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STOP SIX MODEL BLOCK PROGRAM

By the

Housing and Economic Development Department

January 5, 2011

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Purpose of the Presentation

• Review of the Stop Six Model Block Program Funding

• Review the spending options available– Continuation of Home Improvement Program– Existing Home Selection for Acquisition,

Rehab, and Resale– Demolition of Selected Homes

• Timeline for Decision Making

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Stop Six Model Block Budget and Expenditure Summary

Activity Appropriation Spent Balance Source

Minor Home Repair

$50,310.22 $23,285.22 $27,025.00 CDBG (2005)

Acquisition /Rehab/Resale

$563,614.67 0 $563,614.67 CDBG HOME (2005)*

Sign Markers $ 45,200.00 $2,000.00 $43.200.00 CDBG (2005)

Home Improvement Program

$540,875.11 $331,088.80 $207,786.31 HOME (2004- 2005) *

UDAG

Total $1,200,000.00 $356,374.02 $841,625.98

*HOME Funds must be spent by September 2011

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Spending Options

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Homeowner Improvement Program

• $207,786.31 Available • Basic requirements as the program currently exists:

– Total Household Income must be at 80% or less than the Area Median Income– There is a current maximum of $33,500 assistance per house– House must be Owner Occupied– Payback within 10 Years

• In order to accommodate some of the homes that need repairs in excess of those outlined in the Minor Home Repair program, the maximum amount of the loan may be increased over the current limit of $33,500

– However, this will likely increase the federal affordability requirement associated with the Home Improvement Program to greater than 15 years.

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Home Improvement ProgramActivity Appropriation Spent Balance Source

Home Improvement Program

$461,116.21 $333,088.80 $128,207.41 HOME

Home Improvement Program

$79,758.90 $0 $79,758.90 UDAG

Total $540,875.11 $333,088.80 $207,786.31

Expenditure Detail

Address: Status Total:2516 Walker Street Complete 15,920.30$ 2624 Lena Street Complete 39,486.00$ 2512 Birdell Complete 35,387.00$ 3704 Stalcup Complete 39,057.83$ 5137 Anderson Street Complete 31,186.81$ 5124 Anderson Street Complete 36,367.51$ 5128 Anderson Street Complete 38,937.25$ 2709 Lena Street Complete 39,505.00$ 2613 Lena Street Complete 39,841.40$ 2516 Walker Street Complete 17,399.70$

333,088.80$

*Source of Funds: 2005 HOME

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HIP Program Guidelines

• at 80% of AMI• Max of $33,500 assistance• Owner Occupied• Payback within 10 Years• Owner must maintain escrow account for insurance and taxes

Loan Repayment/Deferment Schedule

% of Median Income To Be Repaid To Be a DPL*

0% to 30% 0% 100%31% to 40% 20% 80%41% to 50% 30% 70%51% to 60% 45% 55%61% to 70% 55% 45%71% to 80% 75% 25%

*Deferred Payment Loan*Loans are 0% Interest and on a 120 month term

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HIP Program Ineligible Activities

• New construction, replacement, or the completion of unfinished spaces not required to meet Housing Quality Standards (HQS).

• Materials, fixtures, equipment or landscaping of a type of quality which exceeds that customarily used for surrounding properties of the same general type to be rehabilitated.

• Acquisition of land.• Refinancing or repayment of existing debt

against the property or the applicant.

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HIP Program Ineligible Activities, continued

• Repairs to mobile homes or manufactured homes, if the property is not taxable as real estate of attached to a permanent foundation

• Cost of repairs incurred prior to the execution date of the assisted contract or not included in the signed contract.

• Additional items that are ineligible:

Barbeque Pit Sidewalk Patio Deck

Fireplaces Sprinkler Systems

Swimming Pool Storage Sheds

Flower Box Greenhouse Kennel Outdoor Fireplace

Tools Waterproofing Sauna Satellite Dish

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Homeowner Improvement Program

• $207,786.31 Available • Options

(1) Increase Maximum AssistanceIf the current HIP Program maximum assistance level is adjusted to allow increased loan amounts of up to $50,000, up to 4 residences may be eligible assistance.

• increase affordability period• Timing

(2) Leave Maximum Assistance at $33,500• Timing

(3) Move all available funding to a new activity

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Acquisition, Rehab, and Resale

• $563,614.67 available funding• Funds could also be used for the acquisition of lots.

– Existing structures on these lots could then be rehabilitated– Vacant lots could be used for new construction of affordable

houses– Existing structures on these lots could be demolished where

needed.– Whether the houses are rehabilitated, demolished, or contain

new construction, the lots may then be resold.

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5115 Draper

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5200 Cottey

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2508 Dillard

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Acquisition, Rehab, and Resale

• $563,614.67 available funding– approximately $100,000- $120,000 per

house for new construction– Rehab is limited to $40,000-$50,000

• Options(1)Acquire lots and construct or rehab

- approximately 4 or 5 new construction

(2)Move funding to different activity

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Demolition

• No specific funding identified, however can move CDBG funds to this activity

• Option– Demo all or some city owned vacant

properties that cost more than $40,000 to rehab

– Demo houses on city owned lots only for new construction

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Acquisition, Rehab, and Resale and Demo Example

10 Houses identified for Demolition=Depending on the project, demolition

could cost $8,000 per unit for a total of $80,000.

This leaves $760K for new construction=About 6 new houses

Total Houses Demolished= 10 Total New Houses Built= 6

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Timeline

• Next Meeting on January 19th

– Make decision on activities to be funded and amount of funding

• Begin Federal Process to spend funds within time allowed

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MODEL BLOCKS PROGRAM

Housing and Economic Development Department

January 5, 2011

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Stop Six Minor Home Repair Program –

Expenditure Detail

Address: Status Total:2517 Village Creek Road Complete 4,000.00$ 5136 Sears Drive Complete 4,000.00$ 5233 E. Berry Street Complete 3,669.87$ 5116 Anderson Street Complete 3,640.35$ 5113 Cottey Street Complete 4,000.00$ 5245 E. Berry Street Complete 3,975.00$

23,285.22$

*Source of Funds: 2005 CDBG

Activity Appropriation Spent Balance Source

Minor Home Repair

$50,310.22 $23,285.22 $27,025.00 CDBG (2005)

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Stop Six Neighborhood Signs/Markers

*Neighborhood Signs were ruled ineligible CDBG expenditures

Activity Appropriation Spent Balance Source

Sign Markers $ 45,200.00 $2,000.00 $43,200.00 CDBG (2005)

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Stop Six Acquisition /Rehab/Resale – 2005 HOME & CDBG Funds

Activity Appropriation Spent Balance Source

Acquisition /Rehab/Resale

$332,689.78 0 $332,689.78 CDBG (2005)

Acquisition /Rehab/Resale

$196,124.89 0 $196,124.89 HOME (2005)

Acquisition /Rehab/Resale

$9,800 0 $9,800.00 HOME (2004)

Acquisition /Rehab/Resale

$25,000.00 0 $25,000.00 HOME (2004)

Total $563,614.67 0 $563,614.67