including delays or by reason of strikes, work slow-downs or stoppages, or force majeure.
1.6 Consultant agrees to perform this Agreement in accordance with the highest degree of skill and expertise exercised by members of Consultant’s profession working on similar projects under similar circumstances.
1.7 Consultant shall cooperate in good faith with C ity in all aspects of the performance of this Agreement.
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1.8 In the course of the performance of this Agreem ent, Consultant shall act in the City’s best interest as it relates to the project.
1.9 The designated project manager for Consultant s hall be Julius Nyanda. The Consultant’s project manager shall have all the nec essary authority to direct technical and professional work within the scope of the Agreement and shall serve as the principal point of contact with the City and the City’s project coordi nator. The authorized principal of Consultant executing this Agreement for the Consultant shall h ave authority to make decisions regarding changes in services, termination and other matters related to the performance of this agreement on behalf of Consultant.
1.10 The Consultant (and its employees, agents, rep resentatives, and subconsultants), in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of the City. The City shall not direct the work and means for accomplishment of the services and work to be performed hereunder. The City, however, retains the right to require that work performed by Consultant meet specific sta ndards consistent with the requirements of this Agreement without regard to the manner and mea ns of accomplishment thereof.
Subcontractors shall assume all of the rights, obli gations and liabilities, applicable to it as an independent contractor hereunder. Consultant repre sents and warrants that it (i) is fully experienced and properly qualified to perform the class of work and services provided for herein, (ii) has the financial capability and shall finance its own operations required for the performance of the work and services and (iii) is properly equi pped and organized to perform the work and services in a competent, timely and proper manner i n accordance with the requirements of this Agreement.
1.11 This Agreement contains provisions that permit mutually acceptable changes in the scope, character or complexity of the work if such changes become desirable or necessary as the work progresses. Adjustments to the basis of payment and to the time for performance of the work, if any, shall be established by a written contract amendment (approved and executed by the City) to accommodate the changes in work.
2. DUTIES OF CITY
2.1 City shall furnish to Consultant all available and pertinent data and information requested by Consultant to facilitate the preparation of the documents called for in this Agreement.
Consultant shall be entitled to reasonably rely on all such information.
2.2 City shall provide contract administration ser vices. City shall notify Consultant of required administrative procedures and shall name r epresentatives, if any, authorized to act in its behalf.
2.3 City shall review documents submitted by Consu ltant and shall render decisions pertaining thereto as promptly as reasonably possible.
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3. COMPENSATION
3.1 For the full performance of the services descri bed herein by Consultant, City agrees to compensate Consultant for all services and direc t costs associated with the performance of the project in an amount not to exceed $175,000 205,000 paid in monthly installments of $14,583.33 17,083.33 per month, as follows:
a. Once each month, Consultant shall submit for pa yment by City, an itemized invoice for services performed during the previous billing peri od. The invoice shall describe the services rendered and the title of the item of work, andwork and shall list labor hours by personnel classification. Said invoice shall be based on all labor and direct expense charges made for work performed on the project. Labor charges shall be i n accordance with the fee schedule found in Exhibit A of this Agreement. City shall pay Consultant for services rendered and approved by the City within 30 days from the date the itemized invo ice is received by the City, subject to the maximum not to exceed amount specified above and th e City’s right to object. Failure to provide an itemized invoice for services performed during the previous billing period may result in delays in processing the invoice.
b. Direct costs are those outside costs incurred o n or directly for the project, andproject and substantiated with invoices for the charges. Direc t expenses include printing, reproduction, and delivery charges.
3.2 If Consultant incurs other costs which are not specifically covered by the terms of this Agreement, but which are necessary for performance of Consultant’s duties, City may approve payment for said costs if authorized in writing by the City in advance. However, Consultant may retain outside legal counsel from time to time, wit hout prior written consent by the City, to assist Consultant with legal matters within the scope of this Agreement, so long as outside legal fees are at the Consultant’s sole.
3.3 City may order changes in the scope or charact er of services in writing, including decreasing the amount of Consultant’s services. In the event that the work is decreased, Consultant is entitled to full compensation for all services performed and expenses incurred prior to receipt of notice of change. Under no conditions shall Consult ant make any changes to the work, either as additions or deductions, without the prior written order of the City. In the event, that the City determines that a change to the work or services from that specified in this Agreement is required, the contract time and/or actual costs reimbursable by the City for the project may be adjusted by contract amendment or change order to accommodate t he changed work. The maximum not to exceed total amount specified in this Article 3 (Co mpensation) shall not be exceeded, unless authorized by written contract amendment or change order, approved and executed by the City.
Consultant shall obtain prior written approval for a revised fee schedule from the City before exceeding such fee schedule.
3.4 In no event, will the Consultant be reimbursed for any costs or expenses at any rates that exceed the rates for set forth in the fee schedule found in Exhibit B.
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4. SUBCONSULTANTS
4.1 Consultant may not subcontract any services req uired under this Agreement without the prior written consent of the City.
4.2 Consultant shall be responsible to City for the performance of any and all subconsultants who perform work under this contract , and any acts of negligence or misconduct on their part. Consultant is solely responsible for all payments due to subconsultants.
4.3 Nothing contained herein or otherwise shall req uire Consultant to obtain written approval by the City for the performance of certain duties under this Agreement by Consultant’s related entities, including HouseKeys Services Corp oration, a California corporation for brokerage and lending services and HouseKeys Resource and Education Center, Inc., a California public benefit corporation, for housing and propert y acquisition and redevelopment activity in connection with this Agreement. Furthermore, Consu ltant’s related entities shall not be considered subconsultants under this Agreement.
5. OWNERSHIP OF DOCUMENTS AND MATERIALS
All original drawings, documents, papers, data, materials, photographs, negatives and other work products prepared by the Consultant and/or its subconsultants in the performance of the services encompassed in this Agreement (whether in printed or electronic format) (“project-related documents and materials) shall be the property of the City and may be used on this project without the consent of the Consultant or its subcontractors . City acknowledges that such drawings, documents, and other items are instruments of profe ssional services intended for use only on the subject project. Consultant agrees that all copyri ghts which arise from creation of the Project- related documents and materials pursuant to this Agreement shall be vested in the City and waives and relinquishes all claims to copyright or other i ntellectual property rights in favor of the City.
Upon the completion or termination of this Agreement for any reason, the City shall be entitled to receive, and Consultant shall promptly provide to the City upon request, all finished and unfinished project-related documents and materials, produced o r gathered by or on behalf of Consultant that are in Consultant’s possession, custody or control. Consultant may retain copies of said documents and materials for its files. In the event of termi nation, any dispute regarding compensation or damages shall not hinder, prevent, or otherwise imp act the City’s right to promptly receive and use such documents and materials which are the sole and exclusive property of the City.
6. TERMINATION
Notwithstanding any other provision of this Agreement, City may terminate this Agreement at any time, with or without cause, in its sole discretion, by giving notice in writing to Consultant of such termination. In the event of termination, the Consultant shall have the right and obligation to promptly assemble the work then in progress for the purpose of completing the work and
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delivering all materials and documents to the City.
6.1. Termination Without Cause. To ensure a seamless transition and facilitate the recovery of fees earned for services rendered, a minimum notice period of six months shall be observed for any termination without cause. The Consultant shall be entitled to receive compensation for the services rendered and fees earned up until the term ination date in accordance with the payment provisions set forth in Section 3.1.
6.2 Termination With Cause. In the event of termina tion for cause, the Consultant need be compensated only to the extent required by law.
7. AUDIT AND INSPECTION
Consultant shall permit authorized representatives of City to inspect and audit all data and records relating to its performance under this Agre ement for a period of three years following acceptance of the final study.
8. EQUAL EMPLOYMENT OPPORTUNITY
Consultant agrees to refrain from discriminatory employment practices on the basis of race, religious creed, color, sex, national origin, handi cap, sexual orientation, or ancestry of any employee of, or applicant for employment with, such Consultant or subcontractor.
9. INSURANCE AND INDEMNIFICATION
9.1 The parties acknowledge that this Agreement doe s not involve any design professional services from the Consultant.
With respect to all matters , Consultant agrees to indemnify, defend (with couns el reasonably satisfactory to the CITY) and hold harmless the CIT Y, its officers, officials, directors, agents representatives, volunteers, and employees to the f ullest extent allowed by law from any and all claims, actions, causes of action, losses, damages, liabilities and costs of every nature, including but not limited to all claims, actions, causes of a ction, losses, damages, liabilities for property damage, bodily injury, or death, and all costs of defending any claim, caused by or arising out of, or alleged to have been caused by or arise out of, in whole or in part, Consultant’s performance under this Agreement, except for any claims, action s, causes of action, losses, damages, costs or liabilities proximately caused by:
(a) Consultant ministerially carrying out the express written direction of the City involving no discretion on the part of the Consultant;
(b) The sole negligence or willful misconduct of City.
City shall not be liable for acts of Consultant in performing services described herein.
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In no event shall this section be construed to require indemnification by the Consultant to a greater extent than permitted under the public policy of th e State of California; and in the event that this contract is subject to California Civil Code sectio n 2782(b), the foregoing indemnity provisions shall not apply to any liability for the active negligence of the City.
Nothing contained in this provision shall be constr ued as relieving the Consultant from any obligation to provide indemnity or defense that was undertaken pursuant to any prior contract between the parties.
The defense and indemnity provisions obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by the insurance obligations contained in this Agreement. The foregoing indemnity provisions are intended to full y allocate the parties’ risk of liability to third- parties; and there shall be no rights to indemnity or contribution, in law or equity or otherwise between the parties that are not set forth in this section. Consultant waives all rights to subrogation for any matters covered by the provisions of this s ection. Consultant’s responsibility for such defense and indemnity obligations as set forth in t his section shall survive the termination or completion of this Agreement for the full period of time allowed by law.
9.2 Consultant shall maintain insurance conforming to the following specifications to the fullest amount allowed by law for a minimum of two years following the termination or completion of this Agreement:
A. Types of Coverage
The policies shall afford the following types of c overage:
1. Commercial General Liability;
2. Automotive;
3. Workers’ Compensation and Employer Liability; a nd
4. Professional Liability and/or Errors and Omissi ons
B. Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. For Commercial General Liability: Insurance Serv ices Office (ISO) CGL Form 00 01 11 85; and
2. For Automotive Liability: ISO CA 00 01 06 92 includ ing symbol 1(any auto); and
3. For Workers’ Compensation: insurance as required by the Labor Code of the State of California and Employer's Liability insurance; and
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4. For Professional Liability and/or Errors and Omi ssions: insurance covering negligence committed by or on behalf of Consultant in rendering services to City.
C. Minimum Limits of Insurance
Consultant shall maintain limits no less than:
1. General Liability: $1,000,000 combined single li mit per occurrence for bodily, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the ge neral aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage.
3. Workers’ Compensation and Employer's Liability: Workers’ Compensation limits as required by the Labor Code of the State o f California and Employer's Liability limits of $1,000,000 per accident.
4. Professional Liability and/or Errors and Omiss ions: $1,000,000 per claim and $2,000,000 in the annual aggregate.
The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbre lla or excess insurance shall contain or be endorsed to contain a provision that such cov erage shall also apply on a primary and non-contributory basis for the benefit of City (as agreed to in this Agreement) before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.
D. Deductible and Self-Insured Retention
Any deductibles or self-insured retention must be d eclared to and approved by the City, and shall not reduce the limits of liability. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self- insured retention as respects the City, its agents, officers, attorneys, employees, officials a nd volunteers; or the Consultant shall procure a bond guaranteeing payment of losses relat ed to investigations, claim administration, and defense expenses. Policies cont aining any self-insured retention provision shall provide or be endorsed to provide t hat the self-insured retention may be satisfied by either the named insured or the City.
E. Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
1. General Liability and Automobile Liability Cover age:
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a. The City, its agents, officers, attorneys, empl oyees, officials and volunteers are to be covered as additional insureds as respects: liability arising out of this Agreement performed by or on behalf of the Consultant, products and completed operations of the Consultant, premises ow ned, occupied or used by the Consultant, or automobiles owned, leased, hired or borrowed by the Consultant. It is a requirement of this Agreement that any availab le insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits set forth in this Agreement shall be availab le to the City as an additional insured. Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage limits specified in this Agreement , or (2) the broader coverage and maximum limits of coverage of any insurance pol icy or proceeds available to the named insured, whichever is affords greater coverage. b. The Consultant's insurance coverage shall be pri mary insurance as respects the City, its agents, officers, attorneys, employees, officials and volunteers.
Any insurance or self-insurance maintained by the C ity, its agents, officers, attorneys, employees, officials and volunteers shal l be excess of the Consultant's insurance and shall not contribute with it.
c. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its agent s, officers, attorneys, employees, officials, and volunteers.
d. The Consultant's insurance shall apply separatel y to each insured against whom claim is made or suit is brought excep t with respect to the limits of the insurer's liability.
2. Workers’ Compensation and Employer’s Liability C overage: The insurer shall agree to waive all rights of subrogation agai nst the City, its agents, officers, attorneys, employees, officials, and volu nteers for losses arising from work performed by the Consultant for the City.
3. All Coverages: Any unintentional failure to comp ly with reporting provisions of the policies shall not affect coverage provided to the City; and unless otherwise approved by the City, each insuran ce policy required by this clause shall be endorsed to state that coverag e shall not be canceled by either party, except after thirty (30) days prior written notice by regular mail has been given to the City, or ten (10) days for cancellation for non-payment of premium.
E. Suspension or Cancellation
If any of the coverages required by this Agreement should be suspended, voided, cancelled or reduced in coverage during the term of this Agreement, Consultant shall immediately notify City and replace such coverage with another policy meeting the requirements of this
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Agreement.
F. Subcontractors
Consultant agrees that any and all contracts with subcontractors for performance of any matter under this Agreement shall require the s ubcontractors to comply with the same indemnity and insurance requirements set forth in t his Agreement to the extent that they apply to the scope of the subcontractors’ work. Subcontractors are to be bound to contractor and to City in the same manner and to the same extent as the Consultant is bound to City under this Agreement.
Subcontractors shall further agree to include these same provisions with any sub-subcontractor. A copy of this Agreement will be furnished to the sub contractor on request. The Consultant shall require all subcontractors to provide a valid certificate of insurance and the required endorsements included in the Agreement prior to commencing any w ork, and will provide proof of compliance to the City.
G. Acceptability of Insurers
Without limiting Consultant's indemnification provi ded hereunder, the policies of insurance listed in Article 9.2 of this Agreement are to be issued by an issuer with a current A.M.
Best Rating of A:V and who is authorized to transac t business in the State of California, unless otherwise approved by the City.
H. Verification of Coverage
Consultant shall furnish the City with endorsements and certificates of insurance evidencing coverage required by this clause. The c ertificates for each insurance policy are to be signed by a person authorized by that insurer to bi nd coverage on its behalf. The certificates are to be on forms acceptable to the City. Where required by statue, forms approved by the Insurance Commissioner are to be submitted. All certificates are to be received and approved by the City before work commences.
10. MISCELLANEOUS
10.1 This Agreement shall be binding on the heirs, executors, assigns and successors of Consultant.
10.2 Neither party may assign this Agreement, or an y portion hereof, without the prior written consent of the other.
10.3 This Agreement shall not be construed to alter , affect, or waive any lien or stop notice rights, which Consultant may have for the pe rformance of services pursuant to this Agreement.
10.4 Neither party’s waiver of any term, condition or covenant, or breach of any term, condition or covenant shall be construed as the waiver of any other term, condition or covenant or waiver of the breach of any other term, condition or covenant.
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10.5 This Agreement contains the entire Agreement b etween City and Consultant relating to the project and the provision of services to the project. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are of no force or effect.
Subsequent modifications to this Agreement shall be in writing and signed by both City and Consultant.
10.6 If any term, condition or covenant of this Agr eement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement shall be valid and binding on City and Consultant.
10.7 This Agreement shall be governed and construed in accordance with the laws of the State of California.
10.8 This Agreement may be executed in counterparts and will be binding as executed.
10.9 All changes or amendments to this Agreement mu st be in writing and approved by all parties.
10.10 The term of this Agreement shall commence upo n execution of the Agreement and terminate on June 30, 2024. Any extension of the Ag reement shall be mutually agreed upon in writing and shall require an amendment to the Agreement signed by both parties.
10.11 Consultant owes the City a duty of undivided loyalty in performing the work and services under this Agreement, including, but not limited to, the obligation to refrain from having economic interests and/or participating in activities that conflict with the City’s interests in respect to the work and/or services and project. The Consu ltant shall list current clients who may have a financial interest in the outcome of this Agreement . The Consultant hereby certifies that it does not now have, nor shall it acquire any financial or business interest that would conflict with the performance of services under this agreement. Consultant shall not make or participate in making or in any way attempt to use Consultant’s position to influence a governmental decision in which Consultant knows or has reason to know Consultant has a direct or indirect financial interest other than the compensation promised by this Agreement. C onsultant will immediately advise the City if Consultant learns of a financial interest of Consultant's during the term of this Agreement.
10.12 This Agreement is entered into, and to be per formed in Santa Clara County, California, and any action arising out of or related to this Agreement shall be maintained in a court of appropriate jurisdiction in Santa Clara County, California.
11. NOTICES
Notices required under this Agreement may be delivered by first class mail addressed to the appropriate party at one of the following addresses:
CITY: City of Campbell
Attention: City Manager
70 North First Street
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Campbell, CA 95008
CONSULTANT: HouseKeys Inc.
Attn.: Julius Nyanda
409 Tennant Station Ste. 495
Morgan Hill, CA 95037
Having read and understood the foregoing Agreement, the undersigned parties agree to be bound hereby:
CONSULTANT
By: ____________________________________________
Julius Nyanda
CEO, HouseKeys Inc.
CITY OF CAMPBELL
By: _____________________________________________
Brian Loventhal
City Manager
Exhibit A – Scope of Services
Exhibit B – Fee Schedule
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The Scope of Work details the roles and responsibilities of the City and Consultant. The Schedule starts from the date the contract is fully executed by both parties.
1. Consultant will administer the program and assur e BMR Deed Restrictions are recorded and followed by all parties as applicable for each property.
2. Consultant will provide offsite support for serv ice requests. Orientations and workshops will be held in the City of Campbell.
3. Consultant will
regularly update BMR guidelines and program materials annually in conjunction with City staff to reflect the Consultant’s administrative process for BMR Administration including, but not limited to: applications, program pamphlets, resale calculations, buyer selection process, sale and resale of units, refinancing requests, collection of City fees and other applicable fees, and default monitoring/resolution process.
4. Consultant shall prepare updates to the BMR Owne r/Application Participation Guide (to add a reference to the pricing procedures, repa ir requirements, and clarify recertification requirements) and BMR Rental Applic ation/Participation Guide (to clarify the maximum number of occupants allowed in a studio unit, clarify recertification requirements, and include options f or participants to exceed-income limits) for future consideration by the Council by December 31, 2024 .
5. Consultant will maintain a BMR program website p resence that will link to the City’s housing website.
6. Consultant will conduct annual recertification / monitoring of rental and ownership below market rate program units providing 30 days t o submit recertification packages.
7. Consultant shall update pricing guides for below -market rate rental and homeownership units
annually within 30 days of publication of annual income limits by the California Department of Housing and Community Development (HCD) .
8. Consultant and the City have agreed to the follo wing mutually acceptable performance measures for BMR program administration. These measures shall be
included in the quarterly BMR summary report.
a. General Inquiries: Respond within 48 business ho urs. b. Loan Requests: Respond within 48 business hours. Complete requests within reasonable time, with weekly status updates for outstanding requests. c. Orientations: Minimum 6 per year, with more as n eeded for new opportunities. d. Rental Vacancies: Fill vacancies within 60 days.
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e. Follow up letters sent at 60 and 90 days after t he initial request for recertification packages before beginning enforcement procedures. f. Eligibility List: Maintain a minimum buyer-to-pr operty ratio of 5:1. g. Application ID issuance: Issue upon receipt of request. g.h. City/Consultant Coordination: Consultant shall schedule a regular monthly coordination meeting with City staff.
9. Consultant shall maintain the City’s existing re cords, databases, and files through a file retention and management system for the program. All electronic records will be considered work products that are property of the City of Campbell. The Consultant shall update the City’s records quarterly to ensure a coordinated seamless record - keeping process. Database access shall be provided to City staff directly involved in the BMR program administration. The database shall include the following at a minimum:
a. For each BMR / RDA Development (new and existing ):
1) A list of all BMR / RDA units in the development
2) The date of the BMR / RDA developer agreement
3) BMR / RDA units lost, including date, reason for loss, initial sales price, resale price, and actions taken
b. For each owner unit (new and existing):
1) The address for each ownership unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current owner of record
4) The expiration date of the owner agreement
5) The last date of recertification
6) The recertification status (updated annually)
7) The original sales price
8) The current resale restriction price
9) Dates of owner turn-over, as applicable
c. For each renter unit (new and existing)
:
1) The unit number for each rental unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current tenant of record
4) The last date of recertification
5) The recertification status (updated annually)
d. For each affordable housing loan:
1) The type of loan (e.g., RDA, BEGIN, FTHB, etc.)
2) The address associated with the loan
3) The current owner of record (this should be the loan recipient)
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4) The amount, term, and due date of the loan
5) dates of payoff and interest collected, as appli cable 6) dates of refinance/subordination, as applicable
7) dates of write-off and amount, as applicable
e. Other information as requested and mutually agre ed to.
10. Consultant shall provide a quarterly BMR summary report to the City on the following dates and with the following information, consistent with task #8 and #9#5 and #6:
Q1 (July – Sept): End of October
Q2 (Oct – Dec): End of January
Q3 (Jan – March): End of April
Q4 (April – June): End of July
a. Performance Measures (see task # 85)
b. For each owner unit (new and existing):
1) The address for each ownership unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current owner of record
4) The last date of recertification and current rec ertification status
c. For each renter unit (new and existing)
:
1) The unit number for each rental unit
2) The level of affordability (e.g., Very Low, Low, Moderate) 3) The current tenant of record
4) The last date of recertification and current rec ertification status
d. For each affordable housing loan:
1) The type of loan (e.g., RDA, BEGIN, FTHB, etc.)
2) The address associated with the loan
3) The current owner of record (this should be the loan recipient) 4) The amount, term, and due date of the loan
5) Dates of payoff and interest collected, as appli cable 6) Dates of refinance/subordination, as applicable
7) Dates of write-off and amount, as applicable
e. Current list of defaults and pending defaults
1) Actions taken to date
2) Next steps, including dates
f. In-lieu fees collected, if applicable
g. Other information as requested and mutually agre ed to
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11. Consultant will provide the applicants with the following services:
a. Conducting income qualifications including revie w of assets, income, verifications of employment and all other necessary approvals to ensure qualification for the City loans.
b. Making minor revisions to the City’s existing pr ogram materials and legal documents.
c. Underwriting loan applications in accordance wit h program requirements. d. Preparing all loan documents, overseeing proper execution thereof, and conducting final loan approval reviews.
e. Ensuring timely delivery of all necessary docume nts into escrow, and preparing escrow demands and funding requests.
f. Overall management and implementation of specifi c program policies, including required reporting.
g. Preparation of program materials by revising the City’s current documents. h. Calculating all pay off demands and issuing any disclosures and tax forms as required by State and/or Federal Law.
i. Calculating the resale value of all BMR homes as requested annually by the County.
j. Work with City staff to ensure a seamless and co ordinated development of documents as it relates to the BMR Program, including the RDO appli cation process where BMR units are included, reviewing developer agreements, and ensuring that BMR requirements are outlined in an A ffordable Housing Agreement and any subsequent amendments to the deve lopment documentation.
12. Consultant shall act as transaction coordinator for all real estate transactions and will provide the City with a fee schedule. Consultant will charge BM R re-sale transaction fees in line with applicable recorded D eed Restrictions. Consultant will charge the developer transaction coordination fees in accordance with the Affordable Housing Agreement pertaining to the subject development project.
13. Consultant will coordinate document transmittal s between buyers, homeowners, developers, and City as needed. Consultant will be responsible for ensuring all documents submitted for City signatures are complete and accurate. Consultant will be responsible for making any necessary corrections to documents.
14. Consultant shall work alongside Staff to conduc t monitoring to annually evaluate BMR owners’ & renters’ compliance with the terms an d conditions of the BMR recorded deed restrictions and program guidelines including the following:
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a. Mailing monitoring letters to all the BMR units.
b. Reviewing in conjunction with City staff, City o r County Assessor data to assist in the process (e.g., water utility bills, property records). c. Review City’s preliminary monitoring list to ide ntify follow up actions required. d. Meet with City staff to develop guidelines for a cceptable default remedies (e.g., allowing rental of BMR units for hardship cases).
15. Consultant shall work alongside Staff to invest igate and identify cure for potential BMR defaults including:
a. Conduct follow up of those BMR owners who do not submit their compliance documentation.
b. Reviewing information from calls from BMR neighb ors and interested parties. c. Conduct reasonable follow-up investigation to as sess potential BMR defaults including unit site visits.
d. Scheduled appointments with BMR owners.
e. For confirmed defaults, provide owners with list of actions needed to remedy the default
and conduct follow-up to monitoring compliance.
f. Maintaining log of actions taken to remedy the d efaults. g. For those defaults in which the owners choose to not remedy the situation within a reasonable amount of time, Consultant will meet with City staff to determine the course of action to pursue. City authorization will be sought for any legal action taken.
h. City will provide a list of any current BMR defa ults and actions taken to date.
16. Consultant shall conduct introductory Home Buye r Education/Training classes – HomeBuyer Orientation Classes prior to BMR application
17. Consultant shall build and maintain a group of local (live or work in the City of Campbell) qualified and eligible BMR homebuyers at a minimum Buyer-to-Property ratio of 5:1
18. Consultant will partner with the City to create City legal templates for documents required for
signature by the BMR participants. Consultant shall supply documents that are typically used in Santa Clara County for r esidential real estate transactions (e.g. purchase and sale, disclosure acknowledgements, addendums, etc.)
19. Consultant will maintain a list of approved loan officers and lending operations eligible to provide mortgage lending for purchase and refinance transactions
20. Consultant will review individual BMR restricti ons for terms and requirements as
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needed including shared equity programs, down payment assistance loans and any resale restriction agreements.
21. Consultant will prepare City staff reports rela ted to the BMR program, including the following:
a. Contract Renewal and Program Update Report | Dra ft due to City staff: End
of March 31, 2025 .
b. Compliance Program Update Report | Draft due to City staff: End of August 31, 2025 .
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BMR ADMINISTRATOR - HOUSEKEYS
Description Fee 1 Fee Cap / Max Billed To
Program Administration $205175 ,000 / year ($ 17,083.33 14,583.33 / month ) City
Loan Processing
Transaction Fee
$1,250.00 per
transaction
2 $1,250.00 per
transaction Owner / Lender
New BMR Sales
Transaction Fee
3% of
Sales Price
Maximum
$18,000.00
Buyer (via
Sales Price)
BMR Resale (compliant)
Transaction Fee
6% of
New Sales Price
Maximum
$36,000.00
Buyer (via
Sales Price)
Acquisition (default) and
BMR Resale / Rehab
Transaction Fee
5% of Resale
Restriction Price
plus 5% of
New Sales Price
Maximum
$60,000.00
Buyer (via
Sales Price)
Application I.D.
Issuance No fee No fee n/a
Participant I.D.
Issuance No fee No fee n/a
Opportunity Drawing
(Lottery) Entry Fee $25.00 $25.00 Applicant
Application Fee $75.00 $75.00 Applicant
Billing Rate for Projects
Outside of Contract Scope $250.00 / hour $250.00 / hour City
1 Fees may be lower pursuant to the relevant execute d Agreement (e.g., developer agreement, owner resale restriction agreement, promissory note, etc.)
2 25% of the $1,250 loan processing fee ($312.50) paid by the owner/lender will be transferred to the City for administration and internal processing of the subordination / payoff request.
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City of Campbell / HouseKeys
Below Market Rate (BMR) Program
Rental Application Guide
[November 2018 Draft]
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TABLE OF CONTENTS
1. Introduction Page 2
2. Online Web Portal Page 3
3. Establishing an Account Page 4
4. Household Information Profiles Page 5
5. Application Process Page 6
6. Below Market Rate (BMR) Maximum Rental Rates Page 11
7. Tenant Selection, Lease Signing, and Move In Page 12
8. Participant / Tenant Compliance, Responsibilities, and Annual Recertification Page 13
9. The Application File Structure & Application Criteria Page 14
10. Eligibility Criteria and Preferences Page 15
11. Qualification Factors Page 19
12. Income Inclusion and Exclusion Page 21
13. Reasonable Accommodation and Exception Requests Page 24
14. Landlord Compliance and Owner / Management Responsibilities Page 25
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1. INTRODUCTION
HouseKeys is the City of Campbell’s Affordable Housing Program Administrator. This Rental Application Guide includes the guidelines, policies, and procedures that comprise the Affordable Rental Program for Below Market Rate (BMR) units.
Applying for, renting, and following leasing rules on an Affordable Rental Unit differs in many ways from renting at market rate. These differences include maintaining income eligibility during the entire lease term. It is important that prospective tenants understand the rules and procedures of the City’s Affordable Housing Program (“Program”) fully.
The Program Application Guide and other relevant information (e.g., Ordinances, procedures, and income limits), will be amended and updated from time to time . All proposed changes are subject to approval by the City Council prior to implementation and shall comply with state and federal affordable housing laws.
Updates to this Program Application Guide and other relevant information will be posted on the HouseKeys website
Please contact HouseKeys with any questions or concerns regarding this document or any other question regarding the City’s affordable housing program:
Online: http://www.housekeys2.com
Email: [email protected]
Phone: 1-877-460-KEYS (5397)
Address: 70 N. First Street Campbell, CA 95008
ALL GUIDELINES ARE SUBJECT TO CHANGE WITHOUT NOTICE
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2. ONLINE WEB PORTAL DASHBOARD OVERVIEW
Information Profiles Tools & Planning Program Center
Information Profiles are used to
gather important facts that
determine your eligibility and
qualification. Th ese profiles will
be used by the Program
Administrator to complete your
Program application and
determine your eligibility to
participate in Program activities.
There are many calculations
involved in an Affordable
Housing Program. From
calculating the income category
of your household, to
determining your maximum
restricted rent pr ice and utility
allowance, it’s important to
understand the math behind
these Programs.
All Application, Opportunit ies,
Opportunity Drawing s, and
Participation Activit ies are
captured in your Program
Center. As soon as you
complete your initial registrati on,
this is where you’ll spend the
most time participating in the
Program.
Program File Cabinet Program Marketplace Community Center As you start to apply for and
participate in Program activities,
your file cabinet is where you’ll
track progress, exchange
information, and communicate
with Program administrators.
The Program marketplace is
where you can shop for
ownership, rental, and financing
opportunities.
The online community center will
have a classroom, a bulletin
board, and chatroom so you can
stay educated, informed and in
touch with other Program
participants and stakeholders.
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3. ESTABLISHING AN ACCOUNT (HOUSEHOLD PROFILE) IN THE MYHOUSEKEYS (WWW.MYHOUSEKEYS.COM)
The following five (5) actions are the initial steps needed to establish your household’s affordable housing account.
REGISTRATION
PROCESS ACTION OR MILESTONE
1. Initial Signup
Start out by completing our simple registration form. This step collects very basic information from you to establish a User Account, including your name, contact information, and your household size and income.
2. Complete the
Registration Wizard
The next step includes additional details about your address, household members, income profiles, and preference criteria. The preference criteria are described on Step 5 of the Registration Wizard. Completion of the Wizard will create a summary of your household and provide you with access to additional features of the Administrator Platform.
3. Browse the
Marketplace
The Marketplace allows you to shop for Ownership, Rental and Finance Program opportunities that interest you. Make sure to read the Program Profile and get an understanding for how it works, the intent, the rules and the process.
4. Request an
Application I.D.
The Application I.D. allows the Program Provider and Administrator to identify your household as a prospective applicant household. It also puts you on the notification list to receive information and updates.
5. Find an Opportunity
and Enter an
Opportunity
Drawing
Each Opportunity is placed into an Opportunity Drawing that allows HouseKeys to facilitate multiple applicant interest. Application I.D.s are prioritized through a Random Selection Process (Lottery) or by Time and Date Stamp (First -Come- First-Serve).
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4. HOUSEHOLD INFORMATION PROFILES
HouseKeys holds orientation classes t o introduce the Program and help applicant Households organize their application files and prepare for the application process. The application packet is broken down into 10 Household Information Profiles:
# Information
Profile Name
Description Purpose
1 Location Profile Where you live and
where you work
The address where you live and work is an important factor in determining your eligibility. The county you presently live in, or may be moving to, is often used to determine how to categorize your household.
2 Member Profile The people who live in
your housing unit
The number of people in your household determines your household size and household size is used to determine income category.
3 Income Profile Documenting the total
income of all
household members.
Income documentation is required by all household members who are 18 years of age or older
4 Expense Profile Documenting monthly
expense obligations
It’s important to ensure that your total monthly expenses show that you can afford the monthly rent for the unit you are applying for 5 Asset Profile Deposit Funds and
other Assets
You need to document your rental deposit funds. Please note that Assets are included in income calculations using the income shown on statements or calculations used by the Program Underwriter. See Asset Limits below. 6 Liability Profile Your Debt Your debt adds to monthly expenses and the maximum monthly rent that you can afford is an important qualification factor
7 Credit Profile Your Credit Score All three credit bureaus (Equifax, Experian, and TransUnion) are evaluated to ensure you meet minimum credit requirements
8 Public Record
Profile
Collections, Liens,
Bankruptcies and
Foreclosures
These are evaluated to determine whether or not there is any risk that the finalization of lease signing or meeting any of the property management requirements.
9 Demographics
Profile
Applicant
Characteristics
Demographic information is critical to ensure fair housing compliance and to track how Program Providers are meeting their housing goals. 10 Program
Preference Profile
Program Factors that
determine Applicant
Priority
While all applicants may apply for a housing program, applicants that live and work where the program is located are prioritized in many jurisdictions.
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5. APPLICATION PROCESS
5A. APPLICATION PROCESS (ORIENTATION, PRE-APPLICATION, AND PREFERENCES)
The application process is summarized below and on the following pages:
ORIENTATION
• All applicants, co-applicants, married couples, domestic partners, and any person that can or will be on the lease, must complete the Orientation before being eligible to participate in an Opportunity Drawing. Any exceptions to this rule will be posted in the Opportunity Drawing details. Applicants can sign up for an orientation class on the HouseKeys website.
PRE-APPLICATION AND APPLICATION ID ASSIGNMENT
• Request an Application ID in the Program Center
• Answer all of the Pre-Application Questions in the Request Wizard • The applicant will either receive a pass or fail rating based on the information in the pre-application wizard • If the applicant passes, an Application ID will be assigned immediately. If there is a system delay or malfunction, Applicat ion IDs can take up to 10 business days to be assigned.
• An Application ID does not mean you are eligible or approved for the Program. It provides the applicant Household with the ability to enter Opportunity Drawings.
PREFERENCES AND RANKING
In all instances, the live in Campbell / work in Campbell / work-for Campbell preference ( described in Section 9) will be used and verified by HouseKeys during the application process. Applicant Households that meet the stated preference criteria will be assigned a higher ranking. Once the preferred Household list is exhausted, HouseKeys will begin processing the files for the non- preference households.
Continued next page
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5B. APPLICATION PROCESS (OPPORTUNITY DRAWINGS)
Affordable Rental Opportunities are marketed through an Opportunity Drawing (i.e., lottery). Applicant Households enter an Opportunity Drawing using their Application ID number.
OPPORTUNITY NOTIFICATION
• A notification email will be sent out to Application ID holders. When a new Opportunity Drawing is released it will be posted in the Program Center
• Follow the instructions and review the terms in each Drawing Notification. It is the applicant Household’s responsibility to follow all instructions in each Opportunity Drawing, based on the method used. Each Opportunity Drawing announcement will include the selection method, file submission instructions, and one or more deadlines that the applicant Household must meet.
OPPORTUNITY ENTRY
• Once the applicant reviews the Opportunity Drawing information and is certain that he/she can meet ALL listed requirements, the applicant can follow the instructions to Enter Drawing
• Applicant must complete Authorization Form for verification and sharing information with Property Management (landlord) • Applicant must complete the Intent to Abide Form to confirm that the applicant understands the Program Requirements • Applicant Households can only apply for one Opportunity Drawing at any one time. If an applicant Household has entered more than one drawing, the lowest ranked submission will be chosen. Applicant Households are allowed to opt out of any drawing as long as the “opt out form” is submitted before an applicant Household enters another drawing. • If there is another Opportunity Drawing available at the same time, the applicant can opt out of one Opportunity Drawing to ente r another, if it is done before the Opportunity Drawing submission deadline. • If a household applies for two opportunities at the same time, and obtains two priority numbers, the applicant will be assigned the lower priority number.
• In some cases, the Opportunity Drawing will remain open until all applicable units are leased. Anyone who enters their Application ID into an Opportunit y Drawing after the first deadline will be added to the end of the list using the time and date stamp of their Opportunity Drawing entry.
• Ranking and file request numbers are issued to set the processing order for each Opportunity Drawing. A new ranking and file request number will be issued every time an applicant Household participates in a new Opportunity Drawing. Ranking, file request, and Application ID numbers are not transferable.
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5C. APPLICATION PROCESS (OPPORTUNITY DRAWING METHODS)
When an Opportunity becomes available, HouseKeys uses the methods outlined below to determine the order in which Application IDs and files will be ranked and organized for review.
METHOD 1: LOTTERY SELECTION AND ASSIGNMENT
All applicant Households that enter their Application ID numbers into an Opportunity Drawing by the deadline will receive an Application ID ranking. If a Lottery is held, Application IDs will be chosen at random and assigned an Unfiltered Ranking nu mber based on the order in which they were drawn.
Each Application ID on the Unfiltered Ranking list will be re- ordered to account for the Live/Work Preference and a new ranking list Filtered by Live/Work Preference will be created. The Unfiltered Ranking num ber becomes the tie breaker between households with the same preference category.
Please note: Applicant Households who do not meet the Occupancy Standard will be assigned a lower priority number, regardless of lottery placement, or other eligibility criteria (e.g., First Time Home Buyer [FTHB]).
METHOD 2: FORM SUBMITTAL (DATE & TIME STAMP) TIE-BREAKER
All applicant Households that enter their Application ID numbers into an Opportunity Drawing by the deadline will receive an Application ID ranking. The Unfiltered Ranking in this method is based on the time and date stamp that their entry form was completed.
As with Method 1, the Unfiltered Ranking number list is re- ordered based on Live/Work Preference and the Unfiltered Ranking number is used as the tie breaker between households with the same preference category.
Please Note: Applicant Households that do not meet the Occupancy Standard will be ranked last.
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5D. APPLICATION PROCESS (APPLICATION REVIEW)
TENANT APPLICATION REVIEW AND LANDLORD SCREENING
• The Administrator will determine the processing order of the applicants and their priority ranking • Once the Administrator has finalized the application ranking and processing order, a list will be sent to the landlord to beg in the background and credit check process using the previously signed authorization form. If the Administrator performs the background and credit check, this will be done immediately following the application ranking and processing order determination.
PROGRAM APPLICATION PACKAGE COMPLETION
• Once written confirmation has established that an applicant has met all requirements after credit bank background check, the Administrator will request the full application package for Underwriter review. • Applicants must provide and return all necessary documents to underwrite the file to the Administrator within 3 business days. • Documentation needs to be dated within 30 days of submission. • Applicants/Co-applicants, and or household members who submit inaccurate information, altered documentation, or false documentation or certifications, will be disqualified.
• Once all documents are received, the Applicant will be provided with a Submission ID which will be their file in line for Processing and Underwriting
APPLICATION REVIEW
• The application package will be reviewed, and if complete, will be submitted to the underwriter for review • If the application is incomplete, applicants will be given written notice to respond with any file updates or missing items • Applications that remain incomplete after notifications and applicable grace periods, will not be processed or forwarded to the Underwriter for final review
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5E. APPLICATION PROCESS (APPLICATION UNDERWRITING AND APPEAL)
APPLICATION UNDERWRITING
• The Underwriter will complete the review and issue a Program Eligibility and Qualification Certification (AKA “Approval Letter”). • It is important to note that the Program Underwriter may request additional items from the applicant. If the applicant does not respond within the grace period, or a denial is issued, the Underwriter will move to the next Submission ID holder. • If approved, the Administrator will notify the landlord of the outcome so that the applicant can move on with the leasing documentation and lease/contract signing as described in the next section.
APPEAL
• If the applicant does not agree with the Processor or Underwriter decision, the applicant Household will have 3 business days to appeal. The applicant Household will need to submit clear and sufficient documentation, along with an appeal form that details why they feel the decision is inaccurate, within the timeframe given. • Administrator Management will review the Appeal and all documentation. • Administrator will contact the applicant regarding the status of the appeal approximately 7 business days from the date the complete Appeal Package was submitted. Administrator may require additional time as will be indicated during the status notification
• Administrator is unable to hold properties for households in the application or appeal process. Administrator will move on to the next Application ID holder after the initial appeal review
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6. BELOW MARKET RATE MAXIMUM RENTAL RATES (Updated Annually)
Maximum Rental Rates: Maximum BMR rental rates are updated annually using the formula defined in the City’s Inclusionary Ordinance.
"Affordable rent" means monthly rent, including utilities and all fees for housing services, which do not exceed the following:
1. For lower-income households: one-twelfth of thirty percent of sixty percent of area median income, adjusted for assumed household size based on presumed occupancy levels of one person in a studio apartment, two persons in a one bedroom unit, three persons in a two bedroom unit, and one additional person for each additional bedroom thereafter.
2. For very low-income households: one-twelfth of thirty percent of fifty percent of area median, adjusted for assumed household size based on presumed occupancy levels of one person in a studio apartment, two persons in a one bedroom unit, three persons in a two bedroom unit, and one additional person for each additional bedroom thereafter.
The allowance for utilities is based on estimates published by the Santa Clara Housing Authority and the California Department of Housing and Community Development (HCD).
Area median income (AMI) is the household income for the median (i.e., middle) househol d in a region. Each year, the Federal Department of Housing and Urban Development (HUD) calculates the median income for every metropolitan region in the country.
The United States Census Bureau uses a series of terms to determine the definition of a household. The basic meaning of Household is an occupied housing unit. A Householder (Primary Applicant) is the person whose name the housing unit is rented to or owned by. Members of the household share familial ties, living space, expenses, debts and/or assets with the Householder.
Rent Adjustments: The BMR rental rate may be increased once in a 12- month period. Rent adjustments will be based on the updated income limits published by the California Department of Housing and Community Development (HCD) annually and posted on the Administrator website.
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7. TENANT SELECTION, LEASE SIGNING, AND MOVE IN
Once an applicant is selected and their file is fully underwritten, and a Program Approval is issued, the Administrator will contact the Landlord and provide the name of the selected applicant to coordinate the next step which is signing the lease agreement and all Program related documents.
1. Lease/Contract Signing:
a. The landlord will schedule an appointment with the applicant to go over all documents and sign the lease agreement. b. The landlord may ask the tenant for other documents needed to finalize the move-in (e.g. renter’s insurance). c. The applicant must comply with all Landlord requirements.
2. Move in Process:
a. The landlord may start the move- in process with the applicant once all of the rules and regulations for the project are explained and accepted by the applicant.
b. The landlord shall provide Administrator staff with a copy of the lease agreement, renter’s insurance, and all other documents deemed necessary to document the file for Administrator records. c. Once all documents have been approved by the landlord and Administrator and signed by the applicant, the “applicant” becomes a “participant” and must comply with all BMR Program rules and regulations, including but not limited to submitting all required Annual Certification documentation described on the following page.
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8. PARTICIPANT / TENANT COMPLIANCE, RESONSIBILITIES, AND ANNUAL RECERTIFICATION
Participant/Tenant Compliance and Responsibilities:
1. The tenant shall comply with all rules and regulations set forth by the Landlord or development.
2. The tenant shall also comply with all Affordable Program (BMR) requirements for the duration of the lease.
3. Tenant must notify Owner/Manager within ten (10) working days of any and all changes in family structure, family size, employment income etc.
Annual Recertification Process:
1. All BMR tenants shall be recertified once per year, at the end of the lease term, for compliance with all Program requirements including, but not limited to income and family size.
2. Administrator will initiate the Recertification Process with the Owner/Manager as described in the next section.
3. The Program Coordinator will require a full and complete application package for any household asking for a lease extension or a new lease.
4. The tenant will be required to sign the “Intent to Abide” disclosure/form.
5. The tenant will have 30 days to submit all required documentation, following notification of the annual recertification process.
6. Refusal by tenant to promptly provide all required documents for re -certification will result in a 60 -day Termination of Lease and a Notice to Vacant will be sent out.
Enforcement
1. If tenant fails to cure t he violation, the City/Administrator will exercise its legal right to coordinate with Property Owner, Landlord, and/or the Management Company to initiate Unlawful Detainer proceedings
2. The City/Administrator reserves the option to apply to a court of competent jurisdiction if it deems legal action is appropriate
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9. THE APPLICATION FILE STRUCTURE & APPLICATION CRITERIA
Program Eligibility and Qualification Criteria
The primary role of a Program Administrator is to determine the eligibility and qualification of applicant Households. A Program Processor serves the role of gathering the documents needed to evaluate the application and a Program Underwriter reviews the application to determine if it meets Program requirements.
It is important to understand that there is a lot of information needed to determine whether an application meets all the Program requirements. The application criteria used to determine whether an applicant Household will be approved fall into one of two categories:
• Program Eligibility Criteria: These are standards that define the characteristics of the target households who are best served by the Program and help the Program provider meet its intended goals. These standards often follow legal definitions and published documentation requirements. Underwriters evaluate Program Eligibility Criteria to determine if households “check eligibility boxes” that include, but are not limited to, residence address, employment address, household size requirements, total household income requirements, and whether an applicant meets the leg al standard to be defined as a first-time homebuyer. Program Underwriters need to consider Program eligibility for the years prior to the rental application.
• Program Qualification Criteria: Once it is determined that an applicant is eligible for the Program, the Program Underwriter must also make sure that the rental opportunity is affordable for the applicant and that they are tenant-ready. In addition to requiring applicants attend orientation classes, the underwriter ensures that the tenant understan ds what they are signing up for and is comfortable with the annual income recertification.
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10A. ELIGIBILITY FACTORS AND PREFERENCE CRITERIA FOR RENTAL OF BMR UNITS
The City’s Inclusionary Housing Ordinance establishes a priority system for allocating the limited number of affordable rental units.
First priority (for up to ten percent of all affordable units) shall be given to income eligible employees of the City of Cam pbell. Second priority is given to income eligible existing Campbell residents and third priority is given to income eligible persons employed within the city limits of the City of Campbell. If a particular address is in question, Administrator will check with City staff to determine if the property is within the City’s jurisdictional boundaries.
The preference system will be used to establish a ranking of applicants. An eligible household will be ranked according to where they live or work . While an applicant who lives or works within the city limits will have priority over an applicant who does not, residency/employment status is not a requirement for the Program, and all individuals and households may apply. Households comprised of applicants who do not reside or work in Campbell may occupy a BMR unit if there are no eligible Campbell residents or workers on the eligibility list for occupancy.
PROGRAM PREFERENCE CRITERIA*
Priority 1: Work for City
(for up to 10% of units)
Must currently work for the City of Campbell government entity at least 20-hours per week, and held their position for at least 6-months Employee must have passed probation
Priority 2: Live in Campbell Must currently live in Campbell and maintained residency for at least 6-months Priority 3: Work in Campbell
Must currently work at a business located in Campbell
at least 20-hours per week, and held position for at least 6-months * This category includes Campbell School District employees . The district office is located in Campbell although the school building may be located in another city
*Eligibility will be evaluated at the time of lottery submission and verified again prior to occupancy
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10B. OCCUPANCY STANDARDS FOR PROGRAM UNITS
Applicant/Co-Applicants must occupy the property as their principal residence. This means that the Applicant/Co-Applicants must use the property as their primary place of residence and the property must be tenant-occupied upon renting for the term of the lease agreement. Use of the property for additional rental purposes, including temporary leases, sub- leasing or room rentals are not allowed under the Program and will trigger immediate action.
To ensure that the City's limited BMR units are used efficiently, a household must be of a size equal to the number of bedrooms in the BMR unit. Pursuant to fair housing laws, the maximum occupancy allowed in a BMR Unit is two people per bedroom, plus one additional person. The table below shows the minimum and maximum household size based on the number of bedrooms. In some cases, an exception to the minimum standard may be made where no other qualified renter can be approved within 30- days of holding the lottery.
The City’s BMR Administrator will verify household occupancy once per year for the Term of the Lease Agreement between the City and the renter(s).
Note: Maximum Household size is subject to change per property management or Affordably Housing Agreement documents.
PROGRAM OCCUPANCY STANDARDS
Number of Bedrooms Minimum Household Size Maximum Household Size One 1 3
Two 2 5
Three 3 7
Four 4 9
Five 5 11
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10C. INCOME ELIGIBILITY CRITERIA
Income Eligibility is based on household size (number of persons in the household) and whether a household’s income is below income category limits published annually by the California Department of Housing and Community Development (HCD) on their HCD website as well as the Program Website. These resources should be used to determine the income percentage and income category that is applicable to your household.
Campbell’s housing ordinance presently defines the three income types most often used in their affordable homeownership program
• “Very low-income Household” means a household whose household income does not exceed very low-income limits applicable to Santa Clara County
• “Lower-Income Household” means a household whose household income does not exceed the lower income limits applicable to Santa Clara County.
• “Moderate-Income Household” means a household whose household income does not exceed one hundred twenty percent of the area median income applicable to Santa Clara County
It is very important for the applicant Household to know BOTH:
• Applicant Household Income as a percentage of the published County Median Income (calculated by dividing Household Income by the published Median Income Amount) applicable to your household size • Whether or not applicant Household Income is below the published income category limit applicable to your household size (e.g. Extremely Low, Very Low, Low, Median, or Moderate)
Income earned from assets, such as dividends, interest, rental income, business income, etc., is included in the household’s annual income pursuant to the Code of Federal Regulations , Title 24, Part 5 income inclusions (§ 5.609). Income calculation is also guided by California Code of Regulations , Title 25, Chapter 6.5 Program Operations, Gross Income (§ 6914). To qualify for the City of Campbell BMR Program, your househol d’s combined gross annual income cannot exceed the maximum income limit for your household size, as established by the HCD. All household members ages 18 or older must have their income verified. Household members that do not work or will not have any income in the next 12 months must complete a zero-income affidavit.
Note: The income categories for a particular development may vary in accordance with the Affordable Housing Agreement.
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10D. ASSET LIMITATION
In addition to meeting the income limit, there are restrictions on the amount of assets that a household may have to be eligible for the City of Campbell’s Program. For households applying to be a renter of a BMR unit, the limit is 100% of household AMI.
Asset limit = 100% of household AMI
The Administrator will review household income and assets for all occupants, including temporary occupants. To determine total household assets, Administrator will review the household’s total assets according to monthly financial statements and/or other valuations. A six-month average will be calculated just prior to Program application to determine eligibility and avoid applicant “asset dumping” (asset liquidation or transfer to other parties). Assets held in IRS-recognized retirement accounts (401-k’s, IRA’s, etc.) are not included for the purpose of determining whether an Applicant meets the Program asset limits. However, retirement and insurance payments will be used to determine gross household income.
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11. QUALIFICATION FACTORS
RENT TO INCOME RATIO
• To qualify, applicants must have income at least 2 times the tenant paid rental amount for Below Market Rent ( BMR) rental units. Applicants may be accepted with conditions, such as additional security deposit or guarantor. • No more than 50% of the applicant’s income can go to the rent payment. For example, if income is $30,000, the maximum rent cannot exceed $1,250.00 (50% of $30,000/12). Additional debts will also be taken into consideration. • If a guarantor is required, the guarantor’s income must be 5 times the tenant paid rental amount.
CREDIT
• The applicant shall pay the required non-refundable fee to the landlord in the form of a money order or cashier check. • A credit report is required for all applicants and co-applicants • All applicants/co-applicants must pass the landlord’s credit check and a background check. • The minimum credit score is 620 (in addition to Landlord Requirements). • An applicant with an unsatisfactory credit report will be denied. • Excessive collection accounts, including utility accounts (regardless of status) will result in denial of the rental application. All utility collection accounts within the last 2 years must be paid in full and confirmation presented with the application in order to be approved.
• An applicant whose credit report contains more positive than negative history may be approved subject to an additional deposit. • Bankruptcy (regardless of discharge) or repossession within the last 2 years will be grounds for denial of the application or may require an additional deposit for approval.
• Applicants with a foreclosure history over 2 years old may be accepted without an additional deposit. Applicants with a more recent foreclosure history may be approved with an additional deposit. • Rental housing debt, evictions, or collections will result in automatic denial of the application. • Any unresolved tax liens will negatively impact the overall applicant screening result.
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11. QUALIFICATION FACTORS (CONTINUED)
BACKGROUND SCREENING
• All applicants will be screened for criminal history at initial application. • A f elony conviction or adjudication for a felony offense against persons or property in the last seven years will result in an automatic denial of application.
• A misdemeanor conviction may result in denial of application or lease renewal with conside ration given to the nature of the conviction.
• Applicants or current residents appearing on the list of known terrorists and/or wanted fugitives as provided by the Office of Foreign Asset Control (OFAC), federal agencies (including the FBI or other state and local law enforcement agencies) will be denied.
GUARANTORS
• Acceptable guarantors must reside in the United States and qualify in each of the above categories. An additional deposit may be accepted if a qualified guarantor is not available.
RENT HISTORY
• Applicants (except first time renters) must have at least 12 months of verifiable and positive residency history immediately preceding application.
• First-time renters or applicants with no verifiable residency history will require payment of an additional deposit or acceptable guarantor in lieu of immediate past rental history.
• Residency history that includes prior evictions, multiple late payments, returned checks, poor housekeeping, conduct disturbi ng the rights and comforts of other residents, unauthorized occupants, property damage or failure to adhere to the policies and regulations of the community or management company will result in automatic denial of the application. • Landlord reference indicating the landlord would not re-let to the applicant due to lease violation is grounds for automatic denial of the application.
• If the applicant owned his/her immediate prior residence, mortgage history will be verified through a c redit report or other documentation of homeownership.
IDENTIFICATION
All applicants will be asked to provide positive identification including a copy of a valid driver’s license and social security card.
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12. INCOME INCLUSION AND EXCLUSION
The Federal and State government both have rules that determine how Gross Income is calculated and what income types are included and excluded from the Gross Income total.
Application Criteria Description
• The gross amount, before any payroll deduction, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services
• The net income from the operation of a business or profession (for this purpose, expenditure for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business). The adding back of certain deductions will be subject to underwriter approval (e.g. depreciation). • Interest, dividends and other net income of any kind from real or personal property. • Payments in lieu of earnings, su ch as unemployment and disability compensation, worker’s compensation and severance pay (except as outlined in “exclusions” section)
• Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on a passbook savings rate, up to 10%. The current passbook savings rate used by the Administrator is 2.5% • Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling;
The following is an abbreviated list of items that are excluded from income:
• Casual, sporadic or irregular gifts
• Amounts which are specifically for or in reimbursement of the cost of medical expenses • Lump-sum additions to family assets such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlement for personal or property losses • Foster child care payments
• The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the eligible household
• See full inclusion list on the Program Website
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Income Review Procedures
Income maximums are based on “gross” income derived from all sources as detailed in Internal Revenue Code (26 USC Section 61), whether or not exempt from federal income tax. Administrator projects future income based on the gross income on each applicant’s past income. In addition to other items deemed necessary to make this income determination, the Administrator may request up to 4 of the most recent year -to-date pay statements and the previous year’s final pay statement. Ad ministrator must review income documentation for all Household members 18 years and older, regardless of dependency status. Applicants without income will need to sign a Zero-Income Affidavit provided by the Administrator. Unemployment benefits are considered income.
Please Note: All Variable Income is subject to Underwriter Approval. Each circumstance is different and must be considered using the documentation in the file. The terminology in this Guide is meant to be used as a basic guide to help pros pective applicant Household’s understand how this income type is considered during the underwriting process.
For employed applicants, annual income is generally derived by dividing the year-to-date gross income by the current pay period count and then by annualizing an estimated pay period amount by the total pay period count over one year (12 months). Please note that a Verbal and Written Verification of Employment may be required to be completed by the Employer issuing the pay statements.
# How Often Paid How to Determine Annual Income
1 Paid Annually Annual Gross Pay
2 Paid Monthly Use monthly gross payment x 12
3 Paid Twice Monthly Twice monthly gross pay x 2 pay periods x 12 4 Paid Biweekly Biweekly gross pay x 26 pay periods
5 Paid Weekly Weekly gross pay x 52 pay periods
6 Paid Hourly Hourly gross pay x average # of hours per week x 52 weeks 7 Government Employees with Annual Award Letters Income may be derived by referring to the Annual Award Letter
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Variable Income (Tips, Overtime, Bonuses, etc.)
Please Note: All Variable Income is subject to Underwriter Approval. Each circumstance is different and must be considered using the documentation in the file. The words below are meant to be used as a basic guide to help prospective applicant Household’s understand how this income type is considered during the underwriting process.
Tips, Overtime, Bonus, and other “variable income amounts” (amounts that change with each pay period) will be annualized separately from the base income outlined on the chart above. All income will be annualized and totaled unless the applicant can provide documentation from the employer. The employer must be available to complete a verbal verification of employment with the Administrator. In cases, where the variable income item is a one -time occurrence, the amount will be removed from the annualized calculation of income and added in a one-time total to determine the annual income.
Example: An applicant earns $60,000 per year based on base m onthly pay statements of $5,000 ($5,000 x 12). In addition to the base income show, the applicant received a $2,500 one-time bonus in the first quarter of the year. If annualized, the $2,500 quarterly bonus would total $10,000 and the total income would be $70,000 ($60,000 base + $10,000 annualized bonus income). If proper documentation shows that the $2,500 is a one -time payment, and Administrator is able to verify and validate this information, the $2,500 would be added to the $60,000 base. The alternative total income would be $62,500 ($60,000 base + $2,500 one-time bonus).
Seasonal Workers: Administration will not annualize current income for seasonal workers who provide a Verification of Employment from their employer (s) verifying that the work does not occur year-round
Self-Employed Income: All self-employed applicants must submit a notarized Self -Employed Affidavit provided by Administrator. If self-employed for 2 or more years, Administrator will use verifiable (verified using Form 4506-T) federal income tax returns and review the net income for as many as 3 years of tax returns to determine the projected annual income. If self -employed less than 2 years, Administrator will review the submitted Profit & Loss Statement and use it to determine pr ojected annual income. Additional documentation may be needed from the Self-Employed Household Member in order to determine projected annual income.
Calculating Income from Cash Income: In the case of an applicant who is paid cash for employment, Administrator will require a Verification of Employment from the applicant’s employer to confirm annual income and IRS Tax Verification Form 4506-T to confirm that no taxes were paid.
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Variable Income (Continued)
Income from Commercial Property or Land Owned: The net income from any commercial property or land owned by any applicant shall be counted toward the annual Household income.
Unemployed Applicants: Unemployed applicants who are receiving no income at all should submit a Zero -Income Affidavit as provided by Administrator in place of income statements. Applicants receiving unemployment benefits do not need to complete the Zero-Income Affidavit as unemployment benefits are considered income.
Additional Notes on Income Calculation
If applicant has recently changed positions with employer, HouseKeys will determine the effect of the change on the applicant’s eligibility and opportunity to receive bonus or overtime pay in the future
If applicant who has historically been employed on a part -time basis indicates that he or she will now be working full time (or vice versa), obtain written confirmation from borrower’s employer
A verbal verification of employment (VOE) may be required for each employer
All material alterations, and/or omissions from the initial Registration, Application ID Questions, Opportunity Drawing Entry Form, Application Submission and Supporting Documents; including but not limit ed to household size, income and asset information, etc., are not permissible and will render all future re-submissions ineligible for review and approval for a period of one year. Exceptions for re-submissions are significant life events such as a job/car eer change, marriage, death, or the birth of a child and are at the discretion of the Administrator.
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13. REASONABLE ACCOMMODATION AND EXCEPTION REQUESTS
Accommodations in Program rules, policies, practices, or services, when such accommodations may be necessary to afford person s with disabilities, or a household with a member with disabilities, equal opportunity to apply for a BMR home. The requested accommodation must be reasonably related to the particular disability of the household member, and must be necessary in order to provide the household with equal access to housing.
Households or individual applicants unable to produce any particular document required in the application form for legitimate reasons beyond their control (natural disaster, military service, refugee status, domestic violence, witness protection program, disability etc.) may request an exception for that particular document.
Upon such request, Administrator may request a reasonably equivalent alternative document, and/or any additional supporting documentation deemed necessary by the Program Processor and Program Underwriter to verify eligibility of the Applicant/Co- Applicant and/or their entire Household.
Exceptions related to disabilities (reasonable accommodations) may be requested according to this procedure, with a brief description of the exception(s) needed due to the Applicant’s disability. The City and Administrator wil l consider the requested exception and will provide a written response within 14 calendar days, stating if the requested exception can be granted in full or part and the reason for such decision. The Administrator may approve or deny such request. If denied, Applicants may submit an appeal of such denial to the City.
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Below Market Rate (BMR) Program
14. LANDLORD COMPLIANCE AND OWNER / MANAGEMENT RESPONSIBILTIES
1. General Compliance: The landlord shall comply with all Program requirements and provide requested documentation to the City/Administrator in accordance with these Program Guidelines, the Developers Affordability Agreement , and the City’s Inclusionary Housing Ordinance.
2. Current Records. The landlord shall keep current and updated BMR tenant/participant records that relate to Program eligibility (e.g. household member occupancy changes, employment loss, income changes, etc.).
3. Annual Recertification: Owner / Manager shall, upon request, provide Administrator with all required Annual Audit documents listed on the Program checklist, for review and approval, as part of the annual recertification process.
4. Tenant Income Changes: Following notification to and verification by Administrator , the Owner / Manager shall terminate the tenant’s lease and send the tenant a not ice to vacate if the tenant’s income level exceeds the maximum income limit for that particular PROGRAM unit.
5. Vacancies: Owner / Manager shall notify Administrator in writing, using Exhibit A of the rental guide, upon vacancy of any BMR unit.
a. Administrator will set up a lottery and start processing applications within 60 to 90 days of receiving the notice. b. Administrator will provide a list of potential tenants to the Owner / Manager for review and approval. c. Owner / Manager shall provide Administrator with the following documents for all approved tenants:
1) Copy of the credit report
2) Copy of the background check.
3) Letter of approval once a tenant has been approved by the Owner / Manager for occupancy. 4) copy of the lease agreement
5) Updated rent roll
6) All other relevant reports or documents, as requested by the Administrator / City
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Below Market Rate (BMR) Program
Ownership Application Guide
[November 2018 Draft]
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TABLE OF CONTENTS
1. Introduction Page 2
2. Online Web Portal Page 3
3. Establishing An Account Page 4
4. Household Information Profiles Page 5
5. Application Process Page 6
6. Below Market Rate (BMR) Pricing And City’s Option To Purchase Page 11
7. Application File Structure And Criteria Page 12
8. First-Time Homebuyer Education And Title Requirements Page 14
9. Eligibility And Preference Criteria Page 15
10. Application Criteria Page 19
11. Transaction And Document Handling Page 26
12. Reasonable Accommodation Page 28
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1. INTRODUCTION
HouseKeys is the Cit y of Campbell ’s Affordable Housing Program Administrator. This Ownership Application Guide includes the guidelines, policies, and procedures that comprise the Affordable Ownership Program for Below Market Rate (BMR) homes.
Buying, owning, and selling an Affordable Below Market Rate (BMR) Ownership Unit differs in many ways from buying, owning, and selling at market rate. It is important that the buyers and sellers of BMR Ownership Units understand the rules and procedures of the City’s Affordable Housing Program (“Program”) fully.
The Program Application Guide and other relevant information (e.g., Ordinance procedures and income limits) will be amended and updated from ti me to time. All proposed changes are subject to approval by the City Council prior to implementation and shall comply with state and federal affordable housing laws.
Updates to this Program Application Guide and other relevant information will be posted on the HouseKeys website
Please contact HouseKeys with any questions or concerns regarding this document or any other question regarding the City’s affordable housing program:
Online: http://www.housekeys2.com
Email: [email protected]
Phone: 1-877-460-KEYS (5397)
Address: 70 N. First Street Campbell, CA 95008
ALL GUIDELINES ARE SUBJECT TO CHANGE WITHOUT NOTICE.
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2. ONLINE WEB PORTAL DASHBOARD OVERVIEW
Information Profiles Tools & Planning Program Center
Information Profiles are used to
gather important facts that
determine your eligibility and
qualification. Th ese profiles will
be used by the Program
Administrator to complete your
Program application and
determine your eligibility to
participate in Program activities.
There are many calculations
involved in an Affordable
Housing Program. From
calculating the income category
of your household, to
determining your maximum
restricted rent price and utility
allowance, it’s important to
understand the math behind
these Programs.
All Application, Opportunities,
Opportunity Drawings, and
Participation Activities are
captured in your Program
Center. As soon as you
complete your initial registration,
this is where you’ll spend the
most time participating in the
Program.
Program File Cabinet Program Marketplace Community Center As you start to apply for and
participate in Program activities,
your file cabinet is where you’ll
track progress, exchange
information, and communicate
with Program administrators.
The Program marketplace is
where you can shop for
ownership, rental, and financing
opportunities.
The online community center will
have a classroom, a bulletin
board, and chatroom so you can
stay educated, informed and in
touch with other Program
participants and stakeholders.
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3. ESTABLISHING AN ACCOUNT (HOUSEHOLD PROFILE) IN THE MYHOUSEKEYS (WWW.MYHOUSEKEYS.COM)
The following five (5) actions are the initial steps needed to establish your household’s affordable housing account.
REGISTRATION
PROCESS ACTION OR MILESTONE
1. Initial Signup
Start out by completing our simple registration form. This step collects very basic information from you to establish a User Account, including your name, contact information, and your household size and income.
2. Complete the
Registration Wizard
The next step includes additional details about your address, household members, income profiles, and preference criteria. The preference criteria are described on Step 5 of the Registration Wizard. Completion of the Wizard will create a summary of your household and provide you with access to additional features of the Administrator Platform.
3. Browse the
Marketplace
The Marketplace allows you to shop for Ownership, Rental and Finance Program opportunities that interest you. Make sure to read the Progr am Profile and get an understanding for how it works, the intent, the rules and the process.
4. Request an
Application I.D.
The Application I.D. allows the Program Provider and Administrator to identify your household as a prospective applicant household. It also puts you on the notification list to receive information and updates.
5. Find an Opportunity
and Enter an
Opportunity
Drawing
Each Opportunity is placed into an Opportunity Drawing that allows HouseKeys to facilitate multiple applicant interest. Application I.D.s are prioritized through a Random Selection Process (Lottery) or by Time and Date Stamp (First -Come- First-Serve).
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4. HOUSEHOLD INFORMATION PROFILES
HouseKeys holds orientation classes t o introduce the Program and help applicant Households organize their application files and prepare for the application process. The application packet is broken down into 10 Household Information Profiles:
# Information
Profile Name
Description Purpose
1 Location Profile Where you live and
where you work
The address where you live and work is an important factor in determining your eligibility. The county you presently live in, or may be moving to, is often used to determine how to categorize your household.
2 Member Profile The people who live in
your housing unit
The number of people in your household determines your household size and household size is used to determine income category.
3 Income Profile Documenting the total
income of all
household members.
Income documentation is required by all household members who are 18 years of age or older
4 Expense Profile Documenting monthly
expense obligations
It’s important to ensure that your total monthly expenses show that you can afford the monthly rent for the unit you are applying for 5 Asset Profile Deposit Funds and
other Assets
You need to document your rental deposit funds. Please note that Assets are included in income calculations using the income shown on statements or calculations used by the Program Underwriter. See Asset Limits below. 6 Liability Profile Your Debt Your debt adds to monthly expenses and the maximum monthly rent that you can afford is an important qualification factor
7 Credit Profile Your Credit Score All three credit bureaus (Equifax, Experian, and TransUnion) are evaluated to ensure you meet minimum credit requirements
8 Public Record
Profile
Collections, Liens,
Bankruptcies and
Foreclosures
These are evaluated to determine whether or not there is any risk that the finalization of lease signing or meeting any of the property management requirements.
9 Demographics
Profile
Applicant
Characteristics
Demographic information is critical to ensure fair housing compliance and to track how Program Providers are meeting their housing goals. 10 Program
Preference Profile
Program Factors that
determine Applicant
Priority
While all applicants may apply for a housing program, applicants that live and work where the program is located are prioritized in many jurisdictions.
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5. APPLICATION PROCESS
5A. APPLICATION PROCESS (ORIENTATION, PRE-APPLICATION, AND PREFERENCES)
The application process is summarized below and on the following pages:
ORIENTATION
• All applicants, co-applicants, married couples, domesti c partners, and any person that can or will be on title, must complete the Orientation before being eligible to participate in an Opportunity Drawing. Any exceptions to this rule will be posted in the Opportunity Drawing details. Applicants can sign up for an orientation class on the HouseKeys website.
PRE-APPLICATION AND APPLICATION ID ASSIGNMENT
• Request an Application ID in the Program Center
• Answer all of the Pre-Application Questions in the Request Wizard • The applicant will either receive a pass or fail rating based on the information in the pre-application wizard • If the applicant passes, an Application ID will be assigned immediately. If there is a system delay or malfunction, Applicat ion IDs can take up to 10 business days to be assigned.
• An Application ID does not mean you are eligible or approved for the Program. It provides the applicant Household with the ability to enter Opportunity Drawings.
PREFERENCES AND RANKING
In all instances, the live in Campbell / work in Campbell / work-for Campbell preference (described in Section 9) will be used and verified by HouseKeys during the application process. Applicant Households that meet the stated preference criteria will be assigned a higher ranking. Once the preferred Household list is exhausted, HouseKeys will begin processing the files for the non- preference households.
Continued next page
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5B. APPLICATION PROCESS (OPPORTUNITY DRAWINGS)
Affordable Ownership Opportunities are marketed through an Opportunity Drawing (i.e., lottery). Applicant Households enter an Opportunity Drawing using their Application ID number.
OPPORTUNITY NOTIFICATION
• A notification email will be sent out to Application ID holders. When a new Opportunity Drawing is released it will be posted in the Program Center
• Follow the instructions and review the terms in each Drawing Notification. It is the applicant Household’s responsibility to follow all instructions in each Opportunity Draw ing, based on the method used. Each Opportunity Drawing announcement will include the selection method, file submission instructions, and one or more deadlines that the applicant Household must meet.
OPPORTUNITY DRAWING ENTRY
• Once the applicant reviews the Opportunity Drawing information and is certain that he/she can meet ALL listed requirements, the applicant can follow the instructions to Enter Drawing
• Applicant must complete Authorization Form for verification and sharing information with Lender • Applicant must complete the Intent to Abide Form to confirm that the applicant understands the Program Requirements • Applicant Households can only apply for one Opportunity Drawing at any one time. If an applicant Household has entered more than one drawing, the lowest ranked submission will be chosen. Applicant Households are allowed to opt out of any drawing as long as the “opt out form” is submitted before an applicant Household enters another drawing. • If there is another Opportunity Drawing available at the same time, the applicant can opt out of one Opportunity Drawing to enter another, if it is done before the Opportunity Drawing submission deadline. • If a household applies for two opportunities at the same time, and obtains two priority numbers, the applic ant will be assigned the lower priority number.
• In some cases, the Opportunity Drawing will remain open until all applicable units are sold . Anyone who enters their Application ID into an Opportunity Drawing after the first deadline will be added to the end of the list using the time and date stamp of their Opportunity Drawing entry.
• Ranking and file request numbers are issued to set the processing order for each Opportunity Drawing. A new ranking and file request number will be issued every time an applicant Household participates in a new Opportunity Drawing. Ranking, file request, and Application ID numbers are not transferable.
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5C. APPLICATION PROCESS (OPPORTUNITY DRAWING METHODS)
When an Opportunity becomes available, HouseKeys uses the methods outlined below to determine the order in which Application IDs and files will be ranked and organized for review.
METHOD 1: LOTTERY SELECTION AND ASSIGNMENT
All applicant Households that enter their Application ID numbers into an Opportunity Drawing by the deadline will receive an Application ID ranking. If a Lottery is held, Application IDs will be chosen at random and assigned an Unfiltered Ranking nu mber based on the order in which they were drawn.
Each Application ID on the Unfiltered Ranking list will be re- ordered to account for the Live/Work Preference and a new ranking list Filtered by Live/Work Preference will be created. The Unfiltered Ranking num ber becomes the tie breaker between households with the same preference category.
Please note: Applicant Households who do not meet the Occupancy Standard will be assigned a lower priority number, regardless of lottery placement, or other eligibility criteria (e.g., First Time Home Buyer [FTHB]).
METHOD 2: FORM SUBMITTAL (DATE & TIME STAMP) TIE-BREAKER
All applicant Households that enter their Application ID numbers into an Opportunity Drawing by the deadline will receive an Application ID ranking. The Unfiltered Ranking in this method is based on the time and date stamp that their entry form was completed.
As with Method 1, the Unfiltered Ranking number list is re- ordered based on Live/Work Preference and the Unfiltered Ranking number is used as the tie breaker between households with the same preference category.
Please Note: Applicant Households that do not meet the Occupancy Standard will be ranked last.
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5D. APPLICATION PROCESS (LOAN REQUIREMENTS, APPLICATION FILE REQUEST, AND APPLICATION COMPLETION)
MORTGAGE LOAN REQUIREMENTS
The applicant Household must obtain a loan pre-approval from an Administrator-approved Lender to enter an Opportunity Drawing.
Applicant Household must have acceptable payment-to-income ratios and show enough liquid assets (e.g. cash) to successfully close on the proposed home purchase. Any down payment assistance or closing cost assistance that will be used will need to have a written pre-approval from the program provider as well.
• Applicants must obtain a m ortgage pre-approval letter, on mortgage company letter, with loan officer information, including their National Multistate License System (NMLS) ID number and packet must include:
o Uniform Residential Loan Application and Uniform Underwriting and Transmittal Summary o Verification of Employment and Verification of Assets o Credit Report and Automated Underwriting System Findings (e.g. Desktop Underwriter Findings)
APPLICATION RANKING AND FILE REQUESTS
• The Opportunity Drawing Terms and Notifications will indicate when, where and how the Program Application Package needs to be submitted
• Applicants must provide a complete Program Application Package, including exhibits and the supporting documents listed on the Document Checklist, to HouseKeys by the deadline stated in the Opportunity Drawing Notification.
PROGRAM APPLICATION PACKAGE COMPLETION
• Documentation needs to be dated within 30 days of submission. • Applicants/Co-applicants, and or household members who submit inaccurate information, altered documentation, or false documentation or certifications, will be disqualified.
• Once all documents are received, the Applicant will be provided with a Submission ID which will be their file in line for Processing and Underwriting
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5E. APPLICATION PROCESS (APPLICATION REVIEW AND UNDERWRITING)
APPLICATION REVIEW
• The application package will be reviewed, and if complete, will be submitted to the underwriter for review • If the application is incomplete, applicants will be given written notice to respond with any file updates or missing items • Applications that remain incomplete after notifications and applicable grace periods, will not be processed or forwarded to the Underwriter for final review
APPLICATION UNDERWRITING
• The Underwriter will complete the review and issue a Program Eligibility and Qualification Certification (AKA “Approval Letter”). • It is important to note that the Program Underwriter may request additional items from the applicant. If the applicant does not respond within the grace period, or a denial is issued, the Underwriter will move to the next Submission ID holder. • If approved, the Administrator will notify the landlord of the outcome so that the applicant can move on with the leasing documentation and lease/contract signing as described in the next section.
APPEAL
• If the applicant does not agree with the Processor or Underwriter decision, the applicant Household will have 3 business days to appeal. The applicant Household will need to submit clear and sufficient documentation, along with an appeal form that details why they feel the decision is inaccurate, within the timeframe given. • Administrator Management will review the Appeal and all documentation. • Administrator will contact the applicant regarding the status of the appeal approximately 7 business days from the date the complete Appeal Package was submitted. Administrator will notify the applicant is additional time is needed. • Administrator is unable to hold properties for households in the application or appeal process. Administrator will move on to the next Application ID holder after the initial appeal review
Application Changes: No Application changes are allowed after an application is submitted and after an application deadline has passed unless the change is (1) the removal of an applicant, (2) the additi on of an applicant’s s pouse, domestic partner or new household member in the case of an adoption or new guardianship; (3) an update of income qualification, such as a new job or a job that has ended; or (4) correction of technical errors, such as phone number or other non-qualifying information. All applications must be reviewed for income qualification within one hundred and twenty (120) days prior to the Close of Escrow of a BMR Unit.
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6. BELOW MARKET RATE OWNERSHIP PRICING AND CITY’S PURCHASE OPTION
The purpose of the Below Market Rate ( BMR) program is to provide long- term affordable homeownership opportunities for low and moderate-income households. Households that purchase a BMR home will be required to sign affordable housing documents to ensure the home remains affordable, and the homeowner occupies the home, for the entire restricted term (generally 45 years). As agreed to in the affordable housing documents, a homeowner may choose to sell the BMR home during the restricted term; however, the home will be sold at the restricted price. BMR units are priced using the formula defined in the City’s Inclusionary Ordinance :
"Affordable ownership cost" means average monthly housing costs during the first calendar year of a household's occupancy, as determined by the City, including mortgage payments, loan insurance fees, if any, property taxes, reasonable allowances for utilities and property maintenance and repairs, homeowners insurance and homeowners association dues, if any, which do not exceed the following:
1. For lower-income households: one-twelfth of thirty percent of seventy percent of area median income, adjusted for assumed household size based on presumed occupancy levels of one person in a studio apartment, two persons in a one bedroom unit, three persons in a two bedroom unit and one additional person for each additional bedroom thereafter.
2. For moderate-income households: one-twelfth of thirty-five percent of one hundred ten percent of area median income, adjusted for assumed household size based on presumed occupancy levels of one person in a studio apartment, two persons in a one bedroom unit, three persons in a two bedroom unit and one additional person for each additional bedroom thereafter.
Area median income (AMI) is the household income for the median (i.e., middle) household in a region. Each year, the Federal Department of Housing and Urban Development (HUD) calculates the median income for every metropolitan region in t he country. The United States Census Bureau uses a series of terms to determine t he definition of a household. The basic meaning of Household is an occupied housing unit. A Householder (Primary Applicant) is the person whose name the housing unit is rented to or owned by. Members of the household share familial ties, living space, expenses, debts and/or assets with the Householder.
If the owner wishes to sell during the restricted term, the City has the option to either purchase the BMR home for the restricted price or assign the BMR home to another eligible buyer for the restricted price. The City is not obligated to p urchase but the seller is obligated to give the City the option to do so. Homeowners can sell their home at a market rate price at the end of the restricted term.
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7. THE APPLICATION FILE STRUCTURE & APPLICATION CRITERIA
Program Eligibility and Qualification Criteria
The primary role of a Program Administrator is to determine the eligibility and qualification of applicant Households . A Program Processor serves the role of gathering the documents needed to evaluate the application and a Program Underwriter reviews the application to determine if it meets program requirements.
It is important to understand that there is a lot of information needed to determine whether an application meets all the program requirements. The application criteria used to determine whether an applicant Household will be approved fall into one of two categories:
• Program Eligibility Criteria: These are standards that define the characteristics of the target households who are best served by the program and help the program provider meet its intended goals. These standards often follow legal definitions and published documentation requirements. Underwriters evaluate Program Eligibility Criteria to determine if hous eholds “check eligibility boxes” that include, but are not limited to, residence address, employment address, household size requirements, total household income requirements, and whether an applicant meets the legal standard to be defined as a first-time homebuyer. Program Underwriters need to consider program eligibility for up to three years before the application date and up to a year after the estimated close of escrow date
1. • Program Qualification Criteria: Once it is determined that an applicant is eligible for the program, the Program Underwriter must also make sure that the home purchase is affordable for the applicant and that they are mortgage and hom e-purchase ready. In addition to requiring applicants to attend first-time homebuyer classes, an underwriter will evaluate the application to ensure successful and sustainable homeownership.
1 “Up to three years” speaks to the First-Time Homebuyer status that is typically verified using 3 years of tax returns. Since Total Household Income is projected forward, it’s important to understand that the Program Underwriter is considering income circumstances going forward one year.
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8. FIRST-TIME HOMEBUYER EDUCATION AND TITLE REQUIREMENTS
First-Time Homebuyer Education Workshop Requirement
All applicants who will take title to the property must attend and complete a first-time homebuyer in-person education workshop and receive a certificate of completion from a HUD and Administrator-approved First-Time Homebuyer Education Provider before going into contract on a BMR Unit. A copy of the certificate of completion is required and certificates will be accepted for up to two years after completion.
Title Requirements
All adult Household members must appear as an owner or co-owner on the BMR Unit title. They also must co-sign for any purchase loan (unless they are a non-borrowing spouse) and sign all affordable housing documents (as defined on page 2) for the BMR Unit with the following exceptions:
1. Legal dependents of titleholders as claimed on the most recent federal income tax return or legal minor children of titleholders. Spouses or Domestic Partners are not considered dependents;
2. Household members younger than age 24 who are the child of a titleholder who will reside in the BMR Unit as their primary residence, regardless of being named as a dependent on the federal tax form of a titleholder; and
3. Recent immigrants with insufficient credit history as defined as a person who has been in the United States for 2 years or less as supported by entrance documentation or a sworn statement and lender documentation of the reason for a loan denial, including a copy of applicant’s credit report.
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9. ELIGIBILITY FACTORS AND PREFERENCE CRITERIA FOR OWNERSHIP OF BMR UNITS
The City’s Inclusionary Housing Ordinance establishes a priority system for allocating the limited number of affordable rental units .
First priority (for up to ten percent of all affordable units) shall be given to income eligible employees of the City of Cam pbell. Second priority is given to income eligible existing Campbell residents and third priority is given to income eligible persons employed within the city limits of the City of Campbell. If a particular address is in question, Administrator will check with Cit y staff to determine if the property is within the City’s jurisdictional boundaries.
The preference system will be used to establish a ranking of applicants. An eligible household will be ranked according to where they live or work. While an applicant w ho lives or works within the city limits will have priority over an applicant who does not, residency/employment status is not a requirement for the Program, and all individuals and households may apply. Households comprised of applicants who do not reside or work in Campbell may occupy a BMR unit if there are no eligible Campbell residents or workers on the eligibility list for occupancy.
BMR PREFERENCE CRITERIA*
Priority 1: Work for City
(for up to 10% of units)
Must currently work for the City of Campbell government entity at least 20-hours per week, and held their position for at least 6-months Employee must have passed probation
Priority 2: Live in Campbell Must currently live in Campbell and maintained residency for at least 6-months Priority 3: Work in Campbell
Must currently work at a business located in Campbell at least 20- hours per week, and held position for at least 6- months. This category includes Campbell School District employees. The district office is located in Campbell al though the school building may be located in another city.
*Eligibility will be evaluated at the time of opportunity drawing submission and verified again prior to occupancy
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9B. OCCUPANCY STANDARDS FOR BMR UNITS
Applicant/Co-Applicants must occupy the property as their principal residence. This means that the Applicant/Co-Applicants must use the property as their primary place of residence and the property must be owner -occupied upon purchase for the life of the deed restrictions. Use of the property for additional ownership purposes, including temporary leases, sub-leasing or room rentals are not allowed under the program and will trigger immediate action.
To ensure that the City's limited BMR homes are used efficiently, a household must be of a size equal to the number of bedrooms in the BMR unit. Pursuant to fair housing laws, the maximum occupancy allowed in a BMR u nit is two people per bedroom, plus one additional person. The table below shows the minimum and maximum household size based on the number of bedrooms. In some cases, an exception to the minimum standard may be made where no other qualified buyers are remaining in the Opportunity Drawing or within 30-days from the time that the first file is requested from Opportunity Drawing entrants.
The City’s BMR Administrator will verify household occupancy once per year for the life of the restriction term (generally 45-years).
Note: Maximum Household size is subject to change per property management or Affordably Housing Agreement documents.
PROGRAM OCCUPANCY STANDARDS
Number of Bedrooms Minimum Household Size Maximum Household Size One 1 3
Two 2 5
Three 3 7
Four 4 9
Five 5 11
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9C. INCOME ELIGIBILITY CRITERIA
Income Eligibility is based on household size (number of persons in the household) and whether a household’s income is below income category limits published annually by the California Department of Housing and Community Development (HCD) on their HCD website as well as the Program Website. These resources should be used to determine the income percentage and income category that is applicable to your household.
Campbell’s housing ordinance presently defines the three income types most often used in their affordable homeownership program • “Very low-income Household” means a household whose household income does not exceed very low-income limits applicable to the County
• “Lower-Income Household” means a household whose household income does not exceed the lower income limits applicable to the County.
• “Moderate-Income Household” means a household whose household income does not exceed one hundred twenty percent of the area median income applicable to the County
It is very important for the applicant Household to know BOTH:
• Applicant Household Income as a percentage of the published County Median Income (calculated by dividing Household Income by the published Median Income Amount) applicable to your household size • Whether or not applicant Household Income is below the published income category limit applicable to your household size (e.g. Extremely Low, Very Low, Low, Median, or Moderate)
Income earned from assets, such as dividends, interest, rental income, business income, etc., is included in the household’s annual income pursuant to the Code of Federal Regulations , Title 24, Part 5 income inclusions (§ 5.609). Income calculation is also g uided by California Code of Regulations , Title 25, Chapter 6.5 Program Operations, Gross Income (§ 6914). To qualify for the City BMR Program, your household’s combined gross annual income cannot exceed the maximum income limit for your household size , as established by the HCD. All household members ages 18 or older must have their income verified. Household members that do not work or will not have any income in the next 12 months must complete a zero-income affidavit.
Note: The income categories for a particular development may vary in accordance with the Affordable Housing Agreement.
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9D. ASSET LIMITATION CRITERIA
In addition to meeting the income limit, there are restrictions on the amount of assets that a household may have to be eligible for the City BMR Program. For households applying to be an owner of a BMR unit, the limit is 50% of household AMI plus the down- payment up to 20% of the BMR price, post-closing (after the close of escrow).
Asset limit = 50% of household AMI plus the down-payment up to 20% of the BMR price
So for example, the asset limitation for a 4- person household purchasing a 3- bedroom moderate income home with a 20% down payment would be approximately $185,000 where AMI is $150,000 and the BMR price is $550,000.
ASSET LIMITATION EXAMPLE
Maximum Household Income Example Purchase Price Example Asset Limit $150,000: (50% = $75,000) $550,000: (20% = $110,000) $185,000: ($75,000 + $110,000)
There is also a minimum loan amount of 70% of the purchase price. So, for example, with a Sales Price of $550,000 the first loan amount cannot be lower than $385,000. All-cash purchase escrows will not be allowed.
The Administrator will review household income and assets for all owner -occupants, temporary occupants, and other occupants, regardless of such household member’s interest in purchasing or occupying a BMR home. To determine total household assets, HouseKeys will review the household’s total assets according to monthly financial statements and/or other valuations. A six -month average will be calcula ted just prior to Program application to determine eligibility and avoid applicant “asset dumping” (asset liquidation or transfer to other parties) . Assets held in IRS-recognized retirement accounts (401-k’s, IRA’s, etc.) are not included for the purpose of determining whether an Applicant meets the Program asset limits. However, retirement and insurance payments will be used to determine gross household income.
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9E. FIRST-TIME HOME BUYER CRITERIA
To be eligible for the City ’s BMR homeownership program, all household members on Title must be a first -time homebuyer, except as provided below. A first-time home buyer (FTHB) is an individual who has NOT had an ownership interest in a home in the three years immediately preceding their application date, except as follows:
(1) A displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not, within the preceding two years, worked on a full-time basis as a member of the labor force for a consecutive twelve- month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family; or (2) A single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A singl e parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody or is pregnant; or (3) An existing BMR homeowner who no longer meets the occupancy standards in these guidelines and otherwise qualifies to purchase a larger or smaller BMR home at the time of re-application.
Notwithstanding the forgoing, the following interests shall not by themselves, disqualify an applicant from falling within the definition of first time home buyer:
• Applicants who own a mobile home are not considered home owners under the BMR program and are eligible to participate.
However, if the mobile home unit is not sold and is retained by the homeowner, the property will be included in asset income calculations along with any rental income.
• Ownership in timeshares.
• Beneficiary of a trust for which the trustor/trustee is still living. • Ownership of shares in a limited equity co-op.
To verify FTHB status, HouseKeys will review 3 years of federal tax returns to confirm that the applicant has not claimed any of the tax deductions associated with homeownership (e.g. deductions of mortgage interest or property tax payments). If not legally obligated to file, the applicant must complete a Jurat explaining the reason along with supporting documents. HouseKeys will also review a credit report for mortgage loans and perform title searches to confirm the applicant is not an owner of record on any existing properties for at least 3 years. T he applicant must not be on title for any housing unit at all, whether they live in the unit or not. Other documentation may be requested to determine first time homebuyer status.
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10. APPLICATION CRITERIA – ENTERING HOUSEHOLD INFORMATION INTO THE PROGRAM APPLICATION
10A. Household Size, Location & Member Identification
The Household Location and Member Profiles capture the basic information used by the Program Underwriter to determine who is part of the household and which members will become the title-holding homeowners.
Information
Profile
Criteria Criteria Description
Location
Profile
Verification of
Residence Location
• At least one member of the applicant Household , who will be taking title to the property, must provide the following proof of residency for the 6 months preceding their entry to an Opportunity Drawing:
o One utility bill with a City address dated within 45 days preceding the application date for the BMR Unit. Utility bills can include gas, electric, garbage, or water; or:
o Current paystubs with City address; or
o A current, formal lease with a City address
Location
Profile
Verification of
Employment Location
• Administrator shall verify that a person works in the City by reviewing an applicant’s paystubs. If an applicant’s employer is not based in C ity, or if a person’s paystubs do not reflect a C ity work address, the applicant must supply a letter from the employer stating that the person works primarily in City and demonstrates that at least 75% of their working hours are in City
Member
Profile
IDENTIFICATION
• All applicants will need to provide positive identification including a copy of valid driver’s license and a copy of a valid social security card.
Member
Profile
HOUSEHOLD
SIZE
• Any household members not living in the same household at the time of application will need to be a co- applicant for the fi rst mortgage loan and on title to form a household
• Tax returns and current addresses will be used to determine household size • All applicants, co- applicants, married couples, partners, domestic partners etc. that are on title will have to occupy the proper ty for 45 years per the signed deed restrictions
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10B. Income Review Procedures
Income maximums are based on “gross” income derived from all sources as detailed in Internal Revenue Code (26 USC Section 61), whether or not exempt from federal income tax. Administrator projects future income based on the gross income on each applicant’s past income. In addition to other items deemed necessary to make this income determination, the Administrator may request up to 4 of the most recent year -to-date pay statements and the previous year’s final pay statement. Administrator must review inco me documentation for all Household members 18 years and older, regardless of dependency status. Applicants without income will need to sign a Zero-Income Affidavit provided by the Administrator. Unemployment benefits are considered income.
For employed applicants, annual income is generally derived by dividing the year-to-date gross income by the current pay period count and then by annualizing an estimated pay period amount by the total pay period count over one year (12 months). Please note that a Verbal and Written Verification of Employment may be required to be completed by the Employer issuing the pay statements.
# How Often Paid How to Determine Annual Income
1 Paid Annually Annual Gross Pay
2 Paid Monthly Use monthly gross payment x 12
3 Paid Twice Monthly Twice monthly gross pay x 2 pay periods x 12 4 Paid Biweekly Biweekly gross pay x 26 pay periods
5 Paid Weekly Weekly gross pay x 52 pay periods
6 Paid Hourly Hourly gross pay x average # of hours per week x 52 weeks 7 Government Employees with Annual Award Letters Income may be derived by referring to the Annual Award Letter
Continued Next Page
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10C. Income Inclusion and Exclusion
The Federal and State government both have rules that determine how Gross Income is calculated and what income types are included and excluded from the Gross Income total.
Application Criteria Description
• The gross amount, before any payroll deduction, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services
• The net income from the operation of a business or profession (for this purpose, expendi ture for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business). The adding back of certain deductions will be subject to underwriter approval (e.g. depreciation). • Interest, dividends and other net income of any kind from real or personal property. • Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay (except as outlined in “exclusions” section)
• Where the family has net f amily assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on a passbook savings rate, up to 10%. The current passbook savings rate used by the Administrator is 2.5% • Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling;
The following is an abbreviated list of items that are excluded from income:
• Casual, sporadic or irregular gifts
• Amounts which are specifically for or in reimbursement of the cost of medical expenses • Lump-sum additions to family assets such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlement for personal or property losses • Foster child care payments
• The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of t he amount actually charged the eligible household
• See full inclusion list on the Program Website
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10D. Variable Income (Tips, Overtime, Bonuses, etc.)
Please Note: All Variable Income is subject to Underwriter Approval. Each circumstance is different and must be considered using the documentation in the file. The words below are meant to be used as a basic guide to help prospective applicant Household ’s understand how this income type is considered during the underwriting process.
Tips, Overtime, Bon us, and other “variable income amounts” (amounts that change with each pay period) will be annualized separately from the base income outlined on the chart above. All income will be annualized and totaled unless the applicant can provide documentation from the employer. The employer must be available to complete a verbal verification of employment with the Administrator. In cases, where the variable income item is a one -time occurrence, the amount will be removed from the annualized calculation of income and added in a one-time total to determine the annual income.
Example: An applicant earns $60,000 per year based on base monthly pay statements of $5,000 ($5,000 x 12). In addition to the base income show, the applicant received a $2,500 one-time bonus in the first quarter of the year. If annualized, the $2,500 quarterly bonus would total $10,000 and the total income would be $70,000 ($60,000 base + $10,000 annualized bonus income). If proper documentation shows that the $2,500 is a one -time payment, and Administrator is able to verify and validate this information, the $2,500 would be added to the $60,000 base. The alternative total income would be $62,500 ($60,000 base + $2,500 one-time bonus).
Seasonal Workers: Administration will not annualize current income for seasonal workers who provide a Verification of Employment from their employer (s) verifying that the work does not occur year-round
Self-Employed Income: All self-employed applicants must submit a notarized Self -Employed Affidavit provided by Administrator. If self-employed for 2 or more years, Administrator will use verifiable (verified using Form 4506-T) federal income tax returns and review the net income for as many as 3 years of tax returns to determine the projected annual in come. If self -employed less than 2 years, Administrator will review the submitted Profit & Loss Statement and use it to determine projected annual income. Additional documentation may be needed from the Self-Employed Household Member in order to determine projected annual income.
Calculating Income from Cash Income: In the case of an applicant who is paid cash for employment, Administrator will require a Verification of Employment from the applicant’s employer to confirm annual income and IRS Tax Verification Form 4506-T to confirm that no taxes were paid.
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Variable Income (Continued)
Income from Commercial Property or Land Owned: The net income from any commercial property or land owned by any applicant shall be counted toward the annual Household income.
Unemployed Applicants: Unemployed applicants who are receiving no income at all should submit a Zero -Income Affidavit as provided by Administrator in place of income statements. Applicants receiving unemployment benefits do not need to complete the Zero-Income Affidavit as unemployment benefits are considered income.
Additional Notes on Income Calculation
If applicant has recently changed positions with employer, the Administrator will determine the effect of the change on the applicant’s eligibility and opportunity to receive bonus or overtime pay in the future
If applicant who has historically been employed on a part -time basis indic ates that he or she will now be working full time (or vice versa), obtain written confirmation from borrower’s employer
A verbal verification of employment (VOE) may be required for each employer
All material alterations, and/or omissions from the initial Registration, Application ID Questions, Opportunity Drawing Entry Form, Application Submission and Supporting Documents; including but not limited to household size, income and asset information, etc., are not permissible and will render all future re-submissions ineligible for review and approval for a period of one year. Exceptions for re-submissions are signif icant life events such as a job/career change, marriage, death, or the birth of a child and are at the discretion of the Administrator.
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10E. Determining Mortgage and Home Purchase Readiness
Affordable homeownership programming requires that applicant H ouseholds who meet the basic requirements for being considered eligible, must also prove that the home purchase fits within their household budget and that they are able to successfully obtain mortgage financing. The following table summarizes the information needed by the Underwriter to approve a household:
Income
Profile &
Expense
Profile
HOUSING
PAYMENT
TO INCOME
RATIO
• To qualify, an applicant’s total housing payment, including principal & interest, taxes, insurance, and association dues cannot exceed 40% of the income for Below Market (BMR) home. For example, if your annual income is $90,000 your maximum monthly house payment cannot exceed $3,000 or $36,000 per year (40% of $90,000 = $36,000 divided by 12 = $3,000).
• Additional debts will also be taken into consideration and cannot exceed 45% of income.
• Non-borrowing applicant’s debt will be added to ratios Expense
Profile
RENT
HISTORY
• Applicants/co-applicants will need to show the last 6 months of rent history • HouseKeys will review the current rent vs. the new housing payment for affordability.
Any circumstance where the new housing payment exceeds 150% of current rent will be considered a “Payment Shock” risk. For example, if your current rent is $1,000 per month, then any housing payment exceeding $1,500 per month would be considered a potential payment shock risk ($1,000 x 150% = $1,500).
• If Payment Shock risk exists, the underwriter may make an exception if compensating factors are present in the file (e.g. post-close reserves) Asset
Profile
DOWN PAYMENT
• The minimum down payment for the BMR program is 3% of the purchase price with first mortgage loan amount equal to 97% of the purchase price. • The minimum 3% of the purchase price must come from the applicant’s own funds, and be present in the applicant’s account for at least 6 months • A gift can be used for any down payment amount more than 3% of the purchase price • Note: In some cases, mortgage financing programs may require 5% of the purchase price in order to be approved
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10F. Public Record and Default Risk
In addition to determining home purchase readiness, the Program Underwriter must also determine the risk of the property being lost to foreclosure or the risk of a lien being attached to the property that can adversely affect the resale process or excess sale proceeds. The following table summarizes the information needed by the Underwriter to reduce risk and approve a household:
Liability
Profile &
Credit
Profile
CREDIT REPORT
AND CREDIT
SCORES
• A credit report is required for all applicants and non-borrowing applicants • The credit report must include information from all three credit bureaus (Experian, TransUnion, Equifax) and use a mortgage-risk model (used by licensed mortgage lenders)
• The lowest median (middle) score is used
• The minimum credit score is 620
• An applicant or co-applicant with an unsatisfactory credit report will be denied. • We will be reviewing the Credit Report to identify all of the account balances and monthly payments
• The monthly payments on your credit report will be used to determine the total debt ratio (total debt and household payments divided by monthly income) • As stated above, the total debt ratio cannot exceed 45% of monthly income Public
Record
Profile
PUBLIC RECORD
SEARCH
(DETERMINED
USING A
STATEMENT OF
IDENTITY FORM)
• An applicant or Co -applicant may apply for consideration under the following circumstances:
• Chapter 13 bankruptcy – after 2 years from discharge or 4 years from dismissal. • Chapter 7 – after 4 years from discharge
• Short Sale/Deed in Lieu - after 4 years
• Foreclosure - after 7 years
• All applicants, co-applicants, and non-borrowing spouse cannot have liens outstanding at the time of the home purchase
• All liens, including IRS liens, or any past due money owed to the IRS, shall be required to be paid off prior to being issued a program approval.
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11. TRANSACTION AND DOCUMENT HANDLING
File Stacking (List of Documents Needed for Each Stage of the Transaction)
If application is approved, and the applicant Household is cleared to move forward with the purchase, the applicant’s lender must supply the following documentation to the Administrator (Financing File Stacking Order ):
1. Lender Checklist (listing all the loan documents)
2. Loan Application with final figures and lending terms (currently known as a 1003)
3. Uniform Underwriting and Transmittal Summary (currently known as 1008)
4. Mortgage Loan Commitment Letter
5. Loan Estimate
Routing documents to the City for signatures can take 10 to 14 business days. Before any transaction documentation can be sent to the City for signature, the following documents will need to be in the Administrator’s file ( Pre-Close Stacking Order):
1. Estimated Settlement Statement – Seller (Re-Sale and Acquisition Transactions Only)
2. Estimated Settlement Statement – Buyer
3. Estimated Settlement Statement – Master
4. Copy of 1st Lender Note & Deed of Trust
5. Copy of 1st Lender Escrow Instructions
6. 1st Lender Request for Notice of Default
7. Copy of any Subordinate Lender Notes and Deeds of Trust
8. Copy of any Subordinate Lender Escrow I nstructions
9. Subordinate Lender Request for Notice of Default
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After closing, the Title Company must provide the following to the Administrator ( Post-Close Stacking Order)
1. Executed BMR Agreements Docs, Notes and Deeds of Trust
2. Recorded Agreement
3. Recorded Request for Notice of Default
4. Final Settlement Statement – Seller (Re-Sale and Acquisition Transactions Only)
5. Final Settlement Statement – Buyer
6. Final Settlement Statement – Master
7. Alta Policy
Length of Escrow and Fall -Out Risk
The typical escrow period for a BMR Unit sale is 90 days. This period can stretch out longer if the property is under construction and there are delays. Applicant Households must be prepared for a long escrow period and to continually keep their file updated to comply with the one hundred twenty -day (120-Day) application review period. Households must be eligible and qualified through to close of escrow. Unfortunately, a change in the application file during the escrow period can cause the applicant Household to become disqualified and lose out on the purchase opportunity.
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12. REASONABLE ACCOMMODATION AND EXCEPTION REQUESTS
Accommodations in Program rules, policies, practices, or services, when such accommodations may be necessary to afford person s with disabilities, or a household with a member with disabilities, equal opportunity to apply for a BMR home. The requested accommodation must be reasonably related to the particular disability of the household member, and must be necessary in order to provide the household with equal access to housing.
Households or individual applicants unable to produce any particular document required in the application form for legitimate reasons beyond their control (natural disaster, military service, refugee status, domestic violence, witness protection program, disability etc.) may request an exception for that particular document.
Upon such request, Administrator may request a reasonably equivalent alternative document, and/or any additional supporting documentation deemed necessary by the Program Processor and Program Underwriter to verify eligibility of the Applicant/Co- Applicant and/or their entire Household.
Exceptions related to disabilities (reasonable accommodations) may be requested according to this procedure, with a brief description of the exception(s) needed due to the Applicant’s disability. The City and Administrator wil l consider the requested exception and will provide a written response within 14 calendar days, stating if the requested exception can be granted in full or part and the reason for such decision. The Administrator may approve or deny such request. If denied, Applicants may submit an appeal of such denial to the City.
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Below Market Rate (BMR) Program
Ownership Participation Guide
[November 2018 Draft]
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TABLE OF CONTENTS
1. Introduction Page 2
2. Online Web Portal Page 3
3. Establishing an Account Page 4
4. Household Information Profiles Page 5
5. Program Participation Page 6
6. Resale Price Determination Page 7
7. Price Determination Methods Commonly Used Page 8
8. Ownership and Estate Planning Page 10
9. Compliance and Annual Certification Page 11
10. Refinance and Subordination Requests Page 13
11. Capital Improvements and Special Assessments Page 17
12. Ownership Changes, Re-Sales, and Approved Vendors Page 19
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1. INTRODUCTION
HouseKeys is the City of Campbell’s A ffordable Housing Program Administrator. This Program Participation Guide includes the guidelines, policies, and procedures that comprise the affordable homeownership program for below market rate (BMR) homes.
Buying, owning, and selling an Affordable Below Market Rate (BMR) Ownership Unit differs in many ways from buying, owning, and selling a market rate. It is important that the buyers and sellers of BMR Ownership Units understand the rules and procedures of the Program fully.
The Program Participation Guide and other relevant information (e.g., Ordinance procedures and income limits) will be amended and updated from time to time, so long as such rules, policies and procedures do not viol ate any affordable housing laws . All proposed changes are subject to approval by the City Council prior to implementation.
Updates to this Program Participation Guide and other relevant information will be posted on the HouseKeys website
Please contact the City or HouseKeys regarding any conflicts between this Program Participation Guide, the Developer’s Affordable Housing Agreement, the owner’s BMR Agreement, and/or the City’s recorded documents.
Please contact HouseKeys with any questions or concerns regarding this docu ment or any other question regarding the City’s affordable housing program:
Online: http://www.housekeys2.com
Email: [email protected]
Phone: 1-877-460-KEYS (5397)
Address: 70 N. First Street Campbell, CA 95008
ALL GUIDELINES ARE SUBJECT TO CHANGE WITHOUT NOTICE
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2. ONLINE WEB PORTAL DASHBOARD OVERVIEW
Information Profiles Tools & Planning Program Center
Information Profiles are used to
gather important facts that
determine your eligibility and
qualification. Th ese profiles will
be used by the Program
Administrator to complete your
Program application and
determine your eligibility to
participate in Program activities.
There are many calculations
involved in an Affordable
Housing Program . From
calculating the income category
of your household, to
determining your maximum
restricted rent price and utility
allowance, it’s important to
understand the math behind
these Programs.
All Appl ication, Opportunities,
Opportunity Drawings, and
Participation Activities are
captured in your Program
Center. As soon as you
complete your initial registration,
this is where you’ll spend the
most time participating in the
Program.
Program File Cabinet Program Marketplace Community Center As you start to apply for and
participate in Program activities,
your file cabinet is where you’ll
track progress, exchange
information, and communicate
with Program administrators.
The Program marketplace is
where you can shop for
ownership, rental, and financing
opportunities.
The online community center will
have a classroom, a bulletin
board, and chatroom so you can
stay educated, informed and in
touch with other Program
participants and stakeholders.
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3. ESTABLISHING AN ACCOUNT IN THE HOUSEKEYS SYSTEM
The following four (4) actions are the initial steps needed to establish your household’s affordable housing account.
In some cases, the participant may have already established an online account. If you have not established an account, or you need to update your account, please complete the following steps.
REGISTRATION
PROCESS ACTION OR MILESTONE
1. Initial Signup
Start out by completing our simple registration form. This step collects very basic information from you to establish a User Account, including your name, contact information, and your household size and income.
2. Complete the
Registration
Wizard
The next step includes additional details about your address and household members. Completion of the Wizard will create a summary of your household and provide you with access to additional features of the Administrator Platform.
3. Request a
Participation I.D.
The Participation I.D. allows the Program Provider (City of Campbell) and the Administrator (HouseKeys) to confirm your identify and match you up with the Program File. It also will be used to track your Service Request Tickets.
4. Open a Service
Request Ticket
Whether you want to remodel your BMR home, refinance your mortgage, sell your BMR home, or ask a general question – it all starts with opening a Service Request Ticket so that the Administrator can gather the information needed to help you. The online form also creates a timestamp, so we can answer your question in the order received and in a timely manner.