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October 21, 2025
ITEM TITLE
Housing Grants and Appropriation: Adopt a First Amendment to the U.S. Department of Housing and Urban Development Fiscal Year 2025-26 Annual Action Plan and Appropriate CalHome Program Income Report Number: 25-0209
Location: No specific geographic location
Department: Housing and Homeless Services
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (CEQA) State Guidelines . T herefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Under the National Environmental Policy Act (NEPA) the activity is exempt pursuant to Title 24, Part 58.34(a)(2)&(3) of the Code of Federal Regulations and pursuant to the U.S. Department of Housing & Urban Development Environmental Guidelines.
Recommended Action
Conduct the public hearing and adopt resolution s approving A) First Amendment to the City of Chula Vista U.S. Department of Housing and Urban Development 2025-2026 Annual Action Plan and appropriating funds therefor, and B) Approving the continued use of CalHome program income for first-time homebuyer loans and appropriating funds therefor. (4/5 Vote Required)
SUMMARY
The City of Chula Vista’s Annual Action Plan is a document required annually by the U.S. Department of Housing and Urban Development (HUD) to describe the funding strategy for use of various entitlement funds.
The 2025-26 Annual Action Plan (Action Plan) was adopted on June 10, 2025 pursuant to Council Resolution No. 2025 -092. Any significant funding changes to the approved Action Plan consti tute a Substantial Amendment and must be approved by City Council.
Resolution A amends the Action Plan to redistribute Community Development Block Grant (CDBG) funds to subrecipients, appropriate excess HOME Investment Partnerships (HOME) funds for the Cit y’s First-Time Homebuyer program and Tenant -Based Rental Assistance Program, and appropriate excess Emergency Solutions Grant (ESG) funds for shelter operations related activities.
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ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with CEQA and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Under NEPA, the activity is exempt pursuant to Title 24, Part 58.34(a)(2)&(3) of the Code of Federal Regulations and pursuant to the U.S. Department of Housing & Urban Develop ment Environmental Guidelines. Thus, no further environmental review is necessary at this time.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
HOME Investment Partnerships Program (HOME)
HOME is a block grant administered by HUD for the purpose of increasing the supply of affordable housing available to low-income persons. HOME funds have historically been used by the City of Chula Vista (City) to issue loans to first -time homebuyers, provide short-term tenant-based rental assistance , and finance the development of new affordable housing. Due to loan payoffs by first-time homebuyer participants and prior- year unallocated funds, $1,488,848.59 is now available for programing.
More favorable market conditions have led to increased participation in the City’s first -time homebuyer program this calendar year. These funds are issued to qualifying low-income homebuyers for down payment and closing cost assistance, with limits on property type and value. The maximum loan amount per household is currently the lesser of 22% of the purchase price of the home or $120,000. The loans accrue 3% simple interest as a deferred “silent second” mortgage on the property. The loans are repaid to the City when the property is sold or transferred and can then be recycled into new program funds. The proposed resolution would authorize $1,000,000 in additional funding for first-time homebuyer loans.
Staff proposes appropriating the remaining $488,848.59 for the tenant-based rental assistance (TBRA) program to assist approximately twenty-four (24) low-income and unhoused residents of Chula Vista. This program is essential for the residents of the Chula Vista Village at Otay shelter as they transition into permanent housing . To date, a pproximately 90% of successf ul exits into permanent housing have been facilitated by the TBRA program. In the 2025 calendar year, nine shelter residents have been housed using the TBRA program . An additional eight Chula Vista residents who were determined to be at risk of homelessness also received TBRA assistance . The assistance is provided for one year, with a n option to continue for one additional year.
Community Development Block Grant (CDBG)
One subrecipient that was awarded funds through the current Action Plan declined to accept the funds. This leaves $30,000 available in the public services funding category of CDBG. Staff has reviewed the applications that were received during the Notice of Funding Availability in connection with the Action Plan and identified four subrecipients that were awarded less than their full funding request. (The City routinely awards funds in amounts smaller than requested, in order to equitably distribute funds.) These four partner organizations P a g e | 3
are SBCS Corporation, Meals on Wheels, Voices for Children, and the Chula Vista Community Collaborative .
Based on an analysis of the original fundin g requests, the remaining balance of funds, and discussions with those partners, staff is proposing to award the remaining funds as follows:
Organization and Program Original
Allocation
Amended
Allocation
Change
SBCS Corporation – Family Violence Support
Services Program $40,000 $55,000 $15,000
Meals on Wheels - Senior Meal Delivery &
Accompanying Services $25,000 $30,000 $5,000
Voices for Children - Court Appointed Special
Advocate $15,000 $20,000 $5,000
Chula Vista Community Collaborative - Family
Resource Center Emergency & Basic Services $25,000 $30,000 $5,000
Emergency Solutions Grant (ESG)
The third HUD grant provided to the City is ESG, which can be used for outreach, shelter, and homelessness prevention. There is currently $5,003.51 in unused prior year ESG funds. Staff recommends appropriating these funds for the Chula Vista Village at Otay shelter operating expenses.
CalHome Program
The California Department of Housing and Community Development (HCD) administers the CalHome Program, which provides grants to local jurisdictions for first time homebuyer assistance. The City utilizes CalHome funds to further support its first-time homebuyer program, providing financial assistance to eligible low-income households for down payments and closing costs. The City previously appropriated $254,497.58 in CalHome funds in March 2022 to this program and is now recommending the appropriation of an additional $ 250,500.60 in program income, generated from loan repayments to further expand homeownership opportunities. Due to the limited nature and eligible uses of these funds, staff is also recommending that all future program income is appropriated for the creation of new loans.
Next Steps
Staff recommends that the City Council conduct the public hearing to solicit input from the community on the 2025-2026 amended Action Plan funding recommendations presented. The plan was released on the City’s federal grant webpage for the required 30 -day review, the comment period began on September 29, 2025 and will close October 31, 2025.
Staff will incorporate all public comments into the final amended Action Plan, and submit these to HUD after the public comment period closes. Due consideration will be given to all comments and views expressed by the public. The final Substantial Amendment will have a section that presents all comments and addresses them, as appropriate.
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DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There are no current year fiscal impacts to the General Fund as a result of this action. The proposed amendments are outlined below. This action amends the fiscal year 2025 -26 budget by appropriating $1,523,852.10 to the supplies and services category of the Federal Grants Fund, and amends the fiscal year 2025-26 budget by appropriating $250,500.60 to the supplies and services category of the State Grants Fund.
All of the funds being appropriated must be spent on activities related to affordable housing and community development.
Program Original 2025-26
Allocation
Amount Increased Amended 2025-26
Allocation
HOME – First-Time
Homebuyer $0 $1,000,000 $1,000,000
HOME – Tenant-Based
Rental Assistance $176,943 $488,848.59 $665,791.59
CDBG - Family Violence
Support Services Program $40,000 $15,000 $55,000
CDBG - Court Appointed
Special Advocate $15,000 $5,000 $20,000
CDBG - Senior Meal
Delivery & Accompanying
Services
$25,000 $5,000 $30,000
CDBG - Family Resource
Center Emergency & Basic
Services
$25,000 $5,000 $30,000
ESG – Shelter Operations $0 $5,003.51 $5,003.51
CalHome – First-Time
Homebuyer $0 $250,500.60 $250,500.60
Total $281,943.00 $1,774,352.70 $2,056,295.70
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the City’s General Fund as a result of this action, as all costs associated with the administration of the CDBG, HOME, ESG, and CalHome programs are covered by the respective grants.
ATTACHMENTS
None.
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Staff Contact: Dania Gonzalez, Principal Management Analyst Stacey Kurz, Director Housing and Homeless Services