TO: Community Development Block Grant Program Committee
THRU: Russell Bunim, Community Development Director
FROM: Jessica Herrera, Housing Manager
1. Subject
title
Commitment of $1,700,000 in HOME Program Income, HOME Entitlement Funds, and Housing Set-Aside Funds for the acquisition and preservation of a 20-unit affordable housing property at 202-208 W. Hoover Avenue.
body
2. Summary
Consideration of a recommendation to approve a conditional commitment of $1,700,000 in City affordable housing funds to Orange Senior Housing, a California nonprofit public benefit corporation, for the acquisition and preservation of a 20-unit apartment property located at 202-208 W. Hoover Avenue, subject to completion and satisfaction of all City and federal program requirements.
3. Recommended Action
recommendation
1. Approve a preliminary commitment of $1,700,000 in affordable housing funds for the acquisition and preservation of the 20-unit apartment property located at 202-208 Hoover Avenue using the following resources:
a. $383,914.31 in HOME Program Income
b. $1,200,000 in HOME Entitlement Funds, including CHDO Set-Aside Funds; and
c. $116,0855.69 in Housing Set-Aside Funds.
2. Authorize staff to draft a conditional commitment letter based on the recommended City assisted funding to the City Council for consideration and approval, incorporating the conditions listed in the staff report and any additional changes or revisions approved by the Committee.
end
4. Discussion and Background
Orange Senior Housing submitted a request for $1,700,000 in affordable housing funds to assist with the acquisition and rehabilitation of 202-208 W. Hoover Avenue in Orange, 20-unit apartment complex. The proposal is intended to preserve the existing apartment community as affordable housing rather than pursue a conventional market-rate acquisition. The developer states that its due diligence will confirm the current income characteristics of the existing tenants and that the proposed project would not require relocation of existing tenants. The proposed ownership structure would include a commitment to lease units to senior households age 62 and older as units become available.
The developer proposes to partner with Anaheim Supportive Housing, another nonprofit organization, in the acquisition and ownership of the property. The two organizations would combine available resources with the City’s assistance to complete the acquisition.
Affordability Unit Mix Proposal
The proposed affordability mix of the units is as follows:
|
Unit Type |
Number of Units |
Proposed Income Level |
|
1 Bedroom |
4 |
30% AMI |
|
1 Bedroom |
8 |
50% AMI |
|
1 Bedroom |
4 |
65% AMI |
|
2 Bedroom |
3 |
65% AMI |
|
Residential Manager |
1 |
Manager Unit |
|
Total |
20 |
|
The final affordability requirements will be established through the City's regulatory agreement and applicable HOME requirements and will be subject to staff review and approval.
Proposed City Funding
Staff proposes to utilize a combination of federal and local affordable housing resources to provide the requested $1.7 million in financing, comprised of:
1. HOME Program Income: $383,914.31
2. HOME Entitlement Funds, including Community Housing Development Organization (CHDO) Set-Aside funds: $1,200,000
3. Housing Set-Aside Funds: $116,085.69
HUD requires entitlement cities to set-aside 15% of their total entitlement of HOME funds every year specifically for projects that are being acquired, developed, or sponsored by CHDO’s, private, community-based non-profit organizations. The $1,200,000 includes the 15% CHDO set-aside for CHDO’S in Fiscal Years 2023-2027.
Conditions for Funding
The proposed $1,700,000 commitment would be conditional and preliminary and would not constitute an unconditional obligation by the City to fund the project.
Prior to final execution of City loan documents and disbursement of funds, the project would be required to satisfy all applicable City, HUD, and other requirements, including, but not limited to:
• Completion and approval of the required Environmental Review;
• Completion of underwriting and financial feasibility review;
• Completion of the required Subsidy Layering Review;
• Verification of the availability and eligibility of each proposed funding source;
• Confirmation of the project's compliance with applicable HOME Program requirements under 24 CFR Part 92;
• Confirmation of the project's affordability and tenant eligibility requirements;
• Approval of the final project budget and sources and uses; and
• Execution of the City's loan, regulatory, security, and other required documents.
The developer's request states that the proposed acquisition requires a conditional commitment from the City, with fully a executed HOME loan documentation targeted for November and acquisition closing targeted for December 11, 2026.
Recommendation
Staff recommends approval of City-assisted funding for the acquisition of the 20-unit property located at 202-208 W. Hoover Avenue to preserve existing affordable housing. The proposed funding would utilize restricted City resources specifically designated to support affordable housing activities such as the proposed project.
5. ATTACHMENTS
1. Letter from Orange Senior Housing