CITY OF COMMERCE
AGENDA REPORT
TO: Honorable City Council
FROM: City Manager
SUBJECT: Authorize the submission of a Calhome application to the California Department of Housing and Community Development and related supporting actions MEETING DATE: February 11, 2025
RECOMMENDATION:
The City Council will consider adopting a Resolution authorizing the submission of a Calhome application to the California Department of Housing and Community Development. Authorize the City Manager to negotiate and execute a professional services agreement with Global Urban Strategies for the preparation and submittal of the grant application.
BACKGROUND:
The CalHome Program is authorized by Chapter 6 (commencing with Section 50650) of Part 2 of Division 31 of the State Health and Safety Code. Additionally, Proposition 1C, the Housing and Emergency Shelter Trust Funds Act of 2006, provides funding for CalHome mortgage assistance for low, or very low, income first time homebuyers and owner-occupied housing rehabilitation for low, or very low, income homeowners (0 to 80% of Median Family Income). The CalHome application is a competitive application process rated and ranked by HCD to determine the grant recipients.
If awarded, these funds will provide low interest (0 to 3%, determined by the City Council) deferred payment loans to seniors, persons with a disability, and families of low and moderate-income who own and occupy their homes and need financial assistance to make repairs and improvements. This program is a reimbursable program with no matching funds required to participate.
The 2024 Homeownership Super Notice of Funding Availability (HOSN) has been issued by the California Department of Housing and Community Development (HCD), with approximately $143.1 million available for the CalHome Program. The application deadline is March 13, 2025.
The City of Commerce intends to apply for funding under the CalHome Program to support low- to moderate-income first-time homebuyers and owner-occupied housing rehabilitation. The City seeks to request a funding allocation of $4,965,000.00 but will not exceed a maximum of $6,000,000.00 which would be divided across the following program activities:
First Time Homebuyers Program in the amount of Two Million Two Hundred Five Thousand Dollars ($2,205,000.00); and Owner Occupied Rehabilitation in the amount of Two Million Seven Hundred Sixty Thousand Dollars ($2,760,000.00).
Total request of Four Million Nine Hundred Sixty-Five Thousand Dollars ($4,965,000.00) but at no point will exceed a maximum combined total of Six Million Dollars ($6,000,000.00).
ANALYSIS:
The City of Commerce is taking an important step to secure essential funding for its residents by seeking approval to apply for the CalHome Program under the 2024 Homeownership Super Notice of Funding Availability (HOSN). This program is designed to provide financial assistance to low- and very low-income homeowners and first-time homebuyers, helping to ensure housing stability and support critical rehabilitation efforts within the community.
If awarded, CalHome funds will offer deferred payment, low-interest loans ranging from 0% to 3% to seniors, individuals with disabilities, and low- to moderate-income families who need financial support for home repairs and improvements. Additionally, the program aims to foster economic stability and investment by making homeownership more accessible to first-time buyers. Notably, this initiative requires no matching funds from the city, making it financially viable.
Given the competitive nature of the application process, city staff recommends partnering with Global Urban Strategies, Inc. to enhance the city's chances of securing funding. The terms of the agreement with Global Urban Strategies shall be negotiated and executed by the City Manager. The agreement shall be subject to approval as to form by the City Attorney.
The City plans to request $4,965,000, with a maximum request cap of $6,000,000. These funds will be allocated across two crucial areas: $2,205,000 for the First-Time Homebuyers Program and $2,760,000 for Owner-Occupied Rehabilitation efforts.
One of the key challenges in this process is the competitive nature of the application scoring. Without external support, the City would only earn 52 points, which falls below the threshold required for a viable application. However, by collaborating with Global Urban Strategies, Inc., which has a strong track record in similar programs, the City's application score could increase to 92, making it a strong contender for funding. Additionally, the administrative grant allocation will cover Global's compensation, eliminating the need for additional financial commitments from the City's General Fund.
With the application deadline approaching March 13, 2025, the City Council must act quickly to approve the resolution authorizing the submission. This decision will ensure the City remains eligible for CalHome funding and help secure essential resources supporting homeownership, community revitalization, and improved living conditions for Commerce residents. Moving forward with this initiative, the City is committed to strengthening its neighborhoods and ensuring a stable housing environment for those who need it most.
ALTERNATIVES:
Approve staff recommendation
Disapprove staff recommendation
Provide further direction to staff
FISCAL IMPACT:
No matching funds are required to apply. This program has a reimbursable payment structure; the City must expend the funds and then submit them for reimbursement. The City will request, but funds may not be guaranteed, an initial program advance of up to twenty-five percent to fund start-up administrative costs and initial applications.
RELATIONSHIP TO STRATEGIC GOALS:
This agenda item relates to the 2016 Strategic Plan, Community Quality of Life Guiding Principle 4:
Support and evaluate community services, programs and events that promote healthy and quality lifestyles for our residents. Enhance public safety and social services through innovative programs that meet the needs of the residential and business communities.
Recommended by: Vilko Domic, Assistant City Manager
Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form by: Noel Tapia, City Attorney
Respectfully submitted by: Ernie Hernandez, City Manager ATTACHMENTS:
Resolution