O-2002-2599 - Laserfiche WebLink

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REQU*r FOR CITY COUNCIL AGODA ITEM Agenda Date Requested: December 9. 2002 Requested By: Doug Kneuaaer/Gwen Goodwin Department: Planning Report: Resolution: Ordinance: X Consider possible action regarding three ordinances in association with the Harris County Office of Economic Development Grant: Exhibits Annronriation Source of Finds: Northside Neighborhood Account Number: 15-9892-859-1100 Amount Budgeted: $120,000 Amount Requested: $110,000 Budgeted Item: © NO SUMMARY & RECOMMENDATION In March 2002, Council member James Warren submitted an application to the Office of Housing and Economic Development (formerly Harris County Community Development) for US Department of Housing and Urban Development's (HUD) HOME program funds. The application described a program that culminates with 11 new homes in the Northside neighborhood. Two "model" homes will be built initially to garner interest; nine additional homes will be built as qualified homebuyers are identified. In addition, all 11 qualified homebuyers will receive down payment assistance. On May 2, 2002, the City received a conditional award letter indicating that the application was approved for $350,000 in HOME funds. On May 14, 2002, the City conditionally accepted the award. Pending City Council's approval, the City also agreed to meet the 25% matching fund requirement of $87,500. This totals $437,500 in HOME program funds. The Office of Housing and Economic Development (OHED) structured the grant into two contracts: Contract #1 is for $181,900. Contract #1 pays for the construction of two "model" homes built on 4 lots. The City is required to competitively bid the construction of these 2 homes. The cost (approximately $12,000) of securing the four lots, (2 building sites), is a grant eligible cost that will be deducted from the City's $87,500 match. Once constructed, these homes will be the OHED's property until they are sold as a part of Contract #2. Contract #2 provides a budget of $243,600: approximately $168,100 from the OHED and roughly $75,500 from the City's match. Approximately $22,145 in down payment and closing costs assistance is available for each of the 11 qualified homebuyers. (This includes the 2 houses described in Contract #1.) In this phase, the builder, (selected by competitive bid in Contract #1), will secure financing for the acquisition of lots and construction of 9 homes. The down payment assistance and closing costs will be paid to the builder at closing. Council is asked to consider an ordinance authorizing an agreement between the City of La Porte and OHED on behalf of the US Dept. HUD. Contracts 41 & 2 are shown in Exhibit A. Because the City does not have the staff resources to administer this type of grant, we are requesting Council approval to retain the services of Southeast Texas Housing Finance Corporation (SETH) and Sheila Frye and Associates. SETH will administer the Program on behalf of the City for a fee of $17,500. This includes marketing, reviewing applications, maintaining pertinent files, serving as liaison with the builder, lender, OHED and other parties. Frye and Associates will provide marketing, homebuyer's education, and pre -qualification for a fee of $5,000. Their responsibilities are described in their respective "Letters of Agreement". Council is asked to consider an ordinance authorizing agreements between the City, SETH, and Sheila Frye and Associates for administrative services. The fees for SETH and Sheila Frye and Associates will be a cost to the City in addition to the $87,500 grant match. The proposed funds for this grant are funds previously budgeted for implementation of the Northside Neighborhood Plan: $100,000 budgeted in FY 01 20,000 budgeted in FY 02 $120,000 Total