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THE CITY OF 2 CITY COUNCIL AGENDA REPORT PL E ASANTON. September 3, 2013 Assistant City Manager TITLE: APPROVAL OF A $375,000 ALLOCATION FROM THE LOWER INCOME HOUSING FUND TO PREPAY TWO CALHFA HELP LOANS RELATED TO THE CITY'S DOWN PAYMENT ASSISTANCE PROGRAM SUMMARY In 2003, the City was awarded a Housing Enabled by Local Partnerships Program ("HELP") loan from the California Housing Finance Agency ("CaIHFA") in the amount of $450,000 to establish a Down Payment Assistance ("DPA") program. The City combined the HELP funds with $150,000 from its Lower Income Housing Fund to create a loan funding pool of $600,000. Due to a slow housing market, only $95,000 of these HELP funds were used to fund four DPA loans prior to the HELP funding expiring in late 2005. In 2007 the City received a second HELP allocation of $250,000 and of this amount, $247,487 was utilized to fund 11 additional DPA loans. As E result of these loans, the total amount of HELP loans issued since 2003 is $342,487 and with loan interest, the total payoff of these loans is currently $364,643. CaIIiFA loan terms require the City to repay the principal and 3% annual simple interest wi:hin ten years of receipt of the HELP loan. Recently, CaIHFA has offered the City a discount $46,635 (based on a 9/6/2013 repayment funding date) if it agrees to an early repayment of HELP loans. There is funding available in the City Lower Income Housing Fund and as a result, early repayment is recommended. RECOMMENDATION Approve the allocation of an amount not to exceed $375,000 (to accommodate any delays in repayment) from the Lower Income Housing Fund (271900) to repay the existing two HELP loans with CaIHFA. FINANCIAL STATEMENT The Lower Income Housing Fund's balance is estimated at $17 million with $9 million reserved for the Kottinger Place development project. As such there is adequate funding to make the early repayment. The actual repayment amount will be determined by the discounted interest due on the date the repayment is funded by the City and as such savings may be slightly more or less than the $46,635 noted above.