MINUTES TOWN OF GILBERT REDEVELOPMENT COMMISSION

SPECIAL MEETING OF JANUARY 30, 2002, 6:30 PM.

1025 S. GILBERT ROAD
GILBERT, ARIZONA 85296

COMMISSION PRESENT: Chairman Haug, Vice Chairman Fresquez, Commissioner Thomson, Commissioner Valentine and Commissioner Iacobazzi

COMMISSION ABSENT: None.

STAFF PRESENT: Community Development Specialist Carl
Harris - Morgan, Town Manager George Pettit, Councilman Don Skousen, and Administrative Assistant Elizabeth Stupski

OTHERS PRESENT:        Joann Hauger (Community Housing Resources of Arizona), Minnette Himmelberger (Community Services of Arizona)
ROLL CALL

Roll was called and a quorum was declared.

1.        Downpayment Assistance Program Applications
Community Development Specialist Harris - Morgan gave an overview of what is to be accomplished at the special meeting of January 30, 2002. He stated that applications were made available for the Downpayment Assistance Program in December with a submittal deadline of January 25, 2002 at 5 p.m. The Town received applications from Community Housing Resources of Arizona and Community Services of Arizona and both organizations are requesting $100,000 in funding. Community Development Specialist Harris - Morgan mentioned copies of the applications were provided to the Commissioners. He indicated the Commission is requested to recommend which organization will receive the $100,000 in CDBG funds to carry out the downpayment assistance program.

Chairman Haug asked the Commission if they would like to hear from the applicants or ask the applicants questions. Commissioner Valentine stated his preference would be to hear from the applicants since the applications were very close and both applicants were present. Commissioner Valentine felt this would assist him in determining which organization should receive the funding.

Before the applicants spoke, Community Development Specialist Harris - Morgan reviewed the guidelines and stated that Town Council has indicated a preference to fund a project. They are:
- All or almost all of the funds provide downpayment, second mortgage, or similar assistance directly to home buyers that otherwise would be unable to purchase a home in Gilbert.
- All funds provided to homebuyers are repaid and recycled to assist new home buyers.
- Downpayment assistance is provided to significantly more than 5 home buyers through this project (average assistance is significantly less than $20,000 per household).
Community Development Specialist Harris - Morgan said these are not requirements but a preference by Council.

Ms. Joann Hauger, Executive Director for Community Housing Resources of Arizona (CHRA) distributed information about the organization and gave a brief history about CHRA and other programs administered by CHRA.

Ms. Hauger summarized what CHRA is proposing for the Downpayment Assistance Program that being:
- $90,000 of the $100,000 for soft second loans to clients.
- Fund an average of 9 households (if average assistance is $10,000). Ms. Hauger explained how the organization determines how much a household would qualify for using a debt ratio figure established by CHRA.

Community Housing Resources of Arizona provides one - on - one prepurchase counseling which improves the prospective homebuyer’s chances of qualifying for a mortgage and increases the homeowner’s understanding of the process, responsibilities of owning a home and consequences of delinquent mortgage payments. Ms. Hauger stated the successes of other programs provided by CHRA. She indicated there have been no defaults with a program similar to Gilbert’s. Ms. Hauger mentioned the downpayment assistance would be secured by a promissory note and subordinate deed of trust. The downpayment assistance funds would be repaid to CHRA if the property ceases to be the homeowner’s principal residence through sale or rental of the property or when the original mortgage is repaid through refinancing. Refinancing is discouraged by CHRA but is allowed to obtain a lower interest rate. All funds that are repaid are recycled through the program and used to assist additional clients.

Ms. Hauger stated some applicants may not qualify due to over income, poor credit to qualify for a mortgage or have too much debt and CHRA would still provide the one - on - one counseling. For the over income client, CHRA suggests alternative program sources. Ms. Hauger mentioned CHRA provides follow - up counseling as needed. Ms. Hauger stated CHRA is requesting $10,000 to administer the program and provide counseling.

CHRA does require the prospective homebuyer to pay their own closing costs that would be reasonable. CHRA feels if the buyer puts in their own dollars they would take it more seriously.

Community Housing Resources of Arizona office is located in Phoenix with 20% of clients from the East Valley. The Commissioners were given an opportunity to ask questions.

Vice Chairman Fresquez inquired the length of time for the one - on - one counseling. Ms. Hauger responded the client attends 3 sessions with each session averaging about two hours. Commissioner Iacobazzi asked if the geographical location of the organization would present any problem by potential clients from Gilbert. Ms. Hauger stated a couple traveled from the East Valley for default counseling recently and reiterated that 20% of their clients are from the East Valley. Chairman Haug inquired what the average household income of the applicants. Ms. Hauger responded that for 2001 the average household income was $31,000. Commissioner Valentine asked for an explanation of what is meant by a soft second mortgage. Ms. Hauger stated there is a lien on the property, which is a loan to buyer, and there is no payment on it until sale of the property.

Community Development Specialist Harris - Morgan asked Ms. Hauger to explain how the program works when someone comes into the program and are they forced to look for housing in a certain area. She indicated that there are no restrictions to buy in a certain area. CHRA currently has downpayment programs available for both Maricopa County and Phoenix. Ms. Hauger reassured the Commission that the monies would be used strictly for Gilbert. Vice Chairman Fresquez inquired as to the staff size of CHRA to administer the program. Ms. Hauger responded herself and 4 others. Chairman Haug thanked Ms. Hauger for her presentation and responses to the questions.

Ms. Minnette Himmelberger of Community Services of Arizona (CSA) was given an opportunity to give a presentation about the organization and details of the program proposed by CSA. She indicated CSA is a statewide program and are HUD certified counseling agency. CSA currently administers the homebuyer program in the City of Scottsdale and Glendale. CSA also is funded by the Arizona Department of Commerce to administer this program in Pinal, Gila, La Paz and Mohave Counties.

Ms. Himmelberger stated all the participants in the program must attend two six - hour homebuyer sessions. Gilbert hosted two sessions recently with 30 people in attendance. Sixteen are going through the program at this time with four ready to close in February. Ms. Himmelberger said the program is pretty much the same as CHRA. She expanded on CSA requires the participants to attend the homeownership classes and do individual counseling where a credit check is done, review finances, income and debt to determine if the person can sustain the home comfortably and successfully. CSA keeps in contact with the lenders during the whole process.

Ms. Himmelberger stated that CSA would work with those who are not ready to be homeowners and they could stay with the organization until they are ready. Ms Himmelberger indicated that CSA is looking to assist 5 ? 6 families looking at assistance of $10,000 - 15,000 per family.

The Commission was given an opportunity to ask questions about CSA or CHRA. Some of the questions asked were about the debt ratio used by CSA versus CHRA; the administrative costs of CSA; the default rate for CSA and if either organization does a follow - up after the client is in the home.

A MOTION was made by Commissioner Valentine, seconded by Commissioner Iacobazzi to recommend that the Town Council immediately allocate $100,000 in Community Development Block Grant Funds to Community Housing Resources of Arizona for a downpayment assistance program as described in the application form. Voice vote carried 5 - 0.

Chairman Haug thanked Community Housing Resources of Arizona and Community Services of Arizona representatives for their time and appreciates the presentation given by each. He indicated that both applications were commendable and only wished the Town had funding for both organizations.

ADJOURNMENT
A MOTION was made by Vice Chairman Fresquez, seconded by Commissioner Thomson to adjourn the meeting. The meeting was adjourned at 7:35 p.m.

ATTEST:

Thomas Haug, Chairman

Elizabeth A. Stupski, Recorder

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