CRA 97-06-09MINUTES OF A REGULAR MEETING OF THE
CYPRESS REDEVELOPMENT AGENCY
HELD
June 9,1997
Chairman Carroll called the meeting of the Cypress Redevelopment Agency to
order at 10 p.m., Monday, June 9, 1997, in the Council Chamber, 5275 Orange
Avenue, Cypress.
PRESENT
ABSENT:
Agency Members Bowman, Jones, Keenan, Piercy and Carroll
None
MINUTES:
It was moved by Agency Member Bowman and seconded by Agency Member Jones
to approve the Minutes of May 12, 1997 as submitted. The motion unanimously
carried by the following roll call vote:
AYES: 5 AGENCY MEMBERS: Bowman, Jones, Keenan, Piercy and
Carroll
NOES: 0 AGENCY MEMBERS: None
ABSENT: 0 AGENCY MEMBERS: None
PARAMETERS FOR THE FIRST TIME HOMEBUYER PROGRAM: The Executive Director
requested the Deputy Executive Director to present the staff report which
indicated that the Redevelopment Agency Board had approved the U.S.E.
Community Services Group to administer the second trust deed and escrow
account for the City's Agency's First Time Homebuyer and Neighborhood
Improvement Programs for a six month trial period. Staff has met with the
consultant and prepared the parameters of the First Time Homebuyer Program for
the Board's approval.
Agency Member Jones asked about applying a percent limitation on the maximum
assistance available. The Deputy Executive Director suggested a maximum
assistance of $30,000 but not to exceed 17.5% with a minimum downpayment of
2.5% from the homebuyer. Agency Member Bowman commented that $30,000
was far too much for a first time buyer program. It seems that a 10% assistance
would probably be more the norm and he would rather help more people. The
Deputy Executive Director said that the applicants would be chosen on a first
come, first serve basis.
Agency Member Bowman said that one of his goals would be to cover as many
properties and as many people as possible for assistance and higher assistance to a
few buyers would preclude that. Agency Member Jones remarked that a $25,000
or $30,000 maximum is fair to everyone but families are not being blocked out.
She asked about 10 year debt forgiveness to recoup the principle so there would
be money to lend in the future.
The Deputy Executive Director responded to questions from Councilmembers on
how some of the parameters were arrived at.
Agency Chairman Carroll suggested that there be a window and then a lottery to
select the successful applicants.
Agency Member Jones suggested that the length of occupancy be changed to 20
years and change the share of equity from 10% to 5% per year, with an
acceleration clause. Agency Member Bowman stated that the home should be
owner-occupied only. He again expressed his concern about the $30,000 cap, he
felt that $20,000 should be the cap so more people could be helped but he would
compromise on $25,000.
Agency Member Keenan agreed on the 17.5% cap on a reasonable amount, and
$25,000 seemed a reasonable amount, and owner-occupied. He expressed concern
about the equity sharing at 10 years and felt that 20 years would be more
comfortable at 5%.
Agency Chair Carroll stated his changes as maximum assistance of $25,000, 17.5 cap,
repayment upon vacation of the owner-occupied property and the participation
share goes to 5% a year instead of 10%.
Agency Member Jones suggested that be 2.5% cash equity plus closing costs be
required from the homebuyer and acceleration clause language included. Another
option on debt forgiveness would be if the home is sold within the first 10 years,
the City would be reimbursed for the principle.
Agency Member Bowman said he was still questioning some of the loan fees, but
there has to be some equitable recovery for the City if someone moves out early.
Agency Member Jones recommended that during the first 10 years the debt be
repaid to the City and debt forgiveness thereafter.
Agency Member Bowman suggested that there be a provision of an assumption of
qualified buyer in case of default. He also suggested using the debt forgiveness
formula outlined by CHAFA. Agency Member Jones expressed concern about
equity participation.
After additional discussion, the Finance Director explained that the goal is long
term ownership and the equity sharing is an attempt to have the homebuyer stay
longer. Responding to Agency Chairman Carroll, the Finance Director explained
equity sharing and how it will be applied.
There was additional discussion on the equity determination and the Finance
Director said, if the house sold after one year, the homebuyer would be entitled to
10% of the growth in equity. The equity would be determined based on the
purchase price of the house and any capital improvements they have records for.
Determination of capital improvement could be made on a definition of capital
improvements or set a dollar limit. Agency Chairman Carroll felt that equity
participation would be acceptable but there must be criteria established on capital
improvements. Agency Member Bowman, asked that staff clarify the amount of
the escrow fees to be charged.
It was moved by Agency Member Jones and seconded by Agency Member Bowman
to approve the parameters for the First Time Homebuyer Program including those
changes made by Agency Members. The motion unanimously carried by the
following roll call vote:
AYES:
NOES:
ABSENT:
5 AGENCY MEMBERS: Bowman, Jones, Keenan, Piercy and
Carroll
0 AGENCY MEMBERS: None
0 AGENCY MEMBERS: None
ADJOURNMENT: Agency Chairman Carroll adjourned the meeting at 10:30 p.m.
ATTEST:
SECRETARY OF THE CYPRESS
REDEVELOPMENT AGENCY
CHAIRMAN OF THE CYPRESS
REDEVELOPMENT AGENCY
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