HomeMy WebLinkAboutIR 8843INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8843
To the Mayor and Members of the City Council Date: May 22, 2007
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SUBJECT: HOUSING TRUST FUND UPDATE
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The purpose of this Informal Report (IR) is to provide the City Council an update on the proposed
Fort Worth Housing Trust Fund ( FWHTF). The City Council has endorsed the establishment of a
Housing Trust Fund to support the City's strategies for neighborhood revitalization, quality affordable
housing, and mixed- income projects.
At the April 10th, 2007, Pre - Council meeting, the Mayor's Advisory Task Force on Quality Affordable
Housing presented its recommendations for the purpose, eligible uses and administration of the
FWHTF. The FWHTF will provide a permanent and annually renewable source of revenue to meet,
in part, the needs of the City's very low, low and moderate income households through a combination
of funds. The FWHTF will provide mixed income projects and disperse affordable housing projects
throughout the City. It will preserve and maintain ownership of rental housing units which are
affordable to very low and low to moderate income households. This will foster and encourage the
private sector to join with the public sector to leverage the City's funds. In the evaluation of
development proposals, the ability to leverage funds will be a determining factor.
Source of Funds
An initial investment of $2.0 million in General Funds will be leveraged with federal HOME grant
funds and Community Development Block Grant Funds. When General Funds are utilized, they will
be enhanced through interest bearing loans and leveraging from the private sector. In particular, they
will address populations and uses for which federal grant funds would not be used. These uses include
serving households earning between 81% and 120% of the area median income (AMI) to achieve
mixed - income objectives. The 120% AMI is a cap, not a target.
First -year sources are:
FWHFC Endowment $4.0 million (restricted)
Loan Funds:
General Funds $2.0 million
HOME Grant Funds $1.750 million
Community Development Block Grant (CDBG) $ 650,000
Interest earned from investment of the endowment fund and lending activities utilizing General Funds
will generate additional lending capital for the FWHTF. Leveraging of the City's investment is a
priority for the fund, especially a sustainable and dedicated source to address the estimated $1.8
billion need for affordable housing as identified by the Mayor's Advisory Task Force on Quality
Affordable Housing. Private sector lending will further leverage the gap financing and guaranties
provided by the FWHTF loans to homeowners and housing developers and builders.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8843
To the Mayor and Members of the City Council Date: May 22, 2007
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r SUBJECT: HOUSING TRUST FUND UPDATE
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Use of Funds
The FWHTF will address the preservation of housing units for homeowners and for renters, and
encourage new construction that promotes mixed - income communities. Permanent supportive
housing and transitional housing for homeless populations with special needs are included in the
priority uses for the fund. Allocations will be in the form of loans, grants, or guaranties. The first -
year targets for allocation by household income are: Households earning less than 30% AMI - 25 %;
households earning between 30% and 50% AMI - 20 %, and households earning 50% to 80% AMI -
50 %.
The first -year use of funds is as follows:
Rehabilitation:
Owner rehabilitation to 120% AMI $1,716,000
Rental rehab project gap financing to 80% AMI $ 572,000
New Construction
Single family infill projects to 120% AM1 $ 792,000
Multi - family project gap financing to 60% AMI $ 440,000
Housing for the homeless $ 572,000
Administration $ 308,000
$4,400,000
Administration
The Task Force recommended that the City enter into a contractual agreement with the Fort Worth
Housing Finance Corporation ( FWHFC) to administer the trust fund. The FWHFC Board of Directors
would be the governing body and would adopt an Annual Plan describing the source and use of trust
fund activities for the upcoming year. Quarterly reports will be developed to describe the progress in
leveraging and lending against performance goals. No more than 10% of the annual budget of the trust
fund will be expended on administrative costs.
The first year (5 %) administrative budget is:
Planning & Administration $ 75,000
Legal, accounting, and professional services $125,000
Outreach and Education $108,000
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 8843
To the Mayor and Members of the City Council Date: May 22, 2007
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• SUBJECT: HOUSING TRUST FUND UPDATE
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An M &C will be prepared for Council consideration of the following:
Designation and allocation of $2,000,000 in Unrestricted Undesignated Retained Earnings
in General Fund for the purpose of establishing a loan fund benefiting low to moderate
income households; and
Allocation of $1,750,000 in HOME funds to the FWHTF; and
Allocation of $650,000 in Community Development Block Grant funds to the FWHTF
Recommendations related to future funding requests will be coordinated with the budget process.
Charles R. Boswell
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS