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First-Time Homebuyer Program Appropriation 2 February 16, 2010 As of February 8th, the City FTHB Program has approved eight (8) loans totaling $220,500. There are two (2) other loan applications totaling $60,000 pending further City review for approval. If these two (2) loans are approved, the remaining loan balance for FY 09-10 will be $19,500. Therefore, staff is recommending an additional $131,000 to bring the loan balance to $150,000, which will be enough for at least another five more loans through the end of this fiscal year. A key reason behind the high demand for the City FTHB loans is the lowered existing home sales prices (including the availability of some foreclosed or short sale houses), which has helped to make homeownership more affordable in San Leandro to low and moderate income first time homebuyers. For San Leandro as of November 2009, the median sales price for single family homes was $345,000 (down from $350,000 a year ago), while the median sales price for condominiums/townhomes was $184,950 (down from $266,000 from a year ago) according to BayEast Association of Realtors. If the Agency approves the additional funding request, the FTHB Program will have been approved for additional mid-year funding due to strong demand for the third consecutive fiscal year. Current Redevelopment Agency Policy The City First Time Homebuyer Program is included in the San Leandro Redevelopment Agency 2004-2009 Implementation Plan as a program to help the City/Agency achieve its affordable housing goals. Previous Redevelopment Agency Action(s) On September 3, 1996, the Redevelopment Agency adopted Resolution Number 96-31, a resolution approving modifications to the First Time Homebuyer Program. The resolution increased the maximum eligible income for first time homebuyer assistance from 110% of Alameda County median income to 120% of median as provided for in State redevelopment law. On June 16, 1997, the Redevelopment Agency adopted Resolution Number 97-13 to make further modifications to the program. The changes included: reducing the program assistance from 5% to 4% of the purchase price, collecting an annual participation fee from program lenders to increase the loan fund, shortening the loan repayment term from 30 to 20 years, allowing all loan repayment income to be added to the program budget, and requiring compliance with the City of San Leandro Community Standards Ordinance. On January 21, 2003, the Redevelopment Agency adopted Resolution Number 2003-002RDA to further modify the program. The changes included: increasing the maximum loan from $10,000 to $20,000, eliminating the requirement that limited the maximum loan amount to 4% of the purchase price, reducing the loan interest rate from 5% to 3%, and allowing the option of repayment of the loan amount and accumulated interest to be deferred conditionally for homebuyers whose incomes are 80% or less than the area median income. On September 19, 2005, the Redevelopment Agency adopted Resolution Number 2005- 023RDA, approving the following changes to the program: increase maximum loan amount from $20,000 to $30,000, allow staff to adjust the existing 3% interest rate to a minimum of 2% below the most current average 30-year fixed rate mortgage no more than twice per fiscal year if needed, work with the Bay Area Homebuyer Agency (BAHBA) to implement the WISH