Town of Paradise
Town Council
Special Meeting Agenda
11:30 AM – May 31, 2022
Town of Paradise Council Chamber – 5555 Skyway, Paradise, CA Meeting Procedures
I. The Mayor is the Presiding Chair and is responsible for maintaining an orderly meeting. The Mayor calls the meeting to order and introduces each item on the agenda.
II. The Town staff then provides a report to Council and answers questions from the Council.
III. Citizens are encouraged to participate in the meeting process and are provided several opportunities to address Council. Any speaker addressing the Council is limited to three minutes per speaker - fifteen minutes per agenda item A. If you wish to address the Council regarding a specific agenda item, please complete a “Request to Address Council” card and give it to the Town Clerk prior to the beginning of the meeting. This process is voluntary and allows for citizens to be called to the speaker podium in alphabetical order.
Comments and questions from the public must be directed to the Presiding Chair and Town Council Members (please do not address staff.) Town staff is available to address citizen concerns Monday through Thursday at Town Hall between the hours of 8am and 5pm.
B. If you wish to address Council regarding an item not on the agenda, you may do so under Item 4, “Public Communication.” Again, please fill out a card and give it to the Town Clerk before the meeting. State Law prohibits Council action on items not listed on a public agenda.
In compliance with the Americans with Disabilities Act (ADA) Compliance, persons who need special accommodations to participate in the Town Council meeting may contact the Town Clerk at least three business days prior to the date of the meeting to provide time for any such accommodation.
Town Manager, Kevin Phillips
Town Attorney, Scott E. Huber
Town Clerk, Dina Volenski
CDD, Planning & Onsite, Susan Hartman
CDD, Building & Code Enforcement, Tony Lindsey
Finance Director/Town Treasurer – Ross Gilb
Public Works Director/Town Engineer, Marc Mattox
Division Chief, CAL FIRE/Paradise Fire, Garrett Sjolund Chief of Police, Eric Reinbold
Recovery & Economic Development Director, Colette Curtis Human Resources & Risk Management Director, Crystal Peters Information Systems Director, Luis Marquez
Mayor, Steve Crowder
Vice Mayor, Greg Bolin
Council Member, Steve “Woody” Culleton
Council Member, Jody Jones
Council Member, Rose Tryon
1 1. OPENING
1a. Call to Order
1b. Pledge of Allegiance to the Flag of the United States of America 1c. Roll Call
2. COUNCIL CONSIDERATION
2a. Discuss and consider adopting Resolution No. 2022-____ “A Resolution of The Town Council of The Town of Paradise Rescinding Resolution 2022- 01 and Adopting the New HOME and CDBG Homebuyer Acquisition Only/Acquisition With Rehabilitation Programs Guidelines. (ROLL CALL VOTE)
3. CLOSED SESSION
3a. Pursuant to Government Code Section 54957.6, the Town Council will hold a closed session to meet with Town Manager Kevin Phillips, Finance Director Ross Gilb, Human Resources Director Crystal Peters and Town Attorney Scott E. Huber, its designated representatives, regarding labor relations between the Town of Paradise and the Paradise Police Officers Association, Confidential Mid-Management Association, General Employees Unit, Police Mid-Management Unit and the Management Group.
ADJOURNMENT
2 Town of Paradise
Council Agenda Summary
Date: May 31, 2022
Agenda Item: 2(a)
ORIGINATED BY: Sarah Richter, Housing Program Technician REVIEWED BY: Kevin Phillips, Town Manager
SUBJECT: Update to HOME First-Time Home Buyer Program
Guidelines
LONG TERM
RECOVERY PLAN:
No
COUNCIL ACTION REQUESTED:
Discuss and consider adopting Resolution No. 2022-____ “A Resolution of The Town Council of The Town of Paradise Rescinding Resolution 2022-01 and Adopting the New HOME and CDBG Homebuyer Acquisition Only/Acquisition With Rehabilitation Programs Guidelines Background:
Since 1995, through various grant sources, the Town of Paradise has provided financial assistance in the form of down-payment assistance to low-income residents. The guidelines for the down payment assistance programs have been substantially the same since at least 2005.
The Town can lend up to $40,000 as a deferred loan for down payment assistance for low-income, first-time home buyers. The interest rate is 3% simple interest for the first 10 years, interest is forgiven after 20 years, and the loan is due after 30 years.
Discussion:
HUD implemented a law in August of 2021 requiring homebuyer counseling for households receiving HOME funds, including households receiving down payment assistance through the Town of Paradise. Because the program guidelines need to be updated to include this new law, this provides the opportunity to make changes to the guidelines in other areas as well – namely in the following areas: loan amount, interest rate, interest forgiveness, and debt to income ratios.
It is staff’s recommendation that Town Council implement changes to the HOME guidelines in order to comply with the homebuyer counseling requirement and to anticipate needed flexibility for our in-fill new construction for first time home buyers program, currently in development.
Staff’s recommendation is to remove the $40,000 cap for assistance and instead have an assistance amount determined by HOME’s regulations that would vary per household and be based on need, allowable debt to income ratio, per unit subsidy, the home value limit, and the amount of the first mortgage. By removing the assistance cap, this would allow the potential to assist home buyers with the 20% down payment required to eliminate mortgage insurance.
Mortgage insurance is insurance paid for by the buyer to the benefit of the lender. It will not settle the debt when the buyer passes away and offers no help to the buyer if they can’t make loan payments. With an FHA loan, the buyer pays .85% for mortgage insurance for the life of the loan, adding hundreds of dollars to the monthly mortgage payments. 3 Staff recommends reducing the front-end ratio to a minimum of 25% instead of 28%. There is no need to increase a home buyer’s monthly payment to meet the ratio requirement.
Staff also recommends reducing the interest rate to 1% per year for 10 years and no longer forgive the accrued interest after 20 years. There is value to the community with a high rate of owneroccupancy, especially in affordable housing, but forgiving the interest after 20 years disincentivizes leveraging the home equity to move up and means less opportunity for new home buyers to move in, and a slower rate of loan payoffs for the Town.
Financial Impact:
No impact to the general fund and little to no impact to the Housing department budget. 4 TOWN OF PARADISE
RESOLUTION NO. 2022-
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF PARADISE RESCINDING RESOLUTION 2022-01 AND ADOPTING THE NEW HOME and CDBG
HOMEBUYER ACQUISITION ONLY/ACQUISITION WITH REHABILTATION
PROGRAMS GUIDELINES
WHEREAS, the Paradise Town Council adopted Resolution 2022-01, “A Resolution Of The Town Council Of The Town Of Paradise Amending The HOME and CDBG Homebuyer Acquisition Only/Acquisition With Rehabilitation Programs Guidelines Previously Adopted By Resolution 17-44 And The CalHome Sponsored First-Time Homebuyer Mortgage Assistance Program Guidelines ” dated January 11, 2022; and WHEREAS, the Town Council now desires to rescind Resolution No. 2022-01 and adopt the updated guidelines for the HOME and CDBG Homebuyer Acquisition Only/Acquisition With Rehabilitation Programs.
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF PARADISE DOES HEREBY RESOLVE AS FOLLOWS:
1. The Town Council hereby amends the HOME and CDBG Homebuyer Acquisition/Acquisition with Rehabilitation Program Guidelines dated May 19, 2022, as shown in the attached as Exhibit A.
2. This resolution is effective immediately upon adoption.
PASSED AND ADOPTED by the Town Council of the Town of Paradise this 31st day of May 2022 by the following vote:
AYES:
NOES:
ABSENT:
NOT VOTING:
____________________
Steve Crowder, Mayor
ATTEST: APPROVED AS TO LEGAL FORM:
_____________________________ _____________________________ Melanie Norris, Deputy Clerk Scott E. Huber, Town Attorney 5 6
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