SR-407-003-21 (3)~_ . .
~ ~;ty af City Council Report
Santa Monica~
City Council Meeting: May 9, 2006
Agenda Item: ~~
To: Mayor and City Council
From: Jeff Mathieu, Director Resource Management Department
Subject: Grant Funding from the California BEGIN Program for the Proposed
Affordable Home Ownership Development at 1943-59 High Place
Recommended Action
It is recommended that the City Council
1. Adopt the attached resolution authorizing the City Manager to apply for
approximately $1,350,000 in Building Equity and Growth in Neighborhoods
(BEGIN) program funds from the State of California,
2. Upon award authorize the City Manager to enter into a grant agreement with the
State and approve all other documents necessary to obtain these funds for the
proposed Community Corporation of Santa Monica home ownership
development at 1943-59 High Place and make budget changes identified in the
Budget/Financial impact section.
Executive Summary
The Community Corporation of Santa Monica (CCSM) will develop approximately forty-
five units of affordable home ownership in the next two to four years at 1943-59 High
Place. The financing for the development is anticipated to be a combination of Housing
Trust Funds, individual homeowner-obtained financing, and State of California home
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ownership subsidies. The state BEGIN program provides mortgage assistance funds to
cities for eligible developments like 1943-59 High Place. Grant applications for BEGIN
funds for this round must be submitted by May 16, 2006.
Discussion
The BEGIN Program is a California Department of Housing and Community
Development program designed to foster partnerships between local jurisdictions and
housing developers to reduce cost and increase the supply of new home ownership
opportunities for low and moderate income households. The current BEGIN Notice of
Availability of Funds provides $27 million in Proposition 46 funds to cities and counties
for mortgage assistance funds for eligible developments.
Previous Council Action
At the October 25, 2005 meeting, City Council and the Redevelopment Agency
approved the proposed concept of an affordable homeownership development of
approximately forty units to be developed by CCSM at 1943-59 High Place.
The anticipated financing of the development includes a City subsidy for the land, down
payments and private mortgage funds obtained by the buyers, and, if the BEGIN Grant
is approved, a State subsidy of up to $30,000 per unit in the form of mortgage
assistance loans to the buyers through the BEGIN Program. The BEGIN assistance to
the buyer will be in the form of a deferred payment loan with a thirty year term and 1%
to 3°lo deferred simple interest.
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Commission Acti
The Housing Commission, at their April 20, 2006 meeting, unanimously recommended
that the City Council authorize the City Manager to apply for and accept BEGIN
Program funds to assist the proposed 1943-59 High Place development.
Budget/Financial Impact
City/Redevelopment Agency financial assistance to this proposed development will be
provided by one or more of the available housing trust funds for affordable housing. By
the City obtaining BEGIN program funds, the City's overall subsidy to the development
would be reduced by up to $30,000 per unit or approximately $1,350,000. Upon award
and acceptance of Grant, revenues will be increased by $1,350,000 and expenditures
appropriated by the same amount.
Prepared by:
Bob Moncrief, Housing Manager
Attachment A: BEGIN Grant Program Resolution
Approved:
Forwarded to Council:
;
.
Jeff Mat , ie P, k
Director;` R source Management O~t~
Departr~e t
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