Loading...
HomeMy WebLinkAbout09-04-07_HRDC Road to Home Request for $200,000 from the Ci_23 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Cynthia Jordan Delaney, Acting City Clerk Chris Kukulski, City Manager SUBJECT: HRDC Road to Home Request for $200,000 from the City of Bozeman’s Big Box Affordable Housing dollars to provide down payment assistance loans MEETING DATE: September 4, 2007 RECOMMENDATION: Listen to the presentation from HRDC Community Development Associate Tracy Menuez. After the Commission discussion, determine whether to grant the funding request. BACKGROUND: The Commission has shown a commitment to affordable homeownership in Bozeman. To date, the City has provided $200,000 to the HRDC’s Road to Home down payment assistance program, assisting 14 qualified low and moderate income households to purchase their first home. The program provides up to $20,000 in down payment assistance through a second mortgage, which is repaid when the household sells, refinances, or otherwise pays off their first mortgage. As loans are repaid, funds are re-loaned to eligible households. At this time, the Road to Home requests $200,000 to continue this program. FISCAL EFFECTS: If approved, the funds distributed to the HRDC’s Road to Home down payment assistance program would be taken from the Affordable Housing dollars in the City’s Development Impacts (Big Box) Fund. Uncommitted dollars in the fund for FY08 total $356,670. Approving this project would leave an uncommitted balance of $156,670 for Affordable Housing in the fund. ALTERNATIVES: As suggested by the Commission. Respectfully submitted, __________________________________ ______________________________ Cynthia Jordan Delaney, Acting City Clerk Chris Kukulski, City Manager 373 Application for Big Box Funds HRDC IX, Inc. The Road to Home Project Description: The Road to Home requests $200,000 in Big-Box housing funds to provide down- payment assistance loans to low and moderate income first time homebuyers purchasing in the city limits. Loans are provided as second mortgages to qualified households; loans are repaid, with appreciation share, when the household satisfies the first mortgage through sale, refinance or other payment. When loan funds are received, the funds are re- loaned to qualifying households. To date, the program has assisted 14 households to purchase their first homes. In addition to down-payment funds from the city, the program also utilizes funding from the Department of Commerce HOME program (used in Gallatin, Park and Meagher counties), the Montana Board of Housing and local banks. The loan fund is administered by the Road to Home staff, which is coordinated by Tracy Menuez, Community Development Associate. Ms. Menuez has managed the loan program since 2003. Project Budget (down-payment assistance program only): Sources: MDOC HOME program $223,280 City of Bozeman $200,000 CDBG program income $ 15,008 TOTAL $438,288 Uses: Down-payment assistance $409,488 Program administration $ 28,800 TOTAL $438,288 Project timeline: This project is ongoing, beginning in 2003. Funds are loaned when received and when qualified households apply. We anticipate that the funds from the city would be spent over a 2 year period, depending on demand. Rating factor responses: 1) Use of funds. The funds will provide down-payment assistance loans for first- time homeownership through second mortgages that are recaptured (with appreciation share). 2) Leveraging of funds. Please see attached documentation for the MDOC HOME program, which will provide $242,846 in 2007 toward the project. The CDBG program income documentation is attached as well. In addition to down-payment assistance funds leveraged, the loan program has leveraged over $5 million in affordable mortgages through our set-aside program with the Montana Board of Housing. 375 3) Demonstration of Need: The City of Bozeman has repeatedly noted first time homeownership as a need for city residents, and as a result helped to establish this loan fund. 4) Progress Measurement and Reporting: The Road to Home will continue making annual reports to the City on our use of City funds. 5) Past performance: The Road to Home has been administering down-payment assistance funds for the City and Gallatin County since 2003, under the coordination of Tracy Menuez, Community Development Associate. Sources of funding utilized on the past 2 years include: The City of Bozeman, MDOC HOME program, and MDOC CDBG program (contacts are attached). 6) Benefit to Low and Moderate income persons: Funds are available to households earning less than 100% of the Area median income for their family size (please see chart below). Family Size and Maximum income Area 1 23456 7 City of Bozeman 40,900 46,700 52,550 58,400 63,050 67,700 72,400 376 July 25 2007 32 South Tracy Bozeman MT 59715 406 587 4486 fax 406 585 3538 800 332 2796 1 1 IIIIIIIIIII1 1 PO Box 1530 Livingston MT 59047 406 222 0896 fax 406 222 1232 800 289 0896 Mayor Jeff Krauss Bozeman City Commissioners 411 East Main Street Bozeman MT 59715 Dear Mayor Krauss and City Commissioners The Human Resource Development Council wishes to thank the City of Bozeman for their commitment to the development of our homeownership initiative The Road to Home At our annual report for the commission in January I spoke of our down payment assistance and homeownership education and pre purchase counseling programs and the City ofBozeman s previous commitments to funding those programs At this time The Road to Home requests 200 000 to continue the city s down payment assistance program To date the city has provided 200 000 to the down payment assistance program These funds have allowed 14 households to purchase affordable homes within the city limits The program provides up to 20 000 in down payment assistance through a second mortgage which is repaid when the household sells refinances or otherwise pays offtheir first mortgage As loans are repaid funds are re Ioaned to eligible households Two loans have been repaid and their proceeds have been loaned to new households leaving a balance of zero in the fund The City ofBozeman s loan fund is unique serving individuals earning up to 100 of the Area Median Income AMI Other funds in Montana use federal dollars and are limited to households earning less than 80 AMI Down payment assistance is a perfect complement to the homeownership counseling and education programs provided by The Road to Home helping customers maintain affordable mortgages It is our hope that the City will continue this valuable program with the contribution ofan additional 200 000 Thank you for your continued support of The Road to Home and its programs iVl HRDC provides essential services such as Affordable Housing Case Management Community DevelopmentrEmergencyServicesEmploymentAsistanceEnerAsistanceandConservationGallatinValleyFoodBankHead Start J Home Health Care Local TransportatIOn Commumty FIrst Fund Resource Property Management lRetired and Senior Volunteer Proiram GlJH377 378 379 380