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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/16/2002 - ITEMS RELATING TO THE HOMEBUYER DOWNPAYMENT ASSIST AGENDA ITEM SUMMARY ITEM NUMBER: 19 FORT COLLINS CITY COUNCIL DATE: July 16, 2002 STAFF: Julie Smith SUBJECT: Items Relating to the Homebuyer Downpayment Assistance Program. RECOMMENDATION: Staff recommends adoption of the Resolution and of the Ordinance on First Reading. The CDBG Commission voted, with one abstention, to recommend the use of the funds for the Downpayment Assistance Program. FINANCIAL IMPACT: This action disburses funding for an affordable housing downpayment project through the HOME and CDBG Programs. A total of $102,000 ($51,000 from HOME Program Income and $51,000 from CDBG Reprogrammed dollars) will be used to extend the City's Homebuyer Assistance Program and provide downpayment assistance to a minimum of 19 additional income qualified families. EXECUTIVE SUMMARY: A. Resolution 2002-066 Allocating Certain Home Program Income Funds and Reprogrammed CDBG Funds to the City's Homebuyer Downpayment Assistance Program. B. First Reading of Ordinance No. 099, 2002, Appropriating Unanticipated Revenue in the Home Investment Partnership Fund for the Homebuyer Downpayment Assistance Program. Since January of this year, the City of Fort Collins has received program income from HOME- funded activities in the amount of$51,000 and has also received previously-funded CDBG dollars from a canceled project. These funds are available for reprogramming to eligible programs and projects. Since 1995, the City has used a portion of its CDBG and HOME funds to provide downpayment assistance to first time homebuyers. Due to low interest rates and a supply of affordable units available for entry-level homeownership, the City's downpayment assistance fund was fully committed by June 1. The intent of this funding request is to extend the Downpayment Assistance Program to allow a minimum of 19 additional households to have access to the funds until regular CDBG and HOME funds become available in November of 2002. DATE: ITEM NUMBER: BACKGROUND: Since 1995,the City of Fort Collins Advance Planning Department has administered the Homebuyer Downpayment Assistance Program that provides downpayment and closing cost loans to income- eligible first-time homebuyers. The Program has used equal amounts of CDBG and HOME federal dollars to fund the Program. Since 1995,the City has helped over 550 families reach the dream of home ownership. Currently, the City provides eligible families with a due-on-sale, zero interest loan of up to $8,336 that can be used for a downpayment or to cover closing cost purposes thereby reducing the out-of- pocket dollars needed to close on a home. The home purchased must be affordable to the family by not exceeding more than 38% of its gross income for housing costs. Federal funds of$400,000 were allocated from CDBG and HOME Programs in November of 2001 to assist 50 families purchase new homes over the next year. Due to a supply of affordable condominiums and lower interest rates, applications for program assistance surged during the first half of 2002 so that by June 1 all available funding had been committed. No additional funding from regular funding streams would be available until mid-November 2002. Since the program serves a vital need in assisting families whose incomes are below 80% of the Area Median Income (AMI) achieve the dream of home ownership, it was proposed that other available funds be directed towards the program to extend the availability of assistance. Funds returned to the HOME Program as program income from repayment of previous loans currently total about $51,000. In addition, funds in the amount of $515,000 have been returned to the CDBG Program from the Fort Collins Housing Authority's Rigden Farm affordable housing project, that is not going forward at this time. These funds are available for immediate reprogramming. CDBG Commission Recommendation A proposal to allocate the$51,000 of the HOME Program Income and a matching amount of CDBG Reprogrammed funds to extend the Homebuyer Downpayment Assistance Program was discussed by the CDBG Commission at its regular meeting on June 13, 2002. The proposal received a recommendation for approval with one abstention. If funded, the Program will begin accepting applications on August 1, 2002 for late-August closings. Approximately 19 families could be assisted with the extension of the program. I RESOLUTION 2002-066 OF THE COUNCIL OF THE CITY OF FORT COLLINS ALLOCATING CERTAIN HOME PROGRAM INCOME FUNDS AND REPROGRAMMED CDBG FUNDS TO THE CITY'S HOMEBUYER DOWNPAYMENT ASSISTANCE PROGRAM WHEREAS, since 1995,the City has administered a Homebuyer Downpayment Assistance Program which provides downpayment and closing costs to low income eligible first time homebuyers; and WHEREAS, the Homebuyer Downpayment Assistance Program has been very successful in helping families reach their goal of home ownership; and WHEREAS, due to a supply of affordable condominiums and low interest rates, the Homebuyer Downpayment Assistance Program has been very popular during the first half of 2002 and all $400,000 of federal funds which were allocated from the CDBG and HOME Programs for the Homebuyer Downpayment Assistance Program have now been depleted; and WHEREAS, the Council has determined that it is in the best interests of the City that additional HOME and CDBG Program funds be allocated to the Homebuyer Downpayment Assistance Program; and WHEREAS, the HOME Program has generated program income in the sum of$51,000 and the CDBG program has received reprogrammed funds in the sum of$51;000 both of which could be used to assist the Homebuyer Downpayment Assistance Program; and WHEREAS,the City has determined that$102,000($51,000 from HOME program income and$51,000 from CDBG reprogrammed funds)should be allocated to support the City's Homebuyer Downpayment Assistance Program. NOW,THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that$102,000 be allocated to the City's Homebuyer Downpayment Assistance Program, with one half of said sum coming from program income from HOME funds and the other half to be allocated from reprogrammed CDBG funds. 2002. Passed and adopted at a regular meeting of the City Council held this 16th day of July, A.D. Mayor ATTEST: City Clerk ORDINANCE NO. 099, 2002 • OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING UNANTICIPATED REVENUE IN THE HOME INVESTMENT PARTNERSHIP FUND FOR THE HOMEBUYER DOWNPAYMENT ASSISTANCE PROGRAM WHEREAS, the City of Fort Collins Advance Planning Department has administered the Homebuyer Downpayment Assistance Program,which has provided downpayment and closing cost loans to income-eligible first-time homebuyers since 1995; and WHEREAS,the Homebuyer Downpayment Assistance Program has used equal amounts of CDBG and HOME federal dollars to fund this program; and WHEREAS,federal funds in the amount of$400,000 were allocated from CDBG and HOME Programs in November of 2001 to assist 50 families with the purchase of new homes over the next year and all available funds have been committed; and WHEREAS, funds have been returned to the HOME Program from repayment of previous loans in the amount of$51,000 and these funds are available for new programs; and WHEREAS, a proposal to allocate the$51,000 of HOME Program revenue and a matching • amount of CDBG reprogrammed funds to extend the Homebuyer Downpayment Assistance Program was discussed by the CDBG Commission at its regular meeting on June 13, 2002 and the proposal received a recommendation for approval; and WHEREAS,Article V, Section 9,of the Charter of the City of Fort Collins permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year, provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year, do not exceed the then current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS,City staff has determined that the appropriation of the HOME Program revenue as described herein will not cause the total amount appropriated in the relevant funds to exceed the current estimate of actual and anticipated revenues to be received in that fund during any fiscal year. NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated from unanticipated revenue in the HOME Investment Partnership Fund the sum of FIFTY-ONE THOUSAND DOLLARS ($51,000) for expenditure for the City's Homebuyer Downpayment Assistance Program. Introduced and considered favorably on first reading and ordered published this 16th day of July, A.D. 2002, and to be presented for final passage on the 20th day of August, A.D. 2002. Mayor ATTEST: City Clerk Passed and adopted on final reading this 20th day of August, A.D. 2002. Mayor ATTEST: City Clerk