AgdaPkt 2019-05-20 Joint SA PFA - Laserfiche WebLink

Browse Search

6.B. - Page 2 of 46 (HOME) grant process for FY2018-2019. On June 25, 2018, the City Council approved the funding from CDBG, HOME and CHDO funds totaling $500,000.00 for the preservation of affordable housing. ANALYSIS In order to provide HHDC with the new funding to refinance the property and extend the period of affordability the City must modify the existing loan on the property to comply with HOME regulations and financing requirements from the new lender. HOME regulations under 92.252(e) establishes the minimum period of affordability for rental housing projects based on the amount of HOME assistance in each unit. The City must then calculate the required minimum period of affordability for each HOME -funded project. The regulation does not establish a maximum, only a minimum, period of affordability therefore it was common practice to require a longer period of affordability for HOME -funded projects. HOME regulations further state that additional HOME funds cannot be invested in projects during the affordability period. In order to comply with HOME regulations the City must execute an Assignment, Assumption, and Loan Modification Agreement with the legal entity formed by HHDC to refinance the property. This will allow the City to provide additional CDBG and HOME funds to preserve affordable housing for a period of 55 - years. A condition set by the new lender for the new financing requires the City to amend the interest rate from an annual 3% to an annual compounded interest of the Applicable Federal Rate (AFR) as published by the Internal Revenue Service (IRS) on the unpaid balance over 55 years. This amendment will also extend the existing loan to 55 years. FISCAL IMPACT Due to the assignment of the loan to the Redwood Oaks Associates II LP, with accrued interest of $125,316, the City will be receiving a higher amount of interest revenue over the term of the loan. This revenue will be used for other affordable housing projects in the future. ENVIRONMENTAL REVIEW This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment. PUBLIC NOTICE Public Notification was achieved by posting the agenda, with the agenda items being listed, at least 72 hours prior to the meeting. City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 30