Consideration and Approval of Contract: First Amendment to Professional Services Contract Between the City of Flagstaff and Housing Solutions of Northern Arizona for the Administration of the Community Homebuyer Assistance Program (CHAP) and Employer Assisted Housing (EAH) Program
 

1. Approve First Amendment to Contract 2025-205 with Housing Solutions of Northern Arizona for the administration of CHAP and EAH programs.
2. Authorize the City Manager to execute all necessary documents.

Staff is requesting City Council’s approval of an amendment to the professional services contract with Housing Solutions of Northern Arizona (HSNA) to administer two City homebuyer assistance programs: the Community Homebuyer Assistance Program (CHAP) and the Employer Assisted Housing Program (EAH).

Following Council direction in October 2024, the City issued a Request for Statements of Qualifications (RSOQ) to identify a qualified third-party administrator. HSNA was selected as the successful respondent through a competitive process. In July 2025, the City entered into a contract with HSNA and HSNA has since begun administration of the CHAP program with a limited scope of work. This contract amendment increases the administration amount from $80,000 to $500,000 and includes the administration of the Permanent Affordability Pilot program.

The contract includes a five-year initial term with the option for two one-year extensions, which will ensure consistent, professional management of housing assistance programs that support City goals related to housing access and affordability.

The professional services contract will be funded through a combination of:

• Expanded Community Homebuyer Assistance Program (CHAP) - Bond Funds
  • $7 million total in general obligation bond funds (authorized by voters under Proposition 442)
  • $3 million budgeted in FY 2025-26 through GL #411-13-105-0355-4-4290 
• Employer Assisted Housing (EAH) Program - City General Funds
  • $148,523 budgeted in FY 2025-26 through GL #021-13-106-0366-4-4290

Housing Solutions of Northern Arizona (HSNA) will receive administrative fees of $2,000 for each CHAP and EAH loan closed, as well as $200 per CHAP applicant for intake services and income eligibility determination. These fees are fixed for the first three years of the contract. Disbursements for CHAP assistance will be made from bond funds, while EAH administrative fees will be paid from the City’s general funds.

In November 2022, Flagstaff voters approved Proposition 442, which included approximately $7 million to expand the Community Homebuyer Assistance Program (CHAP). Between January and September 2024, City staff worked closely with the Housing Commission to develop draft program criteria. In October 2024, City Council reviewed the proposed criteria and directed staff to proceed with a competitive procurement process to select a program administrator. Following this direction, a Request for Statement of Qualifications (RSOQ) was published, and Housing Solutions of Northern Arizona (HSNA) was selected to administer the expanded program. The program officially relaunched with a limited scope under HSNA’s administration in August 2025.

• Approve the contract amendment as presented.
• Approve the contract amendment but with changes.
• Do not approve the contract amendment and provide an alternate direction.

To ensure the effective administration of the Community Homebuyer Assistance Program (CHAP) and the Employer Assisted Housing (EAH) Program, City staff initiated a formal procurement process in October 2024, following Council direction. A Request for Statements of Qualifications (RSOQ) was published in March 2025, and Housing Solutions of Northern Arizona (HSNA) was selected as the most qualified respondent.

The resulting professional services contract dated July 25, 20225 establishes a five-year agreement, with two optional one-year extensions, for the administration of both CHAP and EAH.

The proposed First Amendment to the contract ensures continuity in service delivery, expands access to homeownership, and supports the City’s strategic housing goals by leveraging both general obligation bond funds and general fund allocations. Under the contract as amended, HSNA will manage client intake, eligibility screening, and loan processing for approximately 700 applicants and 148 homebuyers throughout the contract term.

• High Performing Governance:
  • Implement innovative local government programs, new ideas & best practices; be recognized as a model for others to follow.
• Safe & Healthy Community:
  • Support social services, community partners & housing opportunities
• Inclusive & Engaged Community:
  • Ensure city facilities, services, & programs are accessible for all residents & representative of Flagstaff's diverse community

• Robust Resilient Economy:
  • Support & strengthen a more robust, diverse, & sustainable economy in ways that reflect community values & provides for affordable housing opportunities
• Livable Community
  • Actively support attainable & affordable housing through City projects & opportunities with developers
• Environmental Stewardship
  • Implement, maintain & further the Climate Action & Adaptation Plan (CAAP) with awareness of social inequities

• NH.3.1. Provide a variety of housing types throughout the City and region, including purchase and rental options, to expand the choices available to meet the financial and lifestyle needs of our diverse population.
• NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms.
• NH.3.5. Encourage and incentivize affordable housing.
• NH.5.3. Support and expand programs that prevent homelessness

• HA-1: Create housing options for households at all income levels and family sizes occupied by local residents.
• HA-2: Connect people to equitable housing solutions.
• HA-3: Preserve affordable housing.
• HA-4: Protect people from housing discrimination and remove housing barriers.

• Create 3.3: Identify ongoing resource opportunities for the purpose of assisting households experiencing homelessness, households at risk of becoming homeless, first-time homebuyers, and affordable housing targeted to these populations.
• Connect 2.4: Utilize City of Flagstaff resources to educate the community about financing and housing opportunities with an emphasis on assisting low- to moderate-income households to advance through the housing continuum and to address past racial disparities.
• Protect 2.2: Encourage diversity of housing options in all neighborhoods, understanding that exclusive communities are incompatible with the City of Flagstaff's mission to protect and enhance the quality of life for all.