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HomeMy WebLinkAboutMINUTES - 11182008 - SD.4 sE L TO: BOARD OF SUPERVISORS ? '��' Contra -=JF1 Costa FROM: PUBLIC PROTECTION COMMITTEE MAX -� DATE: NOVEMBER 5, 2008 os a X40 S�'4 COi1K� ti County SUBJECT: NEIGHBORHOOD,STABILIZATION PROGRAM, FY 2008/09 COMMUNITY DEVELOPMENT BLOCK GRANT ACTION PLAN SUSTANTIAL AMENDMENT FOR$690199051 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. APPROVE proposed allocation of$6,019,051 in Neighborhood Stabilization Program (NSP) funds; 2. ADOPT the draft FY 2008/09 Action Plan NSP Substantial Amendment; 3. AUTHORIZE the Deputy Director—Redevelopment, or designee, to execute the appropriate documents for transmittal to the U.S. Department of Housing & Urban Development (HUD) and to execute the NSP program Agreements with the HUD; 4. FIND that the Substantial Amendment is exempt from the California Environmental Quality Act [Section 15061(b)(3)]; 5. DIRECT the Conservation and Development Director to file a Notice of Exemption for the Action Plan with the County Clerk and arrange for payment of the associated $50 handling fee. CONTINUED ON ATTACHMENT: ❑ YES SIGNATURE: _.❑.RECOMMENDATION OF COUNTY ADMINISTRATOR ® RECOMME ION OF BOARD COMMITTEE ®APPROVE ❑ OTHE SIGNATURE(S): O GOI,nO,I�A'nCHAIR FEDERAL D.GLOVER ACTION OF BOARD ON �V�' �' to �`— APPROVED AS RECOMMENDED Ef OT ER ❑ VOTE OF SUPERVISORS: I HEREBY CERTIFY THAT THIS IS A TRUE AND / CORRECT COPY OF AN ACTION TAKEN AND V/ UNANIMOUS (ABSENT ) ENTERED ON THE MINUTES OF THE BOARD OF AYES: NOES: SUPERVISORS ON THE DATE SHOWN. ABSENT: ATTESTED: NOVEMBER 18, 2008 �ABSTAIN: Contact: KARA DOUGLAS(925)335-7223 DAVID J.TWA, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: COUNTY ADMINISTRATOR CONSERVATION&DEVELOPMENT DIRECTOR AUDITOR-CONTROLLER COUNTY COUNSEL By: �� rrl(/L Deputy Neighborhood Stabilization Program/CDBG Action Plan Substantial Amendment November lb,2008 Public Protection Committee Page 2 FISCAL IMPACT The recommendations will have no impact to the County General Fund. NSP funds are provided to the County on a formula allocation basis through HUD (Catalog of Federal Domestic Assistance No. 14.218). BACKGROUND/REASONS FOR RECOMMENDATIONS On April 15, 2008, the Board of Supervisors approved the County's FY 2008/09 Annual Action Plan of the Five Year (2006—2010) Consolidated Plan for Community Development Block Grant (CDBG) funds. On July 30, 2008, President Bush signed into law the 2008 Housing and Economic Recovery Act (HERA). HERA included a special allocation of CDBG funds known as Neighborhood Stabilization Program (NSP) funds. NSP provides targeted emergency assistance to state and local governments to acquire and redevelop abandoned and foreclosed residential properties that might otherwise become sources of abandonment and blight within our communities. Contra Costa County, as the Urban County lead agency, has been allocated $6,019,051 in NSP funds. HERA requires that these funds are targeted to the areas with the greatest need as determined by the percentage of subprime or high cost mortgages, rate of foreclosures, and risk of further decline through foreclosures and abandonment. The County has 18 months to fully obligate these funds and four years to expend all funds. Any program revenue can be reallocated to NSP eligible uses through 2014. The purpose of the Substantial Amendment to the Annual Action Plan, submitted for Board consideration today, is to set forth the target areas and programs for the Contra Costa NSP activities. On November 10, 2009,the Public Protection Committee approved the staff recommendation to forward the NSP Substantial Amendment to the Board of Supervisors for review and approval. HERA required HUD to allocate funds and implement NSP very quickly. Due to the highly constrained time frame in which HUD and local jurisdictions are working, elements of NSP are still being evaluated and clarified while plans and programs are being drafted. Therefore, this amendment contains some flexibility to allow the County to make modifications in program design during the next 18 months without requiring additional substantial amendments. The County has analyzed the three HERA required criteria for the distribution of NSP funds (see Attachments A through D). County staff attributed a relative impact value of high, medium, or low to each community for each criterion. Based on this analysis, the following communities have needs that could be addressed by NSP funds: ♦ High Priority Areas: Bay Point, Oakley, Montalvin Manor/Tara Hills/Bayview, Rollingwood,North Richmond, Rodeo and San Pablo ♦ Medium Priority Areas: Brentwood, Discovery Bay, and the western portion of Pinole (Nob Hill, Pinole Shores, and Pinon) The remaining cities and communities are Low Priority Areas. All recommended programs will be available in the High Priority Areas. Some, but not all of the programs will be available in the Medium Neighborhood Stabilization Program/CDBG Action Plan Substantial Amendment November 10,2008 Public Protection Committee Page 3 Priority Areas. NSP funded programs will not be available in the Low Priority Areas. County staff invited staff from all Contra Costa cities to a meeting in September to discuss NSP funds. A second meeting was held on October 2. The purpose of these meetings was to determine what the cities see as their greatest need, and use that information to develop a NSP program. The following table summarizes the program recommendations and amount of funds allocated to each program. Program Area NSP Allocation Number of Homes Revolving Fund for High Priority $3,412,383 20 homes initially, Purchase and more if funds Rehabilitation revolve Revolving Fund for High Priority $1,504,763 8 or more homes Purchase and Self depending on Help Rehabilitation leverage of volunteer (i.e. Habitat for labor, and materials Humanity type donations and ro'ect) foundation grants Down payment High and Medium $500,000 12 loans Assistance/Shared Priority Appreciation Loans Low Income Rental High Priority None at this time. To be determined This project may be funded if the first two are not feasible Demolition and Land High Priority None at this time. To be determined Banking This is a low priority project, but there may be a limited need. Homebuyer Pre- High and Medium None at this time. To be determined purchase Counseling Priority It is anticipated that homebuyer counseling will be funded through other programs. NSP Program N/A $601,905 N/A Planning and Administration The County will likely contract with one or more agencies or individuals to implement the NSP. The County will strive to coordinate activities with the Economic Development Board and local job training programs. California Environmental Quality Act (CEQA) This activity is exempt from CEQA pursuant to 14 CCR 15061(b)(3). Neighborhood Stabilization Program/CDBG Action Plan Substantial Amendment November 10,2008 Public Protection Committee Page 4 CONSEQUENCES OF NEGATIVE ACTION: If the County does not submit a Substantial Amendment to HUD by December 1, 2008, then it will not receive $6,019,051 in NSP funds. The funds will go to the State and will be used in other California communities. ATTACHMENTS NSP Substantial Amendment Notice of Exemption CALIFORNIA ENVIRONMENTAL ,QUALITY ACT Notice of Exemption Contra Costa County Department of Conservation and Development 651 Pine Street, 4th Floor- North Wing, McBrien Administration Building Martinez, CA 94553-0095 Telephone: (925) 335-7223 Contact Person: Kara Douglas Project Description: Neighborhood Stabilization Program (NSP)/CDBG Action Plan Substantial Amendment, The activity consists of the amendment of the FY 2008/09 CDBG Annual Action Plan to include$6,019,051 in NSP funds. NSP provides targeted emergency assistance to state and local governments to acquire and redevelop abandoned and foreclosed residential properties that might otherwise become sources of abandonment and blight within our communities. The purpose of the Substantial Amendment to the Annual Action Plan is to set forth the target areas and programs for the Contra Costa NSP activities. Project Location: Target areas include: North Richmond, San Pablo, Montalvin Manor/Tara Hills, portions of Pinole, Rodeo, Bay Point, Oakley, and Brentwood This project is exempt from CEQA as a: Ministerial Project(Sec. 15268) Other Statutory Exemption, Section Declared Emergency(Sec. 15269(a)) X General Rule of Applicability(Section 15061(b)(3) Emergency Project(Sec. 15269(b) or(c)) Categorical Exemption, for the following reason(s): This activity is not subject to the California Environmental Quality Act(CEQA) pursuant to Article 5, Section 15061 (b) (3) of the CEQA Guidelines. It can be seen with certainty that there is no possibility that the activity may have a significant adverse effect on the environment. Date: November 18 2008 _ By: Department of Development Conservation and Development Representative AFFIDAVIT OF FILING AND POSTING I declare that on I received and posted this notice as required by California Public Resources Code Section 21152(c). Said notice will remain posted for 30 days from the filing date. Signature Title Applicant: Kara Douglas DCD, Redevelopment Division 2530 Arnold Drive, Suite 190 Martinez, CA 94553 County Clerk Fee$50 Due DRAFT THE NEIGHBORHOOD STABILIZATION PROGRAM SUBSTANTIAL AMENDMENT Jurisdiction(s): NSP Contact Person: Kara Douglas Contra Costa County Address: 2530 Arnold Drive, Suite 190 Jurisdiction Web Address: Martinez, CA 94553 www.ccreach.org Telephone: (925) 335-7223 Fax: (925) 335-7201 Email: kdoug@cd.cccounty.us INTRODUCTION On April 15, 2008, the Contra Costa County Board of Supervisors approved the County's FY 2008/09 Annual Action Plan of the Five Year (2006—2010) Consolidated Plan for Community Development Block Grant (CDBG) funds. On July 30, 2008, President Bush signed into law the 2008 Housing and Economic Recovery Act (HERA). HERA included a special allocation of CDBG funds, known as Neighborhood Stabilization Program (NSP) funds. NSP provides targeted emergency assistance to state and local governments to acquire and redevelop abandoned and foreclosed residential properties that might otherwise become sources of abandonment and blight within our communities. Contra Costa County, as the Urban County' lead agency, has been allocated $6,019,051 in NSP funds. HERA requires that these funds are targeted to the areas with the greatest need as determined by the percentage of subprime or high cost mortgages, rate of foreclosures, and risk of further decline through foreclosures and abandonment. The County has 18 months to fully obligate these funds, and four years to expend all funds. Any program revenue can be reallocated to NSP eligible uses through 2014. The purpose of this substantial amendment to the annual action plan is to set forth the target areas and programs for the Contra Costa NSP activities. HERA required the U.S. Department of Housing and Urban Development (HUD) to allocate funds and implement NSP very quickly. Consistent with HERA, HUD is requiring local jurisdictions receiving NSP funds to also respond quickly. Due to the highly constrained time frame in which HUD and local jurisdictions are working, elements of NSP are still being evaluated and clarified while plans and programs are being drafted. Therefore, this amendment contains some flexibility to allow the County to make modifications in program design during the next 18 months without requiring additional substantial amendments. The Urban County includes the unincorporated County and all cities with the exception of Antioch, Concord, Pittsburg,Richmond,and Walnut Creek. Antioch and Richmond received direct allocations of NSP funds. If the State finds Concord,Pittsburg,and Walnut Creek to be high impact communities,they may apply to the State for NSP funds. 1 DRAFT A. DEFINITIONS AND DESCRIPTIONS (1) "Abandoned"A home is abandoned when mortgage or tax foreclosure proceedings have been initiated for that property, no mortgage or tax payments have been made by the property owner for at least 90 days, AND the property has been vacant for at least 90 days. (2) "Affordable Housing Cost for Owner-Occupied Housing" a. For low income households, affordable housing cost shall not exceed the product of 40 percent times 50 percent of the area median income adjusted for household size appropriate for the unit. b. For moderate income households, whose gross incomes exceed the maximum income for low income households and do not exceed middle income households, the product of 40 percent times 70 percent of the area median income adjusted for household size appropriate for the unit. c. For middle income households, affordable housing cost shall not exceed the product of 40 percent times 110 percent of the area median income adjusted for household size appropriate for the unit. (3) "Affordable Rents" a. For low income households, the product of one-twelfth of 30 percent times 50 percent of the area median income adjusted for family size appropriate for the unit, less an allowance for tenant paid utilities. b. For moderate income households whose gross incomes exceed the maximum income for low income households, the product of one-twelfth of 30 percent times 65 percent of the area median income adjusted for family size appropriate for the unit, less an allowance for tenant paid utilities. c. For middle income households, the product of one-twelfth of 30 percent times 110 percent of the area median income adjusted for family size appropriate for the unit, less an allowance for tenant paid utilities. (4) "Area Median Income" shall be determined by the U.S. Department of Housing and Urban Development for the Oakland-Fremont , CA HUD Metro FMR area. This area includes all of Alameda and Contra Costa counties. (5) "Blighted Structure" shall mean buildings or conditions causing blight as defined in California Health and Safety Code Section 3303l(a)(1) and (2) (6) "Continued Affordability" for Owner Occupied Housing shall meet or exceed the HOME Investment Partnerships Act (HOME) minimum requirements [24 CFR 92.254 (a)(4) and (5)] and shall mean one or more of the following: a. Deed Restricted Programs: Buyers of homes assisted with NSP funds in a deed restricted program shall enter into a resale restriction agreement that shall restrict the future sales price to keep the home affordable to future buyers. The resale restriction will also require future purchasers to be low, 2 DRAFT moderate, or middle income, occupy the home as their primary residence, and enter into a new resale restriction. These programs will meet or 'b. Shared Appreciation Loans: Buyers of homes assisted•with NSP funds in a shared appreciation program shall execute a promissory note and deed of trust which will secure the loan principal plus a share of the appreciation. Any loan repayments made during the first five years of the NSP program will be used to subsidize additional purchasers of foreclosed homes. c. Lease to Purchase Program: The County will consider lease to purchase programs if it determines there is a lack of qualified purchasers. It may be beneficial for a potential homeowner to live in the home and make lease payments while working to improve their credit. A portion of the lease payments will be set aside in an account to accrue into an downpayment. (7) "Current market appraised value" shall mean the value of a foreclosed upon home or residential property that is established through an appraisal made in conformity with the appraisal requirements of the URA at 49 CFR 24.103 and completed within 60 days prior to an offer made for the property by a grantee, subrecipient, developer, or individual homebuyer. (8) "Foreclosed". A property "has been foreclosed upon" at the point that, under state or local law, the mortgage or tax foreclosure is complete. HUD generally will not consider a foreclosure to be complete until after the title for the property has been transferred from the former homeowner under some type of foreclosure proceeding or transfer in lieu of foreclosure, in accordance with state or local law. (9) "High Priority Areas" are the cities and communities that have a high score in at least two of the three areas discussed in Section C below. (10) "Household size appropriate for the unit" shall mean the following" Studio Apartment 1 person One Bedroom 2 people Two Bedroom 3 people Three Bedroom 4 people Four Bedroom 5 people (11) "Housing Costs for Owner-Occupied Housing" shall mean all of the following costs associated with a particular housing unit: - a. principal and interest on mortgage loans, and any loan insurance fees associated with the loan; b. property taxes and assessments; c. fire and casualty insurance; d. property maintenance and repairs; e. reasonable allowance for utilities not including telephone or cable; and homeowners association fees, if any. (12) "Low Income" shall mean households whose income does not exceed 50 percent of the area median income. (13) "Low Priority Areas" are the cities and communities that do not have any high scores in the three areas discussed in Section C below. (14) "Medium Priority Areas" are the cities and communities that have at least one high score in the three areas discussed in Section C below. 3 DRAFT (15) "Middle Income" shall mean households whose income does not exceed 120 percent of the area median income. (16) "Moderate Income" shall mean households whose income does not exceed 80 percent of the area median income. (17) "Rehabilitation Standards" shall mean the applicable residential standards in the California Building Code as amended by the California Building Standards Commission. B. AREAS OF GREATEST NEED HUD has provided an estimated foreclosure risk factor to assist jurisdictions in determining the areas of greatest need. HUD provided scores from one to ten with one being the lowest risk and ten being the highest risk. Contra Costa cities and communities with a risk of eight and above include the following: North Richmond, San Pablo, Montalvin Manor, Tara Hills, Rollingwood, Rodeo, Crockett, and Bay Point. (A map of the County with the HUD risk score overlay is included as Attachment A.) However, there are additional communities that have already been greatly impacted by foreclosures and NSP funds will be targeted to those communities as well. (See Section C below.) The redevelopment areas in the County are by definition in great need of public investment.All of the Urban County cities have redevelopment areas with the exception of Martinez, Moraga, and Orinda. The unincorporated community of North Richmond is also a Neighborhood Revitalization Strategy Area for the purposes of the CDBG program. C. DISTRIBUTTONAND USES OF FUNDS The County has analyzed the three HERA required criteria for the distribution of NSP funds. These include those areas with the greatest percentage of home foreclosures, with the highest percentage of homes financed by a subprime mortgage related loan, and identified as likely to face a significant rise in the rate of home foreclosures. (See attachments A through D.) County staff attributed a relative impact value of high, medium, or low to each community for each criterion. Based on this analysis, the following communities have the greatest need and are the High Priority Areas: Bay Point, Oakley, Montalvin Manor/Tara Hills/Bayview, Rollingwood,North Richmond, Rodeo and San Pablo. Brentwood, Discovery Bay, and the western area of Pinole (Nob Hill, Pinole Shores, and Pinon) are also suffering from foreclosures and are the Medium Priority Areas. The remaining cities and communities are Low Priority Areas. All programs listed in Section G will be available in the High Priority Areas. Some, but not all of the programs will be available in the Medium Priority Areas. NSP funded programs will not be available in the Low Priority Areas. 2 HUD developed its risk score using factors that include decline in home values,unemployment rates,rate of high cost loans(i.e. interest rates 3 percentage points above the Treasury rate),foreclosure start rates, and vacant property rates(using U.S. Postal Service reports of homes that are vacant for over 90 days). 4 DRAFT D. LOW INCOME TARGETING $1,504,763 in NSP funds will be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families with low incomes. Programs to accomplish this goal may include self-help homeownership housing and/or rental housing. E.ACQUISITIONS& RELOCATION NSP funds will be used primarily to acquire and rehabilitate foreclosed properties. Some funds may be used to provide downpayment assistance or silent second shared appreciation loans to eligible households for the direct purchase of foreclosed homes. The programs will be limited to vacant homes. Demolition and conversion of blighted structures is not a Contra Costa priority for NSP funds. However, during program implementation, the County may become aware of structures that should be immediately demolished. In that case, the County will make every effort to work with a non-profit developer to build a new home to be sold to a low, moderate, or middle income household. The County will likely contract with one or more agencies or individuals to implement the NSP program. The County will strive to coordinate activities with the Economic Development Board and local job training programs. Additional information on all programs is included in Section G below. F. PUBLIC COMMENT County staff held two meetings with Contra Costa CDBG entitlement jurisdictions and the Urban County participating jurisdictions. The staff provided information at three meetings of the Board of Supervisor's Public Protection subcommittee. A final public hearing was held before the Board of Supervisors on November 18. [insert public comments from board meeting] In addition, the draft NSP Substantial Amendment was posted on the County's website on October 29, 2008. A notice was published in all editions of the Contra Costa Times and on the Internet on October 28, 2008. Comments made during these meetings included the following: • Acknowledgement of the challenge to find owners of foreclosed properties willing to sell at the required NSP program 10%to 15% discount from appraised value. 5 DRAFT • Concern that purchasing homes below the appraised value will set new, lower market comparisons, which will further depress local market areas. • Concern that the short time frame to obligate NSP funds will limit the ability to identify and leverage additional funds to carry out the NSP programs. This would limit the total number of homes and households that could benefit from this program. • Desire to coordinate NSP activities with economic development and job training activities to the extent practicable. G. NSPINFORMATIONBYACTIVITY (1) Revolving Fund for Purchase and Rehabilitation (a) Activity Type:NSP eligible use: Establish funding mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties. Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties. CDBG eligible activity: Acquisition, Disposition, Relocation, Direct Homeownership Assistance, Eligible rehabilitation and preservation activities for homes and other residential properties, housing counseling for those seeking to take part in the activity. (b) National Objective: Low-Moderate-Middle-Income (LMMI) housing. (c) Projected Start Date: January, 2009 (d) Projected End Date: On-going (e) Responsible Organization: Programs initially will be implemented by the Contra Costa County Department of Conservation and Development. The County anticipates it will identify development partners through a request for qualifications or request for proposals process in early 2009. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 (f) Location Description: High Priority Areas (g) Activity Description: It is anticipated that 80 percent of the purchasers will be moderate income and the remaining 20 percent will be middle income. This activity is not expected to meet the low income housing requirement. 6 DRAFT The first priority is for the homes to be sold to LMMI households. If purchase ready buyers can not be identified, the homes may be made available for lease to purchase or.rental. The homes will be sold for an amount equal to or less than the total amount of funds used to acquire and rehabilitate the home. Homebuyers will be required to sign a 20 year resale restriction or a shared appreciation promissory note. If redevelopment housing set-aside funds are used to supplement NSP funds, the buyer will be required to enter into a 45 year resale restriction. In the High Priority Areas, resale restrictions may be a deterrent to buyers who would rather purchase a home without restrictions. Therefore, shared appreciation loans may be a more practical approach. Attachment E has additional information on resale restrictions and shared appreciation loans. This activity will target properties that can be purchased and rehabilitated for under $200,000. All properties will be purchased at a minimum of 5 percent less than the appraised value with a portfolio average discount of 15 percent. However, staff will evaluate whether the NSP exception discount of 10 percent can be justified. Appraisals shall be consistent with the appraisal requirements of the Uniform Relocation Act. (h) Total Budget: $3,412,383 The project budgets will be modified as additional funds are identified. This budget includes only NSP funds. (i) Performance Measures: Initially 20 homes will be purchased and rehabilitated. Additional homes will be purchased and rehabilitated if additional funding can be identified and if the first 20 units are sold quickly so that the sales revenue can be used to purchase and rehabilitate additional homes. (2) Revolving Fund for Purchase and Self Help Rehabilitation (a) Activity TYpe:NSP eligible use: Establish funding mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties. Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties CDBG eligible activity: Acquisition, Disposition, Relocation, Direct Homeownership Assistance, Eligible rehabilitation and preservation activities for homes and other residential properties, housing counseling for those seeking to take part in the activity (b) National Objective: Low-Moderate-Middle-Income (LMMI) housing. (c) Projected Start Date: January, 2009 7 DRAFT (d) Projected End Date: On-going (e) Responsible Organization: Programs initially will be implemented by the Contra Costa County Department of Conservation and Development. The County anticipates it will identify development partners through a request for qualifications or request for proposals process in early 2009. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 (f) Location Description: High Priority Areas (g) Activity Description: This activity is intended to meet the low income housing requirement. It is expected that this activity will be carried out by a non profit that specializes in self help housing. The non-profit will select homebuyers who will assist in the rehabilitation of their future home. This work not only provides a"sweat equity' stake in the home, but also teaches the homebuyer valuable home maintenance skills. The non-profit will be the mortgage lender and will structure the loan to be affordable to the specific household. The typical structure provides a 30 year, zero interest, amortizing loan with a forgivable appreciation share provision.NSP funds will leverage volunteer labor, foundation grants, and donations of materials. The homes will be sold for an amount equal to or less than the total amount of funds used to acquire and rehabilitate the home. Homebuyers will be required to sign a 20 to 30 year resale restriction with the non profit entity operating the self- help program. The County will have a right of first refusal to purchase the home should the non-profit entity not be in a position to exercise its right in a future transaction. If redevelopment housing set-aside funds are used to supplement NSP funds, the buyer will be required to enter into a 45 year resale restriction. All properties will be purchased at a minimum of 5 percent less than the appraised value with a portfolio average discount of 15 percent. However, staff will evaluate whether the NSP exception discount of 10 percent can be justified. Appraisals shall be consistent with the appraisal requirements of the Uniform Relocation Act. (h) Total Budget: $1,504,763 The project budgets will be modified as additional funds are identified. This budget includes only NSP funds. (i) Performance Measures: Initially 8 homes will be purchased and rehabilitated. Additional homes will be purchased and rehabilitated if additional funding can be identified. 8 DRAFT (3) Downpayment Assistance/Shared Appreciation Loans (a) Activity Type: NSP eligible use: Establish funding mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties. CDBG eligible activity: Acquisition, Relocation, Direct Homeownership Assistance, and housing counseling for those seeking to take part in the activity. (b) National Objective: Low-Moderate-Middle-Income (LMMI) housing. (c) Projected Start Date: January, 2009 (d) Projected End Date: On-going (e) Responsible Organization: Programs initially will be implemented by the Contra Costa County Department of Conservation and Development. The County anticipates it will identify development partners through a request for qualifications or request for proposals process in early 2009. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 (f) Location Description: Medium and High Priority Areas (g) Activity Description: This activity is not intended to meet the low income housing requirement. This activity will provide downpayment and/or silent second shared appreciation mortgage assistance. Buyers will be required to contribute at least 3 percent of the purchase price from their own funds. NSP loans will be provided only with 30 year, fixed interest rate loans that conform to California Housing Finance Agency or FHA underwriting criteria. NSP loans will be provided as deferred payment, shared appreciation loans. The loans will be limited to 15 percent of the purchase price. Purchase prices are limited to $400,000. Payments on the loans will be deferred until sale of the home or if the owner no longer occupies the home. When the loan is paid, the borrower will pay the original principal plus a share of the appreciation equal to the percentage of the NSP loan to the original purchase price. Adjustments will be made for capital improvements and deferred maintenance. 9 DRAFT All properties will be purchased at a minimum of 5 percent less than the appraised value with a portfolio average discount of 15 percent. However, staff will evaluate whether the NSP exception discount of 10 percent can be justified. Appraisals shall be consistent with the appraisal requirements of the Uniform Relocation Act. (h) Total Budget: $500,000 The project budgets will be modified as additional funds are identified. This budget includes only NSP funds. (i) Performance Measures: This activity should support the purchase of 12 homes. (4) Low Income Rental (b) Activity Type: eligible use: Establish funding mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties.%Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties. CDBG eligible activity: Acquisition, Disposition, Relocation, Eligible rehabilitation and preservation activities for homes and other residential properties. (b) National Objective: Low-Moderate-Middle-Income (LMMI) housing. (c) Projected Start Date: July, 2009 (d) Projected End Date: On-going (e) Responsible Organization: Programs initially will be implemented by the Contra Costa County Department of Conservation and Development. The County anticipates it will identify development partners through a request for qualifications or request for proposals process in early 2009. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 (f) Location Description: High Priority Areas (g) Activity Description: This activity is for the purchase and rehabilitation of residential properties suitable for long term rentals. This activity will meet the low income housing requirement if the self help homeownership rehabilitation program is not feasible. 10 DRAFT Residential units in this program may include single-family homes from Activity 1 that did not sell and were not included in a lease purchase program. This activity may also include small multi-family rental developments such as 4-plexes. It is expected that these units would be acquired and managed by local non profit housing agencies. NSP funds used to support rental projects will be provided as deferred loans with 0 to 3 percent interest rates. Rental units will be required to remain affordable to low income households for a minimum of 20 years. If redevelopment housing set-aside funds are used to supplement NSP funds, the owner will be required to enter into a 55 year rent restriction agreement. All properties will be purchased at a minimum of 5 percent less than the appraised value with a portfolio average discount of 15 percent. However, staff will evaluate whether the NSP exception discount of 10 percent can be justified. Appraisals shall be consistent with the appraisal requirements of the Uniform Relocation Act. (h)Total Budge : None at this time This activity will be implemented only if Activities 1 and 2 are not feasible. (i) Performance Measures: Performance measures will be determined when funds are budgeted to this activity. (5) Demolition and Land Banking (c) Activit T e:NSP eligible use: Establish land banks for homes that have been foreclosed upon. Demolish blighted structures. CDBG eligible activity: Acquisition, Disposition(includes maintenance), Clearance for blighted structures. (b) National Objective: Low-Moderate-Middle-Area of Benefit(LMMA) housing. (c) Projected Start Date: July, 2009 (d) Projected End Date: On-going (e) Responsible Organization: Programs initially will be implemented by the Contra Costa County Department of Conservation and Development. The County anticipates it will identify development partners through a request for qualifications or request for proposals process in early 2009. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 11 DRAFT (f) Location Description: High Priority Areas (g) Activity Description: This activity is for the purchase and demolition of blighted residential properties. Properties may be held as vacant sites for up to ten years. However, the County will use our best efforts to rebuild on the site as soon as practicable. All properties will be purchased at a minimum of 5 percent less than the appraised value with a portfolio average discount of 15 percent. However, staff will evaluate whether the NSP exception discount of 10 percent can be justified. Appraisals shall be consistent with the appraisal requirements of the Uniform Relocation Act. (h) Total Budget: None at this time This activity will be implemented only if Activities 1 and 2 are not feasible and/or it is determined there is a prevalence of blighted structures that are jeopardizing neighborhood stability. (i) Performance Measures: Performance measures will be determined when funds are budgeted to this activity. (6) Homebuyer Pre-purchase Counseling (a) Activity Type: NSP eligible use: Housing counseling for prospective purchasers/tenants. CDBG eligible activity: Public services for housing counseling, but only to the extent that counseling beneficiaries are limited to prospective purchasers or tenants of the redeveloped properties. (b) National Objective: Serving a limited clientele whose incomes are at or below 120 % of area median income (LMMC). (c) Projected Start Date: July, 2009 (d) Projected End Date: On-going (e) Responsible Organization: The County will work with HUD approved housing counseling agencies. Until an agency or agencies are identified, contact will be through the County. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 12 DRAFT (f) Location Description: Medium and High Priority Areas -(g) Activity Description: This activity is intended to provide comprehensive pre-purchase counseling to prospective NSP participants. The counseling curriculum will include information on mortgage loans and the County's silent second shared appreciation loans. (h) Total Budget: None at this time. It is anticipated that homebuyer counseling classes will be funded through other sources including foundation grants. The County may consider funding this activity at a later time. (i) Performance Measures: Performance measures will be determined if this activity is funded. (7) NSP Program Planning and Administration (a) Activit T e:NSP eligible use and CDBG eligible activity: An amount of up to 10 percent of an NSP grant provided to a jurisdiction and up to 10 percent of program income earned may be used for general administration and planning activities as defined at 24 CFR 570.205 and 206. Activity delivery costs, as defined in 24 CFR 570.206, may be charged to the particular activity performed above and will not count as general administration and planning costs. Pre-award Costs: A grantee may incur pre-award costs necessary to develop the NSP Application and undertake other administrative and planning actions necessary to receive the NSP grant, in compliance with 24 CFR 570.200(h). States may allow subrecipients to incur pre-award costs pursuant to 24 CFR 570.489(h). (b) National Objective: N/A (c) Projected Start Date: October 2008 (d) Projected End Date: On-going (e) Responsible Organization: General NSP planning and administration will be carried out by the Contra Costa County Department of Conservation and Development. Kara Douglas kdoug@cd.cccounty.us Contra Costa County Tele (925) 335-7223 Department of Conservation and Development 2530 Arnold Drive, Suite 190 Fax (925) 335-7201 Martinez, CA 94553 13 DRAFT (f) Location Description: Medium and High Priority Areas (g) Activity Description: Planning and administrative work will include all tasks associated with the development and publication of the NSP Substantial Amendment. Activity development and related legal documents will also be covered by the planning and administration budget. Staff will make every effort to limit planning and administrative costs so that additional funds can be used for program implementation. (h) Total Budget: $601,905 (i) Performance Measures: N/A 14 DRAFT INSERT (NAPS-ATTACHMENTS A- D A-ESTIMATED FORECLOSURE RISK B.1 - PERCENT OF HOME MORTGAGE BY SUBPRIME LENDER IN 2005 B.2- PERCENT OF HOME MORTGAGE BY SUBPRIME LENDER 1997 -2005 C.1 - 2007 HOME FORECLOSURE RATE BY ZIP CODE C.2 - 2008 HOME FORECLOSURE RATE BY ZIP CODE C.3 - INCREASE IN HOME FORECLOSURE RATE BETWEEN 200E AND 2008 D-AREAS OF LOW, MODERATE, AND MIDDLE INCOME 15 • w A s 1 v l L.. 8 3pg2 `p 4i'-a�L#I � M •�: J �3` �yyLSL 0 r-7-71_ M �. j tri �'^�� � �*•�ri "� � :} O `J JI/ DO a : m � a It( t O 9 a _° I/•1 \\w 0 ♦ � U a W i a < 2 C: 0 L) i N. u CC! tz 0 0 0 iu E I E E a Si Uif) C4 ON a C: ON o0 0 2 0 -6 R CN C LO 0 0 CN 0\ m 0�1 ca 16 —C co 7C) U) L -t E E LO V) 00 u < ol �t '8o FD 0 -6 0 -6 ol 0 *6 Z C,4 2 M 0) LO 0 cq 10 CIZ -.0- E E E a 0 (Y) 0 0 � ' 0 0 0� 04 CN b tg x a3 gv:, k}YBb+a -10 T' tt E�2 ANI rl U � 1 ` m CD rl v _ a 6 1 O 0 !' f Y r � r d �rl y \ {}) O + ry iwlf U r 0 y ; ^ a rV d 4Js r s � v (n N c s P O o r Z _ "• a j O .,-E N U Y N 4- � t m m o w o w�F '36 a m 0 m o c ma zvo p ° Soso to �. .. _ ° cc m oo=o� = i• $4 [aha >e, Y jj s�. S�se Q 4Jt Tiq bi�5 s 1. 2p iii � O i• � t U a) } �� Q ■ N _.y L 4 O L W.PPOW - d a) . E- CL o CD cc C C O m m m m o > 4 4 Q d O 0 6 0 c c C m O N N ''c' Z Y o O O O y d m v a a G a`) m m m m m o W C f ter- L 1 1.: __ } 5 U u o i TI- lit � o (� � :..fit•••- m ( - p - a , t D U -At.. 0 a _ _ 61 j o a t 4 O W a� E 0 'V t ' 0000 % �;• `� cac ac a a o O O cq LO c ca N N r r O O O m m m m m Z k 2�n 3 3 Moo f �\ q 3 3 • y afi�^wfu r`"\ $S S o O F.y E_R4p Will Olt OS6 ? ' ( 'ZNrY�$�Yy d' `� '+k��wa Obi• C 5� gve6: *' s ? r '•ay'r4gT,�. 04�0 was � '^ to o�L0 ,d O Y•l'� a.=R`Com'\' ^�z'stt/�71'� �'��Q � o G . .Y D e �' K`,'�� (r a C'4+• ;�,�,,,�.(1� f �c lo stilt r � � t+..f� � 4+$�6-°p Y t5ry "h��'t. 't y•' Y rat .. �.��♦ a5' o a { 't C�i'' �L�t L3 Y � z ',rr?. .a 4'� 6'0� 'o y7 ,}r ar � ^•sys ply X' � ''^ + .L4i ��_'\ h.Ssh $e. 1+�a;'�.b' t�'•-.r+= Ytr�yir '� ✓Y 1...�•��1 + '�-�.:t,'", ,�e.�y�"C'.�`s'7. � sv�sSti:,,,Ln•'�..� �.'`�`�l�yf� %��(�`��( i. ' l •f±�l`� ..�3Z m ' s�* ,Y�,t> Ezy, � B •.f, L, ;St /i# 7'��,i��L!'�RM1�y��t � � .>•f b � AJn�.�1 tr IF t/x 1!! V rte•c �(�4� ( s"1.',^ �, ��f� x `.-•-�S} �\4�a� yew t•S. O/ "]1: +�sf^!7 •\ y. tL r afi• ° Y t t ' O tf 1:, r c�.'.�'.1."``.�(Yj'F''b �,�a"' +r:` _.,•a'&'� q v "�;?s�{?^.... 1,NKY IN c i a � A ..4 0 DRAFT CERTIFICATIONS (1) Affirmatively furthering fair housing. The jurisdiction will affirmatively further fair housing, which means that it will conduct an analysis to identify impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard. (2) Anti-lobbying. The jurisdiction will comply with restrictions on lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part. (3) Authority of Jurisdiction. The jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations and other program requirements. (4) Consistency with Plan. The housing activities to be undertaken with NSP funds are consistent with its consolidated plan, which means that NSP funds will be used to meet the congressionally identified needs of abandoned and foreclosed homes in the targeted area set forth in the grantee's substantial amendment. (5) Acquisition and relocation. The jurisdiction will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601), and implementing regulations at 49 CFR part 24, except as those provisions are modified by the Notice for the NSP program published by HUD. (6) Section 3. The jurisdiction will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135. (7) Citizen Participation. The jurisdiction is in full compliance and following a detailed citizen participation plan that satisfies the requirements of Sections 24 CFR 91.105 or 91.115, as modified by NSP requirements. (8) Following Plan. The jurisdiction is following a current consolidated plan (or Comprehensive Housing Affordability Strategy) that has been approved by HUD. (9) Use of funds in 18 months. The jurisdiction will comply with Title III of Division B of the Housing and Economic Recovery Act of 2008 by using, as defined in the NSP Notice, all of its grant funds within 18 months of receipt of the grant. (10) Use NSP funds<_ 120 of AMI. The jurisdiction will comply with the requirement that all of the NSP funds made available to it will be used with respect to individuals and families whose incomes do not exceed 120 percent of area median income. 21 DRAFT (11) Assessments. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108 loan guaranteed funds, by assessing any amount against properties owned and occupied by persons of low- and moderate-income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if NSP funds are used to pay the proportion of a fee or assessment attributable to the capital costs of public improvements (assisted in part with NSP funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. Iri addition, with respect to properties owned and occupied by moderate-income (but not low-income) families, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than NSP funds if the jurisdiction certifies that it lacks NSP or CDBG funds to cover the assessment. (12) Excessive Force. The jurisdiction certifies that it has adopted and is enforcing: (1) a policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and (2) a policy of enforcing applicable State and local laws against physically barring entrance to or exit from, a facility or location that is the subject of such non-violent civil rights demonstrations within its jurisdiction. (13) Compliance with anti-discrimination laws. The NSP grant will be conducted and administered in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), the Fair Housing Act (42 U.S.C. 3601-3619), and implementing regulations. (14) Compliance with lead-based paint procedures. The activities concerning lead- based paint will comply with the requirements of part 35, subparts A, B, J, K, and R of this title. (15) Compliance with laws. The jurisdiction will comply with applicable laws. Signature/Authorized Official Date Title 22 DRAFT NSP Substantial Amendment Checklist For the purposes of expediting review, HUD asks that applicants submit the following checklist along with the NSP Substantial Amendment and SF-424. Contents of an NSP Action Plan Substantial Amendment Jurisdiction(s): Contra Costa County NSP Contact Person: Kara Douglas Lead Agency ' Address: 2530 Arnold Drive, Suite 190 Jurisdiction Web Address: Martinez, CA 94553 www.ccreach.org Telephone: (925) 335-7223 Fax: (925) 335-7201 Email: kdoug@cd.eccounty.us The elements in the substantial amendment required for the Neighborhood Stabilization Program are: A. AREAS OF GREATEST NEED Does the submission include summary needs data identifying the geographic areas of greatest need in the grantee's jurisdiction? Yes X No❑. Verification found on page 4, Section B B. DISTRIBUTIONAND USES OF FUNDS Does the submission contain a narrative describing how the distribution and uses of the grantee's NSP funds will meet the requirements of Section 2301(c)(2) of HERA that funds be distributed to the areas of greatest need, including those with the greatest percentage of home foreclosures, with the highest percentage of homes financed by a subprime mortgage related loan, and identified by the grantee as likely to face a significant rise in the rate of home foreclosures? Yes X No❑. Verification found on page 4, Section C Note:'The grantee's narrative must address the three stipulated need categories in the NSP statute, but the grantee may also consider other need categories. C. DEFINITIONS AND DESCRIPTIONS For the purposes of the NSP, do the narratives include: • a definition of"blighted structure" in the context of state or local law, Yes X No❑. Verification found on page 2, Section A • a definition of"affordable rents," Yes X No❑. Verification found on page 2, Section A • a description of how the grantee will ensure continued affordability for NSP assisted housing, Yes X No❑. Verification found on page 2, Section A 23 DRAFT • . a description of housing rehabilitation standards that will apply to NSP assisted activities? Yes X No❑. Verification found on page 4, Section A D. INFORMATION BYACTI VI TY Does the submission contain information by activity describing how the grantee will use the funds, identifying: • eligible use of funds under NSP, Yes X No❑. Verification found on page 6-13 • correlated eligible activity under CDBG, Yes X No❑. Verification found on page 6-13 • the areas of greatest need addressed by the activity or activities, Yes X No❑. Verification found on page 6-13 • expected benefit to income-qualified persons or households or areas, . Yes X Non, Verification found on page 6-13 • appropriate performance measures for the activity, Yes X No❑. Verification found on page 6-14 • amount of funds budgeted for the activity, Yes X No❑. Verification found on page 6-14 • the name. location and contact information for the entity that will carry out the activity, Yes X No❑. Verification found on page 6-13 • expected start and end dates of the activity? Yes X No❑. Verification found on page 6-13 E. SPECIFICACTIVITYREQUIREMENTS Does each activity narrative describe the general terms under which assistance will be provided, including: If the activity includes acquisition of real property, • the discount required for acquisition of foreclosed upon properties, Yes X No❑.Verification found on page 7, 8, 9, 11 . If the activity provides financing, • the range of interest rates or shared appreciation(if any), Yes X No❑. Verification found on page 6, 8, 9, 10 24 DRAFT If the activity provides housing, • duration or term of assistance, Yes X No❑. Verification found on page 6, 8, 9,10. • tenure of beneficiaries (e.g., rental or homeownership), Yes X No❑. Verification found on page 6– 10. • does it ensure continued affordability? Yes X No❑. Verification found on page 6– 10. • does the applicant indicate which activities will count toward the statutory requirement that at least 25% of funds must be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals and families whose incomes do not exceed 50% of area median income? • Yes X No❑. Verification found on page 7 & 10. F. LOW INCOME TARGETING • Has the grantee described how it will meet the statutory requirement that at least 25% of funds must be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals and families whose incomes do not exceed 50% of area median income? Yes X No❑. Verification found on page 7 & 10. • Has the grantee identified how the estimated amount of funds appropriated or otherwise made available will be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50% of area median income? Yes X No❑. Verification found on page 8 . Amount budgeted = $1,504,763. G. DEMOLISHMENT OR CONVERSION OF LOW-AND MODERATE-INCOME UNITS Does grantee plan to demolish or convert any low- and moderate-income dwelling units? Yes❑ No X (If no, continue to next heading) Verification found on page Does the substantial amendment include: • The number of low- and moderate-income dwelling units—i.e., < 80% of area median income—reasonably expected to be demolished or converted as a direct result of NSP-assisted activities? Yes❑ No❑. Verification found on page • The number of NSP affordable housing units made available to low- , moderate-, and middle-income households—i.e., < 120% of area median income— reasonably expected to be produced by activity and income level as provided for 25 DRAFT in DRGR, by each NSP activity providing such housing (including a proposed time schedule for commencement and completion)? Yes❑ No❑. Verification found on page • The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income? Yes❑ No❑. Verification found on page H. PUBLIC COMMENT PERIOD Was the proposed action plan amendment published via the grantee jurisdiction's usual methods and on the Internet for no less than 15 calendar days of public comment? Yes X No❑. Verification found on page 5 Is there a summary of citizen comments included in the final amendment? Yes X No❑ Verification found on page 5 L WEBSITE PUBLICATION The following Documents are available on the grantee's website: • SF 424 Yes❑ No❑. • Proposed NSP Substantial Amendment Yes X No❑. • Final NSP Substantial Amendment Yes❑ No❑. • Subsequent NSP Amendments Yes❑ No❑. Website URL: www.ccreach.org K CERTIFICATIONS The following certifications are complete and accurate: (1) Affirmatively furthering fair housing Yes[-] No❑ (2) Anti-lobbying Yes❑ No❑ (3) Authority of Jurisdiction Yes❑ No❑ (4) Consistency with Plan Yes[-] No❑ (5) Acquisition and relocation Yes❑ No[-] (6) Section 3 Yes[:] No❑ (7) Citizen Participation Yes❑ No❑ (8) Following Plan Yes❑ No❑ (9) Use of funds in 18 months Yes❑ No❑ (10) Use NSP funds < 120 of AMI Yes❑ No❑ (11)No recovery of capital costs thru special assessments Yes❑ No❑ (12) Excessive Force Yes❑ No❑ (13) Compliance with anti-discrimination laws Yes❑ No❑ (14) Compliance with lead-based paint procedures Yes[:] No[] (15) Compliance with laws Yes❑ No❑ 26