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RESOLUTION 85/731
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF
CONTRA COSTA AUTHORIZING THE PUBLICATION OF A POLICY
REPORT UNDER SECTION 103A REGARDING A STATEMENT OF THE
POLICIES OF THE COUNTY OF CONTRA COSTA WITH RESPECT TO
HOUSING, DEVELOPMENT AND LOW-INCOME HOUSING ASSISTANCE
TO BE FOLLOWED IN ISSUING QUALIFIED MORTGAGE BONDS AND
MORTGAGE CREDIT CERTIFICATES; AN ASSESSMENT OF THE
COMPLIANCE OF THE COUNTY OF CONTRA COSTA WITH STATEMENTS
MADE WITH RESPECT TO THE ABOVE-STATED POLICIES CONTAINED .
IN THE POLICY REPORT PREVIOUSLY ISSUED BY THE COUNTY OF
CONTRA COSTA; AND AN ASSESSMENT OF THE COMPLIANCE OF THE
COUNTY OF CONTRA COSTA WITH THE INTENT OF CONGRESS THAT
SUCH BONDS AND CERTIFICATES BE ISSUED TO THE GREATEST
EXTENT FEASIBLE TO ASSIST LOWER INCOME FAMILIES TO
AFFORD HOME OWNERSHIP BEFORE ASSISTING HIGHER INCOME
FAMILIES.
WHEREAS, the County of Contra Costa (the "County" )
is authorized under Chapters 1-5 of Part 5 of Division 31 of
the Health and Safety Code of the State of California (the
"Law" ) to issue revenue bonds for the purpose of providing
home mortgages to low- or moderate-income families;
WHEREAS, pursuant to Section 103A(j ) of the
Internal Revenue Code of 1954, as amended (the "Code" ) , prior
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to the issuance of its revenue bonds, the Board of
Supervisors of the County must publish (after a public
hearing following reasonable public notice) a Policy Report
i
Under Section 103A including a statement of the policies of
the County with respect to housing, development, and
low-income housing assistance to be followed in issuing
qualified mortgage bonds and mortgage credit certificates; an
assessment of the compliance of the County with statements
made with respect to the above-stated policies contained in
the County' s previous Policy Report; and an assessment of the
compliance of the County with the intent of Congress that
such bonds and certificates be issued to the greatest extent
feasible to assist lower income families to afford home
ownership before assisting higher income families (the
"Policy Report" ) ;
WHEREAS, this Board of Supervisors must deliver
such Policy Report to the Secretary of the United States
Treasury ( "Secretary" ) on or before December 31, 1985;
WHEREAS, a notice of public hearing with respect to
the proposed Policy Report was published at least fourteen
(14) days before the date set for such public hearing, in a
newspaper of general circulation in the County of Contra
Costa;
WHEREAS, this Board of Supervisors held said public
hearing, at which time an opportunity was provided to present
arguments both for and against the publication of the Policy
Report and ,the nature of the contents of the Policy Report;
NOW, THEREFORE, BE IT RESOLVED by the Board of
Supervisors of the County of Contra Costa, as follows:
1 . This Board of Supervisors does hereby find and
declare that the above recitals are true and correct.
2 . The proposed form of Policy Report presented
to this meeting of the Board of Supervisors is hereby
approved and adopted by the County. The Chairwoman o-f the
Board of Supervisors of the County of Contra Costa is hereby
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authorized and directed to execute such Policy Report on
behalf of the Board of Supervisors, with such changes therein
as she may approve, such approval to be conclusively
evidenced by her execution of such Policy Report.
3 . The appropriate officers of the County are
hereby authorized and directed to mail such Policy Report by
the United States Postal Service, certified mail, return
receipt requested, to the Secretary, to be postmarked on or
before December 31, 1985.
4. The appropriate officers of the County are
hereby authorized and directed to publish or cause to be
published in a newspaper of general circulation a notice of
the availability of such Policy Report or such other notice
or other publication as shall be approved by regulations of
the Secretary. This Board of Supervisors hereby ratifies the
publication of the Notice of Public Hearing by its Chairwoman
on behalf of the Board of Supervisors of the County of Contra
Costa.
5 . It is the purpose and intent of this Board of
Supervisors that this resolution constitute approval of the
Policy Report by the applicable elected representative in
accordance with Section 103A(j ) of the Internal Revenue Code
of 1954, as amended.
6. This Resolution shall take effect immediately
upon its passage.
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PASSED AND ADOPTED by the Board of Supervisors of
the County of Contra Costa on December 10, 1985 by the
following vote:
AYES: curervi sors Poi•.7erS , 11,1cPeak, Schroder , Torlakson ,
Fanden .
NAYES: None . ,
ABSENT None.
Cr
Nancy C. den, Chairwoman
[SEAL]
Attest:
Phil Batchelor, Clerk of the
Board of Supervisors
By:
Deputy Clerk of the Board of Supervisors
n.EFOLUTTON 110 . 85/731
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CONTRA COSTA COUNTY
EMPLOYEE IDENTIFICATION #94-600050-9
POLICY REPORT UNDER
SECTION 103A
OF THE INTERNAL REVENUE CODE
A. GENERAL
On July 18, 1984, Congress enacted into law the Tax Reform Act of 1984. This Act imposes
certain requirements on issuers of qualified single family mortgage bonds and mortgage
credit certificates. One of these requirements is that issuers publish a statement of their
policies with respect to housing, development, and low-income housing assistance and report
on their compliance, for the period between January 1, 1985 and June 30, 1985 with the
policy set forth in the County's prior report under Section 103A and with the intent of
Congress that qualified mortgage bond issues and mortgage credit certificates assist lower
income families to afford home ownership before assisting higher income families. In order
to qualify for a federal tax exemption for interest on qualified mortgage bonds to be issued
in 1986, this statement must be published prior to December 31, 1985. As Contra Costa
County plans to issue qualified single family mortgage bonds and/or mortgage credit
certificates in 1986, possibly in conjunction with the cities of Hercules and Antioch under a
Joint Powers Agreement, the following report is being published in order to comply with the
requirements of the Tax Reform Act of 1984 and the Regulations thereunder.
B. POLICIES AND GOALS
(1) Housing Policies and Goals.
The California State Legislature has found and declared that
"there exists within the State of California a serious shortage of decent, safe, and
sanitary housing which is affordable to many persons in the state. This shortage is
exacerbated during periods of- rising interest rates, particularly as high interest
rates have the effect of diminishing the number of otherwise creditworthy buyers
from qualifying for private sector mortgage capital sources. In order to remedy
this adverse effect on potential home buyers on the lower end of the purchasing
spectrum, it is necessary to implement a public program to reduce the cost of
mortgage financing for the single-family purchases for those persons unable to
compete for mortgage financing in the conventional mortgage market." (California
Health and Safety Code 552001)
The California State Legislature has additionally found and declared that
"it is necessary and essential that counties and cities be authorized to directly and
indirectly make long-term, low-interest loans to persons not presently eligible for
financing through private sector lending institutions to finance construction,
rehabilitation, and acquisition of homes in order to encourage investment and
upgrade local areas". (California Health and Safety Code 552002)
Contra Costa County plans to issue qualified single family mortgage bonds and/or
mortgage credit certificates (the "Bonds/Certificates") in 1986 in furtherance of the
above-stated policies of the California State Legislature and in conformance to the
following policies.and goals:
(i) Use of Proceeds.
The proceeds of the Bonds/Certificates will be used to finance the acquisition of
residences and qualified rehabilitation loans; and perhaps be available to finance
home improvement loans.
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(ii) Targeting of Proceeds to Housing Type.
The proceeds of the Bonds/Certificates will be targeted to new housing, existing
housing, and perhaps to the purchase/rehabilitation of existing homes and home
improvement loans. These housing types are being targeted because they
represent the broad spectrum of homes that are generally affordable to families
of low and moderate income.
(iii) Determination of Need for Targeting.
The need to target by housing type is determined pursuant to Section 52020 of
the California Health and Safety Code, which requires that 60 percent of the
proceeds of a bond issue be used to assist in the financing of new or substantially
rehabilitated homes. According to the Association of Bay Area Government
Housing Needs Report there is a need to accommodate over 58,000 additional
households in the County during the ten year period 1980-1990. The provision of
the Bond/Certificate proceeds facilitates and induces this necessary new con-
struction. Some priority with respect to the remaining 40 percent is provided to
existing homes in order to enhance the affordability of homes generally available
under the program, and to broaden the choice of prospective buyers.
(iv) Method of Targeting Proceeds.
Bond/Certificate proceeds are targeted via a County controlled allocation
process which takes into account unit type, unit price and affordability,
geographic location, and the presence of other mechanisms designed to reduce
unit prices. Priority is provided to housing priced under $100,000, or less than
2/3 of the safe harbor sales price limit. The units selected are from a portfolio
of projects provided by builders/developers in response to a solicitation. The
County makes provision for existing and substantially rehabilitated homes in the
absence of an identified builder/developer.
(v) Other Pertinent Information.
None.
(vi) Relationship of Development and Low Income Housing Assistance Policies.
Programs using the proceeds of Bonds/Certificates in the County are imple-
mented in a manner which addresses the needs of first time homebuyers subject
to income restrictions. All mortgage funds are restricted to households meeting
income restrictions established in the California Health & Safety Code (Sections
52020 and 50189) in order to assist low and moderate income households.
Approximately 2/3 of the Bond Certificate proceeds are reserved for households
with incomes at less than 120% of the County median. Historically 80% of the
proceeds are used by mortgagors earning less than 120% of median. Proceeds of
the Bonds/Certificates are targeted to geographic areas and neighborhoods
where home prices are affordable to persons of low and moderate income. In
order to provide first time homebuyers with a variety of choices, geographic
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dispersion is desired, consistent with affordability. Given the nature of the
County's housing markets, new single family detached homes are most affordable
in the East County, while new condominiums are the most affordable housing
type in the Central and West County. Consumer choice and affordability is
further enhanced by the provision of Bonds/Certificates proceeds for existing
homes. Historically, over 60% of all units financed are priced at least 33%
below the maximum allowed under federal law.
(2) Development Policies and Goals
The California State Legislature has found and declared that
"there exists within the State of California a serious shortage of decent, safe, and
sanitary housing which is affordable to many persons in the state. This shortgage
is exacerbated during periods of rising interest rates, particularly as high
interest rates have the effect of diminishing the number of otherwise credit-
worthy buyers from qualifying for private sector mortgage capital sources. In
order to remedy this adverse effect on potential home buyers on the lower end of
the purchasing spectrum, it is necessary to implement a public program to
reduce the cost of mortgage financing for the single-family purchases for those
persons unable to compete for mortgage financing in the conventional mortgage
market." (California Health and Safety Code §52001)
The California State Legislature has additionally found and declared that
"it is necessary and essential that counties and cities be authorized to directly and
indirectly make long-term, low-interest loans to persons not presently eligible
for financing through private sector lending institutions to finance construction,
rehabilitation, and acquisition of homes in order to encourage investment and
upgrade local areas." (California Health and Safety Code 52002)
Contra Costa County plans to issue qualified single family mortgage bonds and/or
mortgage credit certificates (the "Bonds/Certificates") in 1986 in furtherance of the
above-stated policies of the California State Legislature and in conformance to the
following policies and goals:
(i) Targeting of Proceeds to Areas.
Approximately $6 million, depending on which cities are included as cooperating
cities in the issue, of the proceeds of the Bonds/Certificates will be targeted to
specific "targeted areas residences" as that term is defined in Section 103 A of
the Internal Revenue Code of 1954, as amended (the "Code"). In the past three
bond issues the County has reserved 5%, 1.5% and 11% of mortgage loans for the
financing of properties located in "targeted areas" as that term is used in the
Code. In addition, the County may further target other lower income commu-
nities by providing, on a priority basis, funds for the purchase and/or purchase/
rehabilitation of existing and new homes located in predominantly lower income
communities.
(ii) Targeted Areas Description.
The expected service area of the County program includes three "targeted areas"
pursuant to Section 103A. The first such target area is Census Tract 3141 in the
unincorporated West Pittsburg community, a community in which 67% of the
households have an income below 80% of the median income for the County, and
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17% below the poverty income level. The second "targeted area", a portion of
the City of Martinez, is characterized by an older housing stock and a population
which has approximately 60% of its households with incomes at or below 80% of
median. The third "targeted area" is the City of San Pablo, which may be
included in the 1986 Bond issue, a community in which 62% of the households
have an income below 80% of the median income for the County. Additional
areas in which targeting may occur is in neighborhoods where comprehensive
revitalization is being undertaken through Community Development Programs
and other programs designed to benefit low and moderate,income persons.
(iii) Selection of Targeted Areas.
Section 103A "targeted areas" have been targeted by federal tax law. Additional
targeting of funds to neighborhood, which do not have Section 103A "targeted
area" status may be done based on the presence of a predominantly lower income
population, and other indicators of distress, including those used to designate
neighborhoods eligible for Community Development Block Grant programs.
(iv) Use of Targeted Proceeds.
The proceeds of the Bonds/Certificates which will be targeted to the areas
described in (ii) above will be used to finance the purchase and/or rehabilitation
of existing housing and new construction.
(v) Other Pertinent Information.
Where possible, the County intends to use Bond/Certificate proceeds in conjunc-
tion with developments utilizing public land, other local resources, density
bonuses, or other means of reducing housing prices.
(vi) Relationship to Housing and Low Income Housing Assistance Policies.
Programs using the proceeds of Bonds/Certificates in the County are imple-
mented in a manner which addresses the needs of first time homebuyers subject
to income restrictions. All mortgage funds are restricted to households meeting
income restrictions established in the California Health & Safety Code (Sections
52020 and 50189) in order to assist low and moderate income households.
Approximately 2/3 of the Bond Certificate proceeds are reserved for households
with incomes at less than 120% of the County median. Historically, over 80% of
the proceeds are used by mortgagors earning less than 120% of median.
Proceeds of the Bonds/Certificates are targeted to geographic areas and
neighborhoods where home prices are affordable to persons of low and moderate
income. In order to provide first time homebuyers with a variety of choices
geographic dispersion is desired, consistent with affordability. Given the
nature of the County's housing markets, new single family detached homes are
most affordable in the East County, while new condominiums are the most
affordable housing type in the Central and West County. Consumer choice and
affordability is further enhanced by the provision of Bonds/Certificates proceeds
for existing homes. Historically, over 60% of all units financed are priced at
least 33% below the maximum allowed under federal law.
B• (3) Low-Income Housing Assistance Policies and Goals.
To insure that qualified mortgage bond issues assist lower income families to afford
home ownership, California law provides that a city or county that administers a
home financing program must establish criteria for qualification of persons and
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families for participation in such program. The criteria for the County programs
include a maximum household income for entitlement funds, which maximum shall
not exceed one hundred fifty percent of Countywide median household income for
mortgagors who will be the first occupant of a home and one hundred twenty percent
of the median household income for mortgagors who will not be the first occupant of
a home. In addition, to obtain a supplementary allocation of qualified mortgage
bonds from the California Mortgage Bond Allocation Committee, proceeds of
qualified mortgage bonds issued with such supplementary allocation must be used to
provide mortgages to persons and families whose incomes do not exceed one hundred
twenty percent of median household income for mortgagors who will be the first
occupant of a home and median household income for mortgagors who will not be the
first occupant. Approximately 2/3 of the proceeds of the County's proposed 1986
issuance of bonds/certificates will consist of supplementary funds.
The County plans to issue qualified single family mortgage bonds (and/or) mortgage
credit certificates (the "Bonds/Certificate") in 1986 in furtherance of the above
stated policies of the California State Legislature and in conformance to the
following policies and goals:
(i) Targeting of Proceeds According to Income.
Price and affordability are priority considerations in the selection of units to be
financed with the proceeds of bonds/certificates. Consistent with state law
(California Health and Safety Code 52020 and 50189), the proceeds are
restricted to households meeting targeted low and moderate income require-
ments. Approximately 2/3 of the proceeds are supplementary funds pursuant to
the California Health and Safety Code and therefore will be set aside for persons
earning less than 120% of the County median income. Only 1/3 of the proceeds
are entitlement funds pursuant to the California Health and Safety code and
therefore may be used for persons en between 120% and 150% of the
County median income. Approximately 2 million of the proceeds of the
Bonds/Certificates will be targeted to low-income families, approximately $5
million of the proceeds of the Bonds/Certificates will be targeted to moderate
income families and approximately $10 million of the Bonds/Certificates will be
targeted to median income families. "Low-income families" means families
earning 50% or less of median income; "moderate income families" means
families earning between 50% and 80% of median income. Countywide household
median income for Contra Costa County is currently $40,894.
(ii) Method of Targeting Proceeds.
The County's process of allocating bond/certificate proceeds takes into account
the unit type, unit price and affordability, geographic location, and presence of
other mechanisms to reduce price and/or improve affordability. Unit price and
affordability is the primary criteria for the allocation of proceeds. Proceeds
from the Bonds/Certificates can only be used by mortgagors who satisfy the
income limits contained in the California Health and Safety Code. In addition,
the County may make provision for the financing of the purchase and/or
rehabilitation of existing homes located in communities where low and moderate
income persons predominate.
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(iii) Other Pertinent Information.
Where possible, the County intends to use bond/certificate proceeds in conjunc-
tion with developments utilizing public lands, other local resources, density
bonuses, and other means of reducing housing prices. It has been the experience
of the County that over 80% of the proceeds are used by households earning less
than 120% of the County median income.
(iv) Relationship to Development and Housing Policies.
Programs using the proceeds of Bonds/Certificates in the County are imple-
mented in a manner which addresses the needs of first time homebuyers subject
to income restrictions. All mortgage funds are restricted to households meeting
income restrictions established in the California Health & Safety Code (Sections
52020 and 50189) in order to assist low and moderate income households.
Approximately 2/3 of the Bond Certificate proceeds are reserved for households
with incomes at less than 120% of the County median. Historically, over 80% of
the proceeds are used by mortgagors earning less than 120% of median.
Proceeds of the Bonds/Certificates are targeted to geographic areas and
neighborhoods where home prices are affordable to persons of low and moderate
income. In order to provide first time homebuyers with a variety of choices
geographic dispersion is desired, consistent with affordability. Given the nature
of the County's housing markets, new single family detached homes are most
affordable in the East County, while new condominiums are the most affordable
housing type in the Central and West County. Consumer choice and affordability
is further enhanced by the provision of Bonds/Certificates proceeds for existing
homes. Historically, over 60% of all units financed are priced at least 33%
below the maximum allowed under federal law.
C. COMPLIANCE WITH PREVIOUS REPORT
1. Housing Policies and Goals
(i) Use of Proceeds
On May 1, 1985, Contra Costa County issued Single-Family Mortgage Revenue
Bonds in the amount of $58,999,782.20. The proceeds of the bond sale resulted in
the availability of $58,240,000 for the purchase of approximately 645 homes for
low and moderate income households.
(ii) Targeting of Proceeds to Housing Type
The proceeds of the Bonds provide mortgage funds in the amount of $53,240,000
which is available for the purchase of new single family homes ranging in
purchase price from $65,000 to $161,990. An additional $3,000,000 is available
for the purchase of existing or resale homes and for scattered site new homes for
which a developer had not been identified at the time of issuance. The remaining
$2,000,000 is available for the purchase and rehabilitation of existing homes.
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(iii) Determination of Need For Targeting
The 1985 Bond proceeds are allocated to target over 94% of the mortgage funds
for new or substantially rehabilitated homes. The 1985 Bond will provide
financing for 645 homes and in combination with the 1984 Bond (525 homes), the
1983 Bond (450 homes), and the 1982 Bond (400 homes) will provide over 2000
homes which will be available to low and moderate income persons.
(iv) Method of Targeting Proceeds
The allocation of 1985 Bond proceeds to county developments took into account
unit types, unit price and affordability, and geographic location. The allocations
resulted in unit prices which range from $65,000 to $161,990 with 53% of the
units at a price of under $100,000. Unit types are varied with 44% townhouses
and condominiums and the remaining 56% single family, (attached and detached)
and duplexes. Geographically, the units were divided to provide 42% in West
County, 141/6 in Central County and 44% in East County. In addition, funds were
made available for approximately 70 existing units, some of which may be
purchased and rehabilitated. These funds were made available to households
with incomes under $32,000.
(v) Other Pertinent Information
None
(vi) Relationship of Development and Low Income Housing Assistance Policies
The 1985 .Bond issue was structured to place income limits of 120% of the
County median income on 58% of the funds and income limits of $32,000 or less
than 80% of median income on approximately 9% of the funds. The proceeds of
the Bond issue have been disbursed geographically throughout the county with a
variety of housing types and acquisition price in each area.
2. Development Policies and Goals
(1) Targeting of Proceeds to Areas
The 1985 Bond proceeds were allocated in the amount of $6 million or
approximately 11.3% of the Bond issue to developments within "targeted areas".
In addition, $5 million is allocated for the purchase of existing homes and for
purchase and rehabilitation of existing homes by households with incomes below
$32,000. Most of the homes purchased with these funds will, by virtue of the
income limit, be located in low income communities.
(ii) Targeted Area Description
The 1985 Bond issue service area includes three "targeted areas" pursuant to
Section 103A. The targeted area in a portion of unincorporated West Pittsburg
received allocations totaling $3.7 million. The Martinez targeted area received
$2.3 million in allocations. The third targeted area is the City of San Pablo. As
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no specific developments were located within the city, no area specific alloca-
tions were made. It is anticipated that the allocation for existing homes and the
purchase/rehabilitation funds will be actively utilized within San Pablo.
(iii) Selection of Targeted Areas
No selection of additional targeted areas has occurred.
(iv) Use of Targeted Proceeds
A total of $6 million was allocated from the 1985 Bond issue to specific targeted
areas. Another $5 million is available for purchase of existing homes by
households with income at or below $32,000.
(v) Other Pertinent Information
None
(vi) Relationship to Housing and Low Income Housing Assistance Policies
The 1985 Bond issue proceeds have been allocated in order to reserve 2/3 of the
funds for households with incomes at less than 120% of median. Included within
that amount, approximately 9% of the Bond proceeds are reserved for households
with income levels below $32,000. The Bond proceeds have been targeted by
geographic location and housing type to provide the most affordable housing
possible in each area and still provide a reasonable choice of housing types. The
result is that 80% of the single family homes are located in East County where
land is still relatively inexpensive. The majority of the condominiums and
townhouses are located in West and Central County where land is more
expensive.
B. (3) Low-Income Housing Assistance Policies and Goals
(i) Median income for Contra Costa County is now $40,894. Approximately 9.3% of
the new housing available to be purchased with the 1985 Bond proceeds is priced
below $82,000; an amount affordable to moderate income families (families
earning between 50% and 80% of median income). Median income families can
afford over 57% of the homes available for financing with the 1985 Bond Issue.
In addition, $5 million is reserved for households with income below $32,000.
(ii) Method of Targeting Proceeds
Bond proceeds have been targeted to provide $5 million in financing for
households with incomes under $32,000, $2 million of which is for the purchase
and rehabilitation of existing homes. In addition, $6 million has been reserved
for financing within "targeted areas" pursuant to Section 103A.
(iii) Other Pertinent Information
The County has provided a density bonus for a developer within the Bond
program to allow for an increase in number of units for those units which have
sales prices of approximately $70,000.
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(iv) Relationship to Development and Housing Policies
Approximately 58% of the 1985 Bond proceeds have been reserved for households
with incomes at less than 120% of the County median. The 1985 Bond issue
provides 66% of the total number of units at a price 33% below the maximum
allowed under federal law.
D. COMPLIANCE WITH INTENT OF CONGRESS
On May 15, 1985, the County issued $58,999,782.20 in single family mortgage revenue bonds.
The County took the steps outlined below with respect to the distribution of bond proceeds
in order to assist lower income households:
1. All mortgage funds were restricted to households meeting income restrictions estab-
lished in California Health and Safety Code Sections 52020 and 50189 in order to assist
low and moderate income persons. The median income for the County, as established
for the 1985 Program, is $40,894; therefore, income limits are $49,073 for supple-
mental funds, $61,341 for entitlement funds. Approximately two-thirds of the funds
are supplemental. Bond/Certificate proceeds are targeted via an allocation process
which takes into account unit type, price and affordability, geographic location, and
the presence of other mechanisms designed to reduce unit prices. In addition, a
portion of the 1985 funds were reserved for homes which are to be purchased and
rehabilitated and for the purchase of existing homes. These funds are available to
households with a maximum household income of $32,000.
2. In order to assure that units with sale prices affordable to persons earning less than
120% of the area median were made available to lower income persons before being
sold to higher income persons, program funds were set aside for persons earning 120%
or less of the area median income; approximately 66% of the aggregate mortgages
included in the 1985 program and were so set aside. Most developers participating in
the bond programs are required to reserve nearly all of their allocation for persons
earning 120% or less of the area median income. Homebuyers are required to be first
time homebuyers, except in "targeted areas", as required by the Code. Additionally,
the homes are subject to sales price limits as required by the Code.
3. One of the major criteria for the selection of developments for the County's single-
family mortgage revenue bond programs is to give priority to developers with low sale
prices. Due to the high demand for mortgage money, 66% of the units to be financed
in the 1985 Program were at least 33% below the maximum sale price.
4. Eleven percent (1.5% in 184 and 11% in '85) of mortgage loans were reserved for
properties located in target residential areas populated by lower-income families.
5. The restrictions on sale prices of units, below the maximum permitted under the law,
plus provision for developer buydown of the mortgage interest rate will further enable
lower-income homebuyers to qualify.
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On August 22, 1984, the Contra Costa Home Mortgage Finance Authority, a joint powers
agency between the County and the City of Antioch, issued $57,562,608.11 of Single-Family
Mortgage Revenue Bonds (the 111984 Bonds") in an effort to assist lower-income families to
afford home owernship. As of June 30, 1985, $32,764,951 of the 1984 Bond proceeds
remained available for use. The following information is provided with respect to the 1984
Bonds:
1. All mortgage funds were restricted to households meeting income restrictions estab-
lished in California Health and Safety Code Sections 52020 and 50189 in order to assist
low and moderate income persons. The median income at the time of issuance was
$39,205; therefore income limits were $47,046 for supplemental funds and $58,807 for
entitlement funds. As of June 30, 1985, 11.7% of the loans from the 1984 Bond had
gone to households with income under $32,000 and 77% of the loans were provided to
households with incomes under the supplemental income limit.
2. In order to assure that units with sale prices affordable to persons earning less than
120% of the area median were made available to lower income persons before being
sold to higher income persons, approximately 65% of the aggregate mortgages included
in the 1984 program were set aside for persons earning 120% or less of the area
median income. Most developers participating in the bond programs are required to
reserve nearly all of their allocation for persons earning 120% or less of the area
median income.
3. One of the major criteria for selection of developments for the County's single-family
mortgage revenue bond programs is to give priority to developers with low sale prices.
Due to the high demand for mortgage money, 60% of the units to be financed in the
1984 Program were at least 33% below the maximum sale price permitted by law
(below $112,835). As of June 30, 1985, 82% of the mortgage loans had been made on
homes priced below $112,835, 58% of the mortgage loans had been made on homes
priced below $100,000 and 37% on homes priced below $90,000.
4. $865,983 of mortgage loans were reserved for properties located in target residential
areas populated by lower-income families in the 1984 program. As of June 30, 1985,
5.4% of the mortgage loans had been made on homes located in target areas.
5. The restrictions on sale prices of units, below the maximum permitted under law, plus
provision for developer buydown of the mortgage interest rate will further enable
lower-income homebuyers to qualify.
On April 20, 1983, the County issued Home Morgage Revenue Bonds in the aggregate
principal amount of $37,100,000 (the 111983 Bonds") in an effort to assist lower-income
families to afford home ownership. As of June 30, 1985, $7 million of the 1983 Bond
proceeds remained available for use. The following information is provided with respect to
the 1983 Bonds:
1. All mortgage funds were restricted to households meeting income restrictions estab-
lished in California Health and Safety Code Sections 52020 and 50189 in order to assist
low and moderate income persons. The median income at the time of issuance was
$36,760 for the 1983 Bonds; therefore, income limits were $44,112 for supplemental
funds and $55,140 for entitlement funds under the 1983 Bonds. -Two-thirds of the funds
are supplemental.
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2. In order to assure that units with sale prices affordable to persons earning less than
120% of the area median were made available to lower income persons before being
sold to higher income persons. 55% of the aggregate mortgages in the 1983 program
were set aside for persons earning 120% or less of the area median income. As of June
30, 1985, over 90% of the mortgage loans had been made to households with incomes
of less than 120% of median.
3. One of the major criteria for the selection of developments for the County's single-
family mortgage revenue bond programs is to give priority to developers with low sale
prices. Due to the high demand for mortgage money, 80% of the,units to be financed
in the 1983 Program were at least 33% below the maximum sale price permitted under
the law.
4. Five percent of mortgage loans were reserved for properties located in target
residential areas populated by lower-income families. By June 30, 1983, 7% of the
loans had been made for houses located in target areas.
5. The restrictions on sale prices of units, below the maximum permitted under the law,
plus provision for developer buydown of the mortgage interest rate will further enable
lower-income homebuyers to qualify.
Conclusion
As income restrictions have applied to each of the County's single family housing bond
issues, and for others reasons discussed in this Policy Report, the County has complied
during the six-month period ending June 30, 1985 with the intent of Congress that the
County use its authority to issue qualified mortgage bonds to the greatest extent feasible to
assist lower-income families to afford home ownership before assisting higher income
families, and has been successful in implementing the goals which were stated in the
previous policy report.
E. SUMMARY OF HEARING COMMENTS
A public hearing on the proposed Policy Report was duly noticed and held on December 10,
1985 The following comments were received: NONE
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_ ,II
I
This report is submitted by the undersigned el(
P
i
' C
By: C -•�'�--�
Nanc C. Fanden
Chairwoman
(SEAL)
ATTEST:
Phil Batchelor
County Administrator & Clerk of the
Board of Supervisors
By:
Deputy
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