Loading...
HomeMy WebLinkAboutResolution - 2005-R0277 - Approve CDBG - North And East Lubbock CDC Homebuyer Down Payment Assistance - 06_23_2005Resolution No. 2005-RO277 June 23, 2005 Item 58 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the City Council of the City of Lubbock does hereby approve of the proposal for the North and East Lubbock CDC Homebuyer Down Payment Assistance Program from the Community Development Block Grant (CDBG) Program and all related documents. Said proposal is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 23rd day of Jqde , 2005. /,/X Z/ 4ARC MCDOTtGAL, MAYOR ATTEST: Rebe ca Garza, City Secretary APPROVED AS TO CONTENT: Nancy Ha Communi ccdocs/res-CDC Down Payment-CDBG.res June 17, 2005 ♦i o a � FY 2005-2006 Funding Request FY 2005-2006 Funding Request Page 2 To submit an application, complete Part A — J, Attachments 14 (if applicable) and any other items requested Do not bind the application or include any items that are not requested. Submit one proposal per project. Submit one original and one copy of each application (SINGLE SIDE ONLY) to Community Development, 1625 13th Street, PO Box 2000, Lubbock, Texas 79457 by Auril 1. 2005 5:00 PM. Please review the "Citizen's Guide" for the Community Development programs, goals, requirements and timelines. For assistance, please call the Community Development Department at 775-2301. A. GENERAL INFORMATION Name of Applicant: North & East Lubbock Community Development Corporation ® Not -For -Profit ❑ For -Profit ❑ CHDO ❑City Dept. ❑ Other (Please include a copy of your IRS ruling providing tax exempt status under Section 501(c)(3) of the 1986 IRS Code if you are a non-profit.) 2. Name of Project: Homeboeer Down payment Assis 3. Area or Location of Project: North & East Lubbocl 4. Contact Person/Title: John E. Hall/Executive Director Mailing Address/Zip: POB 2000. Lubbock TX 79457 Telephone/Fax Number(s): 806,775,3260% 806.775,3281 5. Grant Request: ® CDBG ❑ ESG ❑ HOME 6. Amount of Funds Requested for Project: $180,000 7. Amount of Matching Funds for Project: . Match Type: ❑ Cash ❑ Sweat Equity ❑ Other Grants ❑ Donations Identify Source of Match: N/A Match Status: []Confirmed ❑ Requested 8. Unduplicated Units Served (agency's definition) Homeowners produced (a) Total CD Funds Requested$180.000 d) Total Project (b) Total Unduplicated Units Served_—0 e) Total Unduplicated Units Served (c) Average CD Cost Per Unit (alb): f) Average Cost Per Unit (d/e): S18.000 9. Is this project? ®Year 1 ❑ Year 2 ❑ Year 3 0 Year 4 / o a s � o 1 , FY 2005-2006 Funding Request Page 3 B. PROPOSED PROJECT: Project Description: In two sentences concisely describe your project. This description will be used in future publications should your application be approved. Limit two sentences To provide down payment and closing costs assistance for low -moderate income homebuyers; this assistance builds neighborhood assets and stabilizes neighborhoods within the city (although targeted to north and east Lubbock), while increasing tax revenue from the north and east Lubbock quadrant. C. CONSOLIDATED PLAN GOAL Check the ONE GOAL that best describes your project. Check One Prioritized Objective from Consolidated Plan Number of Units This Project Will Serve ,= H-1 Owners -Rehab Households: H-2 Owners -Limited Rehab Households: X H-3 Owners -Assistance for Home Bu ers Households: 10 Economic Development ME CD-1 Rehab of Publicly/Privately Owned Businesses # of Low -Mod Business Owners: CD-2 ED-Direct Assistance to For -Profit # of Jobs Created: CD-3 Micro -Enterprise Assistance # of Low -Mod Business Owners: Infrastructure CD-4 Street Improvements # of Low -Mod Households: CD-5 Sidewalks # of Low -Mod Households: Public Service CD-6 Handicapped Services for Job Training # of People Served: CD-7 Handicapped Services for Recreation # of People Served: CD-8 Substance Abuse Services for Rehabilitation # of People Served: CD-9 Substance Abuse Services for Shelter # of People Served: CD-10 Substance Abuse Services for Training # of People Served: CD-11 Employment Training for Computer Skills # of People Served: CD-12 Employment Training for Job Readiness # of People Served: CD-13 Employment Training for Reading Skills # of People Served: CD-14 Health Services for Children # of People Served: CD-15 Mental Health Facilities for Operations # of People Served: At FY 2005-2006 Funding Request Page 5 The Homebuyer Assistance Program seeks to increase the number of homeowners residing in north and east Lubbock. The program will provide down payment, closing costs and prepaid assistance coupled with counseling and education about the home buying process. This program will provide incentive for all, with a special emphasis toward low -moderate income households to buy homes. The North & East Lubbock Community Development Corporation requests $180,000 to promote homeownership of newly constructed houses in the target area of the CDC. The maximum assistance to any one homebuyer is $18,000: up to $3,000 closing cost, and up to $15,000 for principal curtailment. Assistance is available to low or moderate -income homebuyers at or below 80% of the area median income as determined by the US Department of Housing and Urban Development. The program may also be used, if necessary, for lease -purchase. Use of this option would only be exercised if the tenant is low-income, and the lease is prepared as an intermediate step to homeownership by the tenant. In this case, the non-profit corporation should be allowed to receive the down payment assistance in order to cover reserves as may be required to obtain financing during the lease period. The reserve amount would then be converted to principal buy down and closing cost assistance upon purchase by the tenant of the property. The assistance is amortized without monetary payments on an annual basis over a period of ten years. Upon resale of the property before the expiration of the 10-year period, the balance of the down payment assistance becomes due and payable at closing. In the event that the property is converted from use as a principal residence to rental property before the expiration of the 10-year period, the assistance may be declared due and payable immediately upon proper notification of the property owner. The North & East Lubbock Community Development Corporation will market and recruit prospective homebuyers for homes to be built. The CDC will provide homebuyer education classes, financial literacy and credit counseling. These activities shall prepare the applicant to become fiscally responsible for homeownership. By targeting low and moderate -income households, the program will stabilize neighborhoods. Rental households, in general, tend to be more transient than homeowners. Thus, the program seeks to retain residents in the community and allow them the opportunity to become vested stakeholders. This program shall help the organization to fulfill its mission of increasing the supply of quality and affordable housing. Homebuyer assistance will mitigate barriers to homeownership by reducing expenditures such as closing costs and down payment. This reduction in up -front costs provides motivation for citizens to purchase homes in north and east Lubbock. 2. List Goals, Objectives and Outcomes. What outcome are you trying to achieve? Please include the number of people or households that will directly benefit from the program How will you measure the outcomes? Please list at least one output and outcome. LIMIT 1/2 page The goal of the program is to increase the number of homeowners residing in north and east Lubbock. The objective is to establish a pipeline of interested homebuyers and place them on a structured path where they can get approved for mortgage loans. The ultimate outcome of this program is homeownership. The program will benefit 10-households, while the CDC has aspirations to complete 15-homes per year. The other five households will be moderate income / 4 1 f t O 1 FY 2005-2006 Funding Request Page 6 households that facilitate the area to have mixed -income and strengthen the overall development of the community. Measurement of outputs and outcomes will be achieved in several ways. The CDC will examine quantitative results that include: ♦ The number of participants who received home buyer education certification ♦ The number of participants approved for mortgages ♦ The number of participants purchasing homes in north and east Lubbock Outcome measurements will be more qualitative in scope. Some results to scrutinize will be: ♦ Financial literacy ♦ Community asset building ♦ Pride in ownership versus rental 3. List Activity Measures/Steps required to reach Goals and Objectives. Include a one-year Timeline from planning to completion for each activity measure. Please highlight significant milestones or steps of your proposed program. LIMIT 1/2 page The CDC will actively recruit prospective homebuyers. Based upon an initial in -take assessment, an applicant will be categorized as (1) likely within six months; (2) likely from 6-12 months or, (3) likely from 12 months or later. This process will enable the organization to establish a continuum of homebuyers for homes being constructed. Activities administered continuously throughout the program include: ♦ Marketing and recruitment of prospective homebuyers ♦ Homebuyer education classes (budgeting, responsibilities of homeowners) ♦ Credit counseling ♦ Credit clean-up ♦ Getting approved for mortgage 4. Evaluation: Explain how you plan to evaluate the program. What criteria will you use to measure if the program is successful? Please be specific and elaborate on the output and outcome that you listed above. LIMIT 1/2 page The Theory of Change model will be used to evaluate the program. This monitoring will allow the organization to make any necessary modifications if the program is not achieving its goals within a reasonable time period. The Theory of Change examines the resources input into the program as well as the activities performed. Outputs and outcomes result from the aforementioned input and activities. An initial part of the program monitoring and evaluation will be the number of applicants placed into the pipeline. The organization will have to market the program and solicit homebuyers on a regular basis. The estimate is to put approximately 10-people into this pipeline monthly with the expectation of 10% moving through the process and becoming a homeowner. The next phase of evaluation will be to assess the number of applicants receiving their homebuyer education certification. This number will indicate the effectiveness of the organization's original in- take assessment where the applicant's seriousness to purchase a home is evaluated. { t O 4 1 FY 2005-2006 Funding Request Page 7 The most critical portion to examine is the credit clean up phase. This portion will be most critical as far as participants becoming disenchanted with purchasing a home. At this point, Lubbock Housing Finance Corporation will provide the necessary follow up with the applicant to ensure timely resolution of credit issues so that approval is attained E. PROGRAM INCOME 1. Please list applicant's anticipated program income from this project and detail how applicant will create a return of investment to the grantor particularly if proposed project includes facilities, housing, or economic development. LIMIT 1/2 page The CDC's potential income from this program would be a development fee. This fee would be a part of the construction costs associated with the purchase price of the house and not income derived from this program. At the time of closing, the CDC would collect a nominal development fee (approximately $2,000 per house). These fees are recycled into the CDC for administration purposes. The grantor would also get a return of investment as a by-product of this program. Generating homeowners also increases the tax base for the area. The city, county and school tax system would receive this additional revenue to add to its coiffures. F. PUBLIC SERVICE APPLICANTS ONLY 1. If program is a public service, outline your plan to develop alternative funding to replace Community Development funds at the end of the three-year cycle. Provide a timeline, with measurable goals and objectives as a part of your plan. Limit 1 page 2. If this is your second or third year of funding, update your accomplishments in meeting the goals and objectives in your funding plan and timeline. Limit 1 page / o s t • t FY 2005-2006 Funding Request G. PROJECT BUDGET Page 8 1. Please list applicant's anticipated expenditures, detailing requested funds and applicant's matching funds. Please place Cash, S=Sweat Equity, 0=0ther Grants, D=Donations beside each amount under "Applicant's Match" to denote the type of match being used. ADMINISTRATION: Personnel # Payroll Taxes Employee Benefits Office Supplies Copy Supplies Postage Telephone Promotional Professional Service Vehicle Fuel/Mileage Other. PROGRAM: Acquisition Reconstruction Rehabilitation Installation Demolition TraininWTech. Asst. Direct Assistance $180,000 $180,000 Rental of Space Rental of Equipment Professional Services for Clients Other. Professional services Construction TOTALS $180,000 $180,000 0 A FY 2005-2006 Funding Request Page 9 H. APPLICANT INFORMATION 1. Capacity of Organization: Describe your organization, highlight the following areas: history of organization, mission statement, prior experience, population served, and annual budget. Does your organization perform annual audits? If not, what procedures do you use to ensure proper financial management? LIMIT 3 pages The North & East Lubbock Community Development Corporation is a fairly young entity. The organization was incorporated following the mayor's task force recommendation. Addressing negative population growth, the organization's mission is: to increase the supply of quality and affordable housing, generate economic activity, and coordinate the efficient delivery of social services. Last fall, the CDC collaborated with the City to promote the "Be Home for Christmas" program The organization identified prospective homebuyers. Consequently, three out of the eight homes purchased were a direct recruiting effort of the CDC. Additionally, the executive director has extensive real estate banking experience and is very capable of administering this down payment assistance program. The CDC serves residents in the north and east sectors in Lubbock. Target boundaries begin on North University from 0 Street and continues north to the city limits. The area then moves eastward, crossing Interstate-27 and heading southward to East 34"' Street. This geographic area covers significant portions of districts one and two. The population for this area is approximately 18,000 residents. Currently, the organization receives funding exclusively from the City of Lubbock. The amount of $250,000 has been appropriated as an annual operating budget. These funds carry a four-year commitment through September 2007. The organization will perform annual accounting audits as part of its fiscal policy. The CDC currently outsources accounting to produce audited financial statements. Quarterly unaudited reports are generated by Lubbock Economic Development Alliance's chief financial officer. 2. Staffing: Describe your current organizational structure. For those staff positions that will be involved in the program, list the position, job responsibilities, qualifications, and name of person if available. If the position is filled by a volunteer, please designate as such. LIMIT 1 page The CDC currently has one employee, the executive director. As programs come on line, additional staff will be retained. The organization anticipates hiring a program manager to market and recruit prospective homebuyers and also provide credit counseling. The ideal candidate will have HUD certification along with a minimum of 2 years of experience. Until such time, however, the executive director will continue facilitating workshops. At FY 2005-2006 Funding Request Page 10 3. Reporting Capabilities: Describe your organization's system for collecting and reporting data. Are you providing reports to any other funding entities? LMUT 1/2 page The CDC submits quarterly reports for its programmatic and fiscal activities to the City of Lubbock. The executive director will be responsible for establishing and maintaining reporting as required by any additional contracts. Normally, databases are created to house essential information needed to track the progress of the initiative. I. GOVERNING BODY PROFILE In order to demonstrate compliance with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000(d)) and regulations pursuant thereto (Title 24 CFR Part 1), which state that no person in the United States shall, on the ground of race, color or national origin., be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity for which the applicant receives Federal financial assistance: 1. Describe the method of selection of officers and directors of the board and indicate the time and place of regular meetings. LEMT 1/2 page At the annual meeting of the Board of Directors, (i) six directors shall be elected to staggered terms of six years, with two directors appointed every two years, and (ii) the remaining directors shall be elected for three-year terms. No less than one-third of the directors shall be residents of the North and East districts of the City of Lubbock, State of Texas, thereby meeting the requirements for Community Housing Development Organizations. The remaining directors are not required to be a resident of the State of Texas. Each director shall continue in office until his or her successor has been elected or until the death, resignation or removal of the director in the manner hereinafter provided. The directors serving three-year terms shall be limited to two -consecutive terms on the Board of Directors. Any director may be re-elected to the Board of Directors after a period of at least one year of non -membership. Meetings of the Board of Directors, annual, regular or special, may be held at such place within or without the State of Texas as may be fixed from time to time by the Board of Directors. An annual meeting of the Board of Directors shall be held during the month of September, at a time and place specified by the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting. Regular meetings of the Board of Directors shall be held no less than seven times during a fiscal year (but no more than once per calendar month), at a time and place specified by the Board of Directors, for the purpose of conducting the normal business of the corporation. Special meetings of the Board of Directors may be called upon three days written notice to all directors. The Chairperson or the Secretary upon written request of any officer or any three directors shall call a special meeting. 2. List all board members' names, number of years on board, occupation, and breakdown the gender and ethnicity of the board members. Please indicate officers. LIMIT 1 page Page 11 NAME OCCUPATION ETHNICITY DURATION Greg Garrison, Chair Pan -Tex Plywood & Lumber Anglo-American 15 months Randy Andrews Graco Real Estate Anglo-American 15 months Gary Lawrence Market Lubbock, Inc Anglo-American 15 months Esther Sepeda Hispanic Chamber of Commerce Hispanic 15 months Frank Castaneda Mama Josie's Restaurants Hispanic 15 months Irasema Velasquez AFLAC Hispanic 15 months Dr. Heenan Johnson Dentist African American 15 months Carolyn Thompson Conwright LISD African American 15 months Greg Jones American State Bank Anglo-American 12 months Velma Lethrid a Homemaker African -American 12 months David Martinez Attorney Hispanic 12 months J. Conflict Of Interest Federal law (24CFR570.611) prohibits persons who exercise or who have exercised any functions or responsibilities with respect to the above grants... or who are in a position to participate in a decision making process or to gain inside information with regard to such activities, may obtain a financial interest or benefit from an assisted activity... either for themselves or those with whom they have family or business ties, during their tenure or for one year thereafter. 1. Is there any member of the applicant's sta$_member of the applicant's Board of Directors, or officer who currently is or has/have been within one year of the date of this application a City employee, a member of the Community Development & Services Board, or a member of the City Council? ❑ Yes ❑ No If yes, please list names: 2. Will the funds requested by the applicant be used to pay the salaries of any of the applicant's staff or award a subcontract to any individual who is or has been within one year of the date of this application a City employee, a member of the Community Development & Services Board, or a member of the City Council? ❑ Yes ❑ No If yes, please list names: Page 12 3. Is there any member of the applicant's staff, member(s) of the Board of Directors, or officer(s) who are business partners or immediate family of a City employee, a member of the Community Development & Services Board, or a member of the City Council? ❑ Yes ❑ No Ifyes, please list names: If any member of the Community Development Services Board has a conflict, they may not participate in the sub -committee interview or discussiom nor vote during the recommendation. The applicant certifies to the best of his/her knowledge and belief that the data in this application is true and correct and that the governing body of the applicant has duty authorized the filing of the application and that the applicant will comply with all the requirements of each grant respectively if the application is approved - Please include: 1) the minutes of the board meeting at which this itemrwasaoriz..ed, and 2) who is a thorized to sign the application and/or contracts. Name: �'�.1� L - L-p�,4et l Signature; Title: Board Chairperson Date: f r` Name• Signature: Title: Director Date: ATTACHMENT 1 Construction And Rehabilitation Proiects (Required for all CD projects except Homeowner Reconstruction or Rehabilitation Projects.) Will this project require that Davis Bacon wage rates be paid? Yes No 1. Status of Plans and Written Bid Specifications ❑ Nothing begun at this time. ❑ Preliminary estimate completed. ❑ Sketch of plans completed. ❑ Detailed plans and written bid specifications in preparation. ❑ Detailed plans and written bid specifications completed. ❑ Other (specify): 2. Environmental Issues Testing for asbestos/ Lead based paint. 3. Construction Timeline s m ;t nA*P