AgdaPkt 2009-11-23 clsd and jnt Meeting with Planning

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6.11 Oaks project financing already exceeds this ratio because the acquisition was financed Page 2 at or about 1000/0. Position Funding Source Encumbrance' Secured21 Unsecured 1Sf Cal HFA $ 1,800,000.00 Secured 2nd California Housing and $ 1,020,000.00 Secured Community Development (HCD) 3rd County of San Mateo & $ 250,000.00 Secured City of Redwood City $ 241,000.00 Secured CA Tax C red it Allocation $ 1,400,000.00 Unsecured Committee Total Secured Encumbrance $ 3,311,000.00 Total Unsecured Encumbrance $ 1,400,000.00 Total all Encumbrances $ 4,711,000.00 REDWOOD OAKS CURRENT FINANCING In an effort to eliminate this risk, HILC directed the City's Housing & Economic Development Manager to contact HIP Housing to explore the possibility of CalHFA buying out the City's loan as part of the current loan being offered to HIP Housing. The City received an electronic mail on September 17, 2009 from HIP Housing stating that CalHFA will not approve HIP Housing's request for CalHFA to buyout the City's loan. On October 14, 2009, the HILC reviewed the Subordination request a second time. HIP Housing has been providing needed housing to extremely-low and very-low individuals and families at Redwood Oaks Apartments. Moreover, funding for repairs to the apartment including the outdoor stairwell and deck is needed for health and safety purposes. Accordingly, the HILC made a recommendation with findings pursuant to the Housing Loan Subordination Policy which provides for exceptions for loans not recorded in second position and when the 80:20 loan to value ratio cannot be met. MIS (BondonnolWarhurst) to recommend that Council approve the Redwood Oaks Subordination with CalHFA based on these Findings: . Acknowledgement of the role of HIP in the residential community as an affordable housing provider . Effort to maintain quality projects in Redwood City neighborhoods . By design, the original intent of the City's loan was to recoup funds when Senior mortgages have been paid . It is entirely possible that the type of improvements being made will impact the value of the property so that the City is not in any worse position economically than it would be if HIP did not have the repair work done 1 Amounts shown are rounded. 2 Encumbrance is either secured by a Deed of Trust as collateral. or the loan is not recorded against the property .