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REDEVELOPMENT AGENCY FOR THE ITEM #10 CITY OF COLTON For the Redevelopment Agency Board Meeting of October 4, 2005 TO: Honorable Chairperson and Boardmembers FROM: Candace E. Cassel, Economic Development Director SUBJECT: Consideration and Approval of Agency Resolution No. 847 Approving Submittal of a California Housing Finance Agency (CHFA) Housing Enabled by Local Partnership (HELP) Loan Program Proposal and Authorizing the Executive Director to Execute Loan Documents, and Take Other Necessary Actions to Obtain the Proposed Funding. DATE: September 15, 2005 BACKGROUND The California Housing Finance Agency (CHFA) has announced that it is accepting applications for two rounds of $10 million of HELP (Housing Enabled by Local Partnerships) Program Funds for FY 2005/2006. Applications are due to CHFA on November 14, 2005 with an anticipated award announcement by January 16, 2006. The program guidelines are attached as Exhibit A. CHFA loans the HELP funds to a government entity at 3% simple interest, with a term of 10 years. Each proposal is limited to $1,500,000 and each applicant will be limited to one approved proposal in each fiscal year that the program is offered. Historically, the average award per jurisdiction has been $1 million. The Agency participated in the CHFA program in 1999 and was awarded up to $1,000,000 in funds to facilitate the conversion of Rancho Mediterrania Mobilehome Park into a resident owned community by making low interest (4% simple interest for ten years) loans to homebuyers. Of the five lots sold in 1999/2000, four residents took advantage of the HELP loan program to purchase their lot. Approximately $29,099, remains in outstanding principal and interest under the 1999 CHFA Loan. Section 4 of the 2005-2009 Implementation Plan approved by the Agency Board on March 15, 2005 revealed a shortage of 91 very low-income production units during the previous ten year period. Should the application be successful, the $500,000 in HELP Program funds will assist up to fifty (50) very low-income homeowners while enabling the Agency to work towards meeting it's very low- income owincome housing obligation. Application for a HELP loan in the April, 2005 round but was not accepted by CHFA; we were encouraged to re -apply in the next round. DISCUSSION/ANALYSIS Staff reviewed the 2005/2006 CHFA program criteria with regards to applying for an award of HELP Program funds to facilitate a city-wide home rehabilitation program. Staffs proposal is to apply for $500,000 to assist very low-income households in the City with low interest loans of up to $10,000 for R1AdniWstm ion\Meetings12005 MEETINGS\,Staff Reports In ProgressUMY ApplicationWIELP Loan Staff Report rev.doc