HomeMy WebLinkAboutIR 9136 INFORMAL REPORT TO CITY COUNCIL. MEMBERS No. 9136
To the Mayer and Members of the City Council October 27, 2009
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SUBJECT: REVISIONS TO FORT WORTH NEIGHBORHOOD STABILIZATION
DOWN PAYMENT ASSISTANCE PROGRAM GUIDELINES.
BACKGROUND
On November 11, 2408 City Council, through M&C G-16358, approved staffs recommendation of
the Plan for Use of Neighborhood Stabilization Program Grant Funds from the United States
Department of Housing and Urban Development ("HUD") in the amount of$6,307,433.00.
On January 15, 2009 HUD approved the City's Substantial Amendment to the FY 2408 Action
Plan which proposed to provide a down payment assistance program offering eligible buyers
earning up to one hundred-twenty percent (120%) of the Area Median Family Income (AMFI) the
opportunity to purchase lender-foreclosed properties. At least twenty-five percent (25%) of loans
must be made to households earning less than fifty percent (50%) of the Area Median Income.
The assistance provides homebuyers with a subordinate deferred-payment loan in the amount of
twenty-five thousand dollars ($25,000.00) for closing costs up to five thousand dollars
($5,000.00), Minimum Acceptable Building Standard (MABS) repairs up to five thousand dollars
($5,000.00) and the balance utilized for principal reduction. An affordability period of ten years
accompanies the zero-interest, zero-payment loans. Through the DPAP, the CFW anticipated
that at least 222 homes will be owner-occupied to assist with the stabilization of neighborhoods.
On March 31, 2009 the City entered into a Grant Agreement with HUD to implement the Fort
Worth Neighborhood Stabilization Down Payment Assistance Program ("the Program"). The
Agreement has an eighteen-month term.
PROGRAM STATUS
The Program was launched on April 27, 2009. In the four months ending September 30, 2449,
twenty-six (26) loans have been closed and preliminary conditional commitment of funds have
been made to an additional fourteen (14) potential homebuyers. To date, a total of $1.0 million of
the $5.5 million available loan funds have been funded or committed. Twenty-six formerly
foreclosed-upon houses are now owner-occupied and helping to stabilize the neighborhoods in
which they are located. To date, the Program has provided or committed to assistance to homes
located in Council Districts 2, 4, 5, 6, and 7.
PROGRAM REVISIONS
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In the raourse of working with the Program partners, which include real estate professionals,
lenders, appraisers and title agencies, staff is recommending a series of revisions to the Program
I guidelines to befter align with HUD's emerging guidelines and with market practices. These
revisions are being instituted administratively by staff and require no action by the City Council.
The recommended revisions include:
1 d Zip Code 76244 and delete zip code 76248 consistent with changes made y the U
3. Postal Service, The original zip co-ale extended be, n1 d the City Fort Worth into; �
/ Keller. The new dip code now encompasses only properties located in the City,
ISSUED Y THE l Ali WORTH, TEXAS
INFORMAL REPORT T4 CITY COUNCIL MEMBERS No. 9136
To the Mayor and Members of the City Council October 27, 2009
Page 2 of 2
SUBJECT: REVISIONS TO FORT WORTH NEIGHBORHOOD STABILIZATION
,,,s DOWN PAYMENT ASSISTANCE PROGRAM GUIDELINES.
2. Add "properties must be vacant at the time of purchase offer and remain vacant"
through the closing of the mortgage loan. This avoids the displacement of families living in
the property.
3. Revise the NSP-required purchase price discount to one percent (1%) from fifteen
percent (15%) for consistency with HUD's June 15, 2009 guidance.
4. Revise the calculation for maximum Program combined loan-to-value to exclude the
portion of the funds allocated for closing costs and for MARS-required repairs. These
components do not impact the property's value.
5. Allow sixty (60) days for processing in order to provide adequate time for requisite
property inspections, the City-ordered appraisal as required by HUD, the Environmental
Review and the Program-required lender document submissions. This will also assist in
lenders setting realistic purchase contract closing dates that are consistent with required
processing times. A process timeline has been added.
6. Allow certain borrower-made MARS repairs with City approval and final inspection
when indicated scope of work is nominal and the repairs can be accomplished without a
contractor.
If you have any questions regarding the changes being implemented in this program, please
contact Jay Chapa, Housing & Economic Development Director.
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Dale A. Fisseler, P.E.
City Manager
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