HomeMy Public PortalAbout11-16-95_sp CDBGA G E N D A R E J; �' IrE
CITY F LYNWOOD
CITY CLERKS OFFICE
COMMUNITY DEVELOPMENT BLOCK GRANT NOV 9 q ms - .
ADVISORY BOARD - COMMISSION AM PM
718191101H11211121314
SPECIAL MEETING
THURSDAY NOVEMBER 16, 1995
5:00 P.M.
LYNWOOD CITY HALL COUNCIL CHAMBERS
11330 BULLIS ROAD LYNWOOD, CA 90262
KENNETH ALFORD
CHAIRPERSON
MARGARET ARAUJO
VICE CHAIRPERSON
BLANCA CHAVIRA
COMMISSIONER
DONALD PRIMMER
COMMISSIONER
OPENING CEREMONIES:
A. CALL TO ORDER
B. FLAG SALUTE
C. ROLL CALL
D. CERTIFICATION OF AGENDA POSTING
E. APPROVAL OF MINUTES:
NOVEMBER 1, 1995
F. NEW BUSINESS
LAURA BYRD
COMMISSIONER
CONSTANCE FRANKLIN
COMMISSIONER
MARSHA WILLIAMS
COMMISSIONER
1. PUBLIC HEARING:
AMENDMENT TO REHABILITATION REGULATIONS
REGARDING SUBORDINATIONS
2. LOAN REVIEW COMMITTEE
G. STAFF ORALS
H. BOARD ORALS
I. ADJOURNMENT
Adjourn to the next regularly scheduled meeting at 6:00 p.m. in
the Council Chambers of Lynwood City Hall, 11330 Bullis Road,
Lynwood, California.
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MINUTES OF A REGULAR MEETING OF THE COMMUNITY
DEVELOPMENT BLOCK GRANT ADVISORY BOARD
COMMISSION
WEDNESDAY, NOVEMBER 1, 1995
A. CALL TO ORDER
The meeting was called to order on the above captioned date
by Vice Chairperson Araujo at 6:10 p.m., in the Lynwood City
Hall Conference Room, 11330 Bullis Road, Lynwood, CA 90262.
B. FLAG SALUTE
The Flag Salute was led by Commissioner Primmer. All those
- present participated.
C. ROLL CALL
Vice Chairperson Araujo requested roll call; staff complied
as follows:
PRESENT: Vice Chairperson Araujo
Commissioner Byrd
Commissioner Franklin
Commissioner Primmer
ABSENT: Chairperson Alford
Commissioner Chavira
Commissioner Williams
STAFF: Annette Clark, Project Manager
Chondra Handley, Minutes Clerk
Donyea Adams, Rehab. Specialist
D. CERTIFICATION OF AGENDA POSTING
Staff informed the Commission that the Agenda was posted per
the Brown Act.
E. APPROVAL OF MINUTES
Commissioner Byrd requested that staff correct typing errors
in the Minutes of - September 13, 1995. Staff stated that
corrections would be made. Motion was made by Commissioner
Franklin, seconded by Commissioner Primmer, to approve the
minutes of September 13 and 27, 1995 with the necessary
corrections. Motion carried unanimously.
F. NEW BUSINESS
1. LOAN REVIEW COMMITTEE
Case #95 -10 - The applicant requested approval of a Deferred
Payment Loan in the amount of $9,250.00. Commissioner
Franklin stated that the address indicated that there is more
than one dwelling on the property. Mr. Adams informed the
Commission that the property was a duplex which contained two
single family dwellings, however only one unit was being
considered for rehabilitation. Ms. Clark expressed her
concern regarding the single family dwelling requirement of
the program. In Ms. Clark's opinion, a duplex did not
qualify as a single family dwelling. Mr. Adams said that the
guidelines did, not define or specify exactly which a single
family dwelling is. Therefore because only one unit, which
Ms. Adams considered a single family dwelling, was being
considered rehabilitation, the unit should be eligible.
Motion was made by Commissioner Primmer to table this item
pending clarification on the Rehabilitation Regulations,
concerning single family dwellings. It was seconded by
Commissioner Franklin. Motion carried unanimously.
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Case #95 -11 - The applicant requested approval of an
Emergency Grant for the maximum amount of $3,000. Motion to
approve for the maximum amount of $3,000 was made by
Commissioner Franklin, seconded by Commissioner Byrd. Motion
carried unanimously.
Case #95 -12 - The applicant requested approval of a Deferred
Payment Loan in the amount of $30,000. The Commission,
discussed the overcrowded conditions of the dwelling.
Commissioner Byrd questioned why the program did not
recommend' a room addition, instead of a bedroom extension to
relieve overcrowding. Mr. Adams stated that with all the
necessary repairs, there would not be enough funds to provide
a room addition. The Commission commented that in cases such
as this, a Waiver of the DPL Loan limited should have been
considered to properly address overcrowded conditions.
Commissioner Primmer expressed his concern that the income
listed did not appear to support the eight (8) people
currently residing in the household. The fact that this
project has been carried over pending additional income
information, which was obtained and resubmitted as part of
this new request, made the Commission question if there is
still additional income not reported. Commissioner Primmer
felt that there must be additional income to support a family
of this size. Commissioner Franklin agreed.
Mr. Adams stated that the Commission requested additional
income for this case in July which was received. Mr. Adams
stated that he believed that the income information submitted
was all of the family income.
Commissioner Byrd asked if the additional income submitted
increased or decreased the monthly income amount. Mr. Adams
replied that the monthly income increased.
After further discussion, Commissioner Franklin made a motion
to deny the request, (95 -12). Seconded by Commissioner
Primmer. Motion carried unanimously with the exception of
Commissioner Byrd who was opposed.
Case #95 -13 - The applicant requested approval of an
Emergency Grant in the maximum amount of $3,.000. Motion
was made by Commissioner Franklin, seconded by Commissioner
Primmer to approve the Emergency Grant for $3,000. Motion
carried unanimously.
Case #95 -14 - The applicant 'request approval of an Emergency
Grant in the maximum amount of $3,000. Motion was made by
Commissioner Franklin, seconded by Commissioner Primmer to
approve the Emergency Grant for $3,000. Motion carried
unanimously.
Case #95 -15 - The applicant requested approval of a Senior
Citizen Grant for the maximum amount'of $3,000. Motion was
made by Commissioner Primmer, Seconded by Commissioner
Franklin. Motion carried unanimously.
Mr. Adams submitted a copy of the Rehabilitation regulations
for determination of the single family dwelling requirements.
The Commission 'reviewed the information as it applied to
case #95 -10 above.
Adams stated that the property is a duplex, however the,
Rehabilitation program proposes to renovate only one unit.
Mr. Adams said that the regulations do not specifically
define single family dwelling as one house on a lot.
V
After further discussion, Commissioner Byrd made a motion to
approve case #95 -10 (Request approval of a DPL in the amount
of 9,250), pending clarification of the Rehabilitation
Guidelines.
Commissioner Primmer stated that the regulations should be
revised to provide clear definition for single family
dwellings, in case this situation should arise in the future.
Commissioner Araujo requested Mr. Adams to revise the
regulations as it refers to Single Family Dwellings. Mr.
Adams stated that he would revise the regulations and submit
the revisions to the Commission for review and approval.
The CDBG Commission invited Faustin Gonzales, City Manager,
in the meeting and requested that Mr. Gonzales provide an
interpretation of the Regulations as it referred to single
family dwellings.
Mr. Gonzales stated that the property in question (Case 95-
10) should not be considered a duplex. The property appears
to be two separate houses on a lot, with one owner and one
mortgage. Mr. Gonzales noted that the Rehabilitation program
is currently working in conjunction with Code Enforcement, in
an effort to improve Lynwood housing stock. As a result,
rehab. receives referrals from code enforcement, in cases
where the homeowner needs the assistance of the Rehab program
in order to comply with the Codes, thus assisting in
providing safe and sanitary living conditions. In
conclusion, Mr. Gonzales said that it is the programs
intention to assist property owners in need, therefore Case
95 -10 should not be excluded from the Rehab. program because
there are two houses on the lot, but should be considered as
one property. Mr. Gonzales said that the project should be
considered for funding.
Based upon Mr. Gonzales comments, the CDBG Commission
approved Case #95 -10.
G. STAFF ORALS
Mr. Adams informed the Commission of the program on November
4, 1995 on Penn Street and invited everyone to attend. He
stated that'the Rehabilitation Program is working in
conjunction with Public works in order to repair the street
and various Housing Renovations in an effort to beautify the
.block.
Mr.'Adams also informed the Commission that a Special Meeting
has been scheduled for November 16, 1995 at 5:00 p.m. in
order to hold a Public Hearing to receive public input on the
amendment to the Subordination Procedures in the
Rehabilitation Regulations.
F. BOARD ORALS:
Mr. Primmer addressed his concerns to Mr. Gonzales regarding
the upkeep of the property located by the Freeway overpass
and Lynwood Road. He stated that the vacant lot has become a
dumping area.
Mr-. Gonzales stated that he would bring this matter to the
attention of John Oskoui, Facilities Maintenance Director,
and the problem would be taken care of.
G. ADJOURN
Motion to adjourn to the next regularly scheduled meeting was
made by Commissioner Franklin, seconded by Commissioner
Primmer. Motion carried unanimously. The meeting adjourned
at 7:55,p.m.
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COMMUNITY DEVELOPMENT BLOCK
GRANT
CHILD CARE GRANT EVALUATION
NAME OF ORGANIZATION' Johnson Family Day Care Center
ADDRESS 4220 Alvada St., Lynwood, CA 90262 -
AMOUNT REQUESTED $1,00000
PROPOSED USE OF FUNDS See attachment "A"
RECOMMENDATION
After completing an extensive review of the request for assistance, staff concluded that the
applicant meets all the necessary qualifications, established by HUD and the City of
Lynwood. Therefore, staff respectfully recommends approval of the Child Care Grant for
a maximum amount of $ 1,000 00
The applicant has submitted a proposed cost estimate of the materials to be purchased.
The applicant will receive reimbursement upon proof of purchase of learning materials.
Materials will be monitored by staff to ensure that the materials are being used by the
Child Care Facility
FACTS
1 Applicant has state license to operate a Child Care Center
2. Applicant has been in operation for over a year, as requirement by the
Child Care Grant Program Guidelines.
Applicant is located within the City of Lynwood and meets all necessary
program requirements.
COMMITTEE ACTION:
APPROVED-
DENIED
APPROVED AMOUNT
CHAIRPERSON
DATE
E
ATTACHMENT "A"
Listed below are materials which the applicant proposes to purchase upon approval of the
Grant request:
ARTS AND CRAFTS
1 10 washable liquid paints
$32.00
2. 12 washable people colors paint
42.00
3 1 no spill paint cup set
995
4 1 set beginners brushes
10.95
5 1 four in one portable easel
9450
6 1 portable easel chair
12.50
7 1 extra portable easel paper roll
5.50
8 Alphabet puzzles
5000
PAPERS, CONSTRUCTION
1 2 pks Construction Assorted paper
$ 5 60
2 1 pk Art tissue paper
12.50
3 1 box best buy Crayons (200 count)
2495
4 1 set classroom scissors (12 count)
19.95
5 1 gal Best Buy school glue
10.25
BOOKS
1 1 set first readers books (10 count) $39.50
2. I set listening library books 34.50
3 1 Magnetic Drawing Board 26.50
TOTAL $434 15
Z.
4 j DATE. November 16,1995
TO: Honorable Chairperson and Members of The Commission
FROM: `Gary Chicots, Director
Community Development Department * /
BY: Donyea Adams, Sr Rehabilitation Specialist
Housing Rehabilitation Division
SUBJECT: PUBLIC HEARING FOR PROPOSED AMENDMENTS TO THE
REQUEST FOR SUBORDINATION REGULATIONS.
Purpose:
To inform and discuss with the Community Development Block Grant Advisory Commission
and Residents the amendments to the Request for Subordination Regulations per section 6.02,
6.01 -C and 6.01 -D of the Rehabilitation Program Regulations.
Background
The Rehabilitation Program Regulations , established on November 2,1975, mandate the
guidelines for the City of Lynwood Residential Rehabilitation Program. These regulations were
adopted by City Council to meet the City's Community Development goals of providing its
residents with decent , safe, sanitary housing and a suitable living environment while providing
expanded economic opportunities.
The Rehabilitation Program offers financial assistance to the Community in the form of a
Emergency /Senior Grant up to Three Thousand Dollar ($3,000.00) for emergency housing code
compliance repairs and a Deferred Payment Loan up to Twenty Thousand Dollar ($20,000 00)
for general and emergency housing repairs. The grants are forgiven at the completion of the
work. The deferred payment loan stipulate a 3% interest rate with the principal and interest
pavments deferred until repayment of the loan.
The City loans can be recorded as first, second. or third liens. The majority of the Citv deferred
loans are second and third liens behind a existing first mortgage.The homeowner has the option
to alter or change the existing first lien however, to do that the homeowner must first obtain a
approval from the City of Lynwood to subordinate its position to a new or altered lien.
The City's existing subordination requirements only allow those residents to apply for a
.subordination of there City Loan if thay are 1) financially hardship with impending lose of
property through default and foreclosure or 2) intend to perform additional home improvement
work.
Facts
The Rehabilitation Loan Review Committee evaluates all request for subordination of the City's
Deferred Pavment Loans (DPL) and either recommends City Council approval and execution or
reject the request. Only, those request which provide evidence of financial hardship with
impending loss of subject property through default and foreclosure or intend to perform
additional home improvement work may be considered. Additionally , after proper consideration
of the reasons described above, only those request which provide evidence of sufficient equity to
full collateralize the loan, and sufficient income to guarantee a primary source of repayment
maybe granted the subordination
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- 1 .
The City of Lynwood has prepared a modification to the existing subordination regulation. This
new requirement will allow residents who need to reorganize there current real propertm• liens the
ability to apply for a subordination from the City and receive consideration based on the current
loan to value, the City's lien position, the applicants gross income. detailed information
concerning the new lien, the type and amount of new lien and explanation of the reasons for
obtaining the new lien. This modification will allow residents who are economically
disadvantaged the opportunity to redirect there efforts and expand there financial condition and
allow the City to protect the public investment
New Subordination Criteria
• The loan-to -value (LTV) does not exceed 70 %. The LTV includes all existing liens plus the
new loan amount
• The City's lien position does not change.
• A copy of the banks current appraisal and a qualified title report is submitted for review and
approval.
• The refinance is limited to paying off the existing mortgages that are in front of the City's loan
and absorbing the cost incurred with obtaining the new loan.
• The borrower is not allowed to take cash -out as a result of the refinance.
Changes To Existing Requirements
Section 6.02 /A General - The following section shall be removed from the regulations
Only those requirements which provide evidence of
(1) financial hardship with impending loss of subject property through foreclosure or
(2) intend to perform additional home improvement work
Additional Documentation/Information Required for Subordination Application
1 Dollar amount that will be borrowed.
2. Interest rate. Fixed/Variable.
3 Terms and payment amount.
4. Explanation of what the loan is for
5 List all items to be paid and dollar amount.
6. Is borrower receiving cash in hand.
7 Schedule of before and after payments.
8 ° Dollar amount borrower will be saving.
9 Proof that taxes and insurance are current.
10 Copy of appraisal and credit report.
11 Lenders subordination agreement.
To receive comments from the Advisory Commission, and Residents regarding the modifications
to the existing request for subordination-regulations per section 6.02, 6.01 -C, 6.01 -D of the
Rehabilitation Program Regulations and after comments the Community Development Block
Grant Advisory Committee approve the new Subordination Regulations
Attachments:
1 Existing Request for Subordination Regulations
2. Proposed Request for Subordination Regulations
A. General
The RLRC shall evaluate all requests for subordination
of the City's Deferred Payment Loans (DPL) and either
recommend City Council's approval and execution or
reject the request. Rejection of the request may be
appealed to the City Council by the applicant.
Program staff shall submit to the RLRC a summary sheet
stating the applicant's name and address, income,
amountof DPL, reason for request, information
establishing compliance with financial standards
required by Section 6.02 C or constituting justification
of a permitted deviation from those standards, and
other information needed to establish the propriety of
the request. Applicant must demonstrate both the need
for the subordination and that the immediate repayment
of the City's loan is infeasible.
RINEF .:, .
The proposed transaction shall meet the following
criteria:
The loan to value ratio ( ^LTV "), after
subordination, will not exceed 70 %. For
purposes hereof, the loan amount shall be
deemed to be the total of all loans to be in
effect after subordination including the
City's loan, the new loan and any other loans
secured by a lien on the property.
2. The subordination will not result in the
priority of the lien securing the City's loan
being reduced.
3. The amount of the new loan shall not exceed
the total of (i) the unpaid principal balance
of loan being refinanced, (ii) two month's
accrued interest on the loan being refinanced
(the current month and one prior month), (iii)
the ordinary and necessary costs of obtaining
and closing the new loan (including closing
costs and loan fees not in excess of that
which is normal in the area at the time for
similar loans), and (iv) any prepayment fee
with respect to loan being refinanced in an
amount not to exceed six months' interest on
the amount being prepaid.
P - ,
other information needed to establish the
propriety of the request. Applicant must
demonstrate both the need for the subordination
and his /her inability to pay back the City's loan.
C. Case E_valuetion_gnEJ Determi02112n_of
Eligibility
All provisions of Section 6.01 C. above, shall
apply.
D. Overrule
All provisions of Section 6.01 D., above, shall
apply.
E. Protection of the Pub jnv_egtment
Protection of the public investment shall be of
paramount importance to Program staff and the RLRC
when evaluating requests for subordination. In
those cases in which the applicant's ability to
pay back the City loan has been established, both -
Program staff and the RLRC shall recommend-
rejection of the request for subordination.
Program staff shall strive to impress upon the
applicant(s) both (1) the impropriety of obtaining
windfall profits from public funds and, (2) the
need to recapture the public investment for
recycling into the property rehabilitation loan
pool so as to maximize the benefits of these funds
to the community.
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R
EXISTDr. REGULA IGM
Y
SECTION 6.01 Consideration of Reguests for Property
Rehabilitation Assistance
A. General
The RLRC shall consider all requests for
rehabilitation assistance submitted by • the
Rehabilitation Program staff and approve and /or
reject the applicant(s) request(s).
B. Information on_AOglicants
Program staff shall submit to the RLRC a summary
sheet stating applicant(s) name and address,
income, number of dependents, nature of the
proposed improvements and other background
information as deemed necessary to properly
consider the request.
C. Case Evaluation and_Determination of
€li G112ili tY
Evaluation and approval /rejection of applications
shall be 'within the framework of the
Rehabilitation Program guidelines concerning
eligibility for (1) applicants, and (2)
improvements as established in Chapter VI above.
C . X. Overrule
The RLRC's decision may be overridden only by the
City Council, in response to applicant(s) appeal.
Staff shall provide Council with a copy of the
Minutes of the RLRC meeting at which the case in
question was considered.
SECTION 6.02 Requests for Subordination
A. General
The RLRC shall evaluate all requests for
subordination of the City's Deferred Payment Loans
(DPL) and either recommend City Council's approval
and execution or reject the request. Rejection of
the request may be appealed to City Council by
applicant. Only those requests which provide
evidence of (1) financial hardship with impending
loss of the subject property through default and
foreclosure, or (2) intent to perform additional
home improvement work may be considered.
Additionally, after proper consideration of the
reasons described above, only those requests which
provide evidence of (1) sufficient equity to fully
collateralize the loan, and (2) sufficient income
to guarantee a primary source of repayment may be
granted the subordination.
B. Information on_Apolicants
Program staff shall submit to the RLRC a summary
sheet stating applicant's name and address,
income, amount of DPL, reason for request and
`
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For good cause shown, the RLRC may recommend
to the City Council that greater amounts of
accrued interest and /or loan fees may be
included in the amount of the new loan. Under
no circumstances, however, is the applicant to
be permitted to realize any net cash, directly
or indirectly, from the refinance loan.
1. To support their request for subordination,
applicants shall provide City with a copy of
the new lender's appraisal and a current
preliminary title report describing the
current condition of title to the security
property.
2. Immediately after closing, applicant shall
provide to City a copy of the loan closing
statement for the new loan demonstrating
compliance with the standards set forth in
Section 6.02C3, above, or as modified by the
City.
All provisions of Section 6.01 C, above, shall
apply-
F. Ove r ru 1p
All provisions of 'Section 6.ol D, above, shall
apply.
• ..
Protection of the public investment shall be of
paramount importance to Program staff and the RLRC
when evaluating requests for subordination. In
those cases in which the applicant's ability to
immediately retire the City's loan has been
established, both Program staff and the RLRC shall
recommend rejection of the request for subordina-
tion.
Program staff shall strive to impress upon the
applicant (s) both (1) the impropriety of obtaining
windfall profits from public funds, and (2) the
need to recapture the public investment for
recycling into the property rehabilitation loan
Pool so as to maximize the benefits of these funds
to the community.
TOTAL P.03