Item 5: 2011/12 Funding Allocation for Federal CDBG and HOME Programs

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Housing Rehabilitation Fund will generate an estimated $400,000. In accordance with HUD requirements, program income from revolving loan funds can only be allocated to further the activities of the respective loan funds. The CDBG Advisory Committee held a public hearing and adopted a final recommendation for use of CDBG funds on April 12, 2011. The recommended allocation of new entitlement funds includes funding for public services which includes operating funds for eight social service programs, landbanking program, microenterprise training, and program administration. The package of recommended uses will address critical community needs for social services, affordable housing, and employment opportunities. If the City’s actual allocation of new entitlement funds is greater or lesser than estimated, adjustments will be made to the allocation for the landbanking program. Program income from the Business Development Fund and Housing Rehabilitation Fund will be allocated for new business and housing rehabilitation activities. Attachment A provides a table showing the sources, recommended uses, and a brief description for each use of CDBG funds. HOME Investment Partnership Program The primary purpose of HOME is to expand the supply of housing affordable to low-income persons. The City is the lead entity in the Eugene-Springfield Home Consortium, which has received annual entitlement grants since 1992. The Eugene-Springfield Consortium will receive an estimated $1,363,864 in HOME funds in FY 2011/12. This entitlement allocation is $185,982 less than the amount received in the previous year. Eugene will receive 70 percent of entitlement grant funds ($954,705) and Springfield will receive 30 percent ($409,159). The expected program income will come from repayments received through the Homebuyer Assistance Program and from other housing development loans. The HPB met on April 4, held a public hearing, and made a recommendation for allocation of HOME funds to both jurisdictions. HPB recommends that Eugene’s portion of HOME funds be divided among four program areas: 1) Housing Development Programs; 2) Homebuyer Assistance Program (HAP); ( 3) Security Deposit Assistance; and 4) Community Development Housing Organization CHDO) Operating Support. The proposed allocation is similar to previous allocation of HOME funds with the addition of a pilot security deposit assistance program. The proposed allocation maintains support for a mix of housing development, renter assistance, homebuyer assistance, and organizational support. In addition to these programs, Eugene staff anticipates up to $1,000,000 will be available for HOME interim financing. Through HOME interim financing, the City makes short-term loans for HOME eligible uses with funds dedicated but not yet disbursed for specific projects. The amount of funds available for HOME interim financing is dependent on project timing. If the City’s actual allocation is greater or lesser than estimated, adjustments will be shared equally across the program areas and administration. Attachment B includes a table which provides the sources, recommended uses, and a brief description for each use of funds. Section 108 Loan Guarantee Program In July 2006, HUD selected the City’s Section 108 application to create a $9,895,000 loan pool, together with BEDI grant funds, for redevelopment projects within the Downtown and Riverfront urban renewal districts. On February 26, 2007, the City Council approved an ordinance authorizing the use of the \\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc