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Report to Redevelopment Agency Board regarding Application for HELP Program Page 3 of 4 requesting the homeowner to provide a payment history for the previous 24 months from their first lienholder. Once the application and approval process is complete, loan documents, along with the appropriate disclosure statements, amortization schedules and promissory notes, will be required to be executed by each eligible participant. Participation Conditions The Agency will record a Community Redevelopment Affordable Housing Regulatory Agreement ("Agreement"), restricting the resale of property for ownership and occupancy by persons of very low- income owincome at an affordable housing cost for a time period of forty-five (45) years, pursuant to the Community Redevelopment Law. A Deed of Trust and Request for Notice will also be recorded in a first or second position, to secure the Agency's loan. The program highlights are as follows: 1) Funds are available on a first -come -first served basis to very -low income, owner—occupant homeowners, 2) Up to $10,000 loan for home rehabilitation; a ten year, 3% loan term; with repayment and interest deferred for two years (twenty-four months). 3) The monthly payment on a $10,000 loan for 120 months at 3% interest is just under $100. 4) Rehabilitation will include projects that are of a health and safety and/or code enforcement nature. It is anticipated that the Agency will be able to assist approximately 50 very low income households to address health and safety and/or code enforcement issues within their homes. FINANCIAL IMPACT On October 4, 2004 the City received $136,285 from the distribution of assets received when the Joint Powers Authority (JPA) to Rancho Cucamonga, Palmdale, Porterville and Colton paid off its Single Family Mortgage Revenue Bonds (Series 1986). Provided the Agency's application is approved, CHFA will lend it $500,000, payable in draws as the Agency re -lends the money to very -low income households. The CHFA loan to the Agency would be at 3% interest for ten years. Annual debt service payments are approximately $58,000. In order to be competitive for the funding, the Agency is proposing to defer its borrowers' payments for the first two years. The Agency's payments to CHFA, however, are not deferred. During these first two years, staff proposes that the $136,285 from the JPA assets, referenced above, be used to make the Agency's debt service payments to CHFA during years 1 and 2 of the Agency's loan, while the Agency's borrowers' payments are deferred. The Agency's borrowers' payments will be used to make the Agency's loan payments to CHFA during years 3 through 10 of the Agency's loan. The last 2 years of the borrowers' payments, which will be received during years 11 and 12, two years after the Agency's loan with the CHFA has been paid in full, will be received by the Agency as repayment for R:\Administration\Meetings\2005 MEETINGS\StaffReports In Progress\IELP Application\HELP Loan Staff Report rev.doc