REPORT TO THE CITY COUNCIL
FROM: JENNIFER CLARK, Director
Planning and Development Department
THROUGH: PHIL SKEI, Assistant Director
Planning and Development Department
BY: CORRINA NUNEZ, Project Manager
Housing and Community Development Division
SUBJECT
Title
Approve a $253,673 HOME Investment Partnerships Program, Community Housing Development Organization Agreement with Habitat for Humanity Fresno County, Inc., for the construction of a single-family house at 64 E. Atchison Street in southwest Fresno (Council District 3).
Body
RECOMMENDATION
Staff recommends the City Council approve a $253,673.00 HOME Investment Partnerships (HOME) Program, Community Housing Development Organization (CHDO) Agreement (Exhibit “A” - HOME CHDO Agreement) with Habitat for Humanity Fresno County, Inc., (Habitat) for the construction of a single-family house at 64 E. Atchison Street in Fresno, 93706.
EXECUTIVE SUMMARY
On August 10, 2022, Habitat was selected through a Notice of Funding Availability (NOFA) to receive $253,673.00 in 2022-2023 HOME CHDO funds for its 64 E. Atchison Street single-family housing project. Habitat’s proposed 64 E. Atchison Street project is City-certified to be developed under CHDO status and eligible to receive HOME CHDO funding.
BACKGROUND
As an entitlement jurisdiction receiving an annual allocation of federal HOME Program funding, the City is required to set aside at least 15% of its annual HOME allocation for a certified CHDO project. CHDOs must be a private nonprofit community-based service organization meeting the definition of “Community Housing Development Organization” and must be able to document that the organization has the capacity to own, develop, or sponsor a housing project each time a commitment of funds is provided to a specific project. In previous years, the City would certify an organization as a CHDO every couple of years. However, revised HOME Program rules require CHDO certification each time a new project is proposed. Habitat has served as a CHDO under the HOME program since 1994 and its projects continue to be City certified.
On June 8, 2022, the Community Development Division released an Affordable Housing NOFA that included the $543,761 set aside for 2022-2023 HOME CHDO funding.
In response to the NOFA, the Community Development Division received Habitat’s 64 E. Atchison Street project application, the only HOME CHDO eligible project, requesting $253,673.00 of the $543,761 set aside for 2022-2023 CHDO activities. The estimated cost of the project is $526,326.00: $253,673.00 in City HOME CHDO funds and $272,653 in Habitat funds. Habitat owns the property at 64 Atchison (Exhibit B - Project Location Maps) which it purchased through the Chapter 8 County tax sale process.
If approved as recommended, Habitat will enter into a HOME CHDO Agreement for $253,673.00 at 2% interest, with the interest converting to zero percent upon conveyance of the loan portion to the homebuyer as mortgage assistance. Once completed, Habitat will transfer ownership of the house to the low-income homebuyer through escrow. The balance of any loan portion, if any, will be paid by Habitat. Also, upon transfer of the property to a low-income homebuyer, Habitat will be released from repayment of the homebuyer mortgage assistance portion.
The single-family house to be constructed at 64 E. Atchison will consist of 3-bedrooms/2baths with 1,200 square feet of living space and an attached two-car garage. Habitat will utilize its “sweat equity” building technique and incorporate the City’s Universal Design element into the house. The “sweat equity” method requires that each member of the homebuyer’s household contribute at least five hundred hours of “sweat equity” to help build their house. Habitat will also provide homeownership training in the areas of home maintenance, home improvement, interior design, and consumer awareness.
Habitat has been a leading non-profit housing development organization in Fresno County since 1985 and continues to provide safe, decent, and affordable housing for lower income residents. Habitat’s mission and home building strategy is to partner with low-income households to help ensure that homeownership is a life-long positive and successful experience for all members of the household.
Project partners include Pacific Gas and Electric, Wells Fargo Bank, Premier Valley Bank, Bank of the Sierra, Bank of the West, Mitchell Aire, Hunter Douglas, Val Spar, Cargill, and the San Francisco Federal Home Loan Bank.
Once the project is complete, the single-family housing unit will be counted towards the City’s affordable housing goals as identified in the 2015-2023 Housing Element, 2020-2024 Consolidated Plan, 2023-2025 One Fresno Housing Strategy, and the 2023-2024 Annual Action Plan for new housing development. The proposed single-family house developed at this vacant parcel will also help to make a positive impact to the neighborhood by offering new, in-fill, durable affordable single-family housing.
ENVIRONMENTAL FINDINGS
The Planning and Development Department determined that it has ministerial authority to approve the project, which is statutorily exempt from California Environmental Quality Act (CEQA) pursuant to Article 18, Statutory Exemptions, Section 15268 of the State CEQA Guidelines. In addition, on October 11, 2022, a National Environmental Policy Act for the project activities resulted in a Finding of No Significant Impact and on January 20, 2023, the U.S. Department of Housing and Urban Development issued authorization to use HOME CHDO funds for this project.
LOCAL PREFERENCE
Local preference was not used based on the conditions of federal funding.
FISCAL IMPACT
The HOME CHDO Program funds for the proposed Habitat single-family housing project are appropriated in the 2024 Planning and Development Department fiscal year Budget.
Attachements:
Exhibit A - HOME CHDO Agreement
Exhibit B - Project Location Maps