AgdaPkt 2003-03-24 - Laserfiche WebLink

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4 , 6 2,- REPORT TO REDEVELOPMENT BOARD. M arch 10. 2003 loan is deferred at 0% interest, then due and payable in 30 years after the CHFA loan has been paid in full. This loan has not yet been disbursed and will be cancelled when the Agency loan is recorded. The Agbncy's loan would be in second position behind a first mortgage with California Housing Finance Authority (CHFA) in the amount of $2,080,000. Issues The City Council previously approved HOME funds in the amount of $258,974 from the 2002 -03 annual entitlement for 11 of the units. Upon further review of HOME regulations, it became clear that HOME rents are lower than Section 8 rents, presenting the possibility of a rent loss to the project of $401,400 over the 30 year loan term, therefore, an alternate fund source with fewer restrictions would preserve the long term affordability of these units. Due to the high priority placed on preserving these units as affordable, Staff recommends that Council rescind the $258,974 in HOME funds previously allocated but not yet disbursed. and allocate this amount plus an additional $241,026 for a total second mortgage of $500,000 to fund the required improvements with RDA Housing funds. The total cost of improvements is $866,893; MP Redwood Court Associates will fund the $366,893 balance from HUD required reserves maintained for the project. Fiscal Impact The total amount of RDA Housing funds requested for this project is $500,000. The subject agreement provides this money as a 0% interest loan with principal deferred for a term of 30 years, rather than subject these funds to recapture by the State. On February 10, 2003, the Board approved an appropriation of $500,000 in RDA housing funds for this purpose. eb iJones ho s Housing Coordinator ridgey Bruce Liedstrand Community Development Services Ed Everett City Manager Attachment Agreement 2