HomeMy WebLinkAboutMINUTES - 09191989 - IO.2 I.O. 2
TO: Board of Supervisors
FROM: INTERNAL OPERATIONS COMMITTEE0.
ao a
'4
DATE: September 11, 1989 °sra'couK
SUBJECT: HOUSING ASSISTANCE PROGRAMS FOR FOSTER PARENTS
Specific Request(s) or Recommendations(s) & Background & Justification
RECOMMENDATIONS:
1. Authorize the Community Development Director to set aside $1 million from the proceeds of the County's
Mortgage Revenue Bond Financing and earmark the set aside for foster parents to assist first time homebuyers
within appropriate income limits to purchase housing which is licensable as a foster home,under the conditions
set forth in the attached report from the Community Development and Social Service Departments. Request
the Community Development Director to report to the Board of Supervisors by April 1, 1990 on the extent to
which foster parents have been able to take advantage of this program.
2. Request the Social Services Director to refer qualified foster parents to the appropriate homeowner rehabilitation
loan program as is outlined in the attached report from the Community Development and Social Service
Departments. It is our Committee's intent that the rehabilitation loan program be operated as flexibly as possible
under federal law so that foster parents who have been foster parents for some period of time have an opportunity
to obtain funds to upgrade,enlarge and rehabilitate their home in order to better care for more foster children.
In addition,the program should be operated flexibly enough that families which have a child they are caring for
and for whom they would have to be licensed are offered the opportunity to use rehabilitation loan funds in order
to make it possible to bring their home up to licensing standards in order to avoid the need to separate a child
from those adults the child considers his or her family, solely in order to meet licensing standards.
3. Request the Social Services Director to provide rehabilitation loan program information to all prospective and
current foster parents under the conditions outlined in the attached report from the Community Development
and Social Service Departments and encourage foster parents to apply for funds from the program when doing
so would allow the foster parents to care for more foster children or better care for the foster children they already
have.
Continued on attachment: xx YES Signature:
Recom , e ation of Co my Admi strator Recommendation of Board Committee
Ap Other:
'Signature(s): SUNNE WRIGHT MC PEAK
Action of Board on: September 19 1989 Approved as Recommended x Other
I
Vote of Supervisors I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
X Unanimous (Absent — ) AND ENTERED ON THE MINUTES OF THE
Ayes: Noes: BOARD OF SUPERVISORS ON DATE SHOWN.
Absent: Abstain:
Attested ,1�,,,,�e•r.i �q /98'9
cc: County Administrator Phil Batchelor, Clerk of the Board
Community Development Director of Supervisors and County Administrator
Social Services Director �p
By 0-4, 6 , Deputy Clerk
clvm:eh(io-2bo)
S
4. Direct the Community Development Director,at the time anew mortgage revenue bond issue is being prepared,
to incorporate the maximum flexibility permitted under federal law so that foster parents could, for instance,
obtain a variable rate mortgage and so that foster parents who have been licensed for several years could obtain
mortgage funds to obtain a larger or more adequate home, even if they already own a home.
5. Request the Community Development Director to furnish each member of the Board of Supervisors and the
media with a summary of the number and volume of mortgage revenue bond issues which have been sponsored
by the Board of Supervisors,the number of families who have been helped to purchase a home by this program,
the number of current mortgages which are outstanding and their value,along with any other information which
will demonstrate the importance and value of this program to low and moderate families in Contra Costa County.
6. Remove this item as a referral to our Committee.
BACKGROUND:
On December 20, 1988 the Board of Supervisors referred this issue to our Committee to determine whether it is
possible to make use of the County's tax exempt housing bond programs to provide assistance to foster parents in
acquiring or rehabilitating a home which is or can be licensed as a foster home. The use of these bond funds and
rehabilitation loan funds can assist foster parents to acquire or upgrade and enlarge their existing home. Our
Committee made a status report to the Board of Supervisors on March 21, 1989.
On September 11, 1989 our Committee met with Janet Anderson and Jim Kennedy from the Community
Development Department and Linda Canan from the Social Services Department and reviewed the attached report,
which is incorporated herein by reference. We are pleased to report that as a result of a great deal of cooperation
and hard work by the staffs of the Community Development and Social Service Departments a program has been
designed which can assist foster parents to obtain a home at a low interest rate or to rehabilitate,upgrade or enlarge
their existing home, all in an effort to provide more facilities for the care of foster children. While foster parents
must meet the same income and other standards which any other family would have to meet,the program which has
been designed will provide a pool of money which will be reserved for the purchase of a home by foster parents.
This should assist the Social Services Department in recruiting and retaining more middle to low income foster
parents who can benefit by these programs.
Our Committee believes that we should make the existing available funds under the mortgage revenue bond
financing program available to current foster parents who have demonstrated their commitment to being foster
parents and who would otherwise qualify for the program. However, since the program is currently only available
to first time homebuyers,we suspect that it may be of minimal value to foster parents. We are,therefore,suggesting
that the Board agree to a set-aside of$1 million and request a report back in six months regarding the extent to which
the program has been used. In addition, we are suggesting that future mortgage revenue bond issues incorporate
certain flexible features which might may the program more available to foster parents. The rehabilitation loan
program is much more flexible and could be used to assist existing foster parents who own their homes to upgrade,
enlarge or rehabilitate their foster home in order to care for ore foster children or better care for the foster children
they already have. We want this program to be administered in such a way that it provides the maximum legal
flexibility to foster parents to use the available funds to make it possible for them to care for more foster children
or better care for the foster children they already have.
- 2 -
CONTRA COSTA COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
TO: Internal Operations Committee DATE: August 31, 1989
Supervisor Tom Powers
Supervisor Sunne McPeak
FROM: Janet Anderson, Community Development Dept.
Linda Canan, Social Services Dept.
SUBJECT: Housing Assistance Programs for Foster Parents
This memo outlines preliminary program proposals jointly developed by the
Community Development Department (CDD) and Social Services Department (DSS) to
assist prospective and current foster parents in meeting licensing requirements
for foster homes or expanding their foster home capacity to take in foster
children. The two types of programs involve mortgage revenue bond financing
programs and homeowner rehabilitation loan programs.
These proposals address the need for additional mechanisms to assist in
recruiting and retaining foster parents in light of the critical shortage of
available homes for foster children. These forms of housing assistance could
remove licensing obstacles for foster homes of otherwise eligible foster
parents. According to the Department of Social Services, housing considerations
such as fire/safety standards and living space requirements can prevent
otherwise eligible foster parents from meeting state licensing regulations or
expanding the number of foster children within a home.
Mortgage Revenue Bond Financing
The County's Home Finance Programs provide below market rate financing to first
time homebuyers for existing homes, scattered site new homes, and homes in new
developments participating in the bond program. The Community Development
Department proposes a $1 million set-aside of bond financing out of these funds
earmarked for foster parents to assist in purchasing housing which is licensable
as a foster home. This funding could be available at an 8.3% interest rate for
30 year, fixed rate mortgages to first time homebuyers within .certain income
ranges for housing units under specified sales price limits. In addition,
buyers must be able to meet underwriting standards for credit worthiness and
sufficient income and be able to provide the downpayment and other closing costs
in order to purchase a home through the program. Bond program requirements are
indicated in Attachment A. Foster parents would need to qualify for bond
financing based on the same criteria as other interested borrowers but would
have the advantage of a specific set-aside of funding.
Since tax exempt bond financing is available primarily for first time home
buyers, effectively this program would mainly assist foster parents who are
currently renters. Based on Department of Social Services estimates of typical
household incomes for foster parents, the program's maximum allowed income
}
levels would not be prohibitive but actual incomes may be too low to qualify for
financing without substantial financial assistance. For example, foster parents
on AFDC would not be candidates for bond financing.
The Department of Social Services would refer eligible foster parents to the
lender handling the bond account with verification that the family is either
licensed or would be licensable if their housing was upgraded, along with
pre-screening for eligibility for bond financing. The Department of Social
Services would also provide verification to the lender that the unit being
purchased meets foster home licensing standards.
Bond financing could be made available to prospective or current foster parents
referred from Department of Social Services. While some. foster parents may
subsequently drop out of the program, they would at least have met the income
and first time homebuyer standards which apply to all other buyers in the
program. So that, besides providing homeownership opportunities to first time
homebuyers, the added public purpose could be achieved of providing for the
unique housing needs of some foster parents so that more foster children could
be served. Based on the fact that the average foster home takes in several
foster children, frequently in addition to the parents' own children (491
licensed homes provide 1,193 licensed beds) , it appears that foster parents need
a large number of bedrooms to accommodate their large households. Of the foster
parents who are continuing in the program, the availability of a larger unit may
allow them to take in more children than their current housing allows.
Homeowner Rehabilitation Loans
Existing homeowner rehabilitation programs could provide financial assistance to
prospective and current foster parents who are homeowners for home improvements
to bring their housing up to foster home licensing standards or expand the size
of their homes to accommodate additional foster children. Five different
housing rehabilitation loan programs operate in Contra Costa County which
provide low or zero interest home rehabilitation loans to very low, low, and
moderate income homeowners for improvements to their homes. These funds could
be used to add bedrooms to meet minimum bedroom area requirements, to 'correct
major safety hazards, or to remove barriers to handicapped accessibility. The
attached chart summarizes the program requirements for the different
rehabilitation programs (Attachment B) .
There are some constraints on the availability of these funds to assist foster
parents. First of all , these funds are only available to homeowners in certain
income groups, so that not all homeowners could be assisted. For example, City
of Pittsburg's program only serves very low income households, or those with
incomes below 50% of County median income figures. Other programs primarily
serve homeowners with incomes up to 80% of the County median income adjusted by
household size. Loan program eligibility requirements also include a limit of
available assets in addition to maximum allowable income levels.
The major drawback in meeting foster parents' housing needs is the requirement
in program policies that these rehabilitation funds be used only for room
additions in housing in which overcrowding exists. Overcrowding is defined as
more than 2 persons per bedroom. The U.S. Department of Housing and Urban
Development (HUD) staff, who oversee the various rehabilitation loan programs,
are concerned about the use of limited loan funds for bedroom additions without
some real public benefit, i .e. , actual participation for a significant amount of
time. The issue has been resolved with HUD on the condition that loan funds
would be repaid to the program if the recipient participated in the foster
parent program for less than a year. Housing program policies could be changed
to allow room additions for foster homes under these conditions, but staff of
some housing programs have also expressed concern regarding use of limited
program funds for such improvements. It is not clear how effective these
programs will be in removing the primary licensing obstacle which is inadequate
number of bedrooms.
Beyond HUD-imposed constraints, the locally adopted maximum loan amount of the
programs may prohibit use of these funds for bedroom additions. Since room
additions can cost more than $25,000 (with the exception of garage conversions) ,
loan limits of $20-25,000 could prohibit bedroom additions even in the case of
overcrowding (loan limits range from $15,000 in Concord to $25,000 in Pittsburg;
on the other hand, Contra Costa County's program can use supplemental funds in
rural areas to increase loan amounts by $5,000 and City of San Pablo has
supplemental loans for an additional $10,000) . Another limitation could result
from some program requirements that building code violations be corrected prior
to other uses of the funds, which could eliminate funds available for room
additions for a particular borrower.
Given these existing program constraints, rehabilitation loan programs could
eliminate some deficiencies in foster parents' homes which prevent them from
being licensed. The Department of Social Services would refer qualified foster
parents to the appropriate rehabilitation loan program and would disseminate
rehabilitation loan program information to all prospective and current foster
parents. These families would need to qualify for this funding based on the
same criteria which would apply to any other loan applicant with 'one exception.
HUD would require that the loan applicants qualify based on the potential income
including stipends for foster parents and potential household size including the
foster children. The various rehabilitation program managers are supportive of
this proposal and are interested in accommodating foster parent housing needs to
the extent allowable by HUD.
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