DEPARTMENT: Department of Planning and Community Development
DEPARTMENT HEAD: John M. Dugan
COUNCIL DISTRICTS IMPACTED: City Wide
SUBJECT:
Reprogramming of Home Investment Partnerships (HOME) funds in the amount of $600,000 to Community Housing Development Organization (CHDO) single family new construction set-aside fund.
SUMMARY:
An Ordinance authorizing the reprogramming of Home Investment Partnerships (HOME) funds in the amount of $600,000 available from FY 2014 Multi-family Set Aside to support the CHDO New Construction Set Aside, substantially amending the FY 2015 Annual Action Plan/Budget.
BACKGROUND INFORMATION:
The City receives an annual award of HOME funds awarded through the U.S. Department of Housing and Urban Development (HUD). These funds are designed to meet affordable housing needs of low and moderate income households and homebuyers. On May 29, 2014, City Council adopted the FY 2015 Action Plan and Budget which allocated HOME funds in accordance with the FY 2010-2015 Consolidated Plan.
|
Funding Category |
Description |
Budget |
|
Multi-family Rental Housing |
Funds allocated to support financing of multi-family tax credit projects and to support the Wheatley Courts |
$3,600,000* |
|
Single-family New Construction |
Funding meets the HUD minimum 15% set aside requirement for Community Housing Development Organizations (CHDO’s) to develop new affordable housing units, as well as, provide operational support. |
$900,000* |
|
Homebuyer Assistance |
Providing down payment and closing cost assistance to eligible homebuyers |
$426,925 |
|
Administration |
General grant administration and oversight including legal services, loan servicing, compliance, and grant management. |
$480,398 |
|
|
Total |
$5,407,323 |
*Includes May 21, 2015 Council approved amendment
Quarterly, the City reviews the progress of program funding through current and prior year Action Plans to ensure timely performance of specific programs. Staff produces reprogramming recommendations from completed, cancelled, or low performing activities in an effort to advance the goals of the five year Consolidated Plan. Specifically, for the HOME Program the City is required to meet regulatory commitment and expenditure deadlines or funding is returned to HUD. On July 24, 2013, HUD issued the new HOME Program Final Rule, dictating HOME projects must be committed within one year and completed within four years of commitment. Any project not meeting the above timeliness requirements will be terminated and the City will be required to return HOME funds to HUD.
ISSUE:
The City is required by HUD to meet statutory commitment deadlines to obligate HOME funds by October 31, 2015 to specific projects or uncommitted funding shall be recaptured by HUD. The amount of funding at risk for recapture is approximately $600,000. This is due to the cancellation of the Merchants Ice Lofts multi-family project. Staff is recommending reprogramming $600,000 from the Merchants Ice Lofts project to the CHDO Set Aside fund, thus allowing an award of CHDO funds to be appropriated to an eligible single family development project that will be able to commit funds by the HUD deadline.
ALTERNATIVES:
City Council may elect not to approve the reprogramming action.
FISCAL IMPACT:
The reprogramming action will not have an impact on the General Fund budget. Reprogramming HOME funds to projects that are not committed by October 30, 2015 may result in a return of HOME funds to HUD.
RECOMMENDATION:
Staff recommends an Ordinance authorizing the reprogramming of Home Investment Partnership (HOME) funds in the amount of $600,000 available from FY 2014 Multi-family Set Aside to support the CHDO New Construction Set Aside, substantially amending the FY 2015 Annual Action Plan/Budget.