HomeMy WebLinkAboutTC Agd Pkt 2009-02-18 (3)
TIBURON REDEVELOPMENT
AGENCY
1505 Tiburon Boulevard
Tiburon, CA 94920
Town Council Meeting
February 18, 2009
Agenda Item:
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STAFF REPORT
To:
Chair and Members of the Board
From:
Administrative Services Department
Subject:
Recommendation to Approve a Loan to Marin Housing Authority
for Below Market Rate Unit at Point Tiburon Marsh
Reviewed By:
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BACKGROUND
The Town has contracted with the Marin County Housing Authority ("Housing Authority") to
administer the Below Market Rate ("BMR") program for ownership units. Pursuant to that
contract, the Housing Authority locates qualified buyers for units as they become available for
purchase. Each purchaser must sign two documents that ensure that the unit stays in the BMR
program: (1) A Resale and Financing Restriction and Option to Purchase ("Resale Restriction");
and (2) A Deed of Trust that allows the Housing Authority to foreclose on the unit if the buyer
breaches the first document. The has the right of first refusal; should the Town not desire to
exercise the option to purchase, the Town then may convey the option to the Housing Authority.
The majority ofBMR unit re-sales occur between a willing seller and another low or moderate
income family that has been qualified by the Housing Authority, in which case no public agency
funds are required to close the transaction. But occasionally, the Housing Authority must
exercise the option because of the owner's failure to pay the mortgage, property taxes or HOA
dues, or because of a breach of the Resale Restriction. In these cases, the Housing Authority
must exercise its option to purchase the unit to maintain the unit in the BMR program. This is
presently the case with one of the Marsh Road one-bedroom units. Town staff does not
recommend that the Town exercise its first right of refusal, as we have had difficulty renting one-
bedrooms in the past. Instead, staff recommends that the Agency loan the Housing Authority the
funds necessary to exercise the option. The unit will ultimately be resold to another qualified
buyer and the funds returned to the Town.
The Housing Authority estimates that it will take between six to eight months to complete the
exercise option. Barring complications, the resale price can be set at an amount that will enable
the Town to recoup all of its cost including legal fees.
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FINANCIAL IMPACT
The loan amount shall not exceed $150,000 and would be charged to the Affordable Housing
fund. The eventual resale price will include any lost interest ~ncome calculated at the current
Local Agency Investment Fund rate. Therefore there is no fiscal impact to approving this loan.
RECOMMENDATION
Staff recommends that the Town Council:
Affirm its desire to provide a loan to the Marin County Housing Authority from the
Tiburon Redevelopment Agency's affordable housing fund for the purchase of a below
market rate housing unit in an amount not to exceed $150,000 and authorize the Town
Manager to execute any documents required to provide this loan.
Prepared By:
Heidi Bigall, Director of Administrative Services
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