City of Alexandria, Virginia
________________
MEMORANDUM
DATE: SEPTEMBER 18, 2013
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: RASHAD M. YOUNG, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of a Budget Transfer to Allocate up to $452,000 in Federal Home Investment Partnerships Program (HOME) Monies (Including Local Match) to Rebuilding Together Alexandria.
BODY
_________________________________________________________________
ISSUE: Maximizing the use of available federal affordable housing funds.
RECOMMENDATION: That City Council, as a backup contingency plan to the recently approved loan of $1.078 million to the Wesley Housing Development Corporation for the renovation of the Lynhaven Apartments:
(1) Approve the transfer of $452,000 in federal HOME and matching funds from the Housing Opportunities Fund to the Alexandria Neighborhood Stabilization Program, and
(2) Authorize the City Manager, contingent upon the conditions described in this memorandum, to execute an amendment to an existing agreement with Rebuilding Together Alexandria (RTA) to provide an additional $452,000 in HOME and matching funds with the net proceeds to be returned to the Housing Opportunities Fund.
This transfer is being requested at this time as a backup plan to meet an upcoming HUD funding commitment deadline of September 30 under the federal HOME Program.
DISCUSSION: In February (Attachment), City Council allocated a total of $1 million ($500,000 in federal HOME funds and $500,000 in Community Development Block Grant (CDBG) funds) to RTA to continue the City's highly successful Neighborhood Stabilization Program (NSP), which utilized federal funds allocated through the Virginia Department of Housing and Community Development. Through this allocation, the City created the ANSP and RTA expanded its role in the program to include:
1. Acquiring and holding eligible properties in addition to completing the rehabilitation activities,
2. Purchasing eligible properties throughout the City, rather than operating on a target area basis, and
3. Organizing homebuyer training classes in collaboration with the City and assisting the City in conducting outreach and marketing units for resale.
During the first six months of operation of Alexandria's NSP, which RTA calls "A Home of Their Own", RTA and City staff inspected 16 foreclosed or short sale units throughout the City. RTA has successfully acquired and renovated three units, two of which have been resold to lower-income first-time homebuyers, with the remaining one under contract and expected to be resold no later than October. RTA has expended $462,480 in federal funds in completing these three transactions. The net proceeds from the sale of these three CDBG-assisted units (an estimated $410,000) will be returned to the City upon resale to fund the Home Rehabilitation Loan Program administered by the Office of Housing.
The HOME Program funding totaling $500,000 was allocated for the same purpose, and will remain available to RTA as a source of revolving funds to support the organization's future Alexandria's NSP acquisitions. The allocation of $452,000 in additional HOME and local matching monies proposed here will supplement the earlier HOME allocation, but will be returned to the City upon resale of the unit, rather than being retained by RTA for future acquisitions. These funds are intended to be used as a source of supplemental funding for RTA to acquire properties when all other Alexandria NSP funds are encumbered for units that RTA has acquired or is acquiring, and that have not yet generated proceeds from resale to an assisted homebuyer. Based on Alexandria's NSP program activity to date, it is estimated that these funds will allow RTA to acquire, rehabilitate and resell two properties to lower income, first-time homebuyers.
If approved, the recommended funds will be committed to RTA only if the City does not receive a waiver requested from HUD needed to allow the $1.078 million allocation approved by Council on September 10 for the Wesley Housing Development Corporation's Lynhaven Apartments project to be committed by September 30. The waiver was requested due to a recent sudden change in HUD HOME regulations in regard to obligating funds by the September 30 end of the federal fiscal year. If that waiver is not granted, the commitment of these funds to RTA will avoid their recapture by HUD. If the HUD waiver is granted and the Lynhaven loan committed, the RTA funds will not be committed.
FISCAL IMPACT: Allocation of $452,000 in HOME Housing Opportunities Fund monies ($361,000 in HOME funds and $91,000 in local match from the Housing Trust Fund) to RTA. After this allocation and the prior City Council action on the Lynhaven project the HOME portion of the Housing Opportunities Fund has an unreserved balance of $129,000.
ATTACHMENT:
February 23, 2013 Docket Item
STAFF:
Mark Jinks, Deputy City Manager
Mildrilyn Davis, Director, Office of Housing
Helen McIlvaine, Deputy Director, Office of Housing
Shane Cochran, Program Implementation Division Chief, Office of Housing