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TO: BOARD OF SUPERVISORS '
Costa
FROM: nut-Harvey E. Bragdon '-.y- ' cou "y
Director of Community Development
DATE: May 21, 1996
SUBJECT: FY 1996 HOME Project Agreement and Loan Documents -Lone Tree Way
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
AUTHORIZE the Deputy Director-Redevelopment, or his designee to: (1) execute a HOME Project
Agreement; and (2) enter into legal documents with Rural California Housing Corporation(RCHC)to
provide $380,000 in FY 1996 HOME funds for the Lone Tree Way project to develop single family
homeownership housing for lower-income families in East County.
FISCAL IMPACT
No General Fund impact. HOME funds are allocated by formula, through the U. S. Deparxment of
Housing and Urban Development (HUD) to the Contra Costa Consortium.
CONTINUED ON ATTACHMENT: X YES SIGNATURE: +
/�' &1�'
_RECOMMENDATION OF COUNTY ADMINISTRATOR RE OMMEND TION OF BOARD
COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON_` �2/T/9q( APPROVED AS RECOMMENDED OTHER_
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact: Kathleen Hamm 335-1257
cc: County Administrator ATTESTED
County Counsel PHIL TCH LOR, CLERK OF
Auditor-Controller(N. Garnett) THE BOARD OF SUPERVISORS
Rural California Housing Corp. ANIS C LINTY ADMINISTRATOR
(via CDD) BY ,DEPUTY
59
BACKGROUND/REASONS FOR RECOMMENDATIONS
Rural California Housing Corporation(RCHC)is in the process of developing 65 sweat-equity single
family homes in Brentwood for very-low and low-income first-time homebuyers. Qualified
households will be selected from a pool of interested parties, and will be required to provide 1200
hours of labor toward construction of their own and others' homes. On March 12, 1996, as part of
the public hearing to approve the Contra Costa County FY 1996/1997 Consolidated Plan for
submission to the U.S. Department of Housing and Urban Development (HUD), the Board of
Supervisors approved an allocation of$380,000 in FY 1996 HOME Investment Partnership Act
(HOME) funds to RCHC for this project.
HOME funds,which represent the final financing required to complete this project, will be used for
site acquisition. Following construction of the units, the full amount of the HOME funds will be
rolled over into shared-equity loans to assist qualified lower-income households in acquiring the units.
Participating households will be required to be very-low income(incomes at or below 50 percent area
median). The federal Rural Economic and Community Development Service Program (RECDS) 502
Mortgage Program will provide an interest credit subsidy mortgage for up to 100 percent of the
value of the home to qualified low-income households. The use of HOME funds as silent second
mortgages permits RCHC to deepen affordability and provide homeownership opportunities to
extremely-low income households who would otherwise not qualify for the RECDS mortgage. It is
expected that HOME funds will provide up to twenty fully-deferred shared-equity loans with an
average loan amount of $19,000. If a HOME-assisted unit is sold within the loan term, the
homebuyer must repay the County the principle amount of the HOME loan plus a share in the unit
appreciation. The County's share of the appreciation will equal the amount of the HOME second loan
divided by the original acquisition price. All remaining appreciation accrues to the seller.
The total cost of this project is: $8,578,070. The development budget and sources of funds for this
project are:
Source ° Amount
FY 1996 Consortium HOME $ 380,000
State PDL $ 400,000
RCHC $ 66,000
Wells Fargo $3,249,570
RECDS $3,702,500
Family Builder (sweat equity) 780,000
TOTAL $8,578,070
Use Amount
Predevelopment $ 450,000
Acquisition $ 796,000
Construction $7,332,070
TOTAL $8,578,070
RCHC is the second largest producer of self-help (sweat-equity) housing in the United States, and
since 1967, has assisted over 2,000 families in the building of their own homes. Recent projects
undertaken by RCHC include a 102-unit sweat-equity ownership project in Brentwood, completed
in 1995. The City of Brentwood supports the current project, and assisted RCHC with site selection.
Site acquisition is scheduled for June 1996, with construction for May, 1997 and completion by
December, 1998.
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