Agenda packet — Visalia City Council, April 17, 2023 (part 3 of 3)

Published: 11/19/21

511

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 34 CIUDAD DE VISALIA | Aviso público sobre la
evaluación de las necesidades de la comunidad del plan
de rescate estadounidense de la asociación de inversión

HOME (HOME-ARP)

La ciudad de Visalia recibió $ 1,840,059 en fondos del Plan de rescate estadounidense de HOME Investment Partnership (HOME-ARP), del Departamento de Vivienda y Desarrollo Urbano de EE. UU. (HUD) para ayudar personas sin hogar, en riesgo de quedarse sin hogar, y otras poblaciones vulnerables por proporcionar vivienda, abrigos, asistencia de alquiler, y/o servicios de apoyo para reducir la falta de vivienda y aumentar la estabilidad de la vivienda.

Haga que se escuche su voz: La ciudad de Visalia está buscando la opinión del público para las actividades elegibles de HOME-ARP basadas en las necesidades de la comunidad y las brechas de recursos de vivienda. Los comentarios del público y de las partes interesadas son fundamentales para desarrollar prioridades y metas para el uso de los fondos de HOME-ARP. Las actividades elegibles de HOME-ARP incluyen viviendas de alquiler asequibles, ocupación de habitación individual, asistencia de alquiler y servicios de apoyo.

Encuesta: Favor de responder a nuestra encuesta a www.surveymonkey.com/r/HOME-ARP- NeedsAssessment para identificar las necesidades de la comunidad y las brechas de recursos de vivienda para priorizar las actividades de HOME-ARP. Tenga en cuenta que la encuesta finaliza el 3 de diciembre de 2021.

Audiencia Pública: Se llevará a cabo la siguiente audiencia pública para obtener información adicional del público para el uso de los fondos de HOME-ARP:

Ayuntamiento - Audiencia Pública
Cámaras del Consejo
707 W. Acequia Ave. Visalia, CA 93291
20 de diciembre de 2021, a las 7:00 pm
Si no puede asistir, puede enviar sus comentarios por escrito a Margie Perez, Especialista en Vivienda a [email protected]. La audiencia pública también estará disponible para visualización virtual en vivo en https://visalia.legistar.com/Calendar.aspx.

De conformidad con la Ley de Discapacidades de los Estados Unidos, si necesita asistencia especial para participar en las reuniones, llame al (559) 713-4512 48 horas antes de la reunión. Para personas con problemas de audición, llame al (559) 713-4900 (TTY) 48 horas antes de la hora de reunión programada para solicitar servicios.

Publicado: 11/19/21
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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 35 513

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 36 CITY OF VISALIA | Public Notice of the Draft
2022 Annual Action Plan and 2021 Action Plan Amendment
Review and Comment Period: March 18, 2022 – April 18, 2022

Notice is hereby given that the City of Visalia is seeking input on the draft Program Year (PY) 2022 Annual Action Plan and PY 2021 Action Plan Amendment including the draft HOME Investment Partnership American Rescue Plan Program (HOME-ARP) Allocation Plan. The public comment period for the draft PY 2022 Annual Action Plan and PY 2021 Action Plan Amendment including the HOME-ARP Allocation Plan is March 18, 2022 – April 18, 2022. The draft PY 2022 Annual Action Plan and 2021 Action Plan Amendment including the draft HOME-ARP Allocation Plan is available for public review on the City’s website at www.visalia.city/depts/finance/housing_n_cdbg_services/public_notices.asp.

Staff invites you to attend a community meeting and/or public hearing:

• Community Meeting – April 6, 2022, at 5:30pm at 220 N. Santa Fe, Visalia • Public Hearing – April 4, 2022, at 7:00pm at 707 W. Acequia Ave., Visalia • Public Hearing – April 18, 2022, at 7:00pm at 707 W. Acequia Ave., Visalia

If you are unable to attend, you may submit your comments in writing to Margie Perez, Housing Specialist at [email protected]. The public hearing will also be available for virtual live viewing at https://visalia.legistar.com/Calendar.aspx.

In Compliance with the American Disabilities Act, if you need special assistance to participate in meetings call (559) 713-4512 48-hours in advance of the meeting. For Hearing Impaired call (559) 713-4900 (TTY) 48-hours in advance of the scheduled meeting time to request services.

Published: 3/15/22, 3/18/22 and 4/1/22

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 37 515

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 38 CIUDAD DE VISALIA | Aviso público del borrador de la ciudad de Visalia Plan de acción anual de 2022 y modificación del plan de acción de 2021 Período de revisión y comentario: 18 de marzo de 2022 - 18 de abril de 2022

Por la presente se notifica que la ciudad de Visalia está buscando información sobre el borrador del Plan de Acción Anual del Año del Programa (PY) 2022 y la Enmienda del Plan de Acción PY 2021, incluido el borrador del Plan de Asignación del Programa del Plan de Rescate Americano de la Asociación de Inversión HOME (HOME-ARP). El período de comentarios públicos para el borrador del Plan de acción anual PY 2022 y la Enmienda del Plan de acción PY 2021, incluido el Plan de asignación HOME-ARP, es del 18 de marzo de 2022 al 18 de abril de 2022. El borrador del Plan de Acción Anual PY 2022 y la Enmienda del Plan de Acción 2021, incluido el borrador del Plan de Asignación HOME-ARP, están disponibles para revisión pública en el sitio web de la Ciudad en www.visalia.city/depts/finance/housing_n_cdbg_services/public_notices.asp.

El personal lo invita a asistir a una reunión comunitaria y/o audiencia pública:
• Reunión comunitaria: 6 de abril de 2022 a las 5:30 p. m. en 220 N. Santa Fe, Visalia • Audiencia pública: 4 de abril de 2022 a las 7:00 p. m. en 707 W. Acequia Ave., Visalia • Audiencia pública: 18 de abril de 2022, a las 7:00 p. m. en 707 W. Acequia Ave., Visalia

Si no puede asistir, puede enviar sus comentarios por escrito a Margie Perez, especialista en vivienda a [email protected]. La audiencia pública también estará disponible para visualización virtual en vivo en https://visalia.legistar.com/Calendar.aspx.

En cumplimiento con la Ley de Estadounidenses con Discapacidades, si necesita asistencia especial para participar en las reuniones, llame al (559) 713-4512 48 horas antes de la reunión. Para personas con discapacidad auditiva, llame al (559) 713-4900 (TTY) 48 horas antes de la hora de la reunión programada para solicitar servicios.

Publicado: 3/15/22, 3/18/22, y 4/1/22

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 39 517

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 40 CITY OF VISALIA | Public Notice of the Draft
2023 Annual Action Plan, 2022 Action Plan Amendment,
and 2021 Action Plan Amendment including HOME-ARP
Allocation Plan Amendment
Review and Comment Period: March 17, 2023 – April 17, 2023

The 30-day public comment period is March 17, 2023 – April 17, 2023. The draft plans are available for public review on the City’s website at
www.visalia.city/depts/finance/housing_n_cdbg_services/public_notices.asp.

Staff invites you to attend a community meeting and/or public hearing:

• Public Hearing – April 3, 2023, at 7:00pm at 707 W. Acequia Ave., Visalia • Community Meeting – April 5, 2023, at 5:30pm at 220 N. Santa Fe, Visalia • Public Hearing – April 17, 2023, at 7:00pm at 707 W. Acequia Ave., Visalia

If you are unable to attend a meeting, you may submit your comments in writing to Margie Perez, Housing Specialist at [email protected].

Published 3/15/23, 3/17/23, and 3/31/23

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 41 CIUDAD DE VISALIA | Aviso público para el plan de acción propuesto para 2023 Enmiendas al Plan de Acción 2022 y Enmienda al Plan de Acción 2021 incluida modificación del Plan de asignación HOME-ARP
Período de revisión y comentarios: 17 de marzo de 2023 - 17 de abril de 2023

Por la presente se notifica que la ciudad de Visalia está buscando información sobre el borrador del Plan de Acción Anual del Año del Programa (PY) 2023, la Enmienda del Plan de Acción PY 2022, la Enmienda del Plan de Acción PY 2022 Programa de Estabilización de Barrios (NSP), y la Enmienda del Plan de Acción PY 2021, incluido el borrador del Plan de Asignación del Programa del Plan de Rescate Americano de la Asociación de Inversión HOME (HOME-ARP). El período de comentarios públicos es del 17 de marzo de 2023 al 17 de abril de 2023. El borrador de los planos está disponible para revisión pública en el sitio web de la Ciudad en www.visalia.city/depts/finance/housing_n_cdbg_services/public_notices.asp.

El personal lo invita a asistir a una reunión comunitaria y/o audiencia pública:
• Audiencia pública: 3 de abril de 2023 a las 7:00 p. m. en 707 W. Acequia Ave., Visalia • Reunión comunitaria: 5 de abril de 2023 a las 5:30 p. m. en 220 N. Santa Fe, Visalia • Audiencia pública: 17 de abril de 2023, a las 7:00 p. m. en 707 W. Acequia Ave., Visalia

Si no puede asistir, puede enviar sus comentarios por escrito a Margie Perez, especialista en vivienda a [email protected].

En cumplimiento con la Ley de Estadounidenses con Discapacidades, si necesita asistencia especial para participar en las reuniones, llame al (559) 713-4512 48 horas antes de la reunión.

Para personas con discapacidad auditiva, llame al (559) 713-4900 (TTY) 48 horas antes de la hora de la reunión programada para solicitar servicios.

Publicado: 3/15/23, 3/17/23, y 3/31/23

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 42 Appendix D: SF-424 Form

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 43 521

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 44 522

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 45 Appendix E: SF-424B Form

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 46 524

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 47 Appendix F: SF-424D Form

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 48 526

City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 49 Appendix G: HOME-ARP Certifications

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City of Visalia Draft HOME-ARP Allocation Plan – FY 2021 Action Plan Amendment 50 528
Attachment D: Draft 2023 Annual Action Plan and 2022 Action Plan Amendment Tables Draft PY 2023 CDBG and HOME Annual Action Plan
Table D-1: Draft PY 2023 CDBG & HOME Annual Action Plan Resources: CDBG HOME
2023 Annual Allocation $ 1,200,000 $ 545,000 2023 Program Income 50,000 800,000 Total 2023 CDBG and HOME Resources $ 1,250,000 $ 1,345,000 Expenditures:

Administration and Planning:

Administration $ 250,000 $ 79,500 Total Administration $ 250,000 $ 79,500

Public Services:

Kings Tulare Homeless Alliance $ 20,000 $ - Family Services Voucher Program 50,000 - Kings View PATH Program 50,000 - Fair Housing Education 7,500 - Total Public Services $ 127,500 $ -

Affordable Housing:

Senior Mobile Home Repair Program $ 75,000 $ - Code Enforcement 175,000 - HOME-CHDO Multi-Family Project - 631,125* The Lofts Project - 634,375 Total Affordable Housing $ 250,000 $ 1,265,500

Public Facility Improvements:

ADA Compliance Projects – Tree Wells $ 622,500* $ - Total Public Facility Improvements $ 622,500 $ -

Total 2023 CDBG and HOME Expenditures $ 1,250,000 $ 1,345,000

*Any increase or decrease of CDBG annual allocation and/or program income will be directed to ADA Compliance Projects for downtown tree wells rehabilitation. Any increase or decrease of HOME annual allocation and/or program income will be directed to HOME-CHDO multi-family project.

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Draft PY 2022 CDBG and HOME Action Plan Amendments
Table D-2: Draft PY 2022 CDBG Action Plan Amendment
Resources Approved Adjustments Proposed
PY 2022 Annual Allocation $ 1,183,482 $ - $ 1,183,482 PY 2022 Program Income 50,000 150,000 200,000 Prior Year Resources 1,834,163 - 1,834,163 Total Resources $ 3,067,645 $ 150,000 $ 3,217,645 Expenditures Approved Adjustments Proposed
Administration $ 262,500 $ - $ 262,500 Kings Tulare Homeless Alliance 20,000 - 20,000 Family Services Voucher Program 45,000 - 45,000 Kings View PATH Program 35,000 - 35,000 Fair Housing Education 7,500 (7,500) - Emergency Repair and ADA Program 50,000 - 50,000 Senior Mobile Home Repair Program 100,000 - 100,000 Code Enforcement 150,000 - 150,000 ADA Compliance Projects 342,440 157,500 499,940 Navigation Center Development 2,055,205 - 2,055,205 Total Expenditures $ 3,067,645 $ 150,000 $ 3,217,645

Table D-3: Draft PY 2022 HOME Action Plan Amendment
Resources Approved Adjustments Proposed
PY 2022 HOME Allocation $ 546,791 $ - $ 546,791 PY 2022 Program Income 200,000 - 200,000 Prior Year Funds - 120,000 120,000 Total Resources $ 746,791 $ 120,000 $ 866,791 Expenditures Approved Adjustments Proposed
HOME Admin $ 70,750 $ - $ 70,750 First Time Homebuyer Program 125,000 120,000 245,000 The Lofts Project 551,041 - 551,041 Total Expenditures $ 746,791 $ 120,000 $ 866,791

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2023 Annual Action Plan,
2022 Action Plan Amendment, &
2021 HOME-ARP Allocation Plan
Amendment

CITY COUNCIL MEETING
APRIL 17, 2023
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2 CDBG
 Community Development Block Grant (CDBG)
 Supports community development by providing decent housing, suitable living environment, & expansion of economic opportunities.  Activities Must Meet At-Least One:
Benefit low- or moderate-income persons or areas
Eliminate slums or blight
Meet an urgent emergency
532
3 HOME
 HOME Investment Partnerships Program (HOME)
 Supports increasing affordable housing opportunities.  Eligible Activities:
Homebuyer Assistance
Rehabilitation for Owner-Occupants
Rental Housing Production
Tenant-Based Rental Assistance
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Funding Process 4
Amendments
Appropriate unspent funds or additional funds received.

Annual Action Plan
Implements ConPlan approved activities and projects.

Awards contracts to do as approved in ConPlan.
5-Year ConPlan
Establishes activities and project goals.
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30-Day Public Comment Period
March 17 – April 17
5 4/3/23 – COUNCIL REVIEW
& COMMENT
4/5/23 – CITIZEN

ADVISORY COMMITTEE
4/17/23 – PUBLIC

HEARING FOR ADOPTION
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2023
CDBG
Projected
Resources
6 Table 1- 2023 CDBG Resources
Resources CDBG
2023 Annual Allocation $ 1,206,775
2023 Program Income 50,000
Total 2023 CDBG Resources $ 1,256,775
536
2023
CDBG
Proposed
Funding
7 Table 2 - 2023 CDBG Proposed Funding
Administration $ 250,000
Public Services:

KTHA/CoC $ 20,000
Family Services - Voucher Program $ 50,000
Kings View PATH Program $ 50,000
Fair Housing $ 7,500
Total Public Services $ 127,500
Affordable Housing:

Senior Mobile Home Repair Program $ 75,000
Code Enforcement $ 175,000
Total Affordable Housing $ 250,000
Public Facility Improvements:

ADA Compliance Project - Tree Wells $ 629,275
Total Public Facility Improvements $ 622,500
Total CDBG Expenditures $ 1,256,775
537
2023
HOME
Projected
Resources
8 Table 3 - 2023 HOME Resources
Resources HOME
2023 Annual Allocation $ 538,976
2023 Program Income 800,000
Total 2023 HOME Resources $ 1,338,976
538
2023
HOME
Proposed
Funding
9 Table 4 - 2023 HOME Proposed Funding
HOME Administration $ 79,500
HOME-CHDO Multi-Family Project 625,101
The Lofts Project 634,375
Total 2023 HOME Proposed Funding $ 1,338,976
539
10 2022 CDBG Proposed Amendment
Table 5 - PY 2022 CDBG Annual Action Plan Amendment
Resources Approved Adjustments Proposed
PY 2022 Annual Allocation $ 1,183,482 $ - $ 1,183,482 PY 2022 Program Income 50,000 150,000 200,000
Prior Year Resources 1,834,163 - 1,834,163
Total Resources $ 3,067,645 $ 150,000 $ 3,217,645 Expenditures Approved Adjustments Proposed
Administration $ 262,500 $ - $ 262,500 Kings Tulare Homeless Alliance 20,000 - 20,000
Family Services Voucher Program 45,000 - 45,000
Kings View PATH Program 35,000 - 35,000
Fair Housing Education 7,500 (7,500) -
Emergency Repair and ADA Program 50,000 - 50,000
Senior Mobile Home Repair Program 100,000 - 100,000
Code Enforcement 150,000 - 150,000
ADA Compliance Projects – Transit Pathway 342,440 157,500 499,940 Navigation Center Development 2,055,205 - 2,055,205
Total Expenditures $ 3,067,645 $ 150,000 $ 3,217,645 540
11 2022 HOME Proposed Amendment
Table 6 - PY 2022 HOME Annual Action Plan Amendment
Resources Approved Adjustments Proposed
PY 2022 HOME Allocation $ 546,791 $ - $ 546,791 PY 2022 Program Income 200,000 - 200,000
Prior Year Funds - 120,000 120,000
Total Resources $ 746,791 $ 120,000 $ 866,791 Expenditures Approved Adjustments Proposed
HOME Admin $ 70,750 $ - $ 70,750 First Time Homebuyer Program 125,000 120,000 245,000
The Lofts Project 551,041 - 551,041
Total Expenditures $ 746,791 $ 120,000 $ 866,791 541
2021

HOME-ARP
Allocation
Plan
12 HOME-ARP funds
HOME-ARP funds
• $1,840,059
Qualifying Populations:

Qualifying Populations:
• Homeless
• At Risk of Homeless
• Fleeing Domestic Violence or Human Trafficking
• Greatest Risk of Housing Instability
Eligible Activities:

Eligible Activities:
• Affordable Rental Housing
• Non-Congregated Shelter Units
• Tenant Based Rental Assistance
• Supportive Services
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13 2021 HOME-ARP Allocation
Plan Amendment
 Majestic Project
 7/18/22 Council awarded HOME-ARP RFP to RHCB to covert the Majestic Motel into PSH for people experiencing homelessness.  Amendment Purpose
 To provide preferences to people experiencing homelessness to utilize Coordinated Entry System (CES) into the Majestic Project.  Homekey funds requires utilizing CES.
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14 Action
Tonight
 Staff Recommends
 Conduct a Public Hearing.
 Motion to approve and appropriate
funds for 2023 Action Plan, 2022 Action
Plan Amendment, 2021 Action Plan
Amendment including HOME-ARP
Allocation Plan Amendment.
 Motion to enter into all contracts as
listed in the 2023 Action Plan and 2022
Action Plan Amendment.
 Authorize Submission to HUD.
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Visalia City Council
Staff Report
Visalia City Council
707 W. Acequia
Visalia, CA 93291
File #: 23-0121 Agenda Date: 4/17/2023 Agenda #: 2.

Agenda Item Wording:

Conduct a second Public Hearing to approve and adopt the proposed U.S. Department of Housing and Urban Development (HUD) Neighborhood Stabilization Program (NSP1) Substantial Amendment to provide an estimated $120,000 for the funding of First Time Homebuyer loans for five single-family homes constructed at NW 5th Avenue and N Court Street.

Deadline for Action: 4/17/2023
Submitting Department: Finance and Technology Services
Contact Name and Phone Number: Margie Perez, [email protected] <mailto:[email protected]>, (559) 713-4460; Melody Murch, Assistant Finance Director, [email protected] <mailto:[email protected]>, (559) 713-4379; Renee Nagel, Finance Director, [email protected] <mailto:[email protected]>, (559) 713-4375 Department Recommendation:

1. Conduct a second Public Hearing, allowing a final opportunity for citizens to provide input and comment on the proposed NSP1 Substantial Amendment;

2. Adopt and appropriate the NSP1 Substantial Amendment;

3. Authorize City Manager or their designee to enter into all contracts listed in the NSP1 Substantial Amendment; and

4. Authorize City Manager or their designee to submit the NSP1 Substantial Amendment to HUD.

Background Discussion:

The Neighborhood Stabilization Program was enacted in 2008 under the Housing Economic Recovery Act (HERA) and is referred to as NSP1. NSP1 was established for the purpose of providing emergency assistance to stabilize communities with high rates of abandoned and foreclosed homes, and to assist households whose annual incomes are up to 120 percent of the area median income (AMI), because of the great recession of 2008. The City of Visalia received NSP1 funds in Fiscal Year 2008-2009 and has not since received any additional grant funds. Current available NSP1 funds are a result of program income generated from previous NSP1 first time homebuyer loans. The City of Visalia is nearing closeout of its Neighborhood Stabilization Program and is proposing to reallocate the remaining balance of approximately $120,000 in NSP1 funds. This balance is from recaptured program income and available funds obligated for acquisition, rehabilitation and resell of foreclosed homes through Habitat for Humanity.

An amendment has been prepared, in an effort to close out the 2008 Neighborhood Stabilization Program (NSP1) grant, which proposes the use of approximately $120,000 in remaining NSP1 program income funding to a First Time Homebuyer (FTHB) program or secondary financing for five single-family homes which have been constructed by Self-Help Enterprises (SHE) on NW 5th Avenue Visalia City Council Printed on 4/14/2023Page 1 of 6
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and N Court Street with the use of HOME Investment Partnerships Program (HOME) funds.

Eligible Activities:

Only three possible property types can receive NSP assistance:

1. Foreclosed Properties,

2. Abandoned Properties, or

3. Development on Vacant Land.

NSP1 eligible activities include the following:

A. Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties;
B. Acquisition and rehabilitation to sell, rent or develop abandoned or foreclosed homes and residential properties;
C. Establishment of land banks for foreclosed homes;
D. Demolition of blighted structures; and
E. Redevelopment of demolished, or vacant properties.

Ineligible Activities:

These include, but not limited to:
· Foreclosure prevention
o Including refinancing mortgages, paying back taxes or mortgage payments, and underwriting counseling-related expenses.
· Demolition of non-blight structures
· Any NSP1 activity that is not located within the approved neighborhood/target area.

Proposed Neighborhood Stabilization Program (NSP1) Substantial Amendment:

The proposed NSP1 Substantial Amendment consists of an additional approximate amount of $120,000 in NSP1 program income generated from paid NSP1 funded loans, towards a First Time Homebuyer (FTHB) program or secondary financing for 5 single-family homes constructed on NW 5th Avenue and N Court Street with the use of HOME Investment Partnerships Program (HOME) funds.

The 5 single-family homes are restricted to purchase by households at 80% of the area median income (AMI) or lower who have not owned a home within the past 3-years per HOME program standards.

The NSP1 Homebuyer Assistance will meet the Low-Moderate and Middle-Income (LMMH) national objective. The project will be within an NSP Targeted area, for households at or below 120% of the area median income. The Homebuyer Assistance will be provided to NSP1 eligible beneficiaries.

NSP1 homebuyer assistance follows HOME program standards found in 24 CFR 92.254. NSP1 funds may be used to make housing affordable by providing direct homeownership assistance, reducing the price of the home being sold, or offering downpayment assistance. NSP1 assisted homes will need to remain owner occupied for the life of the loan.

Federal and State Regulations:

Per § 92.254(a)(3), HOME assisted housing must be acquired by a homebuyer whose family qualifies as a low-income family, and the housing must be the principal residence of the family Visalia City Council Printed on 4/14/2023Page 2 of 6
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throughout the period described in paragraph (a)(4) of this section. If there is no ratified sales contract with an eligible homebuyer for the housing within 9 months of the date of completion of construction or rehabilitation, the housing must be rented to an eligible tenant in accordance with § 92.252. In addition, three of the homes were constructed on land purchased with Successor Agency Housing (SAH) funds. As a result, if converted to rental housing those homes would require a 55-year rental affordability covenant in accordance with § 33334.3(f)(1)(B).

Therefore, the City would be responsible to perform a 55-year annual monitoring of those homes.

NSP1 was established for the purpose of providing emergency assistance to stabilize communities with high rates of abandoned and foreclosed homes, and to assist households whose annual incomes are up to 120 percent of the area median income (AMI). The City of Visalia received NSP1 funds in Fiscal Year 2008-2009 and has not since received any additional grant funds. Current available NSP1 funds are a result of program income generated from previous NSP1 first time homebuyer loans. The City of Visalia is nearing closeout of its Neighborhood Stabilization Program and is proposing to reallocate the remaining balance of approximately $120,000 in NSP1 funds. This balance is from recaptured program income and available funds obligated for acquisition, rehabilitation and resell of foreclosed homes through Habitat for Humanity.

Eligible Activities:

Only three possible property types can receive NSP assistance:

1. Foreclosed Properties,

2. Abandoned Properties, or

3. Development on Vacant Land.

NSP1 eligible activities include the following:

A. Financing Mechanisms:

Financing Mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties may include soft-second mortgages, loan loss reserves, and shared equity loans. This use must involve some form of loan or credit enhancement and might include a pool of low interest loans for individuals who purchase and rehabilitate homes for use as their primary residence. Loan forgiveness is allowed, based on performance by the borrower according to terms set by the grantee. Such Financing Mechanisms are distinct from the type of subsidies used below in B or E.

B. Acquisition and Rehabilitation:

In purchasing and rehabilitating homes and residential properties that have been foreclosed upon or abandoned, grantees can finance rehabilitation with loans or grants to make housing affordable, provide direct homeownership assistance, reduce the price of the home being sold, or offer downpayment assistance.

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C. Land Banking:

Land banking - Properties that have been landbanked may use any of the strategies mentioned above under A or B when they are put back onto the market, then renovated and/or sold.

D. Demolition of Blighted Structures:

Demolition of blighted properties to mitigate the likelihood of property value declines in surrounding properties. A structure is blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare.

E. Redevelopment of Demolished, or Vacant Properties:

Redevelopment of demolished or vacant properties could include many of the activities noted above in A and B, as well as new construction of housing for LMMI. These would include loans and grants for homeowners and rental housing providers, homeownership assistance, and other similar forms of assistance.

Ineligible Activities:

Proposed Neighborhood Stabilization Program (NSP1) Substantial Amendment: The proposed NSP1 Substantial Amendment consists of an additional approximate amount of $120,000 in NSP1 program income generated from paid NSP1 funded loans, towards a First Time Homebuyer (FTHB) program or secondary financing for 5 single-family homes constructed on NW 5th Avenue and N Court Street with the use of HOME Investment Partnerships Program (HOME) funds. The 5 single- family homes are restricted to households at 80% of the area median income (AMI) or lower who have not owned a home within the past 3-years per HOME program standards.

NSP1 homebuyer assistance follows HOME program standards found in 24 CFR 92.254. NSP1 funds may be used to make housing affordable by providing direct homeownership assistance, reduce the price of the home being sold, or offer downpayment assistance. NSP1 assisted homes will need to remain owner occupied for the life of the loan.

Federal and State Regulations: Per § 92.254(a)(3), HOME assisted housing must be acquired by a homebuyer whose family qualifies as a low-income family, and the housing must be the principal residence of the family throughout the period described in paragraph (a)(4) of this section. If there is no ratified sales contract with an eligible homebuyer for the housing within 9 months of the date of completion of construction or rehabilitation, the housing must be rented to an eligible tenant in accordance with § 92.252. In addition, three of the homes land were purchased with Low- Visalia City Council Printed on 4/14/2023Page 4 of 6
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and Moderate-Income Housing Asset Funds (LMIHAF) or Successor Agency Housing (SAH) funds.

As a result, if converted to rental housing those homes would require a 55-year rental affordability covenant in accordance with § 33334.3(f)(1)(B). Therefore, the City would be responsible to perform a 55-year annual monitoring of those homes.

Loan Terms: The NSP1 FTHB loan shall be in the form of a second trust deed secured by a Note and Deed of Trust.
• Payments on the loan may be deferred at 0% interest, at the election of the Eligible Homebuyer, for thirty (30) years, beginning at the time of execution of the Note. • The City Loan(s) shall be due and payable in full on the thirtieth (30) year at the conclusion of the deferral period in accordance with the terms of the Note required by the Owner’s Participation Agreement. This will allow the borrower to delay amortization of this portion of the debt until the first mortgage is fully repaid. Borrowers may make payments on this deferred debt at any time during the 30-year deferral period. • The deferred principal amount shall become immediately due and payable at such time as either:
o The Eligible Homebuyer or immediate family member ceases to maintain continuous residence on the property; or
o Title to the property is transferred; or
o The property is refinanced.

Affordability Covenant: A 30-year affordability covenant shall be recorded to maintain affordability.

The affordability covenant shall use the “Recapture Provision”, as referenced under 24, CFR 92.254 (a)(5)(ii)(A)(1) and shall begin the date the Deed of Trust is recorded. “Recapture Provision”, as referenced under 24, CFR 92.254(a)(5)(ii)(A)(1) and shall begin the date the Deed of Trust is recorded. The City may recapture the entire amount of the direct grant subsidy from the homeowner and the difference between the fair market value and the purchase price, if the purchase price is below the fair market value and any additional assistance as referenced above. The amount to be recaptured will not exceed the amount of net proceeds available at the time the home is sold. HOME rule limits recapture to available net proceeds, therefore, if net proceeds are insufficient for the city to recapture the full amount of the Direct assistance/investment, the City will recapture only what is available from net proceeds.

Public Comment Period: The 30-day public comment period for the review of the draft NSP1 Substantial Amendment began on March 17th through April 17th, 2023. During the 30-day public comment period the draft NSP1 Amendment was available for public review on the City’s website at www.visalia.city. Public notices were published on City’s social media outlets, and in the Visalia Times Delta on March 15th, March 17th, and March 31st, 2023. Public notices were also included in Kings/Tulare Homeless Alliance and the Visalia Chamber of Commerce email listservs. A public hearing was conducted on April 3, 2023, to allow public comment and input. The proposed NSP1 Amendment was also presented at the Citizens Advisory Committee (CAC) on April 5, 2023, to receive additional public input. Tonight’s public hearing is the final step in the public comment period.

Fiscal Impact:

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File #: 23-0121 Agenda Date: 4/17/2023 Agenda #: 2.

Approval of this item will appropriate the available balance (approximately $120,000) of NSP1 program income to a First Time Homebuyer Program for single family homes newly constructed at 101, 105, 111, and 113 NW 5th Avenue, and 1113 N Court Street, and no General Fund money is to be included. All proposed budget amounts will become amendments to the current City budget.

Prior Council Action: Click or tap here to enter text.
· March 19, 2018 - Conference with Real Property Negotiators for vacant lots at 101, 105, 111, and 113 NW 5th Ave., and 1113 N Court St.
· April 16, 2018 - Authorize sale of properties located at 101, 105, 111, and 113 NW 5th Ave., and 1113 N Court St. to Self-Help Enterprises for affordable housing development and future sale as owner-occupied single-family detached homes to income qualifying households. · June 18, 2018 - First Reading of Ordinance 2018-10 and held a public hearing to received comment on the sale and development of the properties located at 101, 105, 111, and 113 NW 5th Ave., and 1113 N Court St.
· July 16, 2018 - Second Reading of Ordinance No. 2018-10 and held a public hearing to received comment on the sale and development of the properties located at 101, 105, 111, and 113 NW 5th Ave., and 1113 N Court St.
· April 3, 2023 - Review of draft FY 2022-23 NSP1 Amendment.

Other: None.

Alternatives: None
Recommended Motion (and Alternative Motions if expected):

Staff recommends that Council:

1. Conduct a second Public Hearing, allowing a final opportunity for citizens to provide input and comment on the proposed NSP1 Substantial Amendment;

2. Adopt and appropriate the NSP1 Substantial Amendment;

3. Authorize City Manager or their designee enter into all contracts listed in the NSP1 Substantial Amendment; and

4. Authorize City Manager or their designee to submit the NSP1 Substantial Amendment to HUD.

Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Click or tap here to enter text.
· Attachment A: NSP1 Substantial Amendment
· Attachment B: COV Homebuyer Guidelines
· Attachment C: NSP Amendment PPT
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CITY OF VISALIA, CALIFORNIA

THE NSP SUBSTANTIAL AMENDMENT
AMENDMENT: ADDITION OF ELIGIBLE USE “A”

Jurisdiction(s): City of Visalia
(identify lead entity in case of joint
agreements)

Jurisdiction Web Address:
www.visalia.city
(URL where NSP Substantial Amendment
materials are posted) See below
Contact Person: Leslie Caviglia
Address: 220 N Santa Fe
Visalia, California 93291
Telephone: (559) 713-4312
Fax: (559) 713-4800
Email: [email protected]

Second Contact: Margie Perez, Housing
Specialist, 707 West Acequia, Visalia,
CA 93291; (559)713-4460;
[email protected]
http://www.visalia.city/depts/finance/housing_n_cdbg_services/publications_n_reports/neig hborhood_stabilization_program.asp

This Amendment t o the Acti on Plan for the Neighborhood Stabilization Program 1 is hereby further amended to include the following:

Visalia has exceeded the NSP requirements, including set aside requirements through acquisition, rehabilitation and resell of single-family properties to income qualifying households in both categories (up to 50% AMI and between 51%- 120% AMI). The City was also successful in these income categories.

The City of Visalia is nearing closeout of its Neighborhood Stabilization Program (NSP1) and is propo sing to reallocate approximately $120,000 in Neighborhood Stabilization Program 1 (NSP1) funds from recaptured program income and available funds obligated for acquisition, rehabilitation and resell of foreclosed homes through Habitat for Humanity.

The market has changed substantially since the original grant was awarded; and there are very limited opportunities to make offers on foreclosed homes in the NSP1 targeted area.

NSP1 funds not expended must be obligated to NSP1 eligible activities i n order to meet Federal NSP1 grant requirements. The City proposes to provide First Time Homebuyer (FTHB) assistance as a deferred 30 -year seco ndary financing to newly constructed single-family homes with the use of HOME In vestment Partnerships Program (HO ME) funds, located in Visalia, CA, which meets NSP1 requirements.

NSP1 funds will be used for the secondary financing for 5 -single family homes for income eligible households that have not owned a home in the pas t 3 years , under the Eligible Use “A” – Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties.
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2 The single-family home s are located within the NSP1 target area, with the location addresses of 101, 105, 111, and 113 NW 5th Avenue, and 1113 N Court Street in Visalia, CA. The homes will be sold to households with income meeting the NSP1 income limits at or below 120% area median income. Homebuyers will be required to provide annual occupancy verification for the life of the NSP1 loan, which the Cit y will revie w for compliance.

The City proposes to amend the NSP1 Action Plan 2008, to: 1) Add Eligible Use Activity (“A”) Estab lish financi ng mechanisms for p urchase and redevelopment of foreclos ed homes and residential properties. 2) redirect Neighborhood Stabilization Program (NSP1) Funding from Habitat for Humanity (Habitat) to First Time Homebuyer Assistance under eligible use “A” activity; 3) and provid e remaining funding (approximately $ 120,000) to eligible NSP1 Homebuyers for use of NSP1 funds towa rd 30-year deferred soft-second mortgage to assist income eligible homebuyers. Since this action adds a new eligible activity and new identified beneficiaries, the City has determined that a formal program amendment is required.

NSP NEW ACTIVITY DETAILS

A. AREAS OF GREATEST NEED
The property is within the identified “Area of Greatest Need” – NSP1 Boundaries.

B. DISTRIBUTION AND USES OF FUNDS
The City will provide NSP 1 homebuyer assistance to income eligible homebuyers as a soft-second mortgage. The NSP sof t-second mortgage will be 3 0-year deferred at zero percent interest. The NSP 1 loan will be due and payable in full on the 30 th year at conclusion of the deferral period in accordance with the terms of the Note required by the Owner’s Participation Agreement . The deferral p ayment principal shall become immediately due and payable at such time as either: the eligible homebuyer(s) ceases to maintain continuous residence on the property; Title to the property is transferred; or the property is refinanced.

1) ELIGIBLE ACTIVITY FROM THE NSP REGULATIONS:

• NSP Eligible Use “A”- Financing Mechanisms

2) CORRELATED ELIGIBLE ACTIVITY FROM THE CDBG ENTITLEMENT REGULATIONS:

The correlated eligibility activity from the CDBG Entitlement Regulations for the use of the NSP funding is as follows:

• 24 CFR 570.201 (n) Homeownership Assistance

C. DEFINITIONS AND DESCRIPTIONS
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3 1) Describe how the grantee will ensure continued affordability for NSP assiste d property

The Property will be subject to a Restriction Agreement which will be reco rded against the property. The Agreement shall run with the land and shall bind Owner and all of Owner's successors in interest as owners of the Property.

2) Describe hou sing rehabilitation standards that will apply to NSP assisted activities.

The City of Visalia’s Building Department conducts inspections to confirm that the construction of properties meet s California Building Code requirements. The policy follows local and state regulations and codes , housing quality and habitability standards for construction.

D. LOW INCOME TARGETING

The Homebuyer Assistance will meet the Low-Moderate and Middle -Income ( LMMH) national objective. The project will be within an NSP Targeted area , f or households at or below 120% of the area median income. The Homebuyer Assistance will be provided to NSP1 eligible beneficiaries. All beneficiaries will have income certifications.

E. ACQUISITIONS

Five single -family homes were construct ed on vacan t land with the location addresses of 101, 105, 111, and 113 NW 5th Avenue, and 1113 N Court Street in Visalia, CA. The homes will be sold to households with income meeting the NSP1 income limits at or below 120% area median income.

The number of units- five (5) and there is no intention to demolish units.

F. PUBLIC COMMENT

Provide a su mmary of public comments received to the proposed NSP Substantial Amendment.

During the 30-day noticing of this proposed NSP Substantial Amendment, staff provided information regarding the amendment at three (3) community committee meetings and public hearings, listed below, and the public in general were invited to attend. As identified in the Citizens Participation Plan, the community committees, Citizens Advisory Co mmittee/Disability Advocacy Committee , along with the general public.

The community comments and City Staff responses shall be included.

Staff also presented the NSP1 Amendment at the City Council public hearing meeting s, held on Monday, April 3, 2023 , and Monday, April 17, 2023, held at the City H all, Council Chambers, 707 West Acequia, Visalia, CA, at 7:00 p.m. 553

4 In ad dition to inviting the public and committees, Staff published the public hearing notice in the Visalia Times Delta. The notice was also posted at City Hall East, City Hall West, City Administration, The Public Library, the City’s website , and the City’s social media outlets. A copy of the public notice is attached as Exhibit “A”.

ACTIVITY NO. (#) – Self Help Project NSP INFORMATION BY ACTIVITY (NEW

ACTIVITY- ADDED )

(1) Activity Name: Homeownership Assistance: Financing mechanisms for purchase of residential properties of vacant, ab andoned, foreclosed, or newly constructed on vacant land.

(2) Activity Type : Redevelopment. The identified NSP eligible uses and the CDBG eligible activity’s are as follows:

• NSP: §2301(c)(3)(A)Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties.

• CDBG: 24 CFR 570.201(a) Acq uisition; (b) Disposition, ( n) Homeownership Assistance

(3) National Objective: (Must be a national objective benefiting low-, moderate - and middle-income persons, as defined in the NSP Notice—i.e., ≤ 120% of area median income).

Low Moderate- and Middle -Income Housing (LMMH): The City of Visalia will provide NSP1 funding to provide or improve permanent residential structures that will be occupied by a household whose income is at or below 12 0% area median income (AMI).

The NSP1 homebuyer assistance will be p rovided to households with income who meet the NSP1 income limits at or below 120% area median income. Beneficiaries will be required to certify the ir household income at the time of assistance, which the City will review for compliance.

(4) Projected Start Date: April 1, 2023

(5) Projected End Date: December 31, 2023

(6) Responsible Organization : (Describe the responsible orga nization that will implement the NSP activ ity, including its name , location, and administrator contact information)

HUD has designated the City of Visalia as an entitlement city and a Participating Jurisdiction. The City of Visalia will provide the remai ning NSP funding to a qualified households for homebuyer assista nce as a s oft-second mortgage. (as defined und er 24 554

5 CFR 570.201 (f) (n), to provide low interest loans to individuals who purchase homes for use as their primary residence.

The City will underwrite the project, review income upon initial occupancy only, approve the household eligibility, cash flow , and reserves as needed. Beneficiaries for this amended activity will be persons with incomes below the maximum for the NSP1 program who are in n eed of homebuyer assistance for purchase of a property located at 101, 105, 111, or 113 NW 5th Avenue, or 1113 N Court Street in Visalia, CA. Self-Help Enterprises will be responsible for affirmatively marketing the available units to marginalized subpopulations in the City of Visalia, who may not have otherwise availed themselves of the services provided. Since this action adds a new eligible activity and newly identified beneficiaries, the City has determined that a formal program amendment is required.

Location and contact information is as follows:

City Contact:

City of Visalia
Leslie Caviglia, City Manager
220 N Santa Fe Street
Visalia, California 93291
Duns#030999866

Staff Contact:

Leslie Caviglia, City Manager (559) 713-4317
Renee Nagel, Finance Director (559) 713-4375
Margie Perez, Housing Specialist (559) 713-4460

Non-Profit Developer:

Self Help Enterprises, Inc.

(7) Location Description : (Description may include specific addresses, blocks or neighborhoods to the extent known.)

Proposed properties are located at 101, 105, 111, and 113 NW 5th Avenu e, and 1113 N Court Street in Visalia, CA.

(8) Activity Description:

This activity will address neighborhood stabilization in the NSP1 Boundaries through the financing mechanism for purchase of residential propert ies that may include soft -second mortgages for households a t or below 120 % of the area median income (AMI) level under the Eligible Use “ A”- Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties.

Include a narrative describing the area of gre atest need that the activity addresses ; the expected benefit to income-qualified persons; and whether funds used for this activity will 555

6 be used to meet the low-income housing requirement for those below 50% of area median income.

This activity ad dresses the need of providing homeownership assistance in the form of secondary financing to secure a sufficient amount of financin g to make housing affordable for low-and moderate-income households. Funds for this activity will not be used to meet the l ow-income housing requirement for those below 50% of the area median income level. The City has met the 25% se t asid e low-income housing requirement in previously funded NSP activities.

(9) Total Budget: (Include public and private components)

NSP1 funds will be $120,000 of program funds and program income but could increase slightly if additional program income is received during project negotiations of the funding agreement. The total costs asso ciated with acquisit ion and construction is approximately $1,000,000. Other po tential sources of funding for the project include conventional financing, Developer capital, foundation resources, private donations, and HUD HOME Investment Partnerships Program.

(10) Performance Measures: (Include public and private components)

The proposed NSP1 Amendment will provide Homebuyer Assistance. Accomplishments will be achieved following the close of escrow of an NSP1 income eligible homebuyer(s).

Annual home occupancy verification will be required for the life of the NSP1 loan.

Exhibit “A”, NSP1 Target Area Map
Exhibit “B”, Public Hearing Notice

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7 EXHIBIT “A”
MAP –NSP1 TARGET AREA

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8 EXHIBIT “B”:

PUBLIC HEARING NOTICE

City of Visalia Public Notice of the
Draft 2023 Annual Action Plan, 2022 Action Plan Amendment, 2022 NSP Action Plan Amendment, and 2021 Action Plan Amendment including the HOME ARP Allocation Plan Amendment
Review and Comment Period: March 17, 2023 – April 17, 2023

Notice is hereby given that the City of Visalia is seeking input on the draft Program Year (PY) 2023 Annual Action Plan, PY 2022 Action Plan Amendment, PY 2022 Neighborhood Stabilization Program (NSP) Action Plan Amendment, and PY 2021 Action Plan Amendment including the HOME Investment Partnerships American Rescue Plan Program (HOME-ARP) Allocation Plan Amendment. The 30-day public comment period is March 17, 2023 – April 17, 2023. The draft plans are available for public review on the City’s website at www.visalia.city/depts/finance/housing_n_cdbg_services/public_notices.asp.

Staff invites you to attend a community meeting and/or public hearing:

• Community Meeting – April 5, 2023, at 5:30pm at 220 N. Santa Fe, Visalia • Public Hearing – April 3, 2023, at 7:00pm at 707 W. Acequia Ave., Visalia • Public Hearing – April 17, 2023, at 7:00pm at 707 W. Acequia Ave., Visalia

If you are unable to attend a meeting, you may submit your comments in writing to Margie Perez, Housing Specialist at [email protected].

Published 3/15/23, 3/17/23, & 3/31/23

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SELF-HELP ENTERPRISES - CITY OF VISALIA
Affordable Housing Program
2nd Mortgage Loan
(Households at or below 80% AMI)

Program is administered by Self-Help Enterprises and overseen by the City of Visalia Finance Department – Housing Division (Housing) for Self-Help Enterprises Community Housing Development Organization (CHDO) HOME Investment Partnership funded and Neighborhood Stabilization Program single family properties.

Fair Housing- Equal Opportunity Act
COV Affordable Housing Program effective July 1, 2022

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2 Table of Contents

Introduction .................................................................................................................................................. 3 Program Overview ........................................................................................................................................ 3 Definition of an Eligible Homebuyer ......................................................................................................... 5 City is a second mortgage lender only ...................................................................................................... 6 Available Funds ..................................................................................................................................... 6 Co-Borrowers ........................................................................................................................................ 7 Down Payment Requirement ................................................................................................................ 7 Underwriting ......................................................................................................................................... 7 Application Verification ........................................................................................................................ 7 Form of Assumption Agreement ........................................................................................................... 7 Processing of 2nd Mortgage Loan ................................................................................................................ 7 Loan Packages ............................................................................................................................................... 8 City-Criteria ................................................................................................................................................. 10 Participant Qualifications ........................................................................................................................ 10 City Providing 2nd Mortgage Loan Only ................................................................................................. 11 Fees (Estimated Fees) ......................................................................................................................... 12 Final Credit Decision ................................................................................................................................... 12 City File ........................................................................................................................................................ 12

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3 Self-Help Enterprises Affordable Housing Program
City of Visalia’s HOME and NSP1 funded
2nd Mortgage Loan
Underwriting criteria
Incorporated into Self-Help Enterprises Program Guidelines Introduction
Underwriting criteria was created to assist the City of Visalia, Finance Department-Housing Division (Housing) Staff, Self-Help Enterprises (SHE) a certified Community Housing Development Organization (CHDO) with the City of Visalia, and its underwriter in determining the eligibility of an applicant.

The borrower(s) must meet the City, program funding policies, procedures, and regulations.

Program Overview
The City of Visalia provided HOME Investment Partnership Program, specifically Community Housing Development Organization (CHDO) funds, and Neighborhood Stabilization Program (NSP1) funds to support Self-Help Enterprises project to provide homeownership. Self-Help Enterprises (SHE) is a Certified CHDO with the City of Visalia, who has met the requirements in receiving these funds.

SHE is utilizing Visalia’s HOME- CHDO funds to acquire, rehabilitate and resell single-family dwellings within the City of Visalia limits to income qualifying households. The specific funds utilized shall be referenced within the applicant’s file. Neighborhood Stabilization Program (NSP1) funds may be also used for secondary financing if funds are available. NSP1 financing mechanisms follow HOME federal regulations found in 24 CFR 92.254.

Sale of rehabilitated or construction of Qualifying Single-Family Properties. Following the rehabilitation or construction of a Qualifying Single-Family Property, SHE shall use reasonable efforts to secure an Eligible Purchaser. SHE shall be responsible for the outreach, marketing, screening and intake of potential clients, case file preparation and management.

Before any sale can occur, SHE shall provide the City with evidence satisfactory to the City that the following conditions have been met:

The total cost of development of the Qualifying Single-Family Property, including acquisition, rehabilitation, and soft costs. As documented by SHE and provided to the City.

Sales Price Valuation: The property resale may not exceed 95% of the area median price based on an analysis conducted by Self-Help Enterprises, of the local market and reviewed by the City. 561
4 The sale price shall be equal to or less than the fair market value, which shall be confirmed through an appraisal. If the property is sold below fair market value, the difference between the fair market value and the purchase price is considered to be part of the HOME subsidy and provided directly to the homebuyer as a direct subsidy. Furthermore, any additional subsidy provided to the homebuyer to enable them to purchase the property, which includes down payment assistance, closing costs, interest subsidies, or other HOME assistance including any assistance that reduced the purchase price from fair market value to an affordable price, shall be recaptured.

A 30-year covenant shall be recorded to maintain affordability. The SHE-CHDO Program covenant shall use the “Recapture Provision”, as referenced under 24, CFR 92.254(a)(5)(ii)(A)(1) and shall begin the date the Deed of Trust is recorded. “Recapture Provision”, as referenced under 24, CFR 92.254(a)(5)(ii)(A)(1) and shall begin the date the Deed of Trust is recorded. The City may recapture the entire amount of the direct HOME Subsidy from the homeowner and the difference between the fair market value and the purchase price, if the purchase price is below the fair market value and any additional assistance as referenced above. The amount to be recaptured will not exceed the amount of net proceeds available at the time the home is sold. HOME rule limits recapture to available net proceeds, therefore, if net proceeds are insufficient for the city to recapture the full amount of the Direct HOME assistance/investment, the City will recapture only what is available from net proceeds. This applies regardless of the nature of the sale (voluntary sales including short sales, and involuntary sales including foreclosures).

Eligible properties are single-family properties acquired, constructed, or rehabilitated, and prepared for sale by Self-Help Enterprises, located within the City limits of Visalia.

Upon sale, the property must be “owner-occupied” as a requirement of the program. The property must remain owner-occupied for a minimum of thirty (30) years for borrowers who obtain a second mortgage. In the case of the homebuyer selling the home during the affordability period, the City may recapture the entire amount of the direct HOME Subsidy and the difference between the fair market value and the purchase price, if the purchase price is below the fair market value, and any additional assistance as referenced above. The amount to be recaptured will not exceed the amount of net proceeds available at the time the home is sold. HOME rule limits recapture to available net proceeds, therefore, if net proceeds are insufficient for the city to recapture the full amount of the Direct HOME assistance, the City will recapture only what is available from net proceeds. This applies regardless of the nature of the sale (voluntary sales including short sales, and involuntary sales including foreclosures). 562
5 Rental or transfer of ownership of property during the affordability covenant will cause the loan to become due and payable immediately (See Owners Participation Agreement for Recapture Provisions for details).

The covenants and restrictions identified within it shall remain in effect until amended or either of the following termination events occur:
• The Property remains in the possession of the Eligible Homebuyer and/or an Eligible Household for the entire Period of Affordability; or
• Foreclosure, transfer in lieu of foreclosure, or assignment of an FHA-insured loan to HUD.

To confirm income eligibility, the Participant will complete an application and income eligibility forms (See Income Worksheets and Income inclusion & exclusion definition). Households with gross income at or below 80% of Visalia Area Median Income (AMI) are eligible. (Visalia AMI is defined as HUD HOME Income Limits for Visalia-Tulare-Porterville MSA – County Code 107). The City will not approve any application until confirming eligibility based on limitations to the City’s funding sources.

The Participants Primary (first) mortgage must hold a fixed interest rate, a minimum of a thirty- year term, as well as a housing/income ratio (principal, interest, insurance, and taxes) between 25 to 35% of the gross household income, based on 24 CFR 5.609 criteria. The program requires that the household’s total debt ratio cannot exceed 42% of the gross household income, which includes other monthly obligations.

Participants primary mortgage must include impounds for taxes and insurance, including flood and homeowner’s association dues (if applicable).

Definition of an Eligible Homebuyer
HOME funded programs are required to use the following definition of an eligible homebuyer, which is a “first-time homebuyer” from 8201(m) Title 25 California Code of Regulations:
“First-time homebuyer” means an individual or an individual and his or her spouse who have not owned a home during the three-year period before the purchase of a home with subsidy assistance, except that the following individual or individuals may not be excluded from consideration as a first-time homebuyer under this definition:
• 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 563
6 underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family; • a single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single 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
• an individual or individuals who owns or owned, as a principal residence during the three-year period before the purchase of a home with assistance, a dwelling unit whose structure is:
o not permanently affixed to a permanent foundation in accordance with local or state regulations; or
o not in compliance with state, local, or model building codes and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure.

City is a second mortgage lender only
City will provide secondary loans for a thirty-year term at zero percent (0%) interest. • The loan shall be in the form of a second trust deed secured by a Note and Deed of Trust.
• Payments on the loan may be deferred, at the election of the Eligible Homebuyer, for thirty (30) years, beginning at the time of execution of the Note. • The City Loan(s) shall be due and payable in full on the thirtieth (30) year at the conclusion of the deferral period in accordance with the terms of the Note required by this Agreement.
• The deferred payment principal shall become immediately due and payable at such time as either:
o The Eligible Homebuyer or immediate family* member ceases to maintain continuous residence on the property; or
o Title to the property is transferred; or
o The property is refinanced.
* Immediate family includes only the Borrower’s spouse and/or children.

Available Funds
Participants may utilize City of Visalia HOME first time homebuyer funds and up to 10% of the total acquisition & rehabilitation cost incurred by SHE on the Qualifying Single-Family Property as down payment assistance (2nd mortgage loan to be carried by the City of Visalia, from Self- Help Enterprises proceeds).
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7 Co-Borrowers
Co-borrowers, other than co-occupants, are not permitted on the loan (this is to prohibit investors from utilizing a qualified person to purchase a property for their own investment purposes and their financial gain).

Down Payment Requirement
Borrowers are required to provide a 1% minimal down payment of the sales price.

Underwriting
SHE will provide underwriting and document preparation services for the City of Visalia.

Resulting loans will be serviced by AmeriNat, Inc. according to its existing loan servicing contract with the City of Visalia.

Application Verification
City and SHE will verify income documentation certified by the eligible purchaser. Verification and eligibility will be confirmed by both SHE and City, and must include the following signed documents:
• Three (3) consecutive months most recent pay stubs
• Three (3) years income tax returns and W-2s
• Six (6) months bank statements
• Credit report
• Verification of Employment (VOE) (completed by employer and mailed directly to SHE) • Completion by Eligible Purchaser of HUD certified-Housing Counseling through SHE Form of Assumption Agreement
SHE shall transfer up to 10% HOME-CHDO development funds to a Subject property to an Eligible Purchaser, subject to the obligations of SHE to the City contained in the Note and Deed of Trust between SHE and City required by this Agreement. City agrees to allow SHE to transfer those obligations to an Eligible Purchaser at the close of escrow on a Qualifying Single-Family Property. To transfer its obligations to an Eligible Purchaser, Developer shall ensure that the Eligible Purchaser executes an Assumption Agreement, in a form substantially similar to the “Form of Assumption Agreement” which will be provided to SHE by City.

Security documents to be recorded against a Qualifying Single-Family Property shall be recorded in the Tulare County Assessor’s Office.

Processing of 2nd Mortgage Loan
• Self-Help Enterprises (SHE) will work with the Participant in completing the application and determine initial income eligibility.
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8 • City Housing staff will review Participant’s completed application to confirm income eligibility.
• Primary Mortgage Lender will be required to submit all borrower’s primary mortgage loan underwriting and related documents to Self-Help, for review and preliminary approval. The City will perform the final review and approval of all loans provided through the program.
• SHE will underwrite the City’s loan as per FAP-II Program (per HOME funding requirements) and provide a Final Loan Recommendation (FLR), to approve or deny, within 10 working days to City Housing staff. City Housing staff will then obtain the final approval by the City of Visalia’s Loan Review Committee and/or the Finance Director and return the decision to SHE for loan completion. SHE will provide an approval letter to the lender, which outlines the loan approval conditions. • Once Pre-funding Approval is signed, Participant has up to 60 days to complete escrow.

This time may be extended by the Housing staff or a request to extend the escrow may be submitted to Housing staff with explanation/reason for request. • City will authorize SHE to proceed with loan documentation preparation by returning a signed Final Loan Recommendation.
• When problems arise on loan application packages, which need resolution or clarification, SHE will contact Housing Staff, and/or the lender. • Loan Documents will be drawn by SHE and sent directly to the local title company. If applicable, City staff may assist.
• Loan documents will be executed with the applicant by a local Title Company. • Local Title Company will be responsible for insuring documents are properly recorded and City is in proper lien position according to Escrow Instruction. • Loans will be serviced by AmeriNat, Inc.

Loan Packages
Self-Help Enterprises CHDO 2nd Mortgage Program Application to include:
• Statement of Household Compositions to include, Name, Age, and Relationship to everyone who will occupy the household.
• Income Eligibility Form (titled: First Time Homebuyer, up to 80% of Median Certification, worksheets 1, 2, 3, & 4) (Attachment U, T) City will provide median family income amounts annually to SHE & AmeriNat. http://www.huduser.org/portal/datasets/il.html program eligibility requirement.
• Verification of purchase price must confirm it does not exceed the HUD maximum.

Standard Lender Forms required for Applicant Eligibility:
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9 • Uniform Residential Loan application (1003) completed and signed or other applicable loan application
• Preliminary Title Report
• Appraisal/Fair market valuation (Note: A copy of the appraisal must be submitted to the City via email prior to City loan approval and a copy must be maintained in the loan file) • Clear Termite Report (section 1 and 2)
• Loan estimate
• Closing Disclosure
• Lender’s Underwriting Worksheet (Signed 1008, 1003) or Mortgage Credit Analysis Worksheet (MCAW)
• Credit Report
• Three years signed and completed tax returns including W2’s o If borrower has a business, current profit and loss statement is also required. • Fire Insurance and Flood Insurance (if applicable) (City to be listed as 2nd Mortgagee) • Copy of Escrow Instructions signed by the Seller and the Participant • All appropriate verifications including but not limited to:
o Verification of Employment (signed by employer and employee) o Verification of Deposits or Bank Statements (6 months complete bank statements or verification of deposits required)
o Paystubs (most current 3 months paystubs)
o Gift letters and supporting documentation, when applicable o Explanation of derogatory credit
Primary Lender to forward SHE final primary mortgage approval upon completion.

Standard documents to be completed prior to closing (original documents to be held by City of Visalia, duplicates held by Self-Help Enterprises and AmeriNat, Inc.) • Notice of Right to Cancel
• Truth in Lending
• Promissory Note
• Deed of Trust
• Owners Participation Agreement
• Request for Notice
• Lender’s Escrow Instructions (Including Conditions to Close) • Flood Insurance documentation
• Hazard Insurance documentation
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10 City-Criteria
Participant Qualifications
• Assets are to be reported; however, only income from assets is counted as household income, not asset value.
• Maximum income up to 80% of AMI adjusted for family size (See HUD Income Limits) o Income determination will be based on 92.203(b)(1) of 24 CFR, refer to 24CFR

5.609.
o Debt Ratios:
▪ Front End ratios shall not exceed 35%. Guideline for housing expenses:

This ratio is the result of dividing the housing expenses for the proposed loan by the monthly income of the borrower(s). This includes the monthly principal and interest payments that are stipulated on the mortgage note. In addition, the monthly housing expenses include a monthly amount for the property taxes and hazard insurance (1/12 of the annual taxes and insurance). There may be other expenses, such as condominium fees, homeowner’s fees, special assessments, etc., that are included.
▪ Back End ratios shall not exceed 42%. Guideline of total monthly debt obligations: This ratio is the result of dividing the housing expenses for the proposed loan plus the borrower(s) other monthly credit obligations by the monthly income of the borrower(s). These include monthly credit obligations, such as installment payments, revolving charge cards or other borrower obligations that will continue longer than 10 months.

Usually, 5% of the current balance of a revolving charge account is used for the monthly payment.
▪ Credit Report:
• if more than three derogatory accounts in the past three years are identified (by the “Open” date), then explanation should be provided by the borrower and noted on file
• no bankruptcies within the past two years
• no foreclosures within the past three years
▪ No-established credit is acceptable if Participant has approved proof of timely payments of utilities, rents, or other fixed monthly obligations. No additional layers of risk are advisable for applicants with non-traditional credit.
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11 • At least 3 non-traditional credit references, for a period of 12 months or more, must be developed. Examples of what could be provided are the following:
o Rental or housing payment
o Utility payment records
o Insurance payments
o Payments to a retail store
City Providing 2nd Mortgage Loan Only
Requirements of First Mortgage: Borrower meet Participant Qualifications listed above. • 1st mortgage must be a fixed interest rate
• Taxes, Insurance and HOA dues must be impounded on the first mortgage • Lowest trust deed position for City: 2nd
• Terms of City Second Mortgage:
o The loan shall be in the form of a second trust deed secured by a Note and Deed of Trust at zero (0%) interest
o Deferred loan –30 years
o Repayment – Payments on the loan shall be deferred for thirty (30) years, beginning at the time of execution of the Note
o The City Loan(s) shall be due and payable in full at the conclusion of the deferral period in accordance with the terms of the Note required by this Agreement.
o The deferred payment principal and interest shall become immediately due and payable at such time as either:
▪ The Eligible Homebuyer or immediate family member ceases to maintain continuous residence on the property; or
▪ Title to the property is transferred; or
▪ The property is refinanced.
o Due upon sale, transfer or unit becoming non-owner occupied o Subordination agreement:
▪ 2nd position to primary lender
▪ No cash out allowed
o Loan is not forgivable
• The participant(s) must obtain fire insurance and flood insurance (if applicable) coverage on the property from the date of closing. The City is to be listed as 2nd mortgagee on the policy and the policy must be sufficient to protect the City’s full interest in the property.
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12 Fees (Estimated Fees)
• Underwriting fee: $375.00
• Document Prep: $ 175.00
• Loan warehousing: $ 125.00
• Tax Service: $ 75.00
• Wire Transfer Fees: $ 55.00 for 2nd Trust Deed

Final Credit Decision
After SHE has reviewed the loan package, there can be four potential outcomes:

1. Approval: If the applicant is in good standing, meeting the criteria, and the underwriter has no questions, the loan will be approved with no conditions.

2. Approved with conditions (the most common response):
a. If the underwriter needs additional documentation before a final decision can be made, a "prior- to- document" conditional approval will be rendered. In essence, the loan documents will not be prepared until the condition has been satisfactorily met. An example of a "prior to document" condition could be the absence of a pay stub to validate the borrower’s income.

3. Suspended: Sometimes the underwriter will be unable to decide on a loan file because it is either incomplete or there are many unanswered questions. In these cases, the underwriter will ask for additional information from the borrower before an underwriting decision is made. An example of a suspension may be large gaps in the borrower's previous employment history and no tax returns to indicate the place of employment.

4. Denial: Underwriters will be unable to approve a loan if the loan file has substantial deficiencies and does not meet the minimum standards of the City. AmeriNational will provide the City with a Final Loan Recommendation. If denial is recommended, a second review of the loan recommendation will be made by the City’s Loan Committee before a final denial is communicated to the borrower. Denial letters with the reason for denial are sent to borrowers within 3 days of the final credit decision. Underwriting criteria can be different among lenders and a borrower may find other acceptable alternatives in the marketplace.

City File
Applicant File shall contain the following:
• Pre-Funding Reservation Request (must have a City project # and signed off by City Staff)
• (Pre 1978 homes) Copy of Lead Certification shall be placed into Phase III file • Flood Hazard Area Notice (Verification of Flood Insurance and zone is required) • Fair Lending Notice
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13 • Sellers Lead Based Paint Disclosure (Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards Lead Warning Statement) • Participant eight (8) hour Counseling Certificate of Achievement (mandatory) • Other applicable disclosures (i.e., airport zone)

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NEIGHBORHOOD

STABILIZATION

PROGRAM

AMENDMENT

CITY COUNCIL MEETING
APRIL 17, 2023
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NEIGHBORHOOD STABILIZATION PROGRAM
(NSP)
Purpose
• The purpose of assisting
communities with high
rates of abandoned and
foreclosed homes due
to 2008 recession.

NSP1 Grant
• Received in 2008.
• Closing NSP1 grant.
• NSP program income is
$120,000.
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PROPERTY TYPES
• Only 3 property types can receive NSP assistance:

1. Foreclosed Properties

2. Abandoned Properties

3. Development of Vacant Land
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NSP ELIGIBLE

ACTIVITIES
Financing Mechanisms
For purchase and redevelopment
of foreclosed homes and
residential properties.

Acquisition and
Rehabilitation
Purchase and rehabilitate homes
and residential properties
abandoned or foreclosed.

Land Banking Establish land banks for
foreclosed homes.

Demolition of Blighted
Structures
Demolish blighted structures to
mitigate decline of surrounding
properties.

Redevelop demolished or vacant properties
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NSP1 PROPOSED AMENDMENT
• $120,000 NSP Program Income
• Proposed Activity
• First time homebuyer assistance for 5 single-family homes constructed on NW 5th Ave. and N Court St. with HOME funds. • Loan T erms
• 30-year deferred at 0% interest.
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NSP1

PROPOSED AMENDMENT BENEFITS
Secondary financing for
NW 5th Ave. Project
• Secondary financing needed
due to high housing market.
• Not sold within 9 months
of construction, must be
rented low-income tenant.

Closeout of 2008
NSP1 Grant
• Only 3 eligible types:
• Foreclosed properties
• Abandoned properties
• Vacant land.
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ACTION TONIGHT
• Staff Recommends:
• Conduct a Public Hearing.
• Motion to approve and appropriate funds for the FY 2022-23 NSP1 Amendment.
• Motion to enter into all contracts as listed in the FY 2022-23 NSP1 Amendment.
• Authorize submission to HUD.
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NSP INELIGIBLE ACTIVITIES
Foreclosure prevention
• Including refinancing
mortgages, paying back taxes
or mortgage payments.

Demolition of non-
blight structures
Any NSP1 activity that
is not within the
approved
neighborhood/target
area.
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Visalia City Council
Staff Report
Visalia City Council
707 W. Acequia
Visalia, CA 93291
File #: 23-0119 Agenda Date: 4/17/2023 Agenda #: 1.

Agenda Item Wording:

UPCOMING CITY COUNCIL MEETINGS:

Monday, May 01, 2023 at 7:00 p.m. at 707 W. Acequia
Monday, May 15, 2023 at 7:00 p.m. at 707 W. Acequia
Note: Meeting dates/times are subject to change, check posted agenda for correct details.

In Compliance with the American Disabilities Act, if you need special assistance to participate in meetings call (559) 713-4512 48-hours in advance of the meeting. For Hearing Impaired - Call (559) 713-4900 (TTY) 48-hours in advance of the scheduled meeting time to request signing services.

Any written materials relating to an item on this agenda submitted to the Council after distribution of the agenda are available for public inspection in the Office of the City Clerk, 220 N. Santa Fe Street, Visalia CA 93292, during normal business hours.

Visalia City Council Printed on 4/14/2023Page 1 of 1
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Visalia City CouncilApril 17, 2023

Visalia City Council
April 17, 2023