CC 03-20-2018 Exhibit Item No. 12 BMR Manual Update PresentationCC 03-20-2018 Item No. 12
1
Presentation To
City of Cupertino City Council
Presented By:
Kerri Heusler, Senior Housing Planner
March 20, 2018
Amendment of Policy and Procedures Manual
for Administering Deed Restricted
Affordable Housing Units
(BMR Manual Update)
BMR Program
•262 total BMR ownership and rental units created by the
City’s Housing Mitigation Program
•Ownership‐120 units (median / moderate income)
•Rental‐142 units (extremely‐low / very‐low / low
income)
CC 03-20-2018 Item No. 12
2
BMR Program
www.cupertino.org/housing
BMR Program
•The BMR Manual serves as the day‐to‐day administrative
manual for City staff and Hello Housing, our BMR
program administrator
•The BMR Manual establishes procedures for the ongoing
administration of the City’s BMR units
CC 03-20-2018 Item No. 12
3
BMR Manual Update
•Minor corrections and edits have been made for
consistency, readability, or clarifications
•Policies reviewed periodically based on three categories:
1. Improve Implementation
2. Follow Regional Best Practices
3. Conform to Legal Standards
1. Improve Implementation
Section 2.0 Application Selection Process
•2.5 BMR Application Waitlist‐
•Effective Jan. 1 ‐Dec. 31 each year
•Current tenants not eligible to apply
Section 4.0 Ownership Units
•4.10 Annual Monitoring‐The City / City’s Agent will
monitor compliance of all BMR program requirements,
including occupancy
CC 03-20-2018 Item No. 12
4
Improve Implementation
(cont…)
Section 5.0 Rental Units
•5.1 Income Limits‐Specific units restricted to extremely
low‐income (Greenwood Ct.)
•5.1.1. Minimum Income Requirements‐Minimum
income required by each BMR rental property may not
exceed gross monthly income of over three (3) times the
BMR rental rate
•5.2 Asset Limit‐Assets calculated at the time of
application
Improve Implementation
(cont…)
•5.8 Annual Recertification of Income‐If a tenant no
longer meets the minimum size requirements for their
unit, the household may be moved to a smaller unit in
the same property
CC 03-20-2018 Item No. 12
5
Improve Implementation
(cont…)
Section 6.0 Requirements of Apartment Owners and
Property Managers
•6.2 Eligible Prospective Tenants‐Property managers may
apply the same tenant selection criteria, such as credit
references, as those applied to applicants for non‐BMR
units on the property, except for standards relating to
income eligibility and minimum income
•6.7 Terms of Affordability Covenants‐Deed restrictions
shall remain in effect for a specified period from the
date of the Regulatory Agreement
2. Follow Regional Best Practices
Section 3.0 Minimum Homebuyer/Tenant Eligibility
Requirements
3.4 Definition of Residency in Cupertino‐Occupying and
renting, at the time of application for at least one month
prior, a bone fide rental dwelling unit (mobile home and
SRO units, or) within the Cupertino limits. For homeless
applicants, evidence that the applicant’s last permanent
residence was located in Cupertino and/or documentation
from a case manager or homeless service provider may be
used, which may include places or structures other than a
bona fide dwelling unit (i.e. tent, vehicle, etc.)
CC 03-20-2018 Item No. 12
6
Follow Regional Best Practices
(cont…)
Section 4.0 Ownership Units
•4.1.2 Credit Score‐Minimum 660 credit score required
•4.2 Asset Limit‐Limit of $100,000 or 30% of BMR
purchase price
•4.2.1 Minimum Cash Available‐
•Minimum 3% of own funds required towards down
payment
•Minimum 5% required for down payment + closing
costs (gift funds allowed)
Follow Regional Best Practices
(cont…)
•4.2.2 Gift Funds‐
•Counted towards asset limit
•Maximum of 27% of purchase price
•4.4.1 Initial Prices of Newly Constructed Units‐Based on
maximum affordable housing cost provisions of Sec.
50052.5 of CA Health/Safety Code, Sec. 6920 of CA Code
of Regulations, and most recent published HCD income
limits
CC 03-20-2018 Item No. 12
7
Follow Regional Best Practices
(cont…)
•4.6 Occupancy Conditions‐All owners must occupy the
unit as principal residence at least 10 months/year
•4.7 Required Pre‐Purchase Education‐All applicants
must attend
Section 5.0 Rental Units
•5.3 Qualification as Renter‐Applicant cannot own a
home and/or be on the title of property
Follow Regional Best Practices
(cont…)
•5.6 Occupancy Conditions‐Head of Household(d) must
occupy unit as primary residence for 10 months/year
•7.0 Appeal Process‐Appellant may further appeal the
decision of the Community Development Director or
Executive Director, as applicable, by filing a written
appeal with the Community Development Director
within ten (10) days of the date of the decision. The
appeal will be heard by a Third‐Party Hearing Officer
within thirty (30) days from the date of receipt of the
written appeal. The Third‐Party Hearing Officer’s
decision on the appeal is final.
CC 03-20-2018 Item No. 12
8
3. Conform to Legal Standards
Section 2.0 Application Selection Process
•2.6 False Statements‐
•Households that intentionally make false statements
or misrepresent facts will be removed from the
waitlist and barred from reapplying.
•If the City discovers that a contract was completed by
a purchaser or renter who intentionally made false
statements, the City will treat this as a breach of the
Resale Restrictions.
Conform to Legal Standards
(cont…)
Section 6.0 Requirements of Apartment Owners/Property
Managers
•6.8 Terms of Lease‐BMR tenants will be subject to the
same conditions of tenancy as other tenants occupying
the property, except for terms relating to occupancy,
income eligibility, annual recertification, and limits on
rents.
CC 03-20-2018 Item No. 12
9
Next Steps
1. Adopt The Draft Resolution Approving Amendments To The
Policy And Procedures Manual For Administering Deed
Restricted Affordable Housing Units.