Application Forms · SF424 · SF424 Supplement · Consortium Agreement (MV/Hemet & NHSOC) · Program Summary (see below) Narrative Statements Addressing (Factors 16 see below)
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 1
1. Eligible applicant: The City of Moreno Valley is the lead and eligible applicant for the NSP2 funds because it is a unit of general local government with a proven capacity to fulfill the goals of the Neighborhood Stabilization Program. The signed SF424 form is included with this complete application. 2. Amount: The City of Moreno Valley and the City of Hemet (Cities) are requesting NSP2 funding of $10 million and are committed and capable of returning 259 abandoned and/or foreclosed units of housing back to productive use in the City within the next 3 years. (Please see Factor 3 Use of Funds Table). Our experience as explained in Factor 2 combined with the quality of design and implementation of our programs as noted in Factor 3, clearly demonstrate our merit in receiving NSP2 funds. 3. Eligible Fund Use: The Cities will be using the NSP2 funds to: a. Acquisition, Rehabilitation and Resale – Single Family Residency Program: acquires, rehabilitates and resales abandoned and/or foreclosed properties to arrest the economic decline. These properties will be rehabilitated and brought to a higher energy efficient standard where applicable, and then sold to income qualified, first time home buyers. b. Acquisition, Rehabilitation and Rental – Multi Family Program: acquires, rehabilitates and rents multifamily residential properties to households below 50% of median income and managed by a qualified nonprofit. c. Demolition Program: when a property requires demolition, the Cities will use less than 10% of the NSP2 funds to demolish the property and then rebuild another residential structure (home or multifamily depending upon zoning) in its place. d. Down Payment Assistance Program: a subordinate loan will be provided to qualified home buyers of NSP certified homes in order to fill the affordability gap. Loans are repayable with an equity share provision if the home buyer sells or has a change in title. 4. Income Targeting / Benefit: The Cities’ proposed programs guarantee that all of the NSP2 funds will benefit those families at or below 120% area median income, with at least 25% benefiting those at or below 50% area median income. This goal will be accomplished by assisting all of the areas in our proposed target geography. (Addenda D) 5. Citizen Participation: The City of Moreno Valley posted its NSP2 request for funds, use of funds, target geography and program details on the City’s website
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 2
rd http://www.morenovalley.ca.us/ on July 3 2009. It also published the above details in rd the local paper, Press Enterprise, on July 3 . The City of Hemet posted the same rd program information on their website http://www.cityofhemet.org/ on July 3 2009. This information was also available to those with limited English proficiency. The summary of public comments can be found in Addenda C.
6. Definitions: See Appendix G 7. Demonstrated Organization Capacity: The Cities’ and/or their Development Partners successfully rehabilitated 312 singlefamily homes, 199 units of multifamily rental within the past two years. In addition, both Cities have operated a down payment assistance program for several years and helped hundreds of home buyers obtain the dream of home ownership. Both Cities have extensive experience in acquisition and rehabilitation. In fact the City of Hemet received the League of Cities award for neighborhood revitalization for it’s efforts in rehabilitation two blocks of very low income multifamily units which testifies to their organization capacity. Further details on organization capacity and references can be found in Factor 2. 8. Geographic Need: Every census track in our target geography has a foreclosure index score of 20. Truly the need is great in the Cities of Moreno Valley & Hemet. (See Appendix D)
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 3
Neighborhood Stabilization Program 2 Funds Application
Applicant: City of Moreno Valley Application Number: 732562035 P.O. Box 88005 DUNS Number: 083583849 Moreno Valley, CA 925520805
1. a. Factor 1: Need/Extent of the Problem Target Geography
The Target Geography for the Cities of Moreno Valley & Hemet is the same target area already approved by HUD for the NSP1 funds. Please see Appendix "A". More specifically, the target area was selected because of the significant rise in foreclosures and the spiraling decline in homeownership rates; leading to an overall further decline of neighborhood stabilization. The average foreclosure factor for this target area is 20 as determined from the HUD website. For each census tract, the percentage of foreclosures was the higher of the two index scores and used to compute the average foreclosure factor score. In fact, every census tract in the target area has a foreclosure factor of 20. Clearly there is an urgent need for assistance for this target area of Moreno Valley & Hemet. Moreno Valley & Hemet are located within the “Inland Empire”, which received over $130 million in NSP1 funding. That amount is almost as much as the entire State of California received. In fact, both counties within the Inland Empire (Riverside and San Bernardino Counties) received a "HIGH" risk score, based upon high vacancies in census tracts 1 combined with elevated rates of high cost loans . Furthermore, the housing prices in the Cities of Moreno Valley & Hemet have tumbled from their high point. Peak Median Home Price Moreno Valley Hemet $395,000 $345,000 April 2008 Median Home Price $235,000 $193,000 April 2009 Median Home Price $135,250 $115,000 % Change from Peak 65.76% 66.67%
Source: Dataquick Information Systems & California Association of Realtors (MV Peak 12/06; Hemet Peak 11/05)
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 4
These plummeting home values have only added to the number of housing foreclosures, even from steady home owners as they walk away from homes with negative equity. Lower housing prices may seem to benefit the cause of homeownership in the Cities of Moreno Valley & Hemet as the market adjusts from previous overvaluation. However, the unemployment rate as of April 2009 in the City of Moreno Valley is 15.2% and Hemet is 2 16.5% . This level of unemployment in the Cities severely undermines the ability for Moreno Valley & Hemet’s citizens to meet their basic housing needs as well as qualify for stringent financing credit. b. Market Condition 1. It is disconcerting to forecast the condition of Moreno Valley & Hemet's target geography over the next three years without NSP2 funding. With the current housing market conditions in the Cities of Moreno Valley & Hemet bleak at best, an impending wave of foreclosures will rage again within the next 3 years with many OptionAdjustable Rate Mortgages (ARM’s) ready to reset. The dumping of more foreclosures on the two Cities will be significant. Without the umbrella of NSP2 funding, the Cities of Moreno Valley & Hemet will continue to see the flood of foreclosures cripple the local housing market and worsen the related economic factors in these communities. Even with NSP2 funding, the conditions seem daunting, but NSP2 assistance brings immediate action that is tangible and enables the local housing professionals, residents, and government to bring a better sense of optimism about the current crisis facing our communities. Below are the factors that lead to this forecast: · The first sign of impending foreclosures is the number of Notices of Default. Significantly more foreclosures are on the horizon in the Cities of Moreno Valley & Hemet. In the first quarter of 2009, the Southern California region experienced an 87.3% increase in Notices of Default, while the State of California similarly 3 suffered an 80.0% increase. This drastic increase in Notices of Default will push evermore foreclosures on an already fragile economy. 4 The housing crisis has certainly not hit rock bottom within the Cities of Moreno Valley & Hemet.
5 Distressed sales to total sales ratio in March 2009 in Riverside County was 87% . The housing stock is already saturated with foreclosures and bank owned properties.
Riverside County ranked #2 of all counties in the state of California in percentages of SubPrime Loans to total housing units in 2009. Since the sub prime loans are a major cause of the housing crisis, the volume of housing foreclosures in the county is disheartening. Although the current housing conditions are depressed, only 70% of subprime loans have already been reset. This means that 30% of these caustic loans are yet to hit the market in the
3 4 5
California Economic Development Department
Data Quick Information Systems California Association of Realtors Ibid
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 5
remaining months of 2009 and 2010. Additional foreclosures will be devastating 6 to Moreno Valley & Hemet without the assistance of NSP2 funding. · Not only are the subprime loans a major factor in the future foreclosures awaiting the Cities of Moreno Valley & Hemet, but OptionPayment ARM Reset Loans 7 also plague both Cities. Only 47% of the ARM Mortgages have reset their interest rate, which means the remaining 53% will be reset within the next three 8 years; causing further tragic decline to the housing conditions and economy of the Moreno Valley & Hemet. California Association of Realtors forecasts that California median home prices 9 will continue dropping in 2009 by 28.4% . Since the Cities of Moreno Valley & Hemet have already experienced nearly a 66% decline, this forecast is troubling. The predicted 18month foreclosure rates in the Cities of Moreno Valley & 10 Hemet’s NSP Target Area range from 11.2% to 10.8% respectively , representing a very high rate in comparison to other areas of the Country.
11 12 The market absorption rate for California is 4.6 months , while the rate in the 13 Inland Empire is only 3.5 months . The City of Moreno Valley's rate is 3 months 14 while Hemet's is 3 months . Anecdotal evidence reported by City Code Enforcement and local Realtors is apparent that this number is low because investors are entering the low priced housing market in the region and buying up the foreclosed properties, only to rent them in poor condition.
According to RealtyTrac.com, a sampling of fourthquarter 2008 data showed that as many as 70% of REOs haven’t yet been listed for sale. This means that the Cities of Moreno Valley & Hemet’s depressed housing and economic factors don’t even demonstrate the magnitude of the existing problems within the Cities. The State of California issued a moratorium forbidding any foreclosures for a 90 day period. Certainly this doesn’t mean that there are no foreclosures, but that a stockpile of them are damned up waiting to flood the Cities of Moreno Valley & Hemet.
The facts listed above clearly demonstrate the severe economic and housing conditions predicted for Moreno Valley & Hemet. Moreno Valley & Hemet are not anywhere near the end of this housing crisis and a flood of foreclosures are ready to hit. 2. Moreno Valley & Hemet's housing market has suffered tremendously from the effects of overvaluation, unemployment, and personal bankruptcies. In Southern California, the housing market essentially ran out of truly qualified buyers in 2005. In
8 9 10 11 12 13 14
FirstAmerican CoreLogic, LoanPerformance Data, U.S. Census Bureau, & Federal Reserve Bank of NY (via CAR) Short for Alternative Apaper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A paper, or "prime", and less risky than "subprime," the riskiest category. FirstAmerican CoreLogic, LoanPerformance Data, U.S. Census Bureau, & Federal Reserve Bank of NY (via CAR) California Association of Realtors June 2009 http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/nsp1.cfm Rate at which abandoned or foreclosed homes in a market will sell in a given period of time California Association of Realtors April 2009 Ibid MLS
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 6
order to create more buyers, the lending institutions began expanding their efforts in the subprime and alternative loan products. The Cities of Moreno Valley & Hemet were disproportionally affected by these loans being offered to new buyers and existing homeowner wishing to refinance. This poor lending practice throughout the region falsely sustained the demand for housing and therefore continued the upward trend of values well beyond reality, causing overvaluation. In 2007 the "teaser" fixed period of interest rates expired on the original subprime loans, and the interest rates began to be adjusted upwards. As the interest rates increased the home owners no longer could afford the monthly mortgage payments and started foreclosing on their homes. At the same time, the California economy began to 15 slump and people in the Inland Empire began losing jobs. This combination of over valuation and job loss was deadly for Moreno Valley & Hemet and there was an increasingly oversupply of homes compounded by foreclosures. Home prices quickly dropped. The ripple effect reverberated throughout the local region and the falling home prices caused even nonrisk homeowners to experience negative equity in their homes; spurring further foreclosures as owners simply walked away from their houses. The “housing crisis” in Southern California is truly a crisis in the Cities of Moreno Valley & Hemet. To date, home prices in the Cities of Moreno Valley & Hemet have dropped nearly 66% since their high in 2005 & 2006. While the California's unemployment rate is significantly higher than the national rate, the Moreno Valley & Hemet are experiencing catastrophic unemployment rates, which has led to further foreclosures. Description United States 5.1% 8.9% Riverside County 5.2% 13.1% City of Moreno Valley 6.3 15.2% City of Hemet 6.9 16.5%
Unemployment Rate 2005 Unemployment Rate April 2009
Bureau of Labor Statistics] http://data.bls.gov/PDQ/servlet/SurveyOutputServlet CA Gov EDD www.labormarketinfo.edd.ca.gov]
3. Income characteristics Housing Cost Burden is defined by HUD as the ratio between payments for housing (including utilities) and reported household income. This calculation is based on gross income. It does not make the adjustments to income required by housing assistance programs before percentageofincome rents are determined. Moderate Cost Burden (Cost Burden > 30%) = Housing costs (including utilities) are between 31 and 50 percent of reported income. Severe Cost Burden (Cost Burden >50%) = Housing costs (including utilities) are 16 exceeding 50 percent of reported income.
California Unemployment Rate was 6.8% in 2005, 7.3% 2007 and 10.3% by 2008; CA Economic Development Department. Source: HUD; http://www.huduser.org/publications/affhsg/worstcase/appendixb.html
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 7
% of Median Income 50% 80% 120%
Annual Household Income $33,300 $53,300 $77,400
Monthly Household Income $2,750 $4,417 $6,450
Monthly Payment including utilities $1,262 $1,262 $1,262
Housing Cost Burden 46% 29% 20%
So while the Cities of Moreno Valley & Hemet are experiencing historic lows in their Housing Cost Burden factor and affordability index, other factors should be considered to know the real problem of providing housing to the residents of Moreno Valley & Hemet. 4. Other factors The irony of affordability in Moreno Valley & Hemet is easily overlooked by many. While the housing cost burden and affordability index in both cities seems to indicate a strong case that the market has already corrected itself, the fact of the matter is the problem goes deeper. In a 12 month period from June 2007 to June 2008, Chapter 11 Bankruptcy Filings in the Nation increased 30.6%. In that same period of time, Chapter 11 Bankruptcy Filings in the Central District of California, which includes the Moreno Valley & Hemet area, 17 skyrocketed 167.9% . Personal Chapter 11 Bankruptcy Filings Nation Central District of California June 2007 to June 2008 +30.6% +167.9%
A June 2009 article on www.bankruptcystatisics.com website reported that agencies used to be able to help 2025% of the people who came to them to avoid bankruptcy. Now they find they can only help about 78%. The decrease is largely due to three things; job losses, the disastrous housing market and medical bills. The disastrous housing market and disproportionate unemployment rate in Moreno Valley & Hemet have already been proven in this section. The last item (medical bills) leading to so many bankruptcies in Moreno Valley & Hemet is entirely related to the unemployment rate. Employment based health insurance has been declining throughout California over the past decade. In the past year, about 108,000 workers in the Inland Empire have lost their jobs, and likely their health coverage too. In the County of Riverside the uninsured health care insurance rate is 21.3% while the 18 same statistic for California and the Nation is 20.4% and 17.2% respectively.
http://www.cacb.uscourts.gov/cacb/Publications.nsf/New%20Court%20News/76ADC63FEF70F3A8882574B8007BAA37/$FI LE/Sept_Oct.pdf 18 http://www.healthaccess.org/files/expanding/Inland%20Empire%20Health%20Reform.pdf
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 8
% Without Health Care Insurance National California County of Riverside
Last 10 Years 17.2% 20.4% 21.3%
5. The Cities of Moreno Valley & Hemet are positioned to attack their housing problems immediately with 4 programs described in detail in Factor 3a:
Acquisition, Rehabilitation and Resale Single Family Residency (ARRSFR) Program – is
designed to improve old housing stock. The average age of a twobedroom home for sale in Moreno Valley is 29 years old, while Hemet's is 39 years old. The average age of a threebedroom home in for sale in Moreno Valley is 26 years old, while Hemet's is 25 19 years old . Clearly there is a need in Moreno Valley & Hemet to bring its outdated housing up to 2009 standards. In addition, the ARR Program will increase neighborhood stabilization through home ownership.
Acquisition, Rehabilitation and Rental MultiFamily (ARRMF) Program – is designed to
improve old multifamily housing, secure multifamily housing with quality affordable housing organizations, and provide affordable rental housing to people whose credit issues do not currently allow them to obtain home ownership.
Down Payment Assistance Program – provides financial literacy courses to assist renters
with credits issues and prepares them for future home ownership opportunities. This program is designed to prevent foreclosures through education, as well as provide home buyer financing assistance that will make mortgage payments affordable while establishing a stable home owner.
Demolition Program the depressed housing market, vandalism, and aged housing stock
occasionally require demolition, so that safe and energy efficient replacement housing can be built. The programs listed above are designed to help the Cities of Moreno Valley & Hemet reduce the foreclosure inventory, move renters to home ownership, assist low to moderate income households within the Cities, reduce crime, improve existing home prices and household equity while diminishing the future rate of foreclosures. The programs also improve the energy efficiency of the rehabilitated housing stock and provide for continued affordability in the future.
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035 Page 9
The Cities of Moreno Valley & Hemet are confident that the coordination and implementation of these programs, with the assistance of NSP2 funding, will rapidly arrest the decline of our community. The Cities will be able to help low to moderate income households and provide continued affordability in the future. Since the Cities are able to leverage their NSP2 resources, we are well positioned to accomplish the goals and intent of the Neighborhood Stabilization Program. 2. a. Factor 2: Demonstrated Capacity & Relevant Organizational Staff Past Experience
The Cities of Moreno Valley & Hemet have profound experience in managing neighborhood stabilization activities. The City of Moreno Valley began its efforts of neighborhood stabilization during the last foreclosure cycle 10 years ago, and knows from experience which programs are successful. Between 1998 and 2002, the City of Moreno Valley acquired rehabilitated and resold 102 HUD foreclosure homes. The homes were then sold to lowtomoderate income households. The City utilized private sector companies to assist acquiring, repairing and selling the units. The total construction cost expended reflected approximately $1.6 million or about $15,500 per unit. As requested, the Cities will provide information for the past 24 months only, although the following report only represents a fraction of our success in minimizing the impact of a recessionary economy. Both Moreno Valley & Hemet have been successfully administering a variety of affordable housing programs including single and multifamily housing rehabilitation, senior home repair, acqisition/demolition, first time home buyer, programs as well as residential affordable new construction projects. The Cities have taken an active role in acquiring property, managing rehabilitation work, underwriting loans and grants, managing asset property, preparing project financial analyses, and preparing project bids and proposals. The Cities also actively insures code compliance as well as removing nuisance problems in properties within all the target areas of the Cities. Furthermore, the Cities’ Staff have experience and knowledge in real estate acquisition and sales, real estate financing, real estate appraisal, lead based paint, asbestos, building codes, construction activity, property management, affordable housing regulations, and down payment assistance. Additional information on staff skills can be found under the Management Structure portion of Factor 2. Listed below are activities undertaken by the Cities that exemplify our experience in addressing affordable housing issues: Bay Family Apartments: The Moreno Valley Redevelopment Agency provided $755,000 in financial assistance toward the Bay Family Apartments, a 61 unit complex consisting of 2 and 3 bedrooom units designated for 'verylow' income families. Construction completed in 2007.
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 10
Adrienne and Allies Neighborhood: In partnership with the Moreno Valley Redevelopment Agency, Riverside Housing Development Corporation completed the purchase and rehabilitation of 2 buildings (8 units). Completed in 2007. Sheila Street Neighborhood: The Moreno Valley Redevelopment in a cooperative effort with Riverside Housing Development Corporation completed the purchase and rehabilitation of 2 buildings (8 units). Two capital projects are underway to add sidewalks and a neighborhood park to the Shelia Street area. Completed in 2007. These programs required skills in: city and regional planning; rehabilitation of housing; program marketing and management of waiting lists for potential residents; as well as accessing operating and investment capital, code enforcement, managing contractors and Federal HOME grants. These programs continue to be a source of pride for the Cities of Moreno Valley & Hemet, as we have significantly helped hundreds of households in the last two years improve the energy efficiency and safety of their homes. The citizens of Moreno Valley & Hemet are eager to take advantage of these programs, and we believe the foreclosure problem in our Cities would be worse without these proactive measures of home improvement. Inspection and Acquisition/Rehabilitation of Foreclosed Homes – The inspections include compliance for health and safety violations and conducting abatement actions to eliminate nuisance conditions. The inspections also included identifying major building code violations. This work will be instrumental in the development of a thorough scope of work for homes that are acquired by the Cities of Moreno Valley & Hemet then repaired and made available for first time home buyers. This effort by the cities exemplifies our ability and commitment to maintain quality housing within the communities. It is seen as a proactive approach to maintaining neighborhood stabilization by preventing neighborhood degradation that often precedes foreclosures. Neighborhood Stabilization Program #1 – Collectively, the Cities of Moreno Valley & Hemet were awarded approximately $14 million from HUD for the Neighborhood Stabilization Program 1. The Cities were notified in March that their action plan was approved. Guidelines for the programs were approved and an RFQ issued to hire qualified Development Partners. We are now in the process of acquiring foreclosed homes with the assistance of the National Community Stabilization Trust. In addition to the vast experience of Moreno Valley & Hemet in affordable housing and redevelopment, our Development Partners also bring a wealth of rehabilitation experience. Within the last 24 months, our Development Partners have rehabilitated 312 single family homes and 199 multifamily units that are now integrated into the community, stabilizing neighborhoods while improving energy efficiency.
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 11
Down Payment Assistance Program – The Cities have directly administered their own Down Payment Assistance Program. The City of Moreno Valley has assisted a total of 46 households with down payment assistance loans. The City of Hemet has provided (HOMEfunded) Down Payment Assistance loans to 98 low income households. It’s a credit to the City’s underwriting that there has not been one default. Hemet is currently restructuring its Down Payment Assistance Program in order to reach moderate income families. This locally funded program will piggyback on the NSP1 singlefamily acquisition/rehabilitation/resale program If NSP2 funds are awarded, the City of Hemet may elect to hire Neighborhood Partnership Housing Services (NPHS) to administer their Down Payment Assistance Program. NPHS is a local nonprofit community development organization, part of the Neighborworks® Network, which is dedicated to building stronger communities by providing down payment assistance, HUD approved homebuyer education, homeownership retention counseling (foreclosure intervention counseling), financial literacy workshops and neighborhood revitalization services for families in the Inland Empire. NPHS has assisted more than 1,000 homeowners improve their homes to a safe, livable condition (eliminating many health and safety issues); assisted more than 1,500 families achieve their dream of homeownership; educated more than 8,000 families in pre and post homeownership education issues (financial literacy, homebuyer education, post purchase counseling, default/foreclosure prevention, home maintenance, and, insurance education). b. Management Structure 1. Because they are a unit of local government, the management structure of the Cities of Moreno Valley & Hemet follow common public organization: The Mayor and City Council make all policy decisions abiding by the bylaws of the City. The City Manager for each City reports directly to the Mayor and City Council, while managing the Directors of a variety of departments that provide the needs of the community. The Cities will use the following resources to manage and implement the Neighborhood Stabilization Program 1 and 2, both combined known as “NSP”. These additional resources include, but are not limited to:
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 12
B a rry F o ste r D ire c to r K a nd a c e B a p tiste E xe c utive A s sista nt I D e nise B a gle y M a na ge me nt A na lys t S ha nna P a la u M a na ge me nt A na lys t
M ic he le P a tte rs o n A c ting R e d e ve lo p me nt D ivisio n M a na ge r K a thi P ie rc e S e nio r A d ministra tive A s sista nt A my N e smith S e nio r O ffic e A ssista nt A nnie C la rk S e nio r F ina nc ia l A na lyst
K e yne ic a Jo ne s M a na ge me nt A na lyst G re te l N o b le M a na ge me nt A na lyst Isa R o ja s M a na ge me nt A na lyst
S ha nik q ua F re e ma n A c ting M a na ge me nt A na lyst D o nna M o e lle r H o using P ro gra m S p e c ia list M a ria nne W a gne r H o using P ro gra m S p e c ia list D ia na V a sq ue z H o using P ro gra m S p e c ia list
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 13
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 14
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Factor 3: Soundness of Approach Proposed Activities
Cities of Moreno Valley & Hemet Neighborhood Stabilization Strategy: The Cities of Moreno Valley & Hemet have four Proposed Activities that require NSP2 funding: 1. Acquisition, Rehabilitation and Resale Single Family Residences (ARRSFR) Program 2. Acquisition, Rehabilitation and Rental Program (ARRMF) 3. Down Payment Assistance Program 4. Demolition program In addition, the Administrative costs will not exceed 10% of NSP2 funding. Acquisition, Rehabilitation and Resale Single Family Residences (ARRSFR) Program NSP2 Budget Amount: Estimated Homes: $1,785,715 90
Description: The Cities of Moreno Valley & Hemet have successfully implemented this program in previous years and will therefore be able to immediately begin meeting the goals of NSP. The ARRSFR program is an existing program operated in each City. This program is currently funded by NSP1 funds as well as leveraged private financing from the Development Partners under contract with the Cities. The ARRSFR Program consists of three phases: 1. Acquisition 2. Rehabilitation 3. Resale In each of these phases, the Cities of Moreno Valley & Hemet have a carefully prepared strategy to maximize the success of the Program and leverage the use of funds. Acquisition: Moreno Valley & Hemet are both under contract with the National Community Stabilization Trust (NCST). Several properties have already been purchased from neighboring NSP grantees and the acquisition discount has exceeded 25% of the estimated opinion of value, thereby allowing the Cities of Moreno Valley & Hemet to rehabilitate more homes with their NSP funds. The NCST is an unprecedented collaboration of the nation’s five leading housing and community development nonprofit organizations – the Enterprise Community Partners, Housing Partnership Network, Local Initiatives Support Corporation (LISC), Neighbor Works America, and the National Urban League. Presently the NCST has eight of the largest lenders and mortgage companies in the United States participating in its program including
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 16
Fannie Mae, Freddie Mac, Wells Fargo, JP MorganChase, Citigroup, Bank of America, Saxon Mortgage and GMAC Residential Capital. The purpose of the NCST is to serve as a single point of contact between the leading lenders in the country, which own foreclosed properties, and local government agencies that have received NSP funds and are striving to acquire vacant foreclosed properties. NCST has standardized the process for acquiring properties from lenders before those properties are competitively offered in the open market. An accelerated inspection and escrow closing allows lenders to offer properties at a discount and results in a "winwin" purchase scenario. Rehabilitation: By issuing a competitive RFQ, the Cities of Moreno Valley & Hemet have selected the best qualified and experienced Development Partners to work on their programs. Minimally, these Development Partners must have (or contract with someone who has) a general contractor’s license, a real estate broker’s license and exhibit competency in their work and extensive, direct prior experience in the local market. While Moreno Valley provides a loan for both the acquisition and rehabilitation, the City of Hemet's Development Partners contribute a portion of the acquisition and rehabilitation financing in an effort to leverage the NSP funds. The Cities work with their Development Partners to acquire, rehabilitate, and resell homes under an agreement with each City and per the NSP2 regulations. The Cities have partnered with the Development Partners under an agreement per the NSP2 regulations. The Cities closely monitor the performance of each Development Partner. An affordability covenant will be recorded on the property, ensuring that the home remains affordable for a minimum of 15 years. If the property is sold within the 15 year affordability period, then the full loan amount is recaptured, plus an equity share. Any transfer of title requires notification to a City, thereby ensuring that the covenant remains active on the property. Furthermore, a City annually monitors compliance of the affordability requirements for each unit. Resale: Once the properties are rehabilitated to the new standard, the Cities’ Development Partners will resell them to lowtomoderate income buyers below 120% area median income. A local nonprofit, Neighborhood Partnership Housing Services, assists the Cities by educating and preparing "mortgageready" buyers for the Cities’ programs. Neighborhood Partnership Housing Services has over 18 years of experience in Homebuyer Assistance. They also help bring buyers to Cities’ programs through: Regional Marketing/Branding as well as through a variety of media including cable, MLS, homebuyer fairs, utility bill inserts, MLS, etc. Summary: The ARRSFR Program will use funds from the NSP2 to facilitate the acquisition, rehabilitation, & resale of abandoned and foreclosed singlefamily homes, including condominiums and townhomes. The benefits of the ARRSFR Program are far reaching and will significantly improve conditions within the NSP target area. They include, but are not limited to the following: 1. Quickly halting neighborhood & economic decline
NSP2 Response The Cities of Moreno Valley & Hemet Application Number: 732562035Page 17
2. 3. 4. 5. 6. 7. 8. 9.
Increasing local jobs Supporting local businesses and the local economy Increasing home ownership rates Increasing neighborhood stability Decreasing needed government services (Police, Fire, Code Enforcement) Increasing property values Leveraging resources Stabilizing the housing
The Cities of Moreno Valley & Hemet with a well planned management plan are both highly capable and experienced to administer and manage ARRSFR programs, as well as provide the necessary supervision and control measures required by this program. Acquisition, Rehabilitation and Rental (ARRMF) Program NSP2 Budget Amount: Estimated Units: $5,439,285 109
Description: The Cities of Moreno Valley & Hemet have successfully implemented this program in previous years and therefore will be able to immediately begin meeting the goals of NSP. This program has been funded with a variety of sources in the past, such as: redevelopment housing funds, tax credit financing, HOME funds, as well as other State and Federal sources. NSP1 funds are currently being deployed to leverage private financing from affordable housing Development Partners under contract with the Cities. Extensive experience enables us to accurately certify that a minimum of 100 additional foreclosed multifamily units will be completed and rented to households at or below 50% of the area median income within the next 3 years. The ARRMF Program consists of three phases: 4. Acquisition 5. Rehabilitation 6. Rental In each of these phases, the Cities of Moreno Valley & Hemet have a carefully prepared strategy to maximize the success of the Program and leverage the use of funds. Acquisition: Moreno Valley & Hemet are both under contract with the National Community Stabilization Trust (NCST). The NCST have been active in the Inland Empire and acquisition discounts are exceeding 25% of the estimated opinion of value, thereby allowing the Cities of Moreno Valley & Hemet acquire and rehabilitate more properties with their NSP funds. The NCST is an unprecedented collaboration of the nation’s five leading housing and community development nonprofit organizations – the Enterprise Community Partners, Housing Partnership Network, Local Initiatives Support Corporation (LISC), Neighbor Works America, and the National Urban League. Presently the NCST has eight of the largest
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lenders and mortgage companies in the United States participating in its program including Fannie Mae, Freddie Mac, Wells Fargo, JP MorganChase, Citigroup, Bank of America, Saxon Mortgage and GMAC Residential Capital. The purpose of the NCST is to serve as a single point of contact between the leading lenders in the country, which own foreclosed properties, and local government agencies that have received NSP funds and are striving to acquire vacant foreclosed properties. NCST has standardized the process for acquiring properties from lenders before those properties are competitively offered to the open market. An accelerated inspection and escrow closing allows lenders to offer properties at a discount and results in a "winwin" purchase scenario. Rehabilitation: By issuing a competitive RFQ, the Cities of Moreno Valley & Hemet have selected the best qualified and experienced nonprofit Development Partners to work on this program. Minimally, these Development Partners must exhibit competency in their work and direct prior experience with acquiring, rehabilitating and managing multifamily affordable housing projects. Both cities closely monitor the performance of each Development Partner. Moreno Valley & Hemet with a well planned management structure are highly capable and experienced to administer and manage the ARRMF program, as well as provide the necessary supervision and control measures required by this program. This includes supervising and monitoring the implementation of the 55 year affordability covenant period. Development Partners contribute a portion of the acquisition and rehabilitation financing in an effort to leverage the NSP funds. The Cities also provide the affordability gap to allow restricted rental units to be economically feasible. The Cities have partnered with the Development Partners under an agreement per the NSP2 regulations. The Cities closely monitor the performance of each Development Partner. Rental: Once the units are rehabilitated to a high standard, they are offered for rent. The Cities expect that high quality affordable rental units offered to 50% of the area median income will have a very high demand. In fact, we anticipate having a waiting list. Summary: The ARRMF Program will use funds from the NSP2 to facilitate the acquisition, rehabilitation, & rental of abandoned and foreclosed multifamily properties. The benefits of the ARRMF Program are far reaching and will significantly improve conditions within the NSP target area. They include the following: 1. Quickly halting neighborhood & economic decline 2. Increasing local jobs 3. Supporting local businesses and the local economy 4. Increasing available affordable rental units 5. Meeting the goals of NSP’s “deep targeting” of those under 50% ami 6. Ensuring continued affordability for 55 years, yielding longterm economic benefits. 7. Increasing neighborhood stability 8. Decreasing the need for government services (Police, Fire, Code Enforcement)
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9. Leveraging resources 10. Increasing in property values 11. Stabilizing the multifamily housing Down Payment Assistance Program NSP2 Budget Amount: $1,000,000 Estimated Loans: 50 Description: The Down Payment Assistance Program is a highly successful existing program. This program has been funded in the past by utilizing redevelopment housing setaside funds and is currently funded by NSP1 funds. The Cities will use NSP2 funds to provide down payment assistance loans to households earning 120% of Area Median Income or below. The loans provide an amount to fill the affordability gap in the form of a silent second deferred loan. In an effort to leverage additional funding and provide below market, 1st mortgage loan financing to the home buyer, the terms and conditions of these loans will be subject to CALHFA financing. The homebuyers will be required to obtain a lowrisk, fixed rate mortgage loan for their 1st trust deed financing, preferably at a fixed interest rate. An affordability covenant will be recorded on the property, ensuring that the home remains affordable for a minimum of 15 years. If the property is sold within the 15 year affordability period, then the full loan amount is recaptured, plus an equity share. Any transfer of title requires notification to a City, thereby ensuring that the covenant remains active on the property. Furthermore, the Cities annually monitor compliance of the affordability requirements for each unit. The prospective buyers are also required to attend the 8 hour preacquisition HUDcertified homebuyer counseling session. The Cities of Moreno Valley & Hemet will utilize the services of a HUD approved counseling agency in the local region such as, Riverside Fair Housing, Neighborhood Partnership Housing Services (A NeighborWorks Affilliate), or Neighborhood Housing Services of the Inland Empire (A NeighborWorks Affilliate)to provide the homebuyer counseling. Demolition NSP2 Budget Amount: Estimated Units:
Description: Occasionally, the condition of specific housing units may warrant demolition instead of rehabilitation. The primary reason would be the high proposed cost of rehabilitation versus the value of the home. The livability of a home is also an important consideration (e.g. house size and functionality of the floor plan). Not only is the extent of the rehabilitation a cost consideration for demolition, but also the structural soundness of a home as determined by the City’s Building Official.
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If deemed appropriate, the house will be demolished. Plans to develop the parcel as an infill home will commence as soon as practicable, but no more than 10 years. No more than 10% of the NSP2 funds will be used for demolition, and no public housing will be demolished. The Cities will maintain the sites in good condition until redevelopment occurs. Administration NSP2 Budget Amount:
Description: Administration of NSP funds includes, but is not limited to, the following activities: 1. 2. 3. 4. 5. 6. 7. 8. 9. Compliance monitoring Environmental review for compliance with NEPA Contracting with consultant services for the implementation of program activities Procurement (including letting of appropriate Requests for Proposals, Notice of Funding Opportunities, etc.) Financial data collection and reporting Quarterly reporting Data entry and reporting through DRGR Providing technical assistance to activity sponsors Ensuring public participation
The Cities of Moreno Valley & Hemet will use up to 10% of the NSP2 funds for administration of the various programs and projects stated in the application. Furthermore, if any program income is received, a City may elect to utilize 10% of that amount for future administration if needed. Uses of funds and firm commitments a. The City of Moreno Valley will act as lead agency, with both Cities acting as "responsible entity" for their portion of NSP2 as indicated in table below.
Est. Unit s
Description Total NSP2 Allocation Administration
Est $ Per Unit
Overall $ $10,000,000 $1,000,000
Overal l %
Remaining Funds Demolition ARR SFR ARR MF Down Payment Loans $75,000 $20,000 $50,000 $20,000
$9,000,000 $775,000 $1,785,715 $5,439,285 $1,000,000
90% 8% 18% 54% 10%
70% 70% 70% 62% 100%
30% 30% 30% 38% 0%
$6,300,000 $700,000 $1,250,000 $3,350,000 $1,000,000 9 63 67 50
$2,700,000 $75,000 $535,715 $2,089,285 $0 1 27 42 0
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Grand Total Units
b. The ARRSFR Program will be funded by NSP2 and the City of Hemet's Development Partners have committed $400,000 in private loan financing for rehabilitation. In addition, the City of Hemet will use $400k of their own funds for Down Payment Assistance All of the other proposed NSP2 activities [ARRMF, Down Payment Assistance, and Demolition] will be funded exclusively from NSP2 funds. For the ARRSFR Program, the Development Partners will use NSP2 funds for housing acquisition (and rehabilitation in Moreno Valley) at 0% interest and $0 fees for a period of 180 days; after which the loan accrues 10% simple interest. All project addresses benefitting from these loans will be located within the designated NSP target area and are not identifiable at this time. c. The City of Hemet has committed $400,000 for home buyer assistance loans for their NSP homes. The City of Hemet's Development Partners have committed an additional $400,000 from private financing sources for ARRSFR rehabilitation. The City of Moreno Valley has committed $11.5 million in redevelopment funding to provide 429 units of low to moderate housing units in the Target Geography. d. Occasionally, the condition of specific housing units may warrant demolition instead of rehabilitation. The primary reason would be the high proposed cost of rehabilitation versus the value of the home. The livability of a home is also an important consideration (e.g. house size and functionality of the floor plan). Not only is the extent of the rehabilitation a cost consideration for demolition, but also the structural soundness of a home as determined by the City’s Building Official. If deemed appropriate, the house will be demolished. Plans to develop the parcel as an infill home will commence as soon as practicable, but no more than 10 years. No more than 10% of the NSP2 funds will be used for demolition, and no public housing will be demolished. The Cities will maintain the sites in good condition until redevelopment occurs.
Project Completion Schedule
End Jul09 Metric Complete task Complete task Complete task Complete task % of Funds Expended
Milestone Create guidelines for each NSP activity Issue RFQs and retain Development Partners Submit NSP2 application Nov09 Jan10 Award NSP2 and sign HUD agreement
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Acquire, Rehab & Sell Single Family Feb10 Dec10 Homes Acquire, Rehab & Rent MultiFamily Units Acquire and Demolish Homes Provide Down Payment Loans Acquire, Rehab & Sell Single Family Jul10 May11 Homes Acquire, Rehab & Rent MultiFamily Units Acquire and Demolish Homes Provide Down Payment Loans Acquire, Rehab & Sell Single Family Dec10 Oct11 Homes Acquire, Rehab & Rent MultiFamily Units Acquire and Demolish Homes Provide Down Payment Loans Acquire, Rehab & Sell Single Family May11 Mar12 Homes Acquire, Rehab & Rent MultiFamily Units Acquire and Demolish Homes Provide Down Payment Loans
25 26 2 15 25 26 2 15 25 25 3 15 15 32 3 5
homes units homes homes homes units homes homes homes units homes homes homes units homes homes
All of the 90 homes sold under the Acquisition, Rehabilitation and ResaleSingle Family Home Program will be sold to households at or below 120% of median income. All of the 109 units rented under the Acquisition, Rehabilitation and RentalMulti Family Program will be rented to households at or below 50% of median income. All of the 50 loans under the Down Payment Assistance Program will be provided to households at or below 120% of median income. d. Continued Affordability
At minimum, the Cities will follow the specific HOME affordability and monitoring requirements as defined in 24 CFR paragraph 92. All homes using NSP2 funding will be for households at or below 120% area median income. Those households benefitting from the ARRSR program as well as the Down Payment Assistance Program will have a mandatory affordability covenant placed upon their property ensuring that they will remain affordable for a minimum of 15 years. The cloud on title will require title and escrow to notify a City any time a sale transaction or change in title occurs on an NSP assisted unit. This action will ensure all NSP housing units remain affordable for the entire period.
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Those units under the ARRMF Program will benefit households 50% area median income and below. These properties have a mandatory affordability covenant recorded on the property ensuring that they will remain affordable for a minimum of 55 years. The cloud on title will require title and escrow to notify a City any time a sale transaction or change in title occurs on an NSP assisted unit. This action will ensure all NSP housing units remain affordable for the entire period. City staff will conduct an annual evaluation to ensure compliance with the affordability covenant. e. Consultation Outreach, Communication
(1) This section requires transparency with local government. Since the City of Moreno Valley is the applicant and they are a unit of local government, they clearly meet this requirement without further action. (2) The Cities of Moreno Valley & Hemet have joined with nine (9) other Inland Empire NSP grantees to coordinate a regional marketing outreach effort for their NSP funds. This Inland Empire NSP Coalition started meeting in October 2008 to discuss “best practices” and the benefits of joining their marketing efforts. Currently, the Inland Empire NSP Coalition is developing a branding logo that will be used to certify all NSP homes that meet a list of criterion including: 1. All homes will be inspected by a City inspector 2. All homes will be sold with a one year warranty 3. All homes will be provided with home buyer assistance loans to make the payments more affordable and reach more buyers 4. All homes will have energy efficiency appliances and/or products The Inland Empire NSP Coalition will coordinate regional efforts to notify realtors, lenders, as well as community service groups about the NSP programs and certified homes available for purchase. Homebuyer Fairs and various print and video media will be used to broadcast the NSP programs throughout the Inland Empire. The Inland Empire NSP Coalition will utilize several HUD approved nonprofit counseling agencies (including two NeighborWorks organizations) to provide financial literacy and homebuyer education counseling as well as ensure that qualified families are available to purchase NSP certified homes. (3) As units of local government, the Cities of Moreno Valley & Hemet firmly believe in community awareness of its programs and projects. A City’s website is a place where residents can go to stay well informed about the City’s activities. In regards to the Neighborhood Stabilization Program, the Cities will continue to post updates about the program availability, progress and opportunities. In addition, applications, program guidelines and contact information will be posted that will enable residents to inquire and participate or log a compliant. All citizen contacts are handled promptlyusually the same
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day for simple requests and within 23 days for requests or complaints that require research or consultation with other departments. In addition to internet information, the local paper typically runs quarterly articles on the status of redevelopment projects within the Cities. City Staff also routinely solicits newspaper coverage of redevelopment programs to educate the public, advertise opportunities and communicate with residents. The Mayor and Council will receive annual updates on the status of the NSP activities. These Council meetings are publically noticed and available to observe on the local cable station. f. Performance and Monitoring
As the lead agency in the NSP2 application, the City of Moreno Valley has a HUD approved management plan from the NSP1 application and will continue to utilize that plan for NSP2 funding. Moreno Valley will utilize Disaster Recovery Grant Reporting Program (DRGR) reporting system as required by HUD to submit quarterly reports. Per regulations, all reports will be made available to the public via the city website. The reports will be added to the existing City NSP web page, which has been available since December 2008. NSP reporting duties will be assigned to 12 primary Neighborhood Preservation staff members, with the Department’s Director overseeing. Quarterly and monthly report due dates will be calendared as a means to ensure that deadlines are met. The Cities understands the essential role of monitoring Development Partners in the success of any program. Consequently, the RFQ for selecting the Cities Development Partners and resulting Development Agreement were designed to insure NSP compliance. All NSP scope of repairs, eligible activities, program guidelines and timelines are clearly outlined in the Agreement with the Development Partners. Although the Cities’ Development Partners are carefully chosen for their previous experience and capacity in the local market, the Development Agreement also dictates a quick removal of a Development Partner for lack of performance, if necessary. This motivates the Development Partners to always perform to their commitments and enables the Cities to reallocate funds to a replacement in a timely fashion, while meeting the NSP funding obligations. The Cities of Moreno Valley & Hemet take an active role in physically monitoring the rehabilitation of all units on the various NSP2 programs. A City Inspector closely scrutinizes each Development Partner’s scope of repairs as well as performs progress inspections throughout the length of the construction period. To ensure accountability and program compliance, the Development Partners must submit estimated project costs, change orders and final development costs to a City for their approval and perform to the predetermined time constraints indicated in their Development Agreement.
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The Cities also monitor the projects administratively. Project files are prepared with thorough checklists. Because of their prior experience in the previous foreclosure cycle 10 years ago, the Cities are confident on the quality of data gathering and organization in their program administration. All phases of the program are tracked in the project files: acquisition, rehabilitation, asset management, as well as disposition. This attention to administrative detail ensures that each unit has all the required agreements, forms and approvals as dictated by NSP and a City’s legal counsel.
Neighborhood Preservation will maintain a housing accomplishments spreadsheet that tracks the progress of all Moreno Valley NSP funded activities (including administration) within one report. Every quarter, the Department will use this report to conduct a sidebyside comparison of each activity’s progress. After which an evaluation will ensue to determine if a particular activity is adequately performing or if the reallocation of NSP dollars to a different activity should be considered. Another important use of this form will be to track recipients and to ensure that each activity is benefiting
The Redevelopment Manager is responsible for gathering information on a monthly basis from staff members and consultants working on the various projects. The information gathered is compiled into a report that will be submitted to the Board Members from the corresponding City. Periodically, reports will be submitted to a City Council as an information item. The information gathered will be used to input accomplishments into the Disaster Recovery Grant Reporting (DRGR) system. The City of Moreno Valley has a Senior Financial Analyst on staff within the Economic Development Department who performs consistent internal audits and monitors all grant programs. In Addition, the City's Finance Department (including the City Budget Officer – and the Financial & Administrative Services Director) conducts separate internal audits to verify proper spending while mitigating fraud and misuse. Externally, the Cities are subject to annual, third party Single Audits of which all Federal grants over $500,000 are rigorously examined. For Moreno Valley, these audits are conducted by Mayer Hoffman McCann PC, an independent CPA firm (www.mhmpc.com ). These auditors will inspect the City’s ‘Internal Controls’ and verify to the U.S. government as to the management of both financial and compliance components. The auditors produce a written report at the completion of each monitoring inspection providing a summary of findings and concerns, if any.
Factor 4 – Leveraging other Funds or Removal of substantial negative Effects The approved Development Partners under contract in the City of Hemet with the existing NSP1 program will continue to provide their own private funding for the rehabilitation portion of the NSP2 projects. Both Moreno Valley & Hemet will use their NSP1 funds and the proposed NSP2 funds for "nocost" acquisition loans in an effort to lower total project costs and thereby leverage more units. The Development Partners’ rehabilitation funds for NSP2 represent $400,000.
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The City of Hemet has committed $400,000 for home buyer assistance loans for their NSP homes. The City of Moreno Valley has committed $1.5 million in redevelopment funds to purchase multifamily units in the Target Geography. The Cities of Moreno Valley & Hemet also has an existing relationship with the National Community Stabilization Trust and is already receiving lists of foreclosed properties from them. The Cities will also participate in the REO property acquisition and leveraged financing programs offered by the National Community Stabilization Trust (Stabilization Trust). These activities are complementary and nonduplicative of the Neighborhood Stabilization activities that a City is undertaking locally. In order to participate in the financing programs offered by the Stabilization Trust, the Cities will establish a financing approach consistent with HUD NSP requirements which, through collaboration with the Stabilization Trust, will significantly leverage more private loan capital to finance the acquisition and rehabilitation of vacant and foreclosed homes than would be possible without coordination with the Stabilization Trust. Factor 5 – Energy Efficiency Improvement and Sustainable Development a. Transit The Cities of Moreno Valley and Hemet each have nine (9) bus lines that travel throughout the target area. Residents within the target areas can easily walk to a bus stop near their residence. These public transit options can easily take residents to a variety of regional employment centers for commuting purposes. See Area Transit Map below. All of the bus lines provide convenient service every 10 to 30 minutes (average <20 minutes during peak hours). In addition to bus lines, the Cities also has express bus lines that transport residents from the Target Geography to the nearby Metrolink rail station and Amtrak Train Station in the City of Riverside. As is clearly indicated from the map below, bus and rail service is available to residents within the Target Geography.
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Green building standards
The Cities of Moreno Valley & Hemet will use the housing rehabilitation standards per the requirements of the Cities’ Municipal Codes, California Health and Safety Code, the Building Code, the National Electrical Code, the Uniform Plumbing Code, the Uniform Mechanical Code, the Uniform Housing Code, and relevant sections of Title 24 that pertain to disability access. All housing rehabilitation will be required to have a permit issued and an inspection conducted by the Cities Building Division. Furthermore, as part of the Cities Development Agreement, the rehabilitation will require, where feasible, clauses for: Controlling Erosion and Sediment; providing sustainable landscaping; providing energy efficient landscaping; providing efficient irrigation; utilizing durable, heat absorbing and resource efficient materials; providing solarreflective paving, green roofing material, healthy flooring alternative materials; utilizing local source materials; providing proper sealing joints, moisture prevention tub and shower enclosures, and termiteresistant materials; and any other upgrades where viable to upgrade the rehabilitated properties to a ecologically friendly and green home standard. The inspection of the homes will be conducted to determine all deficiencies. The inspections will include analysis of any required termite repairs as well as general property improvements. The rehabilitation may include improvements for greater energy efficiency, modifications that aid the mobility of the elderly and physically disabled, and repairs that remedy existing nonconforming uses or illegal additions. The projected total amount of required rehabilitation will be determined and a written scope of repairs of required rehabilitation will be prepared. City staff will have the authority to either accept or reject the written scope of repairs and costs before rehabilitation proceeds. The Cities of Moreno Valley & Hemet will require that the rehabilitation work also include controlling or abating any lead based paint hazards present in homes built before 1978. A leadbased paint test and a risk assessment will be conducted to identify any lead based paint hazards. The standards of “LeadBased Paint Poisoning Prevention in Federally Owned and Federally Assisted Housing” found at 24 CFR Part 35 apply. The Cities will also require removal of materials containing asbestos, if necessary, as part of the rehabilitation. c. Reuse of cleared sites
NSP2 funds in Moreno Valley and Hemet will demolish housing units that are dilapidated and beyond repair, thereby removing any possible efforts by speculators to acquire and rent slum condition housing. The vacant sites will be developed into new affordable housing units within the term of the NSP2 regulations and thereby further expanding the supply of
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affordable housing. If new construction is not feasible, the site will be either sold or deeded to the neighboring property owner for their personal use or used as a community resource such as a greenway or pocket park. d. Deconstruction
As part of the City of Moreno Valley's Development Agreement, the rehabilitation will require, where feasible, clauses for proper deconstruction of properties. It is the City’s intent to conserve resources and where appropriate salvage and reuse materials from demolition activities. Factor 6 – Neighborhood Transformation and Economic Opportunity The Cities of Moreno Valley & Hemet certify that the proposed NSP2 activities are consistent 20 with the regional County of Riverside's Consolidated Plan . The Plan is guided by three overarching goals that are applied according to a community’s needs. The three detailed overarching goals are: · To provide a suitable living environment through safer, more livable neighborhoods, greater incorporation of lowerincome residents throughout Riverside County communities, increased housing opportunities, and reinvestment in deteriorating neighborhoods. · To provide decent housing by increasing the availability of affordable housing for persons of low and moderateincome, reducing discriminatory barriers, increasing the supply of supportive housing for those with special needs, and transitioning homeless persons and families into housing. · To expand economic opportunities through more jobs paying selfsufficiency wages, homeownership opportunities, development activities that promote long term community feasibility, and the empowerment of lowerincome persons to achieve selfsufficiency. The County has established the following affordable housing priorities for allocating CPD program resources: (1) Provide homeownership opportunities for firsttime homebuyers and for the low and moderateincome community; (2) Improve the conditions of substandard housing and substandard existing rental housing affordable to lowincome families; (3) Address farm worker and migrant farm worker housing needs in western Riverside County and in the Coachella Valley; (4) Expand the affordable rental housing stock for lowincome and special needs households;
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Provide shelter to the homeless; and Stabilize declining neighborhood conditions due to foreclosures.
The Cities of Moreno Valley & Hemet's NSP2 application will increase the effectiveness of this established regional Consolidated Plan by addressing four out of six affordable housing priorities.
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Disclosures · SFLLL · HUD2880 Appendicies A. Certifications B. Calculation of removal of negative effects rubric C. Summary of Citizen Comments D. Target Area Map with Foreclosure & Vacancy Index Scores E. Leveraging documentation F. Code of conduct G. Definitions of blighted structure, affordable rents and rehabilitation standards H. Documentation of firm commitment executed and dated for each forprofit partner (see Consortium Agreement)
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Appendix A – Certifications
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Appendix C – Summary of Citizen Comment No comments from the public were received
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Appendix D – Target Geography Percentage of Foreclosures Graph
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Appendix G Definitions
Blighted structure. A structure is blighted when it exhibits objectively determinable
signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare.
Low High Fair Market 50% Rent Limit 65% Rent Limit Efficiency $582 $738 $867 $582 $738 Cities of Moreno Valley & Hemet 2009 HOME Program Rents 1 Bdrm 2 Bdrm 3 Bdrm 4 Bdrm $624 $748 $865 $966 $792 $952 $1,092 $1,199 $954 $1,125 $1,583 $1,846 $624 $748 $865 $966 $792 $952 $1,092 $1,199 5 Bdrm $1,065 $1,304 $2,123 $1,065 $1,304 6 Bdrm $1,165 $1,410 $2,400 $1,165 $1,410
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Housing Rehabilitation Standards
· · Make sure they require that it be energy efficient and incorporate cost effective green improvements. See pg. 13 Green requirements.
Appendix F Code of Conduct The City of Moreno Valley can provide the City Procurement Policy upon request (23 pages) and follows the Federal Policy, 24 CFR Part 85, (11 pgs). The following language is an excerpt on procurement from our Subrecipient Agreements. 9. PROCUREMENT PRACTICES. (A) Subrecipient shall comply with procurement procedures and guidelines established by OMB Circular A110. Subrecipient shall undertake informal procurement methods for purchases or contracts that do not cost more than $25,000 in the aggregate, which call for the solicitation of written price quotations (at least 3) from an adequate number of qualified sources. Requests for Proposals shall be solicited for professional services. (B) Subrecipient agrees to adhere to conflict of interest provisions set forth in 24 CFR Part 570.611 in its expenditure of all funds received under this Agreement.
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