HomeMy WebLinkAbout(0046) M&C 21-0894City of Fort Worth, Texas
Mayor and Council Communication
DATE: 11/30/21 M&C FILE NUMBER: M&C 21-0894
LOG NAME: 19POLYTECHNIC NEIGHBORHOOD INFILL
SUBJECT
(CD 8) Authorize Expenditure of HOME Investment Partnerships Program Grant Funds in the Aggregate Amount of $574,353.00 to Development
Corporation of Tarrant County, a Certified Community Housing Development Organization, in the Form of Subordinate Forgivable Loans for
Development of Four Single Family Houses in the Polytechnic Neighborhood, Authorize Execution of Related Documents, and Find that the
Expenditure Serves a Public Purpose and that Adequate Controls are in Place
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager, or his designee, to substitute current and prior funding years in order to meet commitment, disbursement and
expenditure deadlines for grants from the United States Department of Housing and Urban Development;
2. Authorize the expenditure of $574,353.00 in HOME Investment Partnership Program Grant Funds to Development Corporation of Tarrant
County in the form of Subordinate Forgivable Loans for the development of the Polytechnic Neighborhood Single Family Infill Development, a
development of up to four houses located on Avenues G and J, as well as Wallace Street;
3. Authorize the City Manager, or his designee, to execute contracts with Development Corporation of Tarrant County in the total aggregate
amount of $574,353.00 for the construction and completion of the project for a term beginning on the dates of execution of the contracts and
ending three years from the date of execution;
4. Authorize the City Manager, or his designee, to execute all related contracts or other documents necessary for lending activities;
5. Authorize the City Manager, or his designee, to extend the contract for the HOME funds for two one-year extensions if such extensions are
necessary for completion of the development, and to extend the other contracts for lending activities as necessary for completion of the
development; and
6. Authorize the City Manager, or his designee, to amend the contract if necessary to achieve project goals provided that the amendment is
within scope of the project and in compliance with City policies and applicable laws and regulations governing the use of federal grant funds;
and
7. Find that the expenditure of funds serves the vital public purpose of providing quality, affordable housing for residents of the City and that the
contracts and other loan documents provide adequate controls to ensure the public purpose is fulfilled.
DISCUSSION:
On August 4, 2020, the City Council approved the City's 2020-2021 Action Plan for submission to the United States Housing and Urban
Development Department (HUD), which included $574,353.00 in HOME Investment Partnerships Program (HOME) grant funds to Development
Corporation of Tarrant County (DCTC) for the Polytechnic Neighborhood Single Family Infill Development Mayor and Council
Communication (M&C 20-0497). HUD requires the City of Fort Worth (City) to set aside 15 percent of its allocation of HOME funds for Community
Development Housing Organizations (CHDO) activities. DCTC is an experienced single family affordable housing developer and certified by the
City as a CHDO.
DCTC plans to develop four approximately 1,700 square foot, three -bedroom, two -bath, two -car garage single family houses in the Polytechnic
neighborhood. The houses will be sold to individuals or families that earn 80 percent or less of the Area Median Income as determined by the U.S.
Department of Housing and Urban Development (HUD). Buyers must meet all HOME program requirements, including applying for and receiving
at least $1,000.00 in down payment and/or closing cost assistance from the City's Homebuyer Assistance Program (HAP) and occupying the
houses as their primary residences for the designated affordability period.
Staff recommends execution of contracts for four subordinate forgivable loans of CHDO HOME funds in the aggregate amount of $574,353.00
with Development Corporation of Tarrant County, for the development of the Polytechnic Neighborhood Single Family Infill Development based on
the following terms and conditions:
HOME Contract and HOME Loan Terms.
1. Construction must begin within six months of date of Contract execution;
2. Loan term to commence on execution of the loan documents;
3. Three year term for HOME contract and HOME loan;
4. First lien commercial construction loan terms must be acceptable to City;
5. HOME loan will be subordinate only to first lien commercial construction loan;
6. Borrower's performance of the terms of the HOME contract and HOME loan will be secured by a deed of trust;
7. Payment of HOME loan will only be required if Borrower fails to fulfill the HOME requirements in the contract and the terms of the HOME loan;
8. DCTC will be paid a 15 percent developer fee and will retain the net sales proceeds from the houses to be used to construct at least one
additional affordable house to be sold to a HOME -eligible buyer; and,
9. Houses must be sold to HOME -eligible buyers who qualify for a HAP loan of at least $1,000.00.
The expenditure of HOME fund is conditioned upon the following:
1. Satisfactory underwriting in accordance with federal guidance for use of HOME funds and City policies for funding of HOME units;
2. Satisfactory completion of an environmental review, pursuant to 24 CFR Part 58;
3. Receipt of authorization to use grant funds from HUD; and,
4. Closing on all other financing for the project.
By approval of this M&C, the City Council finds that the public purpose served by this project is to benefit low -to -moderate -income residents by
providing them with quality, affordable housing, and that the contract and loan documents are adequate controls to ensure the public purpose is
fulfilled. This project will assist the City in meeting its CHDO commitment and expenditure goals with HUD. A public comment period on the use of
these HOME funds was held from July 1, 2020 to July 31, 2020. Any comments are maintained by the Neighborhood Services Department in
accordance with federal regulations. The Action Plan funding year may vary and be substituted in order to expend the oldest grant funds first.
This project is located in COUNCIL DISTRICT 8
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and execution of the agreement, funds will be available in the
current operating budget, as appropriated, of the Grants Operating Federal Fund. This is a reimbursement grant. The Neighborhood Services
Department is responsible for requesting all reimbursements and will verify funding availability prior to incurring any expense.
Submitted for City Manager's Office by. Fernando Costa 6122
Originating Business Unit Head: Victor Turner 8187
Additional Information Contact: Chad Laroque 2661
Justin McLaughlin 7369