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Transmittal - 4/2/2024ERIN MENDENHALL DEPARTMENT of COMMUNITY Mayor and NEIGHBORHOODS Blake Thomas Director SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 404 WWW.SLC.GOV P.O. BOX 145486, SALT LAKE CITY, UTAH 84114-5486 TEL 801.535.6230 FAX 801.535.6005 CITY COUNCIL TRANSMITTAL ________________________ Rachel Otto, Chief of Staff Date Received: 4/02/2024 Date sent to Council: 4/02/2024 ______________________________________________________________________________ TO: Salt Lake City Council DATE: 04/01/24 Victoria Petro, Chair FROM: Blake Thomas, Director, Department of Community and Neighborhoods __________________________ SUBJECT: Draft legislative policies for the Housing Program Funds, including the establishment of a Tenant and Homeowner Loan Fund, and the Direct Delivery Housing Programs STAFF CONTACT: Tammy Hunsaker, Deputy Director, Community and Neighborhoods Department, 385-315-3315, tammy.hunsaker@slcgov.com Tony Milner, Director, Housing Stability Division, 801-535-6168, tony.milner@slcgov.com Heather Royall, Deputy Director, Housing Stability Division, 801-535-7273, heather.royall@slcgov.com DOCUMENT TYPE: Information only RECOMMENDATION: Briefing and policy discussion BUDGET IMPACT: N/A BACKGROUND/DISCUSSION: Salt Lake City (“City”) utilizes various funding sources to support housing and community development activities. These funding sources primarily include U.S. Department of Housing and Urban Development (HUD) grant programs, Funding Our Future (FoF) sales tax funds, and program income, collectively called the Housing Program Funds. The City allocates a portion of the Housing Program Funds to local organizations for the implementation of activities that support the City’s goals, known as Subrecipient Programs. The rachel otto (Apr 2, 2024 14:20 MDT) 2 City also retains a portion of the Housing Program Funds to administer activities and programs directly to tenants, homeowners, landlords, and property owners, which is known as Direct Delivery Programs. Over the past several months, the Administration has briefed the Council on the Housing Program Funds, particularly on the “dormant” program income and the Direct Delivery Programs. As a next step, this transmittal includes draft legislative policies for the Council’s review and consideration. The ultimate goal is to accomplish the following: • Adopt a Housing Program Funds Policy to establish budgeting standards. This policy shall include the formation of: o A Housing Program Funds Loan Committee that will review, and in limited circumstances approve, funding allocations. o A Tenant and Homeowner Loan Fund that will serve as a revolving source of revenue to continue to fund the Direct Delivery Programs. • Adopt a policy for each of the Direct Delivery Programs to establish legislative standards for how the programs shall be administered. Background On February 14, 2023, the Administration briefed the City Council on dormant program income that had been generated over several years from certain Subrecipient Programs and Direct Delivery Programs. At that time, the Administration identified the need for the following process improvements: 1) Establish Legislative Policies for the Direct Delivery Programs o Currently, the Administration is providing draft legislative policies for certain Direct Delivery Programs for the Council’s review and consideration (Exhibits B – D). 2) Increase Budget Transparency o Currently, the Administration has incorporated a reporting requirement within the draft legislative policies for the Direct Delivery Programs to ensure that the Council receives regular updates on program outcomes to inform future budget decisions. Furthermore, the Administration has provided a draft Housing Program Funds policy that, once adopted, will establish standards for the budgeting process which will t increase transparency (Exhibit A). 3) Align practices with the Open and Public Meetings Act (“OPMA”) o Currently, the Administration is proposing that a Housing Program Funds Loan Committee be established through the Housing Program Funds Policy. OPMA will apply once the policy is codified. It is important to note that most beneficiaries of the Direct Delivery Programs are low and moderate-income individuals and families, and HUD requires that these populations remain confidential. As such, sensitive information such as names, credit history, incomes, and addresses will need to be generalized and/or kept confidential while complying with OPMA requirements. Draft Legislative Policies Draft legislative polices are provided as Exhibits A – D for the Councils review and feedback. 3 The Council may wish to take note of the following: • Salt Lake City Housing Program Funds Policy - Exhibit A Once adopted, this policy will establish standards for the budgeting, accounting, and reporting of the Housing Program Funds, and will establish a revolving loan fund, to be named the Salt Lake City Tenant and Homeowner Loan Fund (THLF). This will serve as a self-replenishing pool of revenue to fund the Direct Delivery Programs. Within the draft policy, the budgeting process for revenue and treatment of program income is based on the source of funding as follows: o New Revenue: Historically, the process to allocate new revenue to specific programs and recipients has been different depending on the source of funding. For example, HUD funds have been subjected to an application and review process that includes recommendations by a resident advisory board and Mayor with final allocations made by the Council, while FoF funds are subjected to a sealed request for proposal (RFP) process. Oftentimes, the same agencies are allocated funding through the different processes. To better coordinate resources, the Administration is proposing to allocate all new funding through an application process, with review by the resident advisory board and Mayor and final allocations made by the Council. o Restricted Program Income: Program Income generated from HUD funds, Funding Our Future, or other restricted sources must be administered according to associated requirements. For example, program income generated by HUD-funded activities shall be recaptured and reallocated annually, along with New Revenue, through an application process, with review by the resident advisory board and Mayor and final allocations made by the Council. o Unrestricted Program Income: Program income generated from activities funded with the THLF — a revolving loan fund to be established and maintained as an account in the general fund — is proposed to be recycled back into the THLF to continue to fund the Direct Delivery Programs. • Salt Lake City Home Repair Program - Exhibit B The City has been operating the Home Repair Program for decades. The program provides grants and loans to low and moderate-income homeowners, defined as 80% of the area median income (AMI) and below, to address emergency and chronic home repair needs. While Housing Stability has been administering the program pursuant to HUD regulations, legislative polices have never been formally adopted by the Council. Since the beneficiaries of the program are individuals and households, funding is proposed to be allocated on a first-come-first-serve basis, rather than on a competitive basis that positions one applicant against another. Once an applicant is deemed eligible, the Administration is proposing that the Housing Program Funds Loan Committee is 4 given authority to make the final determination of funding terms pursuant to the legislative policy. The Administration is proposing that funding be allocated as either a conditional grant or a deferred and/or below market loan. The issuance of grants is proposed to be limited to senior or disabled populations. Loans shall only be structured with deferred payments for households with an income of 50% AMI and below, or on a temporary basis with demonstration of an economic hardship. Loans issued to households at 51% - 80% AMI are proposed to be structured as amortizing loans with monthly repayments. • Salt Lake City Community Land Trust (“CLT”) Program - Exhibit C The City has been operating the CLT program since the Council adopted resolution 12 of 2017 which satisfies the requirements of Utah Code Section 10-8-2, in effect authorizing the City to sell properties at below-market value to facilitate affordable homeownership opportunities. Through the CLT program, the City designates property as part of the land trust model, retaining ownership of the land and only selling the housing structure to a qualified homebuyer. To facilitate affordability for the homebuyer, the City leases the land to the homeowner through a below market-rate lease. The City may also provide mortgage financing for the purchase of the housing unit. The City has added eighteen housing units to the CLT inventory and is actively working to acquire another single-family home with budget approved by the Council for fiscal year 2024 (“FY 24”). Since the beneficiaries of this program are individuals and households, available housing units and corresponding mortgage financing are proposed to be allocated on a first-come- first-serve basis, rather than on a competitive basis that positions one applicant against another. Once an applicant is deemed eligible and is matched with a housing unit, the Administration is proposing that the Housing Program Funds Loan Committee is given authority to make the final determination of funding terms pursuant to the legislative policy. Even though the recommendation is administer the program on a first-come, first-serve basis, the Administration is also proposing that the following populations receive a priority position on the program’s waitlist in order to support the anti-displacement efforts established in Thriving In Place: o Households that currently reside in Salt Lake City municipal boundaries and have done so for twelve (12) consecutive months or longer. o Households that have previously lived in Salt Lake City for a minimum of five (5) consecutive years, and that were displaced within the preceding five (5) years due to rising housing costs or redevelopment of property. 5 If a CLT homeowner elects to sell their home, the draft policy proposes that the homeowner shall receive all their cash equity invested in the house plus an equity share of 1.75% of the original purchase price for each year of ownership to account for appreciation, provided that the equity share is supported by an appraisal. The resale price of the housing unit to the next family shall be based on the total of the original purchase price and equity share from the previous transaction or the fair market value (“-FMV) of the housing unit, whichever is lower. The price of housing units newly added to the CLT inventory shall be based on the FMV of the housing unit. This helps keep housing affordable because it is based on the FMV of the housing unit only, and not the land. • Salt Lake City NOAH Preservation Pilot Program - Exhibit D Through the FY 24 budget, the Council allocated $1.2 million for a Naturally Occurring Affordable Housing NOAH pilot program. NOAH properties— constituting one of Salt Lake City’s largest supply of affordable housing stock — maintain affordable rents without public subsidy and, therefore, do not have a covenant that requires the property to be rented at an affordable rate. These properties are often aging, integrated into established neighborhoods, owned by small to medium scale landlords, and / or are at risk of rent increases through redevelopment or property improvements. This program, once established, is intended to provide financial assistance to NOAH property owners to carry out property improvements in return for a long-term covenant to preserve affordability. The covenant may be structured as either a deed restriction or as a long-term master lease with a housing authority or another qualified housing provider. A deed restriction would restrict the rental of the housing units to qualifying populations at an affordable rental rate. A master lease would reserve the rental of the housing units to recipients of rental vouchers, such as those received through the Housing Choice Voucher (HCV) Program, with the rental rate restricted to the maximum amount allowed by HUD. Reserving housing for families with an HCV, or other types of vouchers, would allow families to retain housing within the city, as families with a voucher often find it difficult to locate housing that is under the maximum rental rate allowed by HUD. As such, the high cost of rental housing has limited the number of families able to use their vouchers within the city. It is important for the program to strike a balance between providing an appropriate level of financial incentive while also attracting NOAH property owners to participate. By definition, NOAH properties do not have an affordable housing encumbrance. Once an encumbrance is recorded on a property’s title, the property’s value is decreased due to the restriction of rental income over time. The lower the rents are restricted, the more the value of the NOAH is impacted. Accordingly, the proposed polices for the City’s NOAH pilot program provide a greater incentive for units that are restricted at lower AMIs. The financing structure is proposed to be issued as a split between a grant and a loan, with the proportion of grant being larger for units that are at the lowest AMIs. Since the direct beneficiaries of this program are property owners, and the confidential information of tenants is not a factor, the funding is proposed to be initially offered on a 6 competitive basis. If qualifying applications are not received, the funding will then become available on a first-come-first-serve basis. Qualifying applications will be reviewed by the Housing Programs Loan Committee for a recommendation, then be forwarded to the City Council for final funding approval. Since the program is initially being structured as a pilot program, the funding is proposed to be allocated in multiple tranches to be able to test the structure of the program and learn and adjust accordingly. Budget Considerations Through the FY24 budget process, the Council allocated $1.2 million to the NOAH program from the unrestricted program income. In addition to the NOAH funding, there is $5,920,000 available in unrestricted program income that was approved by the Council as part of the FY 24 budget, but has not been allocated to a specific use or program. Through various briefings, the Administration has proposed that additional dormant program income be allocated to capitalize the THLF, with the following allocations to specific Direct Delivery Programs: o Home Repair Program: $500,000 o CLT Program with Homebuyer Mortgages: $2,100,000 If the Council is supportive of budget allocations to these programs, the Administration will prepare a budget action item for the Council’s consideration. As new program income is generated, the program income is proposed to be recycled through the THLF pursuant to the Housing Program Funds Policy. Not related to these programs, the Administration has proposed that the unrestricted program income be used to pay off two lines of credit that were utilized years ago to assume shares in homebuyer mortgage loans issued by the City. The current balance required to pay off these lines of credit is ~$2,604,000, as payments are being made monthly and the principal is decreasing. Paying off these lines of credit will save the City a significant amount of interest. In addition, the Administration has proposed that $180,000 of dormant program income be used for a Tenant Relocation Program that the City is establishing based on the policies priorities adopted through Thriving in Place, the City’s anti-displacement plan. In regard to any remaining unrestricted program income, the Administration proposes that that funding be allocated to the THLF for future allocation to a specific Direct Delivery Program. PUBLIC PROCESS: The Administration has briefed the Council on the dormant program income funds on multiple occasions, and any budget allocations of the dormant program income is subject to the City’s budgeting process. EXHIBITS: A. Salt Lake City Housing Program Funds Policy B. Salt Lake City Home Repair Program C. Salt Lake City Community Land Trust (“CLT”) Program D. Salt Lake City NOAH Preservation Pilot Program EXHIBIT A: Page 1 DRAFT - Salt Lake City Housing Program Funds Policy Salt Lake City Housing Program Funds Policy DRAFT 1. GENERAL 1.1 Scope Salt Lake City (“City”) utilizes various funding sources to support housing and community development activities (collectively the “Housing Program Funds”). The City allocates a portion of the Housing Program Funds to local organizations for the implementation of activities that support the City’s goals (“Subrecipient Programs”). The City also retains a portion of the Housing Program Funds to administer activities and programs directly to tenants, homeowners, landlords, and property owners (“Direct Delivery Programs”). This policy establishes standards for the financial and reporting standards for the Housing Program Funds. In addition, this policy establishes a revolving loan fund as a self-replenishing pool of revenue to fund the Direct Delivery Programs. 1.2 Intent Housing and community development policies are outlined in various plans that have been adopted or approved by the City. The intent of the Housing Program Funds is to implement the goals and objectives that are outlined in the relevant plans, including but not limited to the City’s moderate-income housing plan, anti-displacement plan, and 5-year consolidated plan as required by the U.S. Department of Housing and Urban Development (HUD). The uses of the funds for the Direct Delivery Programs shall be outlined in the specific program policy. 2. FINANCIAL 2.1 Revenue Housing Program Funds revenue sources shall include: A. Federal Ongoing: Revenue from federal funding sources that is allocated annually to the City for affordable housing and community development activities, including the following HUD programs: Community Development Block Grant (CDBG), Home Investment Partnership Program (HOME), Emergency Solutions Grant (ESG), and Housing Opportunities for Persons with AIDS (HOPWA). B. Funding Our Future (FoF): FoF sales tax dollars that are designated annually for housing programs. C. Program Income: Revenue generated from the sale of property, the repayment of principal and interest, or other sources of revenue generated from an activity funded with the Housing Program Funds. To comply with the various statutory requirements for each revenue source, the City shall separately account for Program Income according to the associated EXHIBIT A: Page 2 DRAFT - Salt Lake City Housing Program Funds Policy source, as follows: o Restricted Program Income: Program Income generated from Federal Ongoing, FoF, or other sources with federal, state, or other restrictions shall be administered according to associated requirements. For example, Program Income generated from Federal Ongoing funding sources maintains federal requirements in perpetuity and shall be recaptured and reallocated annually pursuant to federal regulations. o Unrestricted Program Income: Program Income generated from the Tenant and Homeowner Loan Fund, or another source that does not have restrictions on the utilization of program income, shall be deposited into a revolving loan fund, pursuant to Section 3: Tenant and Homeowner Revolving Loan Fund, to continue to further the policy objectives contained herein. D. Other Housing Program Funds: The City may designate general fund or other one-time funding from federal, state, or other sources for housing or community development purposes. 2.2 Expenditures 2.2.1: Annual Budget Allocations The City Council shall appropriate the Housing Program Funds revenue to specific Direct Delivery and Subrecipient programs through the annual budget process. The Administration shall propose funding recommendations to the City Council either through a competitive application process or through administrative budget recommendations, as follows: A. Competitive Application Process The following sources of Revenue shall fund either Subrecipient or Direct Delivery programs and shall be subject to an annual competitive application process: a. Federal Ongoing b. FoF c. Restricted Program Income d. Other Housing Program Funds (on a case-by-case basis) Applications shall be subject to a review and funding recommendation process conducted first by the Community Development and Capital Improvement Program Advisory Board (“CDCIP Board”), or its successor, then by the Mayor. The CDCIP Board and Mayor’s funding recommendations shall be submitted to the City Council during the budget deliberation process for the upcoming fiscal year. B. Administrative Budget Recommendations The following sources of Revenue shall fund Direct Delivery Programs to ensure their financial viability. Funding recommendations shall be submitted through the Mayor’s Recommended Budget: a. Unrestricted Program Income EXHIBIT A: Page 3 DRAFT - Salt Lake City Housing Program Funds Policy b. Other Housing Program Funds (on a case-by-case basis) 2.2.2: Direct Delivery Program Project Allocations Once The City Council has appropriated funding to a Direct Delivery Program, funding allocations to specific project recipients shall be determined by the respective Direct Delivery Program policy. A Housing Program Funds Loan Committee shall be established to provide recommendations or decisions of funding, as established by the respective Direct Delivery Program policy, and shall be comprised of five (members), as follows: A. Two (2) members of the CDCIP Board, or its successor B. The Director of Community and Neighborhoods, or designee C. The Director of Housing Stability, or designee D. The City’s Chief Financial Officer, or designee 3. TENANT AND HOMEOWNER REVOLVING LOAN FUND The Salt Lake City Tenant and Homeownership Loan Fund (THLF) shall be established and maintained as a restricted account in the general fund to facilitate the recycling of Unrestricted Program Income for the implementation of the Direct Delivery Programs. The THLF shall be financially managed by the Department of Finance (“Finance”). There shall be deposited into the fund all monies received by the City that do not have federal or state restrictions and that are dedicated to community development and affordable housing programs, including, but not limited to: A. Unrestricted Program Income; B. In lieu payments, mitigation fees, contributions, and other monies that may be received by the City for the purposes of tenant and homeownership housing programs; and C. Other monies appropriated by the City Council. No expenditure shall be made from the THLF without approval of the City Council. Through the annual budget, the City Council shall allocate funds from the THLF to specific Direct Delivery Programs pursuant to Section 2.2. 4. REPORTING The Mayor’s Administration shall submit a report to the City Council on an annual basis that provides an overview of budget expenditures and associated outcomes. The report shall include a summary of property transactions, loans, grants, and populations served. To keep the identity of individuals, tenants, homeowners confidential, reporting shall include the census block group of the property, household, or individual served rather than the address. EXHIBIT A: Page 4 DRAFT - Salt Lake City Housing Program Funds Policy EXHIBIT B: Page 1 Draft - Salt Lake City Home Repair Program Salt Lake City Home Repair Program Legislative Policies DRAFT 1. GENERAL 1.1 Mission The Home Repair Program (“Program”) provides financial assistance to low- and moderate-income homeowners (“Homeowners”) for expenses related to maintaining safe and stable housing in order to preserve the housing stock and the health and wellbeing of the families occupying them. Financial assistance is facilitated through the execution of an agreement between the City, Homeowner, and construction contractor. The City provides project managements services and issues funding directly to the construction contractor on behalf of the Homeowner. 1.2 Project Types The Program includes two types of projects, as follows: A. Minor Repair: Addresses minor home repairs and accessibility needs. B. Home Rehabilitation: Correct deficiencies and bring homes up to Salt Lake City’s existing Housing Code. 1.3 Program Administration The Program shall be administered by the Housing Stability Division, including staff to manage the administration, construction management, and loan servicing aspects of the Program. 2. PROGRAM FUNDING 2.1 Funding Sources The Program shall be funded pursuant to the Housing Funds Policy. 2.2 Program Income Program income shall be generated by the repayment of principal and interest on loans issued through the Program. The financial management of program income shall be pursuant to the Housing Funds Policy. 2.3 Uses of Funding Funding allocations shall be utilized to issue grants and loans to eligible Homeowners. EXHIBIT B: Page 2 Draft - Salt Lake City Home Repair Program 3. ELIGIBILITY REQUIREMENTS 3.1 Eligible Properties Eligible properties shall be owner-occupied housing units located within Salt Lake City boundaries. The property’s real estate taxes, water, and sewer payments must be current and in good standing with the City, provided however that Program funding may be utilized to address code violations. 3.2 Eligible Costs Eligible Costs shall include up to 100% of the cost of labor and materials to correct substandard conditions, correct violations of local housing codes, and to implement certain type of improvements, as follows: A. Replacement and repair of principal fixtures B. Replacement and repair of components of existing structures C. Installation of security and safety devices D. Weatherization and conservation improvements including for water and energy efficiency E. Accessibility improvements and upgrades F. Lead, radon, and other hazard mitigations G. Closing costs, loan origination fees, and loan servicing fees 3.3 Eligible Homeowners Homeowner eligibility shall be based on the following criteria by Project Type: A. Minor Repair: a. Have a household income of 80% of the area median income (AMI) and below; and b. Have a primary resident that is either a senior (aged 62 years or older), or living with a disabling condition that is recognized under federal guidelines. B. Home Rehabilitation: a. Homeowners shall be, and intend to remain, the principal residence of the property for the term of the loan; and b. Have a household income of 80% AMI and below; and c. For households obtaining an amortizing loan: i. Have sufficient income to pay back the loan, as determined by the ratio of the homeowner’s debt-to-income (DTI). Total monthly revolving debts, including the costs for the Home Repair Program loan, cannot exceed a DTI of 45% of the gross monthly income or the maximum amount allowed under HUD’s First Time Homebuyer Program or its successor. In addition to a DTI of 45% or lower, the homeowner shall be required to demonstrate sufficient income, defined as the amount of money a household has left over each month after paying major expenses such as mortgages and car loans, to cover the cost of household needs such as food, EXHIBIT B: Page 3 Draft - Salt Lake City Home Repair Program fuel, clothing, and other household essentials. ii. Have a good history of meeting their financial obligations, as determined by the homeowner’s credit report. 4. FUNDING TERMS AND CONDITIONS Funding awards shall be based on the following terms and conditions: PROJECT TYPE: MINOR REPAIR HOME REHABILITATION Type of Assistance Grant Conditional grant Deferred loan Amortized loan AMI Up to 80% AMI; and a senior or disabling condition Up to 30% AMI and a senior or disabling condition Up to 50% AMI 51% to 80% AMI Debt to Income Requirement n/a n/a n/a 40% or below Homeowner Occupancy Requirement Primary resident upon distribution of funds 5 Years Term of the loan Term n/a 5 Years As long as ownership and occupancy requirements are met Up to 20 Years Interest Rate n/a n/a 0% 0-4% Default Interest Rate n/a 4% on the outstanding balance Payment Type n/a n/a Payments are deferred Payments shall be due monthly Maximum Assistance Up to $2,500 annually; lifetime limit of $20,000 per owner Up to $50,000; lifetime limit of $50,000 per owner Up to $50,000, only one active loan per property Collateral None Deed of trust EXHIBIT B: Page 4 Draft - Salt Lake City Home Repair Program NOTES: ▪ Conditional Grants: Conditional grants shall be forgiven over a 5-year term on a prorated basis. Accordingly, 20% of the loan shall be forgiven annually. ▪ Deferred Loans: Deferred loans shall become payable upon sale or transfer of the property or if the Homeowner no longer lives in the property as an owner-occupant. ▪ Transfer of Loans: Loan may be transferred to certain heirs, including a spouse, child, or a domestic partner, that assume title of the Housing Unit. Eligibility of loan transfer will be analyzed on a case-by-case basis. ▪ Amortized Loans: • Term: Amortized loans shall have a 20-year term but may be shorter if the applicant demonstrates the ability to accelerate repayment based on a DTI analysis. • Interest Rate: Amortized loans shall have an interest rate that is competitive to the current market rate but shall be no lower than 3% unless the applicant demonstrates the need for a lower payment based on a DTI analysis. • Maximum Assistance: The Maximum Assistance amount for amortized loans shall be sized to the lower of $50,000 or the maximum amount affordable with the DTI maximum established in Section 3: Eligibility Requirements. 5. APPROVAL PROCESS Funding shall be awarded on a first come first served basis, as per the date a complete application is submitted. Once a completed application is submitted, the application shall be processed for approval as follows: A. Housing Stability staff shall verify that all Eligibility Requirements are met. If requirements are not met, the application will be denied. B. If Eligibility Requirements are met, Housing Stability staff shall make a recommendation to the Housing Program Funds Loan Committee regarding the maximum assistance amount and other funding terms and conditions based on the standards established in Section 4: Funding Terms and Conditions. C. The Housing Program Funds Loan Committee shall review and has the authority to approve the funding request within the standards set forth in this policy. 6. PROCUREMENT, CONTRACTING, AND DISBURSEMENT OF FUNDS Once an application is approved by the Housing Program Funds Loan Committee, a procurement and contracting process that complies with City and HUD policy shall be carried out. Housing Stability staff shall provide project management services, in coordination with the Homeowner and contractor, to establish and carry out a scope of work. Grant/loan proceeds may be disbursed to the contractor through construction draws. EXHIBIT B: Page 5 Draft - Salt Lake City Home Repair Program 7. LOAN DEFERMENT AND MODIFICATION 7.1 Temporary Deferment of Amortized Loans On an annual basis, existing loan holders can apply for a partial or full deferment of monthly loan payments if the household’s DTI percentage exceeds 50% considering all revolving debt including the Program loan. The amount of monthly loan payments to be deferred shall be based on the 50% DTI threshold. Requests for deferments shall be evidenced by a financial analysis of the household’s income and debt obligations. Deferments may be approved by the Housing Program Funds Loan Committee for up to 12 months and may be reauthorized on an annual basis for up to five (5) years, consecutive or nonconsecutive, during the term of the loan. If a loan deferment is granted, the loan shall be extended for an equivalent period of time. 7.2 Permanent Modification or Deferment of Amortized Loans The following options may be considered if a loan holder continues to experience an economic hardship and has exhausted the temporary loan deferment option provided under Section 7.1: A. Loan Modification If a Household continues to experience a temporary economic hardship, the loan holder may request a permanent loan modification. The loan modification may include extension of the loan term up to 30 years and/or an interest rate reduction. Such requests shall be reviewed and approved by the Housing Program Funds Loan Committee. B. Permanent Loan Deferment If a Household has experienced a severe and permanent economic hardship, the loan holder may request a deferment of the loan until the Homeowner no longer lives in the property as an owner-occupant. The loan shall be due upon sale or transfer of the property. Notwithstanding, the loan may be transferred to certain heirs including a spouse, child, or a person living in the household for at least one year prior to Homeowner’s death. In order to be authorized, such requests shall be reviewed and recommended by the Housing Program Funds Loan Committee and approved by the Director of Community and Neighborhoods. 8. REPORTING Housing Stability shall submit a report to the City Council on an annual basis. The report shall include outcomes associated with the Programs including a summary of projects completed, number of new grants and loans, total outstanding balance of the loan portfolio, and number of delinquencies. EXHIBIT B: Page 6 Draft - Salt Lake City Home Repair Program EXHIBIT C: Page 1 Draft - Salt Lake City Community Land Trust Program Salt Lake City Community Land Trust Program Legislative Policies DRAFT 1. GENERAL 1.1 Mission The Community Land Trust and Homebuyer Loans (collectively the “CLT Program”) work in tandem to provide for-sale housing units in conjunction with mortgage loans to facilitate homeownership opportunities for low- and moderate-income (LMI) households and to maintain the units as affordable over the long-term. The CLT Program allows for equity sharing upon the sale of the home to promote wealth building. The City designates property as part of the land trust model, retaining ownership of the land (“Land”) and selling only the housing structure (“Housing Unit”) to a qualified homebuyer (“Homebuyer”). To facilitate affordability for the Homebuyer, the City leases the Land to the Homeowner through a below market-rate lease (“Ground Lease”) and may provide mortgage financing for the purchase of the Housing Unit. 1.2 Policy Objectives The CLT Program shall promote: A. Affordable homeownership as a way for low and moderate-income families to build wealth and achieve financial stability through equity sharing. B. Affordable homeownership as a way to reject historical policies that precluded minorities and others from purchasing a home and widened the racial wealth gap. C. Affordable homeownership in areas of opportunity as a platform for a range of positive life outcomes, including those related to health and education. D. Affordable homeownership opportunities to combat displacement in neighborhoods faced with gentrification. 1.3 Program Administration The CLT Program shall be administered by the Housing Stability Division, including management of the administration, rehabilitation activities, and loan servicing aspects of the Program. 1.4 Scope of Services Homebuyer Loan mortgage financing issued by the City is exclusively available to Homebuyers participating in the CLT Program; however, a Homebuyer participating in the CLT Program is not required to utilize Homebuyer Loan mortgage financing issued by the City and may use another source of financing subject to approval by the City. EXHIBIT C: Page 2 Draft - Salt Lake City Community Land Trust Program 1.5 Program Inventory Program Inventory shall include residential properties located within Salt Lake City boundaries that have been acquired by the City and designated as part of the CLT Program. Once a property is designated as part of the CLT Program, it shall remain in the CLT Program in perpetuity unless the property is deemed to no longer serve the Mission of the CLT Program or is needed for a different public purpose. In instances where a property shall be disposed of, the property shall be disposed of pursuant to City Code 2.58: City Owned Real Property, but with the sales proceeds designated as Program Income pursuant to this policy. Properties may be acquired for the CLT Program through the following ways: A. The City may purchase properties on the open market. B. The City may purchase properties that, as part of a mortgage or loan issued by the City, there is a contractual clause that gives the City the first opportunity to buy the property. C. The City or its Redevelopment Agency may build Housing Units or partner with development partners to build Housing Units on surplus or other City-owned property. D. The City may purchase property from homeowners who want to place their home into the CLT Program or who agree to undertake a sale-leaseback scenario. Under a sale-leaseback scenario, a property owner would sell the land underneath their house to the City and continue living in the Housing Unit under a long-term Lease. This would provide property owners, such as seniors living on a fixed income, with revenue from the land sale while also adding to the CLT Program’s inventory. 2. PROGRAM FUNDING 2.1 Funding Sources The CLT Program shall be funded pursuant to the Housing Program Funds Policy. 2.2 Program Income Program income shall be generated from the sale of property and the repayment of principal and interest on loans issued through the CLT Program. The financial management of program income shall be pursuant to the Housing Funds Policy. 2.3 Uses of Funding Funding allocations shall be utilized for the following activities: A. The repurchase of Housing Units. B. The rehabilitation of Housing Units to prepare the home for resale. C. Mortgage financing to Homebuyers of Housing Units. D. The acquisition or development of property to add new units to the CLT Program’s inventory. EXHIBIT C: Page 3 Draft - Salt Lake City Community Land Trust Program 3. ELIGIBILITY, PRIORITIZATION, AND APPROVAL PROCESS 3.1 Eligibility Requirements: To be eligible to participate in the CLT Program, an applicant shall meet the following threshold requirements: A. Maximum Income: A household shall have an annual income which does not exceed 80% of the area median income (AMI) of households of equal size residing in the Salt Lake statistical areas as defined by the U.S. Department of Housing and Urban Development (HUD). B. Creditworthiness: A household shall demonstrate a history of meeting their financial obligations, as determined by the homeowner’s credit report. C. Debt Capacity: A household’s debt to income (DTI) percentage, including all revolving debt inclusive of the prospective mortgage financing, shall not exceed 45% of the gross monthly income or the maximum amount allowed under HUD’s First Time Homebuyer Program. D. Tenure Status: A household shall be a first-time homebuyer or have not owned a home in the past five (5) years, or a single parent or individual who has only owned a home with a former spouse or partner while married or in a domestic partnership. 3.2 Application Prioritization and Housing Unit Selection: Applicants that successfully meet the Eligibility Requirements (“Pre-Approved Applicants”) will be placed on a waitlist that is based on a first-come, first-served basis. Provided however that Pre-Approved Applicants that meet one or more of the following criteria will be escalated on the waitlist higher than Pre-Approved Applicants that do not meet these criteria: A. Households that currently reside in Salt Lake City municipal boundaries and have done so for twelve (12) consecutive months or longer. B. Households that have previously lived in Salt Lake City for a minimum of five (5) consecutive years, and that were displaced within the preceding five (5) years due to rising housing costs or redevelopment of property. Once a Housing Unit becomes available, Housing Stability staff will offer it to the first prioritized Pre-Approved Applicant. The applicant may select to move forward with purchasing the Housing Unit or may decline to move forward with that particular Housing Unit. If a Pre-Approved Applicant passes on a Housing Unit, the Housing Unit will be offered to the next prioritized applicant on the waitlist. A Pre-Approved Applicant may pass on a Housing Unit and remain in the same position on the waitlist. Applicants shall demonstrate that they meet eligibility requirements at the time of application and at the time of closing. 3.3 Mortgage Financing Approval Process: Once a Pre-Approved Applicant is matched with a Housing Unit, the Pre-Approved Applicant shall obtain mortgage financing in EXHIBIT C: Page 4 Draft - Salt Lake City Community Land Trust Program one of two ways, as follows: A. If the Pre-Approved Applicant is obtaining independent mortgage financing, the applicant shall provide the City with evidence of the third-party financing amount and terms and the third-party lender’s acknowledgement of participation in the CLT Program; or B. If the Pre-Approved Applicant is obtaining a Homebuyer Loan through the City, Housing Stability staff shall underwrite the loan pursuant to the standards established in Section 4: Mortgage Financing. The Housing Program Funds Loan Committee shall review and has the authority to approve the Pre-Approved Applicants acquisition of the Housing Unit and, if applicable, the terms of the Homebuyer Loan to be issued by the City within the standards set forth in this policy. 4. MORTGAGE FINANCING 4.1 Terms and Conditions: If the Homebuyer elects to obtain a Homebuyer Loan issued by the City, the mortgage financing shall be underwritten and issued pursuant to the following terms and conditions: A. Maximum Loan Amount: Up to 100% of the purchase price of the Housing Unit. B. Debt to Income Maximum: The DTI maximum is the limit established in Section 3: Eligibility Requirements. C. Interest Rate: The interest rate shall be 3%, provided however that a household’s debt to income (DTI) percentage, including all revolving debt inclusive of the prospective loan, is below the DTI maximum established in Section 3: Eligibility Requirements. If a household’s DTI percentage is above the threshold, the interest rate may be reduced to meet the threshold. Interest rates shall be competitive to the market and at no time shall be below 1%. D. Term: The term of the loan shall be up to 30 years. E. Payments: Payments shall be collected monthly. Late payments are subject to a 4% late fee. F. Security: A Deed of Trust and Promissory Note will be recorded on the property. 5. COMMUNITY LAND TRUST 5.1 Pricing Overview: EXHIBIT C: Page 5 Draft - Salt Lake City Community Land Trust Program The resale price and equity sharing terms are intended to balance permanent affordability with equity-building opportunity. If a Homeowner elects to sell their Housing Unit, the Homeowner shall receive the equity they paid down on their mortgage, plus a limited amount of equity from Housing Unit’s appreciation in value. The following components shall be considered: A. Base Price: The Base Price shall be the original purchase price of the Housing Unit by the Homeowner, including the sum of the Homebuyer’s down payment and the amount mortgaged. B. Equity Earned: The equity attributed to the Homeowner’s down payment and principal paid on the mortgage. C. Equity Appreciation: The equity attributed to the appreciation of the Housing Unit’s value after its purchase by the Homeowner. 5.2 Resale Price and Equity Determination: When a Homeowner decides to sell, whether to the City or directly to another qualified household, the Resale Price and corresponding Homeowner Equity Determination shall be the lower of the following two options: A. Option 1 - Standard Formula: o Resale Price: The Base Price plus 1.75% of the Base Price, not compounding, for each year the Homeowner has owned the Housing Unit. Formula: (Base Price) + (1.75% x Base Price x years of ownership) o Homeowner Equity Determination: Equity Earned plus Equity Appreciation capped at 1.75% of the Base Price for each year of ownership, not compounding. Formula: (Earned Equity) + (Base Price x 1.75% x years of ownership) B. Option 2 - Appraised Value: o Resale Price: If the City believes the Resale Formula output is too high for market conditions, the City may, at its expense, commission a market valuation of the Housing Unit. Formula: Appraised Value o Homeowner Equity Determination: The Appraised Value less any outstanding mortgage debt. Formula: Appraised Value – Mortgage Debt For Housing Units newly added to the Program Inventory or Housing Units within the existing inventory that appraise lower than the previously calculated Resale Price, the City may set the current Resale Price at the fair market value of the Housing Unit as determined by an appraisal, considering the Housing Unit only and not the value of the land. 5.3 Ground Lease Terms, Fees, Renewal Option A. Occupancy Requirement: Homeowners shall maintain the housing unit as a primary residence continuously over the term of the ground lease. B. Initial Lease Term: Ninety-nine (99) years. C. Lease Renewal Term: Homeowners shall have the option to extend the terms of the Lease for ninety-nine (99) years. D. Lease Expiration or Termination: Upon expiration or early termination of a Lease, ownership of the Housing Unit shall revert to the City. Upon reversion to the City, the City shall pay the Homeowner, or the Homeowner’s heirs upon death, pursuant to EXHIBIT C: Page 6 Draft - Salt Lake City Community Land Trust Program Section 5.2: Resale Price and Equity Determination. E. Transfer: Homeowner may transfer the lease to income qualified households upon approval by the City, including under the following conditions: a. A transfer to a new Homeowner due to a sale of the Housing Unit. The sale shall comply with Section 5.2: Resale Price and Equity Determination and be approved by the City. b. A transfer, as approved by the City, to certain heirs upon death including a spouse, designated guardian of the Homeowner’s child under the age of 18, or a person living in the household for at least one year prior to homeowner’s death. The eligibility of a ground lease transfer shall be analyzed and approved on a case-by-case basis. F. Lease Fee: $50 per month. The Lease Fee may increase from time to time but may not be increased more than 3% year-over- year. G. Common Area Maintenance (CAM) Fee: For multifamily units, a CAM fee may be assessed that equates to the prorated cost of expenses relating to the maintenance of common areas. H. Maintenance and Repairs: The Homeowner is responsible for repairs and maintenance for both the land and improvements unless otherwise covered by a CAM Fee. I. Repair and Replacement Reserve: A modest fee may be collected on a monthly or annual basis and held by the City in a Repair and Replacement Reserve account to be accessed by the homeowner for repairs and replacement of structural and mechanical systems as approved by the City. Upon resale of a Housing Unit or termination of a Lease, funds accumulated in the Homeowner’s Repair and Replacement Reserve shall be used by the City to fund improvements for Housing Units in the CLT Program’s inventory. 5.4 Option to Purchase Terms In the event that the Homeowner wishes to sell the Housing Unit, the Homeowner shall notify the City, and the City shall have the option to purchase the Housing Unit pursuant to Section 5.2: Resale Price and Equity Determination. If the City declines or the purchase option expires, the Homeowner has the right to sell the Housing Unit in coordination with the City and pursuant to the terms contained herein. Any sale or transfer of a Housing Unit is subject to either an assignment of an existing Lease, with approval by the City, or the execution of a new Lease with the City. 5.5 Property Taxes Homeowners are responsible for paying property taxes on the Housing Unit, as assessed by Salt Lake County or other local taxing districts. If the Housing Unit is financed with a mortgage obtained through the CLT Program, the City may hold an escrow account to collect and pay property taxes and insurance on behalf of the Homeowner. If the Homeowner does not have mortgage financing with the City, the Homeowner shall be responsible for paying property taxes directly to Salt Lake County. 6. DEFERMENT, MODIFICATION, AND DEFAULT EXHIBIT C: Page 7 Draft - Salt Lake City Community Land Trust Program 6.1 Temporary Payment Modification or Deferment of Homebuyer Loan If a Homeowner is experiencing an economic hardship, the Homeowner may apply for a modification of payments or a full or partial deferment of payments to the City. To receive a payment modification or deferment, the Homeowner shall demonstrate that its household’s DTI percentage exceeds 45% considering all revolving debt including the CLT Program payments. The portion of monthly payment amount to be modified or deferred shall be based on the 45% DTI threshold. Request for modifications or deferment shall be evidenced by a financial analysis of the household’s income and debt obligations. Modifications or deferments may be approved by the Housing Program Funds Loan Committee for up to 12 months and may be reauthorized on an annual basis for up to thirty-six (36) months, consecutive or nonconsecutive, during the term of the loan. If a loan deferment is granted, the loan shall be extended for an equivalent period of time. 6.2 Modification of a Homebuyer Loan If the ability to defer has been exhausted, a Homeowner may request a permanent modification to a Mortgage Loan issued by the City. The modification may include adjustment of the term and/or interest rate to make the loan payments more affordable. Modifications shall be reviewed by the Housing Program Funds Loan Committee and unanimously approved by the Director of Housing Stability, Director of Community and Neighborhoods, and Chief Financial Officer or designee. 6.3 Default If a Homeowner defaults on a Homebuyer Loan and/or Ground Lease and does not remedy the default, the City may terminate the Ground Lease, and repurchase the Housing Unit subject to Section 5.2 Resale Price and Equity Determination. 7. REPORTING Housing Stability shall submit a report to the City Council on an annual basis. The report shall include outcomes associated with the Program including an overview of the inventory of Housing Units, purchase and sale transactions, and budget expenditures and revenue. To keep the identity of Homeowners confidential, reporting shall include the census block group of the Housing Unit rather than the address. EXHIBIT D: Page 1 Draft - Salt Lake City NOAH Preservation Pilot Program Salt Lake City NOAH Preservation Pilot Program Legislative Policies DRAFT 1. GENERAL 1.1 Mission The NOAH Preservation Program (“Program”) provides financial assistance to property owners (“Owners”) of naturally occurring affordable housing (NOAH) to carry out property improvements in return for a long-term covenant to preserve affordability. NOAH properties, constituting one of Salt Lake City’s largest supply of affordable housing stock, maintain affordable rents without public subsidy and, therefore, do not have a covenant that requires the property to be rented at an affordable rate. The lack of covenants and subsidies makes NOAH assets vulnerable to either redevelopment or disrepair, both of which create instability for communities. When NOAH properties are redeveloped due to market speculation or upgrades that result in higher rents, existing renters are displaced, and affordable housing units are lost. To preserve the city’s affordable housing stock and prevent displacement, the Program shall provide low interest loans to Owners with the shared social goal of preserving affordability for the long term. 1.2 Program Administration The Program shall be administered by the Housing Stability Division, including staff to manage the administration and loan servicing aspects of the Program. 2. PROGRAM FUNDING 2.1 Funding Sources The Program shall be funded pursuant to the Housing Program Funds Policy. 2.2 Program Income Program income shall be generated by the repayment of principal and interest on loans issued through the Program. The financial management of program income shall be pursuant to the Housing Funds Policy. 2.3 Uses of Funding Funding allocations shall be utilized to issue loans to eligible Owners. EXHIBIT D: Page 2 Draft - Salt Lake City NOAH Preservation Pilot Program 3. ELIGIBILITY REQUIREMENTS 3.1 Eligible Properties Eligible properties shall be properties located within Salt Lake City boundaries that: A. Currently do not have a deed restriction or covenant requiring affordable rents; or that have a project-based affordability deed restriction or covenant that is at risk of being lost due to contract expiration. B. Include housing units that are currently being rented at a rate affordable to households at or below 80% of the area median income (AMI) as defined by the U.S. Department of Housing and Urban Development (HUD), hereafter referred to as an Affordable Unit. An Affordable Unit shall have an annualized rental rate, including cost for basic utilities, that does not exceed thirty percent (30%) of the maximum monthly income permissible for the applicable AMI, assuming a household size equal to the number of bedrooms in the unit plus one. C. Demonstrate a gap between the funding required to improve, maintain, and/or operate the property while maintaining rental rates for the Affordable Units and the amount of revenue available. D. Are current and in good standing with the City on real estate taxes, water, and sewer payments. 3.2 Eligible Borrowers Eligible borrowers include for-profit, non-profit, and limited equity cooperative (LEC) organizations that are existing owners or buyers of NOAH properties, and that: A. Demonstrate property management experience; or that have obtained technical assistance to ensure the successful management and operation of NOAH properties. B. Are tax compliant and current on all City loans related to existing projects undertaken by the borrower and/or any related entity of the borrower. C. Possess all necessary legal and corporate authorization to incur the obligations of the Program financing. D. Possess the appropriate business license, or commit to obtain the appropriate business license, to operate rental housing wit hin Salt Lake City. E. Are enrolled in Salt Lake City’s Landlord Tenant Initiative. 3.3 Eligible Activities A. Capital expenses for emergency stabilization activities including but not limited to roof repair, mold remediation, building systems, building envelope, life safety issues, or other physical needs that could impact the health and quality of life for current residents, or compromise the building structure. B. Capital expenses to provide necessary renovations to ensure the long-term viability of the property with the Affordable Units. Renovations may include, but not be limited to kitchen/bathroom upgrades, paint and flooring upgrades, historic preservation activities, and common area improvements. C. If in conjunction with capital expenses, operating expenses may be eligible to address operating shortfalls and to stabilize the property. EXHIBIT D: Page 3 Draft - Salt Lake City NOAH Preservation Pilot Program D. Capital expenses relating to the improvement or preservation of a LEC, or other shared equity model, in which a self- governing group of residents organize to form a corporation or cooperative to purchase the property. Eligible activities include costs related renovation/rehabilitation required to ensure the long-term viability of the LEC. 4. FUNDING TERMS AND CONDITIONS Funding awards shall be based on the following terms and conditions: Affordability Mechanism Master lease with a housing authority or other qualified agency Deed restriction Rent Restriction Fair Market Rent or the HUD Local Payment Standard Up to 30% AMI 31 to 50% AMI 51 to 80% AMI Income Restriction Up to 50% AMI with a housing voucher Type of Assistance Up to $2,000 grant per Affordable Unit and loan Up to $5,000 grant per Affordable Unit and loan Up to $2,000 grant per Affordable Unit and loan Loan Debt Coverage Ratio 1.15 1.10 1.15 1.20 Affordability Term At least 15 years or the term of the loan, whichever is greater Loan Term Up to 30 years Interest Rate 1% 0% 1% 3% Payment Type Deferred payments for the first five (5) years, monthly amortized payments thereafter Deferred payments Deferred payments for the first five (5) years, monthly amortized payments thereafter Monthly amortized payments Maximum Assistance Up to 90% of project costs, with a maximum of $50,000 per Affordable Unit Equity Contribution 10% of the project cost n/a 10% of the project cost 20% of the project cost Collateral Deed of trust EXHIBIT D: Page 4 Draft - Salt Lake City NOAH Preservation Pilot Program 5. REQUIREMENTS A. Rent Restriction: The monthly rent for the Affordable Units, including all required housing costs per unit, such as utilities and other charges uniformly assessed to all apartment units other than charges for optional services, shall be as follows: a. Deed Restricted Units: The maximum monthly gross rental rate shall not exceed thirty percent (30%) of the maximum monthly income permissible for the applicable AMI, assuming a household size equal to the number of bedrooms in the unit plus one. b. Master Lease Units: The maximum monthly gross rental rate shall not exceed the fair market rent (FMR) or the maximum HUD local payment standard for the Housing Choice Voucher (HCV) program, whichever is lower. B. Income Restriction: The Affordable Units shall be made available only to Eligible Households that are qualifying occupants with an annual income at or below the AMI as applicable for the given Affordable Unit for Salt Lake City Utah, HUD Metro FMR Area as periodically determined by HUD and adjusted for household size. Eligible Households shall qualify upon moving into an Affordable Unit. C. Tenure: Affordable Units shall be provided as permanent housing as evidenced through a lease with a minimum tenure of six (6) months. D. Improvement, Operating, and/or Marketing Plan: Borrowers shall provide physical remediation plan, operating plan, and/or management strategy, as applicable to the project. E. Fair Housing: Borrowers shall establish an affirmative Fair Housing Marketing Plan, including offering units to HCV and other tenant-based rental assistance voucher holders. F. Anti-displacement: Tenants may not be permanently displaced due to rehabilitation activities. Borrowers must establish a tenant relocation plan, in accordance with the Uniform Relocation Act, if tenants are temporarily displaced as a result of rehabilitation activities. G. No Net Decrease in Affordable Units: Projects shall not result in a net decrease of affordable housing units, provided however that a net decrease in units may be approved by the City on a case-by-case basis if the net decrease in units is to facilitate larger unit sizes with more bedrooms. H. Deferred Payments: Deferred payments shall be due upon sale or transfer of the Property, or at the expiration of the Affordability Term or Loan Term. For units at 30% AMI and below, payments may continue to be deferred as long as the unit continues to be restricted at 30% AMI and below, even if the loan term has expired. 6. APPROVAL PROCESS Program funds shall first be available through a competitive notice of funding availability (NOFA) process, with annual Program funds being offered through one or more NOFAs on an annual basis. For each issued NOFA, the City shall evaluate and consider applications for approval as follows: EXHIBIT D: Page 5 Draft - Salt Lake City NOAH Preservation Pilot Program A. Eligibility Review: Applications shall be reviewed by Housing Stability to verify that eligibility requirements are met. B. Review Committee: For applications that meet the basic eligibility requirements, applications shall be forwarded to the Housing Program Funds Loan Committee for review and recommendation. Applications that the Housing Program Funds Loan Committee ranks competitively shall be recommended to the City Council for a funding allocation. C. City Council: The City Council shall make the final selection of projects to receive a funding allocation, subject to the necessary requirements to execute funding agreements. If Program funds do not get disbursed through the NOFA, the City may offer the funds on a first -come, first-served basis, subject to a review by the Housing Program Funds Loan Committee and approval by the City Council. 7. LOAN DEFERMENT AND MODIFICATION In the event of extenuating circumstances, the City may provide payment deferment or a loan modification. Such adjustment to l oan terms shall be considered on a case-by-case basis and shall be subject to a thorough review of the project's financial standing and other relevant information. The process for providing a loan deferment or modification is as follows: A. Deferment: The Director of Community and Neighborhoods may elect to provide the Borrower a temporary forbearance or deferment of payment for up to twenty-four (24) months, consecutive or nonconsecutive. If a loan deferment is granted by the City, the loan term shall be extended for an equivalent period. B. Modification: If the 24-month loan deferment has been exhausted, the Borrow may apply for a modification of loan terms to facilitate affordability of the Borrower’s monthly loan payments. The Housing Program Funds Loan Committee shall review such requests and provide a recommendation that is forwarded to the City Council, who shall consider and act upon all such requests. 8. REPORTING Housing Stability shall submit a report to the City Council on an annual basis. The report shall include outcomes associated with the Program, including a summary of projects completed including a summary of units and affordability levels, number of new grants and loans, total outstanding balance of the loan portfolio, and number of delinquencies.