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HomeMy WebLinkAbout12-13-2005 Adopted CC Min Spc Mtg ~ A special joint meeting of the Dublin Planning Commission and City Council was held on Tuesday, December 13,2005, in the Regional Meeting Room of the Dublin Civic Center. The meeting was called to order at 5:00 p.m., by Mayor Lockhart. . ROLL CALL PRESENT: Councilmembers Hildenbrand, McCormick, Oravetz and Zika, and Mayor Lockhart. Planning Commissioners Biddle, Fasulkey, King, Schaub and Wehrenberg ABSENT: None. . PUBLIC COMMENT Mayor Lockhart asked for public comments. No comments were made by the public at this time. . PROPOSED FIRST TIME HOMEBUYER LOAN PROGRAM WORKSHOP 5:03 p.m. (430-60) Housing Specialist Julia Abdala explained that the City Council and Planning Commission would participate in a joint workshop to discuss components of the proposed First Time Homebuyer Loan Program. Staff would then ask the City Council to provide direction in preparing a draft First Time Homebuyer Program, which would subsequently go to the City Council for consideration and approval. Members of the First-Time Homebuyer Taskforce CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13,2005 PAGE 457 www.ci.dublin.ca.us present, all of whom were instrumental in creating the draft loan program, were introduced: Rick Anixter, Bank of America; JoAnn Duncan, Irwin Home Equity; Mary Rose Parkman, City of Concord; Mike Seeley, DHI Mortgage. Ms. Abdala briefly reviewed the 12 issues which would be discussed and for which Council would give direction by Staff: 1) Definition of a First Time Homebuyer; 2) Target units for which the City would provide loans; 3) Maximum amount of financing that the City could provide in a First Time Homebuyers loan; 4) Maximum sale price allowed for a home to participate in the Dublin program; 5) Maximum income that would be allowed for applicants for a First Time Homebuyer Loan; 6) Who would be able to utilize the Dublin First Time Homebuyer Loan; 7) Type of loan that the City could provide; 8) Possibility of equity sharing on repayment of the First Time Homebuyer loan as apposed to simple repayment of the First Time Homebuyer Loan; 9) If any interest should be charged and the amount of interest that could be charged for the First Time Homebuyer Loan at maturity; 10) City preferences in providing First Time Homebuyer Loans to applicants; 11) Charging an administrative fee for providing the loan and servicing the loan; and 12) Maximum assets that an applicant may own and still quality for a Dublin First Time Homebuyer Loan. Staff suggested that each issue be discussed individually and directed provided by the Council before moving on to the next topic of discussion. Issue #1: DefInition of a First Time Homebuyer. Ms. Abdala advised that Staff recommended that a First Time Homebuyer be defined someone who has not owned a home for 3 years, and reviewed the rationale, as well as pros and cons of the proposed definition. The Council, Commission and Taskforce discussed the pros and cons of the definition, and the possibility of addressing displaced homemakers and other hardship situations in the definition. Ms. Abdala clarified that 3 years and some consideration for displaced homemakers and other hardship situations was recommended by the Council and Commission. CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13,2005 PAGE 458 www.ci.dublin.ca.us By consensus, the Council and Commission concurred that First Time Homebuyer should be defined as no home ownership for three years and should include consideration for displaced homemakers and other hardship situations. Issue #2: Should the City provide loans for inclusionary units as well as market-rate homes? Ms. Abdala advised that Staff recommended that the loan program include both inclusionary and market rate units, and reviewed the rationale, as well as pros and cons of recommendation. The Council, Commission and Taskforce discussed the pros and cons of the definition, agreed that including both would make the program more comprehensive and flexible. By consensus, the Council and Commission concurred that the loan program should include both inclusionary units and market rate homes. Ms. Abdala reviewed inclusionary unit underwriting examples associated with Issue #2, as shown in PowerPoint presentation. Issue #3: What is the maximum amount that the City should loan under the First Time Homebuyer Loan Program? Ms. Abdala advised that Staff recommended 10% for market rate homes and 15% for inclusionary units, and reviewed the rationale, as well as pros and cons of the recommendation. The Council, Commission, Staff and those present discussed the program structure and reviewed possible financing scenarios, as well as the possibility of piloting the program for a year and a loan cap for individual loans. By consensus, the Council and Commission concurred that the maximum loan amount should be 10% for market rates homes and 15% for inclusionary units and no maximum dollar amount cap. CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13, 2005 PAGE 459 www.ci.dublin.ca.us Cm. Zika disagreed, stating that there should be a maximum cap because if the market rate units were funded, there would be no money left to fund inclusionary homes without down payments. Issue #4: Should the maximum home price a buyer may purchase with fmancing from the City of Dublin be set at the latest median price as established by Bay East Association of Realtors? City Manager Richard Ambrose advised that Staff recommended that there be a limit to the process of homes that could be financed through the City's First Time Homebuyers Loan program. By consensus, the Council and Commission concurred that the maximum home price a buyer may purchase with financing from the City of Dublin be set at the latest median price as established by Bay East Association of Realtors. Issue #5: Should loans be made available to qualifying households with incomes up to 140% of the County of Alameda median income? Ms. Abdala advised that Staff recommended that loans be made available to qualifying households with incomes up to 140% of the area median, and reviewed the rationale, as well as pros and cons of the recommendation. The Council, Commission, Staff and those present discussed possible financing scenarios and agreed that, by accommodating this higher income category, more workforce households would be served. By consensus, the Council and Commission concurred that loans should be made available to qualifying households with incomes up to 140% of the County of Alameda median mcome. CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13, 2005 PAGE 460 www.ci.dublin.ca.us Issue #6: Should the City of Dublin offer First Time Homebuyer Loans to nonresidents as well as Dublin residents? Ms. Abdala advised that Staff recommended that the loan program not be limited to Dublin residents only because restricting loan funds could run the risk of not attracting enough qualified candidates. She reviewed the rationale, as well as pros and cons of the recommendation. The Council, Commission, Staff and those present discussed whether or not to include nonresidents in the program. The pool of Dublin residents seeking and qualifying for this type of City financing may be too small to provide for a successful loan program, and the possibility of including qualifying applicants who worked in Dublin. By consensus, the Council and Commission concurred that loans should be made available to qualifying applicants who live and/or work in the City of Dublin. Issue #7: Should Dublin provide loans with payment deferred until the home is sold or refinanced? Ms. Abdala advised that Staff recommended that the program include a deferred loan with the full payment due at the sale or refinancing of the home, and reviewed the rationale, as well as pros and cons of the recommendation. The Council, Commission, Staff and those present discussed various repayment and refinancing scenarios, as well staffing to oversee the program or the possibility of outsourcing for loan servicing if amortized loans were the preferred method of having loans repaid. By consensus, the Council and Commission concurred that the program should include a deferred loan with full payment due at the sale of the home and possibly at refinancing depending on the reason for the refinance. For example, if the applicant refinanced for a better interest rate or put money back into the house, they would not have to repay. If they pulled money out for personal use, they would have to pay the City back at time of refinance. CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13, 2005 PAGE 461 www.ci.dublin.ca.us Issue #8: Should the City loan be repaid with principal and a share in equity earned on home? Ms. Abdala indicated that this option related to market rate units only and advised that Staff was not recommending that to share equity on inclusionary units where the buyers received a First Time Homebuyer loan because of the resale agreements these properties have on title. Staff recommended that whatever percentage of the sale price that the City financed, the City would get that percentage of equity at the sale. For example, on a 10% loan, if the original sale price was $500,000 and the City provided a loan of $50,000, then when the loan was repaid, the City would receive $50,000 plus 10% of any appreciation on the property financed, and the seller would still get 90% of the equity. The rationale, as well as pros and cons of the recommendation, was reviewed. The Council, Commission, Staff and those present discussed various fmancial scenarios for equity sharing, as well as the possibility of having this option for market rate only and #9, which would be discussed next, for inclusionary units. The scenario of the market rate unit selling for less than it was purchased at was discussed, and Staff recommended a clause which stated that, if there was no equity or if the equity was less than what the City would earn in interest, then the City would ask for interest. By consensus, the Council and Commission concurred that market rate home loans should be repaid with principal and a share in the equity percentage equal to matching what the City's contribution was and review how it works with other programs. Issue #9: Should the City First Time Homebuyer Loan Program require loans received to be paid back in full, including interest in the amount of the average rate of return earned by the City. Ms. Abdala advised that, per direction in #8 that market rate home loans should be repaid with principal and a share in equity earned, this issue would apply to inclusionary housing only. CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13, 2005 PAGE 462 www.ci.dublin.ca.us By consensus, the Council and Commission concurred that inclusionary unit loans should be repaid with interest. Issue #10: Should the City preferences used in the Inclusionary Zoning Ordinance be applied to the First Time Homebuyer Program? Ms. Abdala advised that the application of this option would result in a ranking system for applications and reviewed the rationale, as well as pros and cons of the recommendation. The Council and Commission discussed the point system for Inclusionary housing which was already in place, and had taken considerable time and study to devise, and agreed that it could be used as a weighting device for the loan program with the inclusionary units getting preference. Ms. Abdala clarified that the Council was directing Staff to include some preference for Inclusionary units? The Council advised yes. Issue #11: Should the City charge an administrative fee, to be determined, for the administration and servicing of these First Time Homebuyer Loans? Ms. Abdala advised that collecting an administrative fee would help pay for the services of the Housing Staff to administer this program, and reviewed the rationale, as well as pros and cons of the recommendation. The Council, Commission, Staff and those present discussed the costs involved to administer the loan program and whether a fee program would be beneficial or necessary. If no fee was required, the suggestion of collecting money for the mandatory homebuyers' class and credit counseling was also discussed. The Council directed Staff to look at different options and report back to Council when this was presented at a future Council meeting. CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13, 2005 PAGE 463 www.d.dublin.ca.us Issue #12: What should be the maximum in assets owned that should be allowed for a household to qualify for a City loan? Ms. Abdala advised that Staff recommended that no household with liquid assets over $250,000 qualify for a City loan, but the actual situation may vary on a case-by-case basis and would be reviewed and evaluated along with the entire financial status of the household in the underwriting process. The rationale and pros and cons of the recommendation were also reviewed. The Council, Commission, Staff and those present discussed the difference between liquid assets and other assets, as well as the need to allow for some assets to handle emergency situations. By consensus, the Council and Commission concurred that the maximum amount in liquid assets that a household may have and still qualify for the loan program should be $250,000. The Council directed Staff to incorporate the direction given by the Council and Planning Commission related to each of the 12 issues into the draft First Time Homebuyers Loan program to be presented to the Council for its consideration at a future meeting. Mayor Lockhart thanked the First Time Homebuyer Taskforce for their assistance in crafting this program. .. ADJOURNMENT There being no further business to come before the Planning Commission and City Council, the special meeting was adjourned at 6:59 p.m. to the regular Planning Commission meeting of December 13, 2005, and the regular City Council meeting of December 20, 2005 at 7:00 p.m. in the Coun~r I ed at 100 ivic Plaza. A TrEST: ~. ~ \ \ C_ :=1~~ CITY COUNCIL MINUTES VOLUME 24 SPECIAL MEETING December, 13, 2005 PAGE 464 www.ci.dublin.ca.us