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6.A. - Page 82 of 191 CITY OF REDWOOD CITY NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2019 NOTE 3 — LOANS RECEIVABLE (CONTINUED) A. Wyndham Place First Time Homebuyer Loan Program The City established a First Time Homebuyer Program during fiscal year 1995 on a specific development sponsored by the former Redevelopment Agency called Wyndham Place. The program currently involves the resale of Wyndham units where the City has First Right of Refusal. The City exercises its First Right of Refusal and markets the units to qualified buyers. A portion of the City's Shared Appreciation is used to assist the new buyer in the Resale Program. While the initial program in 1995 made 0% interest loans, current buyers in the Resale Program are assisted according to the needs of the borrower. Depending on the borrower's ability to secure private financing for a first mortgage, the City loan is underwritten based on the borrower's spendable income. These loans bear no interest and are secured by second deeds of trust on the property, and typically, no payments are due until five years after the date of purchase. As of June 30, 2019 the City has outstanding loans of $302,649 to eleven Wyndham Place buyers. B. First Time Homebuyer Silent Loan Program In 2000, the former Redevelopment Agency established a First Time Homebuyer Silent Loan Program. Loans are deferred for the first five years, and then amortized at 4% interest over the remaining 25 years. An Equity Participation requirement shares appreciation based on the amount of the Agency's original loan amount. At June 30, 2019, there were outstanding loans to four homebuyers totaling $246,790. C. Loans with Non profits and For Profit Organizations The City and former Redevelopment Agency loaned $500,000 to MP Redwood Court Associates and $650,000 to Hallmark Apartments LLP. The MP Redwood Court Associates loan agreement was entered into in July 2003 for the repair and rehabilitation of housing units. The loan term is 55 years and bears 0% interest. The loan to Hallmark Apartments LLP has interest deferred for the first 30 years after which it bears interest at 3% until the December 2058 maturity. The outstanding balance at June 30, 2019 was $1,133,153. D. Housing Rehabilitation Loans The City and former Redevelopment Agency have outstanding loans for housing rehabilitation in the amount of $1,029,142. E. Shores Childcare Loan The City entered into an agreement with Shores Childcare, LLC whereby $3,200,000 was loaned to Shores Childcare, LLC for construction of a childcare facility on City -owned land in the Redwood Shores area. The term of the loan is 20 years maturing January 2023, with interest payable quarterly and calculated based on the quarterly rate of the State of California Local Agency Investment Fund plus 250 basis points. The outstanding balance of the loan at June 30, 2019 was $686,661. 54 89