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CITY COUNCIL AGENDA ITEM NO. 13

Meeting Date: January 24, 2006

Subject/Title: Approve a Resolution to adopt the First Time Homebuyer Programs Administrative Manual and authorize the City Manager, Housing Manager or either manager's designee to employ the Administrative Manual for all programs administered by the City of Brentwood Housing Division

Prepared by: Kwame P. Reed, Senior Housing Analyst

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve a Resolution to adopt the First Time Homebuyer Programs Administrative Manual and authorize the City Manager, Housing Manager or either manager's designee to employ the Administrative Manual for all programs administered by the City of Brentwood Housing Division.

PREVIOUS ACTION
Ordinance 790 was adopted by the City Council on January 11, 2005 amending the City of Brentwood’s Affordable Housing Program. Ordinance 790 broadened the affordability range to include Moderate-income households along with Very-low and Low-income households as eligible households in the Affordable Housing Program.

On June 14, 2005 the City Council approved a Resolution adopting the 2005/06-2006/07 Operating Budget for the City of Brentwood. This budget allows for the funds to be available for the various loan products that are part of the First Time Homebuyers Program.

On July 26, 2005, the City Council adopted a Resolution approving the First Time Homebuyer Assistance Program and Implementing Loan Documents.

BACKGROUND
The City of Brentwood adopted a new Affordable Housing Ordinance 790 on January 11, 2005, which included an option to contribute to the City’s First Time Homebuyer Program instead of providing moderate-income units on-site. In order to efficiently and effectively use this fund to benefit very low, low and moderate income households, the City of Brentwood commissioned Seifel Consulting Inc. (SCI) to assist in the design of a First Time Homebuyer Assistance Program for the City, which is composed of three programs designed to serve various homebuyers throughout the City.

Due to the complexity and nature of the programs, City staff along with SCI have created an administrative manual that provides direction for the City’s assistance programs and Affordable Housing Program. The purpose for the manual is to provide literature to families, individuals and lenders that may want to participate in the City of Brentwood’s First Time Homebuyers Program or Affordable Housing Program. The manual will also provide City staff and lenders a framework to apply consistent and fair procedures to potential homebuyers.

SCI’s first step was to get an understanding of the current process and procedures that the Housing Division utilizes in taking a family from the waiting list to homeownership. Since the creation of the Affordable Housing Program in 2003, the Housing Division has provided homes for 27 families. Over that period of time the Housing staff has adapted the procedures to make the process easier for those who are involved including staff, lenders, developers and most important, the families. Next, SCI canvassed the best practices of similar programs in comparable California cities, speaking with program administrators, lenders and experts in the field.

SCI then developed procedures for the administration of the loan assistance programs. The initial concept was presented to staff with the recommendation that the program’s mortgage and finance component be administered by a list of preferred lenders. The list of lenders proposed by SCI were all “institutional lenders” that have a strong history of working with other affordable housing programs within the region. Staff intends on reviewing and possibly expanding the list of preferred lenders at a future date. The lenders are:

• Bank of America
• Citibank/Citimortgage
• Washington Mutual
• Wells Fargo Bank

SCI conducted a number of lender training meetings that not only provided training for the lenders about the City of Brentwood’s program, but also provided an opportunity for those lenders to provide feedback on streamlining the proposed programs and procedures.

The manual also provides step-by-step guidelines for all aspects of the program, including those procedures required by potential homebuyers, City staff and preferred lenders from start to finish. An overview of this process is outlined in the First Time Homebuyer Program Process Chart. One significant change to the City’s home buying process is the addition of a second mandatory homebuyer class. The City Council’s direction to the Housing Division to provide as much homebuyer education as possible will be officially implemented with the manual. Every homebuyer that is a participant in the City’s program will attend a First Time Homebuyer Training Program offered by Pacific Communities Services Inc. This class is free to potential homebuyers and teaches them about the importance of understanding the mortgage process as well as what it means to be a homeowner.

All proposed changes to the preferred lender list or any substantive changes to the Administrative Manual will be presented to the Housing Subcommittee for authorization.

RECOMMENDATION
At their November 17, 2005 meeting, the Housing Subcommittee directed staff to bring forward the First Time Homebuyer Programs Administrative Procedures manual.

FISCAL IMPACT
The fiscal impact associated with the approval of the manual was approved on June 14, 2005 by way of Resolution 2005-143 adopting the 2005/06-2006/07 Operating Budget for the City of Brentwood. This budget allows for the funds to be available for the various loans products that are part of the First Time Homebuyers Program.

Attachments
Resolution
First Time Homebuyer Programs Administrative Manual

CITY COUNCIL RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A FIRST TIME HOMEBUYER PROGRAMS ADMINISTRATIVE PROCEDURES MANUAL AND AUTHORIZING THE CITY MANAGER, HOUSING MANAGER AND THEIR DESIGNEES TO EMPLOY THE ADMINISTRATIVE PROCEDURES MANUAL IN THE IMPLEMENTATION OF THE AFFORDABLE HOUSING PROGRAM AND LOAN PROGRAM
WHEREAS, on January 11, 2005, the City of Brentwood adopted an Affordable Housing Ordinance amending Chapter 17.725 of the Brentwood Municipal Code, which ordinance amended the City's Affordable Housing Program and included an option to contribute to the City's First Time Homebuyer Program instead of providing moderate income units on-site; and
WHEREAS, in order to implement the First Time Homebuyer component of the Affordable Housing Ordinance, on July 26, 2005, the City Council adopted a First Time Homebuyer Assistance Program (the "Loan Program") to provide loans to first time homebuyers purchasing market rate homes and homes through the City's Affordable Housing Program. In addition, the City Council approved the form of First Time Homebuyer loan documents and authorized the implementation of the Loan Program; and
WHEREAS, Seifel Consulting Inc. and City staff have worked to design and draft a First Time Homebuyer Programs Administrative Procedures manual (the "Administrative Manual") that describes the procedures necessary to implement the Loan Program, as well as the Affordable Housing Program in general, and includes Affordable Housing and Loan Program documents, including program and loan applications and the already-approved loan documents; and
WHEREAS, the purpose of the Administrative Manual is to provide uniform procedures and documents for use by Housing staff and the public and to ensure consistency and clarity in the implementation of the Affordable Housing and Loan Programs.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BRENTWOOD DOES HEREBY RESOLVE AS FOLLOWS:
1. The Administrative Manual is hereby approved.
2. The City Manager, Housing Manager or either manager's designee is hereby authorized to employ the Administrative Manual in the implementation of the Affordable Housing Program and Loan Program.
PASSED AND ADOPTED this 24th day of January, 2006, by the following vote:
 

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