Consideration and Approval of Contract:  Consideration and approval of the Professional Services Contract for the continuation for the City of Flagstaff Employer Assisted Housing (COF-EAH) program, the administration for the new Community Homebuyer Assistance Program (CHAP), and to provide Homebuyer Counseling and Education as well as Eligibility Determination for all first time Flagstaff homebuyers, Contract No. 2019-03 between City of Flagstaff and Housing Solutions of Northern Arizona, Inc. (HSNA).

The City's Purchasing Section conducted a formal Request for Proposals (RFP), which was advertised on July 5, 2018, with proposal responses due no later than July 26, 2018. HSNA was the single respondent to the Request for Proposal (RFP). The local non-profit agency provided sufficient information to adequately score the proposal based on the parameters within the included scopes of work.  The respondent is a U.S. Department of Housing and Urban Development (“HUD”) approved housing counseling agency and has extensive experience in administering Down Payment/Closing Cost Assistance, Homebuyer Education Services, and Eligibility Determination Services. 

HSNA is Northern Arizona’s primary agency in leveraging local, state and federal funding sources to best serve Flagstaff clients in “arms length” residential real-estate transactions.

The FY 2018 budget includes $95,370 for the Flagstaff Police Department Employer Assisted Housing (FPD-EAH) program (account number 021-05-106-0366-4-4290).

In the FY 2018 budget, City Council authorized the use of $100,000 for the COF-EAH program (account number 021-05-106-0366-4-4290) and $200,000 for the new Community Homebuyer Assistance Program (account number 021-05-106-0361).

Administrative fees to HSNA are $1,250 per loan, paid at the point of closing.

Affordable Housing Goal
Pursue financing strategies for affordable housing to create additional rental and ownership housing opportunities.

Regional Plan: Goal NH.3. Make available a variety of housing types at different price points, to provide housing opportunity for all economic sectors. Policy NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms.
Establish an employer assisted housing program.

Personnel Goal
Expand the Housing Assistance Program for all City Staff.

On July 14, 2015, HSNA was selected as a qualified respondent through a Request for Statement of Qualifications process and Council approved the FPD-EAH program.

On November 7, 2017, Council amended the FPD-EAH pilot program by broadening the assistance to be available to all eligible City of Flagstaff employees, known as the City of Flagstaff Employer Assisted Housing Program (COF-EAH).

1. Approve the contract as recommended, allowing Housing Solutions of Northern Arizona, Inc. to administer the First Time Flagstaff Homebuyer Assistance Programs (COF-EAH and CHAP), including providing Homebuyer Education and Counseling Services as well as Eligibility Determination Services.
2. Do not approve the contract.
3. Direct staff to operate the programs internally, which would require additional staffing and administrative cost considerations.

Many employees and workforce families make too much money to qualify for existing Federally funded down payment and closing cost assistance programs but not enough money to save for homeownership.  The COF-EAH and CHAP programs are designed to provide all eligible households with the opportunity for homeownership by providing funds toward the down payment on a home.

In July 2017 the Flagstaff Police Department Employer Assisted Housing Program (FPD-EAH) was approved by City Council and was created as a pilot program. Due to the success of the program and an increased budget allocation, the Housing Section in collaboration with City Management and Human Resources created the City of Flagstaff Employer Assisted Housing program (COF-EAH). This program was expanded in the spring of 2018 to serve all eligible City of Flagstaff employees, not just sworn officers or dispatch personnel. Furthermore, the amount of assistance per household increased from $7,000 to $10,000. The goals of the COF-EAH Program were not only to add a housing based benefit but to also promote recruitment and retention of City of Flagstaff employees.

Currently, the COF-EAH program is being effectively administered by HSNA. To date, the program has opened the doors to homeownership for thirteen (13) first-time Flagstaff homebuyers.

In FY 2018 City Council budgeted $200,000 to reestablish the Community Homebuyer Assistance Program (CHAP) that was eliminated during the recession. CHAP will provide citizens of Flagstaff with up-front financial assistance in the form of a loan, enabling first-time homebuyers to open the door to homeownership.

The disparity between income and housing costs in Flagstaff is greater than in the average U.S. community, creating a higher than the average number of economically distressed families.  The economic stabilization of households through homeownership provides many secondary benefits that offset and surpass the original expenditures.  These include a diminished need for social services for low to moderate income members of the community, increased contribution by family members to the local economy, stronger neighborhoods, and an increased sense of responsibility to the community through a pride of ownership.
Although COF-EAH and CHAP have parallel goals the parameters of each program differ.

COF-EAH:

• Must be an employee of the City of Flagstaff for at least a year at the time of assistance. There are no income restrictions.
• The program is a 1:1 match up to $10,000.
• The interest-free loan is forgiven $1,000 per year.
• Funding restricted to homes purchased within a prescribed area for Flagstaff emergency employees.

CHAP:

• There are income restrictions. A household must not exceed 125% of the Area Median Income (AMI) which for 2018 is $93,900 in gross income for a household of 4.
• The program is a 3:1 match with assistance not exceeding $15,000 per household.
• The loan is repayable based on an equity-share model.
• Funding restricted to homes purchased within Flagstaff City limits.

Similarities of COF-EAH and CHAP include but are not limited to the following:

• Eligible Buyers must be first-time Flagstaff homebuyers.
• Eligible Buyers must occupy the home as their principal residence.
• Eligible Buyers must complete online a homebuyer education course and one-on-one housing counseling through HSNA prior to closing on their home.
• Loan assistance is recorded in the second position behind the primary mortgage.
• Administrative fees to HSNA are $1,250 per loan, paid at the point of closing.

In addition to administering COF-EAH and CHAP, HSNA will provide Homebuyer Counseling/Education and Household Eligibility Determination services.

The intent of the City of Flagstaff’s Homebuyer Counseling and Education Program (HCEP) is to ensure potential first-time homebuyers in the City of Flagstaff are educated about the home-buying process, have resources to overcome barriers to homeownership and make informed decisions regarding their housing choices. Potential buyers will also be educated about financial assistance programs available to first-time homebuyers.

 None.

The administration of the COF-EAH and CHAP program will provide homebuyer education, counseling and financial assistance in order to increase homeownership opportunities to eligible Flagstaff households.

Mortgage lenders, realtors, employers, social service agencies and the community at large greatly contribute to and benefit from, the success of housing assistance programs. These programs provide stability for our community.

Initial notification of the RFP was provided through PlanetBids. The RFP in the Arizona Daily Sun on July 8 and July 15, 2018.  The RFP was issued on July 5, 2018, and due on July 26, 2018.  HSNA the only respondent and was deemed the successful bidder.