Agenda Item No: K.4
AGENDA REPORT
DATE: February 4, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025 -20 HD Application to California Department of Housing and Community Development for CalHome Funding
Authorizing the Submittal of an Application to the California Department of Housing and Community Development for $1,000,000 in CalHome Funding
Funding Source: N/A
Contact: LaTanna Jones, (707) 428-7647
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
City staff desires to apply for $1,000,000 in CalHome funds from the California Department of Housing and Community Development (HCD) to assist Fairfield residents in building Accessory Dwelling and Junior Accessory Dwelling Units (ADU/JADU) and provide mortgage assistance for First Time Home Buyers. This e ffort will increase the supply of affordable housing units on the market, expand economic opportunities for low -income residents, and allow more low and moderate-income households to become homeowners. Both programs are consistent with the goals and need identified in the Fairfield Housing Element.
DISCUSSION
HCD issued a 2024 Homeownership Super Notice of Funding Available (NOFA) on December 12, 2025, for the CalHome Program. The CalHome Program provides loans and grants to local public entities and nonprofits for various housing projects, including Mortgage Assistance Programs and ADU/JADU Programs.
The City can apply for $1,000,000 in program funds under the current NOFA for both activities.
Assistance is provided to First Time Homebuyers through a deferred loan subordinate to the homebuyer's first mortgage. The funds can help households purchase a new or existing home
citywide. Borrowers must attend a first-time homebuyer class and contribute at least one percent of the purchase price from their own funds.
ADUs are created via a garage conversion into a legal dwelling unit or when a standalone building with a permanent foundation is constructed on the property of an existing single -family home.
Junior units are created by remodeling an existing single-family home to create a new separate legal dwelling unit within the home's existing square footage. Junior units will have a 500-square- foot dimension limit.
Under the City's program, the ADU/JADU units will be created with income -qualified homeowners. The new units will then be rented to income-qualified tenants at rents within state and federal affordability limits.
The City is proposing a pilot program with a grant -funded activity that will assist homeowners with the creation of ADUs/JADUs o n their property. The program will offer fully deferred or amortized low -interest loans to qualifying homeowners. The loans will have a due -on-sale provision if the home is sold, transferred, or ceases to be the borrower's principal residence. The loans will cover a large portion of the project cost of improvements, making it easier for low - income families to afford ADU/JADU additions.
FINANCIAL IMPACT
The proposed Mortgage Assistance and ADU pilot program will be funded solely with the CalHome grant. The grant provides sufficient funds for the new unit construction and grant administration costs. Local funds are not required. New state requirements for ministerial approvals will help reduce processing time by Planning and Building Division staff. Over time, the Housing Services Department will retain the loan repayment to fund future housing activities that meet CalHome requirements.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
Public contact has not occurred at this stage. If the program is funded, staff will use multiple public outreach methods to announce and explain the program to potential participants.
ALTERNATIVE ACTION
The council may decide against proceeding with the grant application for this funding cycle.
However, the City would miss an oppo rtunity to promote additional affordable housing options with minimal investment in city funds. Given the local need to increase the supply of affordable and workforce housing, such a delay is not recommended.
COORDINATED WITH
City Attorney’s Office and Community Development.
STAFF CONTACT
LaTan Jones, Director of Housing Services
(707) 428-7647
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution