RFP Title: Below Market Rate Accessory Dwelling Unit Loan Program “Foster City Affordable ADU Program”
Firm Name: Habitat for Humanity Greater San Francisco
Primary Contact: Ashley Spooner-Choi, Director of Public Funding & Grants (415) 625-1015 | [email protected]
Mailing Address: 300 Montgomery Street, Suite 450, San Francisco, CA 94104 Contractor’s License Number: # 728481
Submission Date: February 20, 2026
Organization & Project Overview
Habitat for Humanity Greater San Francisco (HGSF), a 501(c)(3) organization and one of approximately 1,000+ registered U.S. affiliates of Habitat for Humanity International, was formed in August 2008 through the merger of Peninsula Habitat for Humanity and Habitat for Humanity San Francisco. Prior to the merger, Peninsula Habitat served the community since 1989, and Habitat San Francisco served the community since 1992. HGSF has provided homeownership opportunities for 306 local families in the past 35+ years and remains one of very few providers of affordable homeownership opportunities in Marin, San Francisco, and San Mateo counties serving households that earn below 80% of the Area Median Income (AMI). HGSF has built 286 homes in these three geographic areas with zero homes foreclosed.
Our affiliate takes a multi-disciplinary approach to homeownership, serving as the homebuilder, mortgage company, educator, and long-term partner. For over 35 years our teams have been developing new affordable housing opportunities, and more recently refurbishing existing homes to address low-income household displacement in our tri- County service area through our Home Preservation Program. This program focuses on repairs that address safety, accessibility, and health for homeowners on limited incomes.
From upgrading windows, to installing insulation to replacing stairs, this work helps keep longstanding homeowners in their homes.
Company Background and Experience
Habitat brings extensive experience in affordable housing finance, modular/manufactured housing development, construction lending, loan underwriting, and program administration.
We have served as a lender for Home Preservation (HP) loans in Marin, San Mateo, and San Francisco Counties. This work includes originating, underwriting, and servicing loans designed to support low-income homeowners and requires income‑qualification, compliance with State and local guidelines, and long‑term monitoring, servicing, and reporting requirements.
We have also provided home purchase mortgage lending for decades, including financing of manufactured units. Most recently, we closed home purchase loans in San Francisco and Bolinas. References for these or additional programs are available upon selection.
We repurchase deed-restricted units that we’ve previously built or acquired and resell them to income‑qualified households. This experience directly aligns with the needs of ADU financing programs.
Project Team and Key Personnel
The Home Preservation program is supported by a dedicated team of full-time professionals with extensive experience in affordable housing and residential rehabilitation. Jen Wilds, Chief Financial Officer and Chief Operating Officer, oversees the organization’s financial strategy and management. Jen has more than 25 years of financial and operations experience and has previously served in leadership roles at Hotel Tonight and CBS Interactive. Lidia Vieyra, our Senior Loan Officer, is responsible for underwriting loans, ensuring applicant eligibility, preparing loan documents, and closing loans.
Proposed Program
HGSF is interested in providing a Financing Only program, serving as the lender only. If approved, Foster City will grant HGSF $1,100,000 up front to be used to lend to homeowners and cover associated costs incurred by HGSF. HGSF will provide a 0% interest, deferred payment (deferred 20 years) loan of up to $125,000 to each borrower who will install an ADU for the purpose of renting to a low-income tenant for greater or equal to 10 years. The borrower will have an AMI no greater than 120%, with the renter’s AMI capped at 80%. This loan will cover part of the cost of an estimated $300,000+ unit.
Foster City will fund the balance of the ADU cost from other sources not tied to the loan the household gets from HGSF.
No Conflict of Interest & Acknowledgements
Conflict of Interest
There is no conflict of interest relative to the services to be provided pursuant to this RFP.
Habitat for Humanity Greater San Francisco, Inc. (“HHGSF”) and its leadership and staff are subject to legal requirements relating to conflicts of interest. Our Conflict of Interest Policy - adopted by our Board of Directors - is available upon request.
Acknowledgments
Habitat for Humanity Greater San Francisco will have a valid business license in Foster City during the term of the award.
Habitat for Humanity Greater San Francisco acknowledges of Attachment A that we can enter into the City’s standard Professional Services Agreement, including Exhibits A, B, and C.
Habitat for Humanity Greater San Francisco acknowledges additional requirements, including:
a. Maintain a filing system that meets all requirements of the funding sources.
b. Participate in any program reviews or audits.
c. Maintain accounting of available project funds and process clients based on funding availability.
d. Provide data for any required quarterly and annual funding reports. e. Manage program workflow to ensure the timely completion of work. f. Confer with the City to review any proposed revisions of program guidelines as necessary.
Contract Exceptions
Habitat will furnish redlined Sample Agreement and Program Guidelines upon grant selection.
Scope of Work
Task 1: Project Initiation and Project Management
Present a proposed schedule showing milestones and timelines for all phases of work over the contract period. For example: plan pre-review period, marketing, selection of applicants, loan issuance, construction of ADUs. ADUs may be built/installed concurrently or sequentially.
• At the start of the project, the consultant will participate in a kick-off meeting with City staff to review objectives, roles, communication procedures, and reporting expectations.
• The Contractor will work with staff to refine and confirm the project timeline. • Ongoing project management responsibilities include regular check-ins, progress updates, coordination, budget tracking, and responsive communication.
Habitat agrees to the deliverables mentioned in the above bullets. Below is a high-level schedule showing milestones and timelines.
Milestone Completion Date
Work Commences July 1, 2026
Program Set Up December 31, 2026
Originate 2 Loans July 1, 2027
Originate 3 Loans July 1, 2028
Originate 3 Loans June 30, 2029
Contract Expiration June 30, 2029
Task 2: Program Administration and Homeowner Intake
To the extent applicable, outline the firm’s approach to homeowner intake, feasibility review, and, as applicable to the program type, permitting, installation, project communication, and support. Identify platforms or systems used to manage applications and communications.
• The Contractor will manage all Program administration tasks, including homeowner intake, and selection of eligible applicants on a first-come, first-served basis. • The Contractor shall schedule feasibility consultations, prepare feasibility reports, and assist homeowners in selecting an eligible ADU model, as applicable.
• The Contractor is responsible for developing and maintaining all loan applications, coordinating documentation, and managing the applicant process from initial inquiry through project completion.
Habitat will be responsible for applicant selection and approval, with marketing support from Foster City. In addition to the above bullets, HGSF will provide an application that describes income eligibility requirements and lists the documents necessary to prove household income. Typically, to be considered for a Habitat program, an applicant must submit employment income for all eligible household members using one or more of the following methods: year-to-date income from paystubs; two years of federal tax returns; YTD profit and loss statements if self-employed; rental income (as reported or not reported on tax returns); alimony or child support; payments in lieu of earnings, such as unemployment compensation; government income award letters; and zero income affidavits. The applicant will also submit statements for assets, including savings and checking accounts, stocks, bonds, and certificates of deposit. HGSF’s Lending Services department will review all documents to verify sources of income and use a standard income calculation worksheet to ensure that the maximum household income is at or below 80% of AMI for the potential renter and 120% for the borrower applicant.
Task 3: Loan Origination, Underwriting, and Servicing
Explain how private financing and City-funded loans will be administered, including underwriting criteria, loan servicing, documentation, and management of the loan re-use account.
• The Contractor will originate, underwrite, and administer no-interest loans. • The Contractor will use funds received from City pursuant to the Contractor’s agreement with City to fund the loans.
• The Contractor will provide or secure supplemental private financing as needed for each project and must manage the loan documentation and processing in accordance with Program guidelines.
• The Contractor will establish and manage a loan re-use account, collect payments from homeowners, enforce repayment using commercially reasonable practices up to and including foreclosure, and track repayment events. • At the conclusion of an initial three-year term, during which at least eight (8) Affordable ADU loans will be made, the City will have the option to renew the
parties’ existing agreement for an additional three-year term, during which at least an additional eight (8) ADU loans would be made.
Habitat agrees to the above loan origination, underwriting, and servicing terms. Please note, “The Contractor will provide or secure supplemental private financing as needed for each project” has been struck from the third bullet. Foster City will be responsible for securing supplemental funding.
Task 4: Affordability Compliance and Reporting
Explain how the firm will ensure tenant income qualification, rent-limit compliance, annual reporting, and adherence to BMR Guidelines, or if the proposal includes a request for compliance services to be provided separately by the City or its designated agent . • The Contractor will either
o a) ensure that all homeowners and ADU projects comply with the Program’s requirements regarding eligibility, affordability, occupancy, and rental restrictions and include a cost for this service in their proposal, or
o b) request that the City provide compliance services. • The Contractor will also support the City’s compliance monitoring process by maintaining accurate records, providing annual reporting, and assisting with income verification and rental-rate compliance.
• The Contractor must coordinate with City staff to address any issues of non- compliance and enforcement of the Program’s affordability requirements.
Habitat agrees to the information outlined above.
Task 5: Reporting and Records Management
Explain the records management approach and communication with City staff. • The Contractor will maintain accurate and complete records of all Program activities, including loan servicing, homeowner eligibility determinations, project budgets, construction schedules, and compliance documentation. • The Contractor will provide the City with annual reports summarizing Program activity and loan administration.
• All reporting must comply with local, state, and federal regulatory requirements, as well as the City’s contract terms.
Habitat agrees to the information outlined above.
Cost Proposal
CATEGORY DESCRIPTION AMOUNT PER LOAN TOTAL – 8 Loans
Loan Funds Anticipating ADU to cost
at least $300K
Minimum of $75,000 and
Maximum of $125,000
$1,000,000
($125,000 per
loan)
Administration Outreach, marketing,
project management
5% or a maximum of
$6,250 per loan $50,000
Lending,
Servicing, & Loan
Administration
Underwriting, loan
origination, and servicing
5% or a maximum of
$6,250per loan $50,000
Total Contract Amount $1,100,000
Interest Rates & Terms
0% interest and deferred payment for 20 years
Costs Charged to the Homeowner
Homeowners would only incur a loan fee once the loan is repaid (currently a $215 recording fee, a $45 reconveyance fee, and a $30 demand statement fee for each loan) ADU Pricing Structure
N/A
FY2024 Habitat for Humanity Greater San Francisco
Annual Report
Hello supporters,
When people ask why support Habitat for
Humanity Greater San Francisco (Habitat
GSF), our answer is simple: because affordable
housing is the number one challenge in the
Bay Area and Habitat’s unique affordable
homeownership model transforms families’
lives. This isn’t just about homes—it’s about
building communities where families can thrive,
and that benefits everyone. Homeownership
creates a strong ripple effect, positively
impacting everything from educational
outcomes for children to increased public
safety. When people own their homes, they
invest in the success of their neighborhoods.
They care and they matter in fulfilling the vision
of resiliant, strong and vibrant communities.
Becoming a homeowner should not be just a
dream—it’s something people are willing to
work hard for, something they believe they
deserve. When we have over 500 applicants
for eight homes, our answer isn’t to stop—
it’s that we need to do more, and we need
to do it now. This urgency drives us, and it’s
the reason we push forward, even when the
challenge feels immense. It takes time, effort,
and a community-wide commitment to build
and achieve this reality. At Habitat GSF, we are
financially strong and strategically positioned,
with a robust pipeline of new homes and
preservation projects to drive the impactful,
sustainable change our community needs.
At Habitat GSF, we see the impact of this
change every day. Affordable homeownership
transforms lives: more kids go to college,
families build savings, and people become
more active and engaged in their communities.
It’s not just about building homes—it’s about
creating opportunities for people to take pride
in their accomplishments, and that sense of
pride radiates throughout the community.
Of the thousands of volunteers who come
through our doors each year, many share
the same feeling: “I’m doing something that
matters.” That’s what Habitat is all about—
bringing people together to make a lasting
impact. Whether you volunteer your time,
donate, or advocate for change, you are a part
of this movement to address the Bay Area’s
housing crisis. Together, we can move beyond
recognizing the problem and work toward real
solutions, one home at a time.
Thank you for being a vital part of this work.
In community,
Maureen Sedonaen
CEO, Habitat for Humanity
Greater San Francisco
Dameon Philpotts
Board Chair, Habitat for Humanity
Greater San Francisco
This Past Year
Growing Our Impact Welcome Home
13 families
moved in
≈11,000
volunteer hours
Community ImpactStemming Displacement
26 homes preserved
108 homes
prepping for construction
Financial Performance
Net Assets $30,928,020
Revenue
Public
Support
Expenses
* Includes: gain on disposal of property and equipment, and other income. ** Includes: bequests, faith organizations and other non-profit organizations.
Public Support $12,178,751
Sales of Homes $8,671,812
Land Donation $5,000,000
Contributions & Grants $1,842,692
Mortgage Revenue $584,483
Other* $338,134
Government Grants $5,625,195
Individuals $3,512,681
Foundations $1,704,717
Corporations $1,154,120
Other Support** $182,038
Programs $22,904,499
Administration $2,880,102
Fundraising $2,256,091
Forever Affordable Homes
Our affordable homeownership mod
el is unique in that our homes are
permanently affordable, meaning once
the home is built it will remain affordable
for future families. When a homeowner
is ready to move, we purchase the home
back and sell it for an affordable price
to a new family. We celebrated two such
‘resale’ homeowners this year, one in
Redwood City and one in East Palo Alto.
Unprecedented Scale
In early 2024, we closed escrow on a
13.6-acre property in Novato that was
generously donated by Pacific Gas and
Electric Company. The land transfer
marked a major milestone in making the
largest 100% affordable homeownership
development in the state a reality.
Featuring 80 homes set amongst 10 acres
of open space and communal areas, the
project will provide much-needed housing
for more than 300 low- and moderate-
income individuals.
Advocating for Change
In early 2024, we closed escrow on a
13.6-acre property in Novato that was
generously donated by Pacific Gas and
Electric Company. The land transfer
marked a major milestone in making the
largest 100% affordable homeownership
development in the state a reality.
Featuring 80 homes set amongst 10 acres
of open space and communal areas, the
project will provide much-needed housing
for more than 300 low- and moderate-
income individuals.
Expanding Our Impact
In the Bay Area, over 40% of lower-
income households risk displacement. To
achieve greater impact with our Home
Preservation Program, we have focused
resources and expanded our remit. This
enables us to help more homeowners and
perform a broader scope of repairs that
impact those with the greatest need.
Partnering with local municipalities, we
have now rolled out the program in SF
County, Marin County, Redwood City, Daly
City, Belle Haven and more to come!
Championing Affordable Homebuilding
Looking ahead we are crafting an ambitious agenda to push for more resources for affordable housing production both locally, statewide and on a national scale with a federal housing accelerator fund. This work will push forward
a bi-partisan solution to build more starter homes and
responds to the much-needed demand for these homes in
every community.
Preserving Affordable Homeownership
In addition to expanding our Home Preservation into more communities in our region, we are also expanding our remit to meet the need. In the year ahead, we are embarking on a partnership in San Mateo County to provide critical rehabs or replacement for manufactured homes. These homes are
a naturally occuring form of affordable housing, by making repairs or replacements, families will be able to remain in their communities, and vitally, do so in healthier and safer homes.
Forever Affordable Homes
There are a total of four resales currently in our pipeline for fiscal year 2025. That means four more families who can experience the joy and stability of homeownership.
Plus, more families who are ready to move onto market
rate homes, after getting their foot on the ladder through Habitat homeownership. These forever affordable homes
show us the power of access to homeownership.
More Affordable Homeownership in Bolinas
Our latest development in partnership with Bolinas
Community Land Trust (BCLT) is on Wharf Road inthe
heart of the town of Bolinas. The development will include two buildings with six three-bedroom townhomes, two
two-bedroom townhomes. In addition, BCLT will have their permanent office onsite within the approx. 1,500 square feet of ground floor commercial space.
Largest 100% Affordable Homeownership
Development in CA
Habitat GSF continues to make progress toward our largest 100% affordable homeownership project in Novato. We
are currently finalizing design plans and deepening our community outreach and partnerships across the county.
Construction is slated to start in the first half of 2025.
One Day. Day One
We have ambitious goals for the year ahead and a strong pipeline of projects to support this growth. Many of the homeowners we speak with talk about how they wished for the security and stability of homeownership, how it was something they hoped they could work towards one day. Together with our supporters, we are determined to expand our efforts, so we can turn one day into today.
In the Bay Area in particular, the need for housing is great yet the barriers to getting new homes built can be overwhelming, costs alone can be an insurmountable factor. When faced with such headwinds, we pivot and innovate to continuously achieve mission impact. Over the past year we have invested in two partnerships which help us continue our affordable homeownership mission despite the unique red tape we are faced with.
Canal Alliance is a long-standing San Rafael-based nonprofit dedicated to the advancement of Latino immigrants and their families. In the spring of 2024, we announced a formal strategic partnership with them aimed at creating more affordable homeownership opportunities for first-time, low-income families in Marin County.
This partnership comes at a critical time as the area continues to grapple with housing disparities and affordability challenges. Latino families account for only 5% of the homes owned in Marin County, and in San Rafael where the majority of Latino families in Marin County live, housing expenses exceed the national average by 145%. The high cost of housing coupled with an extremely limited housing stock is displacing working families at an alarming rate. The majority of Marin’s workforce now live outside county lines.
Our partnership with Bolinas Community Land Trust is unique, we are the only affiliate in the state currently undertaking such a partnership.
It is one way in which we are seeking out innovative approaches to bringing more affordable homeownership to our region, in ways that fit each community. Currently, the cost of housing in Bolinas exceeds the national average by 176%. To help combat this, through the partnership with BCLT, we have created four new affordable homes for ownership in the town of Bolinas, with another eight in our pipeline.
Innovating Around Constraints
“What I try to create
for my kids is that
sense of stability and
that sense of home and
a place they can come
back to. Seeing them
thrive and flourish is
really all I’m hoping
they can do.”
- Kristen, homeowner
Creating Legacy
Along with her two middle-school aged sons, both fifth- generation San Franciscans, Kristen moved into her new
home in early 2024. Becoming a first-time homeowner was special, as Kristen put it, “It’s the first. It has my full name on it. It’s all mine. It’s that feeling of pride.” The theme of pride of ownership is a common one that comes up when
we talk with the homeowners we partner with. Whether
it’s feeling more comfortable hosting family, having friends over or simply decorating to make your home feel like your own. These seemingly small acts, that many of us may take for granted, can have meaningful and long-lasting impacts.
For Kristen, who moved around as a child and did not
have the security of a home that her family owned, she is trying to drive more stability for her family. As she explains it, “We moved around so much [growing up] that what I
try to create for my kids is that sense of stability and that sense of home and a place they can come back to. Seeing them thrive and flourish is really all I’m hoping they can do.”
Kristen is helping create her community in Diamond
Heights with her Habitat GSF neighbors, as well as beyond, through her volunteering. As she explains, “I try to instill that we have to give back because we’re very lucky in
life. My happy is to see other people happy too.” Kristen explained that within their development of eight homes a true community has developed, where the homeowners
look out for one another and kids can get together to play. “I’m hoping that other people can get into a program such as mine and be able to have this feeling of comfort, home and community.”
Support our work:
habitatgsf.org/donate
300 Montgomery Street Suite 450
San Francisco, CA 94104
Habitat for Humanity Greater San Francisco, Inc.
and Subsidiary
Financial Statements
and Single Audit Reports and Schedules
June 30, 2025
(With Comparative Totals for 2024)
TABLE OF CONTENTS
Page No.
Independent Auditor's Report 1 - 3
Statement of Financial Position 4 - 5
Statement of Activities 6
Statement of Functional Expenses 7
Statement of Cash Flows 8 - 9
Notes to Financial Statements 10 - 32
Single Audit Reports and Schedules
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 34 - 35 Independent Auditor's Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 36 - 38 Schedule of Expenditures of Federal Awards 39
Notes to Schedule of Expenditures of Federal Awards 40
Schedule of Findings and Questioned Costs 41 - 42
Summary Schedule of Prior Audit Findings 43
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Opinion
We have audited the accompanying financial statements of Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the ''Organization''), which comprise the statement of financial position as of June 30, 2025, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the financial statements.
In our opinion, the financial statements r eferred to above present f airly, in all material respects, the financial position o f Habitat for Humanity Greater San Francisco, Inc. and Subsidiary a s of June 30, 2025, and the changes in its net assets and its cash flows f or the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Habitat for Humanity Greater San Francisco, Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements i n accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements t hat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Habitat for Humanity Greater San Francisco, Inc.'s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
1 Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may i nvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. M isstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Habitat for Humanity Greater San Francisco, Inc.'s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Habitat for Humanity Greater San Francisco, Inc.'s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole.
The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. T he information has been subjected to the auditing procedures applied in the audit of the financial statements a nd certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 1, 2025, on our consideration of the Organization's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards i n considering the Organization's internal control over financial reporting and compliance.
Report on Summarized Comparative Information
We have previously audited Habitat for Humanity Greater San Francisco, Inc.'s 2024 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated November 21, 2024. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2024, is consistent, in all material respects, with the audited financial statements from which it has been derived.
San Jose, California
December 1, 2025
3 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Financial Position
June 30, 2025
(With Comparative Totals for 2024)
2025 2024
ASSETS
Current assets
Cash and cash equivalents $ 11,625,024 $ 12,438,365
Restricted cash 2,264,037 5,209,031
Accounts receivable 96,902 73,500
Current portion of grants and contributions receivable 3,601,319 2,560,660 Current portion of mortgage notes receivable 1,390,078 1,354,792 Inventory of homes 1,396,661 1,489,959
Prepaid expenses and other current assets 22,150 169,376 Total current assets 20,396,171 23,295,683
Other assets
Property and equipment, net 85,296 154,756
Grants and contributions receivable, net 1,123,753 326,209 Mortgage notes receivable, net 10,203,512 9,831,699
Construction in progress 12,403,854 8,852,304
Deposits 34,375 34,375
Operating lease right-of-use assets 4,866,702 5,622,810 Total other assets 28,717,492 24,822,153
Total assets $ 49,113,663 $ 48,117,836
The accompanying notes are an integral part of these financial statements. 4 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Financial Position
June 30, 2025
(With Comparative Totals for 2024)
2025 2024
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable $ 720,944 $ 768,801
Accrued liabilities 687,130 649,689
Unearned revenue 9,839 5,000
Current portion of notes payable 400,096 379,856
Current portion of operating lease liabilities 750,580 711,083 Total current liabilities 2,568,589 2,514,429
Long-term liabilities
Line of credit 1,100,000 -
Notes payable, net of current portion and unamortized discount 6,994,836 7,428,427 Refundable advances - governmental grants 2,757,919 2,097,696 Operating lease liabilities, net of current 4,392,683 5,149,264 Total long-term liabilities 15,245,438 14,675,387
Total liabilities 17,814,027 17,189,816
Net assets
Without donor restrictions
Undesignated 12,722,535 13,524,661
Board designated operating reserve 5,311,858 5,456,746
Total without donor restrictions 18,034,393 18,981,407
With donor restrictions 13,265,243 11,946,613
Total net assets 31,299,636 30,928,020
Total liabilities and net assets $ 49,113,663 $ 48,117,836 The accompanying notes are an integral part of these financial statements. 5 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Activities
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
Without
Donor
Restrictions
With Donor
Restrictions
2025
Total
2024
Total
Support, revenues, and gains
Support
Grants and contributions $ 5,410,076 $ 7,563,670 $ 12,973,746 $ 11,646,946 Special events 454,071 15,000 469,071 531,805
Contribution from discount on note payable
issued (Note 9) - - - 1,656,992
In-kind contributions 147,797 197,063 344,860 5,185,700 Net assets released from restriction 6,457,103 (6,457,103) - - Total support 12,469,047 1,318,630 13,787,677 19,021,443 Mortgage discount amortization 666,317 - 666,317 584,483 Sale of homes 2,651,964 - 2,651,964 8,671,812
Other income 781,471 - 781,471 338,134
Total support, revenues, and gains 16,568,799 1,318,630 17,887,429 28,615,872 Functional expenses
Program services
Housing Development 6,638,557 - 6,638,557 17,897,224
Homeowner Development, Volunteers,
Home Preservation 5,148,069 - 5,148,069 5,007,275
Total program services 11,786,626 - 11,786,626 22,904,499 Support services
General and administrative 3,150,326 - 3,150,326 2,880,102 Fundraising 2,578,861 - 2,578,861 2,256,091
Total support services 5,729,187 - 5,729,187 5,136,193
Total functional expenses 17,515,813 - 17,515,813 28,040,692 Change in net assets (947,014) 1,318,630 371,616 575,180 Net assets, beginning of year 18,981,407 11,946,613 30,928,020 30,352,840 Net assets, end of year $ 18,034,393 $ 13,265,243 $ 31,299,636 $ 30,928,020 The accompanying notes are an integral part of these financial statements. 6 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Functional Expenses
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
Housing
Development
Homeowner
Development,
Volunteers,
Home
Preservation
Total Program
Services
General and
Administrative Fundraising
Total Support
Services
2025
Total
2024
Total
Direct housing expenses
Cost of sales - homes $ 1,965,950 $ - $ 1,965,950 $ - $ - $ - $ 1,965,950 $ 12,688,913 Total direct housing expenses 1,965,950 - 1,965,950 - - - 1,965,950 12,688,913 Salaries and benefits
Salaries and wages 1,211,910 2,484,938 3,696,848 1,623,691 756,408 2,380,099 6,076,947 6,144,033 Employee benefits 133,247 309,325 442,572 210,692 76,616 287,308 729,880 722,287 Payroll taxes 87,079 194,979 282,058 116,396 57,448 173,844 455,902 457,674 Workers' compensation insurance 6,511 37,886 44,397 5,124 2,789 7,913 52,310 66,729 Total salaries and benefits 1,438,747 3,027,128 4,465,875 1,955,903 893,261 2,849,164 7,315,039 7,390,723 Professional services 39,008 71,067 110,075 517,946 871,099 1,389,045 1,499,120 1,051,771 Construction project expenses 33,213 1,378,059 1,411,272 - 5,409 5,409 1,416,681 1,388,820 Discount on mortgage issued 1,199,307 - 1,199,307 - - - 1,199,307 2,914,875 Rent 191,440 342,286 533,726 219,511 138,685 358,196 891,922 836,171 Habitat network dues and fees 561,238 3,000 564,238 5,500 1,500 7,000 571,238 12,000 Interest 349,960 - 349,960 29,912 - 29,912 379,872 166,166 Tithe 225,000 - 225,000 - - - 225,000 225,000
Communications 44,651 60,523 105,174 145,282 44,280 189,562 294,736 224,402 Computer software/hardware 26,386 82,539 108,925 77,150 51,605 128,755 237,680 179,855 Bank fees 65 33,308 33,373 18,427 138,762 157,189 190,562 156,351 Office expenses 32,087 60,665 92,752 53,918 19,692 73,610 166,362 132,672 Special events - 45 45 1,241 245,825 247,066 247,111 216,425 Postage and printing 956 (5,053) (4,097) 5,257 122,368 127,625 123,528 123,970 Depreciation 20,085 16,902 36,987 26,781 10,042 36,823 73,810 85,489 Insurance 20,502 24,258 44,760 17,485 8,230 25,715 70,475 67,063 Travel and training 42,931 25,480 68,411 45,566 4,621 50,187 118,598 58,677 Discontinued construction expense 433,362 - 433,362 - - - 433,362 - Taxes and licenses 10,459 11,023 21,482 10,530 5,585 16,115 37,597 18,657 Advertising - - - 16,591 - 16,591 16,591 56,564
Equipment rental and maintenance 3,210 3,326 6,536 2,611 1,619 4,230 10,766 13,022 Promotions and supplies - 13,513 13,513 715 16,278 16,993 30,506 33,106 $ 6,638,557 $ 5,148,069 $ 11,786,626 $ 3,150,326 $ 2,578,861 $ 5,729,187 $ 17,515,813 $ 28,040,692 The accompanying notes are an integral part of these financial statements. 7 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Cash Flows
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
2025 2024
Cash flows from operating activities
Change in net assets $ 371,616 $ 575,180
Adjustments to reconcile change in net assets to net cash used in operating activities
Depreciation 73,810 85,489
Amortization of operating leases right-of-use asset 756,108 736,866 Home sales revenue through issuance of home mortgage notes (2,014,268) (5,259,608) Home sales revenue through refundable advances reconveyed to homebuyer mortgages fund (637,696) (2,923,204)
Home sales revenue through reconveyed notes payable - (489,000) Amortization of mortgage notes receivable discount (666,317) (584,483) Discount on mortgage notes issued 1,199,307 2,914,875
Contribution from discount on note payable issued - (1,656,992) Amortization of notes payable discount 352,052 136,374
Donated land - (5,000,000)
Changes in operating assets and liabilities
Accounts receivable (23,402) (3,799)
Grants and contributions receivable, net (1,838,203) (2,789,014) Inventory of homes 93,298 (815,201)
Construction in progress (3,551,550) 8,698,987
Prepaid expenses and other current assets 147,226 (48,138) Accounts payable (47,857) 111,748
Accrued liabilities 31,440 (87,466)
Unearned revenue 4,839 (45,520)
Refundable advances 328,663 2,097,696
Operating lease liabilities (711,083) (664,458)
Net cash used in operating activities (6,132,017) (5,009,668) Cash flows from investing activities
Purchase of property and equipment (4,350) (7,394)
Payments received on mortgage notes receivable 1,405,739 1,286,796 Net cash provided by investing activities 1,401,389 1,279,402 Cash flows from financing activities
Refundable advances converted to home sale revenue 600,000 2,923,204 Payments on notes payable (727,707) (637,891)
Proceeds from notes payable - 3,082,911
Proceeds from line of credit 1,100,000 -
Net cash provided by financing activities 972,293 5,368,224 Net increase (decrease) in cash (3,758,335) 1,637,958
Cash, cash equivalents and restricted cash, beginning of year 17,647,396 16,009,438 Cash, cash equivalents and restricted cash, end of year $ 13,889,061 $ 17,647,396 The accompanying notes are an integral part of these financial statements. 8 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Cash Flows
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
2025 2024
Cash, cash equivalents and restricted cash consisted of the following:
Cash and cash equivalents $ 11,625,024 $ 12,438,365
Restricted cash 2,264,037 5,209,031
$ 13,889,061 $ 17,647,396
Supplemental schedule of noncash investing and financing activities Mortgage notes receivable assumed under loan servicing agreement $ 341,189 $ - The accompanying notes are an integral part of these financial statements. 9 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
1. ORGANIZATION
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the "Organization" or "Habitat"), is a nonprofit public benefit corporation incorporated in California in 1988 (originally as Peninsula Habitat for Humanity). E ffective August 1, 2008, Habitat for Humanity San Francisco merged into Peninsula Habitat for Humanity and the combined entity was named Habitat for Humanity Greater San Francisco, Inc. The new Organization serves San Francisco, San Mateo, and Marin Counties. T he Organization is affiliated with Habitat for Humanity International, Inc.
HFHGSF Funding Company, LLC (the "Company"), a limited liability company incorporated in California in July 2019, is a wholly-owned subsidiary of the Organization. T he Company acquired from the Organization all of its rights, title and interest in 9 mortgage notes in May 2019, 15 mortgage notes in August 2020, 20 mortgage notes in December 2021, 3 mortgage notes in May 2022, 7 mortgage notes in March 2023, and 7 mortgage notes in June 2024. T he Company pledged these mortgage notes as collateral to secure 6 notes payable to the Northern Trust Company (see Note 9).
The Organization partners with working families and the community to develop affordable homes for first-time home ownership. The Organization builds homes by engaging volunteers to work alongside carefully selected candidate families. T he candidate families invest up to approximately 500 hours of "sweat equity" in the home in lieu of a down payment. T he Organization provides financing for the homes at zero percent interest.
The following is a brief description of the Organization's program services:
Housing development
Land acquisition - Fosters relationships with Marin, San Francisco and San Mateo Counties and their municipalities; locates and acquires land for home construction; obtains funding from multiple affordable housing sources.
Construction - B uilds and rehabilitates homes; trains, organizes, and supervises on-site volunteers.
Tithe - C ontributes a portion of undesignated donated funds annually to Habitat for Humanity International, Inc. for the construction of homes outside the United States.
Programs
Homeowner development - Selects, qualifies, and mentors candidate families, and provides them financial and home ownership education; manages long-term homeowner relationships.
Volunteer services - R ecruits, trains, schedules, and supports volunteers for work at the construction sites, Home Preservation projects, in the office, and on committees. 10 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
1. ORGANIZATION (continued)
Programs (continued)
Home Preservation ("HP") - Delivers critical home repairs and provides zero-to-low interest rate home repair loans to improve health, safety, and well-being of residents in San Francisco, Menlo Park, East Palo Alto, Daly City, and the County of Marin.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting and financial statement presentation The Organization's financial statements are presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") on an accrual basis.
Consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.
The Organization reports its financial position and operating activities in two classes of net assets:
Net assets without donor restrictions - i nclude those assets that are not subject to donor- imposed restrictions and can be used for the general operations of the Organization. T he Board of Directors has discretionary control in carrying out the operations of the Organization.
Net assets with donor restrictions - include those assets which are subject to donor restriction and for which the applicable restriction was not met as of the year end of the current reporting period. O ther donor-imposed restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity. T here were no net assets restricted in perpetuity as of June 30, 2025 and 2024.
Basis of consolidation
The consolidated financial statements include the accounts of the Organization a nd its wholly- owned subsidiary - HFHGSF Funding Company, LLC. A ll significant intercompany balances and transactions have been eliminated.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Accordingly, actual results could differ from those estimates. 11 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and cash equivalents
Cash and cash equivalents include investments with an original maturity of three months or less and exclude donor-restricted receipts and amounts designated for long-term purposes. T he Organization considers all highly liquid investments readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, such as Treasury bills, as cash equivalents.
The Organization m aintains its cash in bank deposit accounts which, at times, may e xceed federally insured limits. T he Organization h as not experienced any losses in such accounts.
Management believes it is not exposed to any significant risk on cash accounts.
Restricted cash
Restricted cash consists of cash held for the Home Repair program and for mortgage assistance grants for future homeowners.
Fair value measurements
The Organization r eports certain assets and liabilities at fair value in the financial statements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Accounting standards set a framework for measuring fair value using a three tier hierarchy based on observable and non-observable inputs. Observable inputs consist of data obtained from independent sources. Non-observable inputs reflect industry assumptions. These two types of inputs are used to create the fair value hierarchy, giving preference to observable inputs.
The three-tier hierarchy categorizes the inputs as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and market-corroborated inputs.
Level 3: Unobservable inputs for the asset or liability. I n these situations, the Organization develops inputs using the best information available in the circumstances. 12 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Inventory of homes
The Organization c lassifies inventory as the following: completed new construction homes; homes purchased for resale program in which rehabilitation is substantially complete; and Habitat built homes that are bought back from the homeowner (resale homes). C ompleted new construction homes and purchased or repurchased homes are stated at the lower of cost or market using the specific identification method. Habitat resale homes are stated at repurchase cost (the original sales price plus appreciation).
Property and equipment
Furniture, equipment, leasehold improvements, and vehicles are carried at cost or, if donated, at their fair value at the date of donation. The Organization capitalizes all acquisitions of property and equipment in excess of $3,000. D epreciation is provided on a straight-line basis over the estimated useful lives of the respective assets, which range from three to ten years.
Impairment of long-lived assets
The Organization reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of the property and equipment may n ot be recoverable. Recoverability is measured by a comparison of the carrying amount of the asset to future net cash flows, undiscounted and without interest, expected to be generated by the asset. If assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For the years ended June 30, 2025 and 2024, there were no events or changes in circumstances indicating that the carrying amount of the property and equipment may not be recoverable.
Construction in progress
Construction in progress is stated at the lower of cost or market using the specific identification method. C onstruction in progress consists of new home building projects under construction, purchased or repurchased homes undergoing rehabilitation, pre-development costs of future projects, and personnel costs (see Note 7).
Mortgage notes receivable
The Organization records home sale mortgages at the gross amount of payments to be received over the lives of the mortgages. The mortgage notes receivable bear no interest and, accordingly, the notes are discounted to reflect imputed interest over the lives of the mortgages. The discount rates used to impute interest are based on the Freddie Mac 30-year fixed-rate mortgage rates for the years ended June 30, 2025 and 2024. Prior to July 1, 2018, the rates were based on estimated interest rates by Habitat for Humanity International.
13 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Mortgage notes receivable (continued)
Mortgage notes receivable are reported net of unamortized discount. Prior to July 1, 2018, the amortization was calculated using the effective interest method; from July 1, 2018, forward, the straight-line method was used. Management estimates that the difference between amortization calculated using the straight-line method and amortization calculated using the effective interest method is not material. D iscount amortization is recognized as revenue on the statement of activities.
The Organization estimates an allowance for credit losses for uncollectible mortgage notes receivable. The estimation of the allowance is based on an analysis of historical loss experience, current receivables aging, and management's assessment of current conditions and reasonable and supportable expectation of future conditions, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. M anagement does not believe an allowance for credit losses is necessary because the mortgage notes receivable are secured by the properties.
CalHome deferred loans
On February 28, 2022, the Organization entered into an agreement with California Department of Housing and Community Development ("HCD"), through its CalHome program, to provide Owner-Occupied Rehabilitation Assistance ("OOR") to San Francisco homeowners which consist of 0% interest, 30-year deferred loans to households at or below 80 percent of AMI or at or below 120 percent of AMI for households who were victims of disaster in return for home repairs performed by the organization. The 0% interest, 30-year deferred loan requires no periodic interest payment and the unpaid principal balance is due 30 years from the date of the note.
Per Accounting Standards Codification ("ASC") 450-30, Contingencies, "a contingency that might result in a gain usually should not be reflected in the financial statements because to do so might be to recognize revenue before its realization." S ince a note receivable payment to be received 30 years from the date of the note is highly uncertain, management decides to adopt the conservative approach of ASC 450 to record the home repair revenue and associated notes receivable in the 30th year when principal is due or the year when cash payment is first received, whichever date is earlier.
Although the Organization has not recorded home repair revenue and associated notes receivable in its financial statements, the Organization tracks all such notes receivable via a third-party loan servicer. As of June 30, 2025, these 0% interest, 30-year deferred loans have a total unpaid principal balance of $641,583.
14 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Grants and contributions receivable
Grants and contributions receivable that are expected to be collected in more than one year are recorded at fair value, which is measured as the present value of their future cash flows. The discounts on those amounts are computed using risk-adjusted interest rates applicable to the years in which the promises are received. A mortization of the discounts is included in grants and contributions income.
The Organization evaluates grants and contributions receivable for collectability based upon economic situation, historical collection information and any relevant factors. No allowance for doubtful accounts was considered necessary for the years ended June 30, 2025 and 2024 because the Organization believed all grants and contributions receivable to be fully collectible.
Grants and contributions
Grants and contributions are recorded at their fair value and are recognized as revenue when the donor makes an unconditional promise to give to the Organization. Donor-restricted grants and contributions are reported as increases in net assets with donor restrictions depending on the nature of the restrictions. W hen a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statement of activities as net assets released from restriction. Net assets released from restriction represent the satisfaction of donor restrictions or the passage of time. Contributions restricted for the purchase of long- lived assets are reported as without donor restriction when the assets are placed into service, unless continuing use restrictions apply.
Conditional promises to give with a measurable performance or other barrier and a right of return are not recognized until the conditions on which they depend are substantially met. A mounts received prior to incurring qualifying expenditures are recorded as refundable advances in the statement of financial position.
In-kind contributions
The Organization records various types of in-kind contributions, including professional services, materials and properties. C ontributed services and materials are recorded at fair value. T he Organization also receives donated services that do not require specific expertise, but which are nonetheless central to the Organization's operations, which are not reflected in the financial statements. Brochures, items for silent auctions at events, or other program-related resources may also be considered a contribution if there is a direct connection to the project or event being funded.
15 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Home sales
Home sales revenue is recognized when a home is sold. At the time of the home sale, certain government refundable advances are transferred to the buyers and forgiven over varying time periods. The Organization r ecognizes the revenue from the sale of homes upon the transfer of these liabilities to the homeowners.
Discount on notes payable
U.S. GAAP requires that notes payable bearing no interest are discounted to reflect imputed interest over the lives of the loan if the financial statement impact is material. The Organization records the discount as a contribution in the statement of activities when the notes are issued. The unamortized discount is recorded against the balance of notes payable and amortized over the term of the notes. Notes payable to governmental entities are exempt from the imputed interest requirement.
Advertising
The Organization's policy is to expense advertising costs as the costs are incurred. Advertising expenses for the years ended June 30, 2025 and 2024, were $16,591 and $56,564, respectively.
Leases
The Organization determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities on the statement of financial position. Finance leases are included in property and equipment and other long-term liabilities on the statement of financial position.
ROU assets represent the Organization's right to use an underlying asset for the lease term and lease liabilities represent the Organization's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Organization's lease does not provide an implicit rate, the Organization uses a risk-free rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Organization has elected to recognize ROU and lease liabilities for short-term leases instead of recording them in a manner similar to operating leases under legacy leasing guidelines. A short-term lease is one with a maximum lease term of 12 months or fewer and does not include a purchase option that the lessee is reasonably certain to exercise. 16 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Expense allocation
The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities and the statement of functional expenses.
Accordingly, certain costs have been allocated among the programs and support services benefited based on a time study analysis and other reasonable methods.
Income taxes
The Organization i s exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. In addition, the Organization qualifies for the charitable contribution deduction under Section 170(b)(1)(A) and has been classified as an organization other than a private foundation under Section 509(a)(2). T he Organization i s also exempt from state income tax under Section 23701d of the California Revenue and Taxation Code.
No income tax provision has been included in the financial statements for HFHGSF Funding Company, LLC which is generally considered a disregarded entity. The income and loss of this company is included in the tax returns of the Organization. Only the annual California limited liability company minimum tax and the annual fee appear as expense in the consolidated financial statements.
U.S. GAAP provides accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain. M anagement has considered its tax positions and believes that all of the positions taken by the Organization in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination.
Reclassifications
Certain reclassifications have been made to the consolidated financial statements for the year ended June 30, 2024 f or comparative purposes to conform with the presentation in the current year consolidated financial statements.
Subsequent events
The Organization h as evaluated subsequent events through December 1, 2025, the date the financial statements were available to be issued. See Note 19 for subsequent events that have a material impact on the presentation of the Organization's consolidated financial statements. 17 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
3. MORTGAGE NOTES RECEIVABLE
As of June 30, 2025, the Organization holds 132 mortgage notes receivable, totaling $24,564,291 at gross value with maturities of 38 to 480 months. The notes are non-interest bearing mortgages, payable in equal monthly installments, and are secured by deeds of trust on the properties.
According to an agreement with Habitat for Humanity International, Inc., the majority of collections on these notes receivable is to be used to construct additional homes. New notes were discounted at a rate of 6.77% and 6.86% for mortgages issued during the year ended June 30, 2025 a nd 2024, respectively using the straight-line method to amortize unamortized discount over the lives of the mortgages. Mortgages are reported net of unamortized discount.
The Organization became the operator of a residential rehabilitation loan program for the County of Marin in 2022. As part of that program, the Organization assumed 134 home repair loans from the Marin Housing Authority on September 10, 2024. The outstanding balance consisted of 17 amortized loans totaling $331,560 and 117 deferred loans totaling $5,643,456 as of June 30, 2025. Due to the uncertainty of collection of the deferred loans, an allowance for credit losses has been recorded for the full amount due on these loans.
Mortgage notes receivable consisted of the following:
2025 2024
Home acquisition loans $ 24,564,291 $ 23,955,762
Residential rehabilitation loans 5,975,016 -
30,539,307 23,955,762
Less: unamortized discount (13,302,261) (12,769,271)
Less: allowance for credit losses (5,643,456) -
$ 11,593,590 $ 11,186,491
18 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
3. MORTGAGE NOTES RECEIVABLE (continued)
Principal payments due on mortgage notes receivable are as follows:
Year ending June 30,
Home
Acquisition
Residential
Rehabilitation Total
2026 $ 1,370,090 $ 19,988 $ 1,390,078
2027 1,345,745 20,943 1,366,688
2028 1,292,760 21,400 1,314,160
2029 1,236,863 19,646 1,256,509
2030 1,191,770 14,825 1,206,595
Thereafter 18,127,063 5,878,214 24,005,277
24,564,291 5,975,016 30,539,307
Less: unamortized discount (13,302,261) - (13,302,261)
Less: allowance for credit losses - (5,643,456) (5,643,456) Net present value of mortgage notes 11,262,030 331,560 11,593,590 Less current portion (1,370,090) (19,988) (1,390,078)
$ 9,891,940 $ 311,572 $ 10,203,512
4. GRANTS AND CONTRIBUTIONS RECEIVABLE
Grants and contributions receivable consisted of the following:
2025 2024
Receivable in less than one year $ 3,601,319 $ 2,560,660 Receivable in one to five years 1,200,000 400,000
4,801,319 2,960,660
Less discounts to net present value (see Note 2) (76,247) (73,791) (76,247) (73,791)
Less current portion (3,601,319) (2,560,660)
$ 1,123,753 $ 326,209
19 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
5. INVENTORY OF HOMES
Inventory of homes consisted of the following:
2025 2024
Newly constructed homes $ 8,304 $ 1,181,612
Home repurchased from Habitat homeowners 1,388,357 308,347 $ 1,396,661 $ 1,489,959
6. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
2025 2024
Furniture and equipment $ 347,343 $ 347,343
Vehicles 49,741 49,741
Leasehold improvements 126,775 134,164
523,859 531,248
Accumulated depreciation (438,563) (376,492)
$ 85,296 $ 154,756
Depreciation expense for the years ended June 30, 2025 and 2024, was $73,810 a nd $85,489, respectively.
20 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
7. CONSTRUCTION IN PROGRESS
Construction in progress consisted of the following:
2025 2024
Pre-development
Novato: Redwood Boulevard (80 homes)
Land acquisition completed December 2023 $ 8,761,985 $ 8,283,327 Menlo Park: Pierce Road (8 homes)
Land acquisition completed June 2025 3,073,201 -
Bolinas (8 homes)
Joint development agreement signed September 2025 550,734 18,438 Menlo Park: Independence Drive (18 homes)
Master Developer working on development permits and
agreements with the City of Menlo Park 17,934 17,177
12,403,854 8,318,942
Terminated
Redwood City: Arguello Street (33 homes) - 533,362
- 533,362
$ 12,403,854 $ 8,852,304
8. LINES OF CREDIT
In July 2019, the Organization entered into a revolving line of credit agreement (loan #110274) with the Bank of San Francisco ("Bank"). T he line of credit was for a maximum amount of $2,000,000 and was secured by the Organization's assets. Interest accrued monthly at an annual variable rate. Interest was due monthly on the fifteenth calendar day of the following month.
Any unpaid interest would be added to principal amount due. The line of credit matured on July 25, 2025. There were no amounts outstanding on this line of credit as of June 30, 2025 and 2024.
In July 2019, the Organization e ntered into a non-revolving line of credit agreement (loan #120429) with the Bank. T he line of credit is for a maximum amount of $3,000,000 and is secured by the Organization's assets. Interest is due monthly on the fifteenth calendar day of the following month. Any unpaid interest will be added to the principal amount due. On September 20, 2023, the Organization renewed the line of credit agreement and the maturity was extended to September 20, 2028, with an interest rate of 8.5%. There were no amounts outstanding on this line of credit as of June 30, 2025 and 2024.
21 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
8. LINES OF CREDIT (continued)
In June 2025, the Organization entered into a revolving line of credit agreement with Habitat Capital, LLC. The line of credit is for a maximum amount of $1,100,000 and is unsecured, with an interest rate of 4.5%. Interest is payable quarterly on the last business day of each quarter.
Outstanding principal plus any accrued and unpaid interest and any other amounts owed are due and payable in equal quarterly installments beginning in the final year of the term concluding on June 30, 2028. Financial covenants include the requirement to maintain a total balance of cash, cash equivalents and receivables equal to or greater than the outstanding loan amount and to maintain a positive average change in net assets for the past three years. Outstanding amounts on this line of credit totaled $1,100,000 as of June 30, 2025.
9. NOTES PAYABLE
Notes payable are detailed as follows:
2025 2024
Payable to the County of San Mateo (LTNHFB) - Home
Program federal funds used for site construction costs of two housing units, secured by individual deeds of trust on property located in Brisbane, California, due in semi-annual non-interest bearing payments of $698 through June 2037. $ 16,284 $ 17,679 Payable to the County of San Mateo (LTNHBC) - Home
Program federal funds used for site construction costs of five housing units, secured by individual deeds of trust on property located in Brisbane, California, due in semi-annual non-interest bearing payments of $2,111 through June 2032. 28,211 32,434 Payable to the County of San Mateo (LTNHFS) - Home
Program federal funds used for site construction of four housing units, secured by individual deeds of trust on
property located in South San Francisco, California, due in semi-annual non-interest bearing payments of $7,261
through December 2025. 3,130 17,652
Payable to the Northern Trust Company (LTNNT1) - 0%
interest, secured by deeds of 9 mortgage loans. D ue in various monthly installments through July 2047. T he
Organization recognized a contribution from the discount totaling $1,032,778 in the consolidated statement of
activities during the year ended June 30, 2019. T he
discount is amortized using the straight-line method in the term of the loan. 1,418,525 1,515,885
22 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
9. NOTES PAYABLE (continued)
2025 2024
Payable to the Northern Trust Company (LTNNT2) - 0%
interest, secured by deeds of 15 mortgage loans. D ue in various monthly installments through January 2048. T he Organization recognized a contribution from the discount totaling $1,054,545 in the consolidated statement of
activities during the year ended June 30, 2021. T he
discount is amortized using the straight-line method in the term of the loan. 1,782,128 1,916,958
Payable to the Northern Trust Company (LTNNT3) - 0%
interest, secured by deeds of 20 mortgage loans. D ue in various monthly installments through January 2051. T he Organization recognized a contribution from the discount totaling $1,242,830 in the consolidated statement of
activities during the year ended June 30, 2022. T he
discount is amortized using the straight-line method in the term of the loan. 2,048,044 2,238,474
Payable to the Northern Trust Company (LTNNT4) - 0%
interest, secured by deeds of 3 mortgage loans. D ue in various monthly installments through June 2052. The
Organization recognized a contribution from the discount totaling $393,788 in the consolidated statement of activities during the year ended June 30, 2022. T he discount is
amortized using the straight-line method in the term of the loan. 611,960 646,575
Payable to the Northern Trust Company (LTNNT5) - 0%
interest, secured by deeds of 7 mortgage loans. D ue in various monthly installments through October 2052. T he Organization recognized a contribution from the discount totaling $2,148,690 in the consolidated statement of
activities during the year ended June 30, 2023. T he
discount is amortized using the straight-line method in the term of the loan. 3,671,374 3,806,890
23 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
9. NOTES PAYABLE (continued)
2025 2024
Payable to the Northern Trust Company (LTNNT6) - 0%
interest, secured by deeds of 7 mortgage loans. D ue in various monthly installments through December 2053. The Organization recognized a contribution from the discount totaling $1,656,992 in the consolidated statement of
activities during the year ended June 30, 2024. T he
discount is amortized using the straight-line method in the term of the loan. 2,955,399 3,082,911
Payable to Housing Endowment and Regional Trust of San
Mateo County (LTNHRT) - used to acquire real property at 612 Jefferson Avenue, Redwood City, California. I n
September 2022, 19 homes on Jefferson Avenue were sold, and the balance was reclassified from refundable advance to a loan that is secured by individual deeds of trust on
properties on Jefferson Avenue (see Note 12). T he loan bears no interest, and payment of $12,500 is due monthly through September 2042. 437,500 462,500
Payable to Habitat for Humanity International, Inc.
(LTNHHI) - In October 2022, the Organization signed a
$1,000,000 unsecured loan from Habitat for Humanity
International. On June 30, 2023, the Organization signed an amendment updating the interest rate from 3.75% to 2.75%, effective July 1, 2023. T he loan's automatic option was amended to automatically extend 4 times by one-year terms based on request of the Organization, or to be called by Habitat for Humanity International, Inc. at the end of
December 31, 2023. T he loan is used for general
development and homebuilding efforts. 1,000,000 1,000,000 13,972,555 14,737,958
Less discount on notes payable (6,577,623) (6,929,675)
7,394,932 7,808,283
Current portion (400,096) (379,856)
$ 6,994,836 $ 7,428,427
The discount rates on the notes payable range from 3.33% to 8.06% based on an annual simple average using rates published by Habitat for Humanity International, Inc. and the Federal Home Loan Mortgage Corporation. Amortization of these discounts on the notes payable for the years ended June 30, 2025 and 2024 was $352,052 and $136,374 respectively. 24 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
9. NOTES PAYABLE (continued)
Future principal payments on notes payable are as follows:
Year ending June 30,
2026 $ 754,011
2027 750,881
2028 1,750,881
2029 750,881
2030 750,881
Thereafter 9,215,020
13,972,555
Less: debt discount (6,577,623)
Term loan, net of discount 7,394,932
Current portion, presented at discounted amounts (400,096) $ 6,994,836
10. REFUNDABLE ADVANCES - GOVERNMENTAL GRANTS
The Organization r eceives funds from governmental agencies for the purpose of constructing homes and ultimately lowering the mortgage of the prospective homeowners. A t the time of homes sale, the loans are transferred to the buyers and forgiven over varying time periods. The Organization recognizes revenue from the sale of homes upon the transfer of their liabilities to the homeowners. See Note 13.
The Organization received $2,000,000 from the County of Marin for an owner-occupied home repair loan fund for low-income borrowers in 2023. A ny bank interest earned on the Marin County CDBG Home Preservation Loan Fund is considered program revenue to be remitted annually to the federal government via Marin County.
25 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
10. REFUNDABLE ADVANCES - GOVERNMENTAL GRANTS (continued) Refundable advances - governmental grants consisted of the following:
2025 2024
County of Marin Community Development Agency Loan
Program $ 2,000,000 $ 2,000,000
County of Marin Community Development Agency Loan
Program Revolving Loan Fund 748,439 -
CalHome Owner-Occupied Rehabilitation Reuse Funds 9,480 - CalHome Mortgage Assistance Reuse Funds - 60,000
City of Novato Mortgage Assistance Funds - 37,696
$ 2,757,919 $ 2,097,696
11. NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions include those assets which are subject to donor imposed stipulations. Those restrictions may involve purpose (i.e. the donation is restricted to a specific use) or time (i.e. the assets are used in a future period). In some cases, both a time and purpose restriction may apply.
The Organization's net assets with donor restrictions for the year ended June 30, 2025, consisted of the following:
Beginning of
Year Contributions Releases End of Year
Contribution from discount
on note payable issued $ 6,916,329 $ - $ (338,706) $ 6,577,623 Low-income housing
acquisition and
construction 5,030,284 7,578,670 (5,921,334) 6,687,620
In-kind contributions - 197,063 (197,063) -
$ 11,946,613 $ 7,775,733 $ (6,457,103) $ 13,265,243
12. CONDITIONAL PROMISES TO GIVE
Conditional grants are recognized as revenue when the Organization meets or substantially meets the terms and conditions of the grants.
26 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
12. CONDITIONAL PROMISES TO GIVE (continued)
Conditional promises to give consisted of the following:
2025 2024
Residential rehabilitation program within the County of Marin $ 2,797,570 $ 2,000,000
Wharf project 673,672 -
Rehabilitation of two homes within the City of Daly City 273,794 - $ 3,745,036 $ 2,000,000
13. SALE OF HOMES
During the year ended June 30, 2025, the Organization s old 3 homes, including 2 homes on Aspen Drive and 1 resale on Burdell Place, with a total cost of $1,965,950 and sales revenue of $2,651,964. During the year ended June 30, 2024, the Organization sold 13 homes, including 8 homes on Amber Drive, 1 home on Jefferson Avenue, 1 resale on Rolison Road, 2 homes on Overlook Drive and 1 resale on Gloria Way, with a total cost of $12,688,913 and sales revenue of $8,671,812.
14. IN-KIND CONTRIBUTIONS
Donated materials
Donated materials and equipment include materials physically incorporated into a project or the use of equipment to carry out project activities. T ypically, these consist of materials or equipment used for the construction of a project. Donated materials and equipment are recorded at fair value based on invoices, price sheets, and quotations from third parties.
Donated services
Donated services which require a specialized skill and which the Organization would have paid for if not donated, are recorded in the consolidated financial statements as in-kind contributions revenue at the estimated fair value at the time the services are rendered, based on the costs provided by professionals at their standard rates.
The Organization a lso receives significant donated services of an unskilled nature, primarily volunteers who work on the construction and rehabilitation of homes, as well as in the office.
During the years ended June 30, 2025 and 2024, volunteers donated 11,148 and 10,692 hours, respectively, whose value management has estimated at $468,141 and $415,057, respectively.
The value of the donated hours were not recorded in the consolidated financial statements. 27 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
14. IN-KIND CONTRIBUTIONS (continued)
Donated land
The Organization r eceived donated land in Novato, California, during the year ended June 30, 2024. The Organization intends to develop the land into an affordable housing project. The donation was recorded in the consolidated financial statements as in-kind contribution revenue at the market value of $5 million on the date of valuation, based on an appraisal performed by a commercial real estate appraiser.
In-kind contributions are summarized as follows:
2025 2024
Donated materials $ 1,953 $ -
Donated services 342,907 185,700
Donated land - 5,000,000
$ 344,860 $ 5,185,700
15. RETIREMENT PLAN
The Organization h as a 403(b) retirement plan in which the employer matches employee contributions up to 5% of gross salary. The plan covers all employees with one year of service or more and who are at least 21 years of age. Employer contributions to the employee accounts for the years ended June 30, 2025 and 2024, were $185,235 and $200,649, respectively.
16. RELATED PARTY TRANSACTIONS
HFHI Tithe
The Organization donates to Habitat for Humanity International, Inc. ("HFHI") annually for the construction of homes outside of the United States, as determined by the Organization's Board of Directors. These funds are used to construct homes in economically depressed areas around the world. For both the years ended June 30, 2025 and 2024, the amount contributed was $225,000 and is included in Tithe expense under program services in the consolidated statement of functional expenses.
Insurance policy
The Organization h as a blanket policy for auto, general and builder's risk insurance through Habitat for Humanity International, Inc. F or the years ended June 30, 2025 a nd 2024, the insurance expense was $70,475 and $67,063, respectively. 28 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
17. COMMITMENTS
Right of first purchase
Upon the acquisition of land granted to the Organization f or construction, various agreements require the Organization to maintain the properties as affordable housing for a certain period of time. T hese affordability restrictions vary from 45 to 99 years. A r ight of first purchase is recorded at the time of sale giving the Organization the right to purchase the property should the homeowner decide to sell. The Organization resells purchased Habitat-built homes to qualified first-time homebuyers at an updated price, at which time the required affordability term restarts.
Office and warehouse leases
In October 2021, the Organization s igned a non-cancelable lease for office space in San Francisco, expiring on December 31, 2031. T he monthly rent of $57,195 was payable commencing in January 2022, with annual increases on each anniversary as stated in the lease agreement.
On July 28, 2022, the Organization signed a non-cancelable lease for a new commercial warehouse space in San Francisco, expiring on July 31, 2027. The monthly rent of $9,375 was payable commencing on November 1, 2022, with annual increases on each anniversary as stated in the lease agreement. The Organization has an option to extend the lease for another 5-year term when the lease expires.
Additional information related to leases is as follows:
2025 2024
Weighted-average discount rate - operating leases %2.77 %2.77 Weighted-average lease term - operating leases 5.25 years 6.25 years Cash paid on operating leases $ 860,246 $ 833,128
Operating lease liabilities $ 5,143,263 $ 5,845,020
29 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
17. COMMITMENTS (continued)
Office and warehouse leases (continued)
The scheduled minimum lease payments under the lease terms are as follows:
Year ending June 30,
2026 $ 888,477
2027 917,676
2028 818,769
2029 831,819
2030 856,773
Thereafter 1,330,236
5,643,750
Less: discount to present value (500,487)
$ 5,143,263
18. LIQUIDITY AND FINANCIAL ASSETS
As part of the Organization's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due.
To meet liquidity needs, the Organization maintains adequate levels of cash and cash equivalents available. A ccounts receivable, current portion of mortgage notes receivable and unrestricted grants and contributions receivable will be collected within one year. U nrestricted short-term grants and contributions receivable will be available to support general operations of the Organization.
The Board requires that the Organization maintains a minimum of six months of operating reserve at all times. As of June 30, 2025, the balance of the reserve was $5,311,858. However, the fund can be undesignated by the Board for operational needs at any time. 30 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
18. LIQUIDITY AND FINANCIAL ASSETS (continued)
The following is a quantitative disclosure which describes financial assets that are available as of June 30, 2025 and 2024 to fund general expenditures and other obligations when they become due for one year:
2025 2024
Financial assets
Cash and cash equivalents $ 11,625,024 $ 12,438,365
Accounts receivable 96,902 73,500
Current portion of grants and contributions receivable 3,601,319 2,560,660 Current portion of mortgage notes receivable 1,390,078 1,354,792 16,713,323 16,427,317
Less: amounts unavailable for general expenditure within one year:
Net assets with purpose restrictions (6,687,620) (5,030,284) (6,687,620) (5,030,284)
$ 10,025,703 $ 11,397,033
19. SUBSEQUENT EVENTS
On July 25, 2025, the Organization extended its line of credit with the Bank (loan#110274) to August 25, 2025. On September 20, 2025, this line of credit was renewed, and the maturity was extended to July 25, 2027, with an interest rate set at the Prime Rate (7.25% upon extension).
On August 29, 2025, the Organization sold a home in East Palo Alto for $188,100 in sales revenue.
On September 16, 2025, the Organization received conditional approval from the County of Marin for the following grants: $286,057 PLHA loan, two CDBG grants of $391,590 and $38,796, and a Home Investment Partnership Program (HOME) grant of $430,440.
On September 19, 2025, the Organization made a deposit into escrow of $46,659 for the purchase of a manufactured home for $93,317.
On September 20, 2025, the Organization extended its line of credit with the Bank (loan#120429) to September 20, 2030, with an interest rate set at the Prime Rate (7.25% upon extension).
On October 16, 2025, the Organization purchased a building in San Francisco for $900,000.
In October 2025, the Organization exercised its option to repurchase a home on Amber Drive and a home on Oakdale Avenue in San Francisco.
31 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
19. SUBSEQUENT EVENTS (continued)
In October 2025, the Organization received approval of a $2.4 million loan from Marin Community Foundation.
32 SINGLE AUDIT REPORTS AND SCHEDULES
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Habitat for Humanity Greater San Francisco, Inc. and Subsidiary ( the ''Organization''), which comprise the statement of financial position as of June 30, 2025, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the financial statements, and have issued our report thereon dated December 1, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Organization's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.
A deficiency in internal control e xists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness i s a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
34 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Organization's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards i n considering the Organization's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
San Jose, California
December 1, 2025
35 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
THE UNIFORM GUIDANCE
To the Board of Directors
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the ''Organization'')'s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the Organization's major federal programs for the year ended June 30, 2025. The Organization's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
In our opinion, the Organization c omplied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the Organization and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the Organization’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Organization’s federal programs.
36 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Organization’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may i nvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Organization’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. S uch procedures include examining, on a test basis, evidence regarding the Organization’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. Obtain an understanding of the Organization’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance i s a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
37 Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. G iven these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. H owever, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
San Jose, California
December 1, 2025
38 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2025
Pass-Through
Entity
Federal Grantor/Pass-Through Grantor/ Assistance Identifying Total Federal Program or Cluster Title Listing Number Number Expenditures Expenditures of Federal Awards
US Department of Housing and Urban Development
Community Development Block Grant Program
Pass-through program from:
County of San Mateo 14.218 N/A $ 1,000,000
County of Marin Community Development Agency 14.218 N/A 172,705 City of Redwood City 14.218 N/A 44,647
City of Daly City 14.218 N/A 290,488
Total Community Development Block Grant Program 1,507,840 Total Expenditures of Federal Awards $ 1,507,840
The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
39 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Schedule of Expenditures of Federal Awards
June 30, 2025
1. BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the "Organization") under programs of the federal government for the year ended June 30, 2025. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.
Code of Federal Regulations P art 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or limited as to reimbursement. P ass- through entity identifying numbers are presented where available and applicable.
Grant periods for certain of the grants included in the Schedule may be different from the fiscal year of the Organization.
3. FEDERAL LOAN PROGRAMS
The accompanying schedule of expenditures of federal awards includes loan balances for which continuing compliance is required. The balances of the loans which continuing compliance was required as of June 30, 2025 amounted to $1,000,000.
4. INDIRECT COSTS
The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
40 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiency(ies) identified that are not considered to be material weaknesses? None reported
Noncompliance material to financial statements noted? No Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified that are not considered to be material weaknesses? None reported
Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No
Identification of major programs:
Name of Federal Program or Cluster Assistance Listing Number Community Development Block Grant Program 14.218
Dollar threshold used to distinguish between Type A and Type B programs $750,000
Auditee qualified as low-risk auditee? Yes
41 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
SECTION II - SUMMARY OF FINANCIAL STATEMENT FINDINGS
There are no financial statement findings to be reported.
SECTION III - SUMMARY OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS There are no federal award findings to be reported.
42 Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Summary Schedule of Prior Audit Findings
For the Year Ended June 30, 2025
There were no prior year findings.
43 Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 1
UNSOLICITED PROPOSAL
Affordable Housing Loan Servicing Software
Prepared for the City of Foster City | Community Development Department April 2026
SUBMITTED BY
Applied Business Software, Inc.
The Mortgage Office® (TMO)
7755 Center Ave.
Huntington Beach, CA, 92647
www.themortgageoffice.com
SUBMITTED TO
Nori Jabba
Housing and Sustainability Manager
City of Foster City
Community Development Department
610 E. Hillsdale Blvd., Foster City, CA 94404
EXECUTIVE SUMMARY
Applied Business Software, Inc. is pleased to present this unsolicited proposal to the City of Foster City on behalf of The Mortgage Office® (TMO), a purpose-built loan servicing and portfolio management platform designed specifically for government agencies, housing finance authorities, and community development lenders administering affordable housing programs.
Foster City’s expanding commitment to affordable housing, as reflected in its 2023–2031 Housing Element and the newly launched Supportive and Special Needs Housing Program, requires not only strong program administration and supportive services, but also rigorous, long-term management of the loan and financial instruments that fund these programs. As the City’s affordable housing portfolio grows through programs funded by CDBG, HOME, the Affordable Housing Fund, and other sources, the administrative burden of tracking deferred loans, forgivable notes, compliance reporting, and income recertification will grow accordingly.
This proposal suggests a cost-efficient alternative to outsourced subservicing: implementing an in-house loan servicing software platform that allows the City to directly manage its affordable housing loan data, simplify HUD compliance reporting, and lower long-term servicing expenses. Alternatively, TMO can be used by a loan servicer or subservicer as a management tool for loan servicing operations. Currently, over 400 government agencies, CDFIs, and housing finance organizations throughout the United States—including many cities and counties in California overseeing HOME and CDBG portfolios—use TMO.
“The City of Foster City manages a growing portfolio of affordable housing investments. TMO gives your team a single system of record for every loan, covenant, and compliance obligation — purpose-built for the way government lenders work.”
THE OPPORTUNITY: MANAGING FOSTER CITY’S AFFORDABLE HOUSING PORTFOLIO Cities administering affordable housing programs funded through federal, state, and local sources face a layered compliance environment. Deferred payment loans, forgivable notes, covenant-restricted units, and income-based repayment structures all require careful tracking across multi-year terms — often spanning 15, 20, or 30 years. Without purpose-built software, these portfolios are commonly managed in spreadsheets or general-purpose databases that were never designed to handle the nuances of affordable housing compliance.
Foster City’s Affordable Housing Fund, Existing Unit Purchase Program (EUPP), and any HOME or CDBG-funded loan activity represent exactly the kind of portfolio that benefits most from a dedicated loan servicing platform. Common pain points for cities at this stage include:
• Manually tracking affordability covenants and loan maturity dates across a growing portfolio • Assembling HUD IDIS or CAPER data from disparate spreadsheets and files • Managing annual income recertifications and occupancy compliance without an automated workflow
Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 2 • Limited audit trail and version control when loan terms are modified or deferred • High cost and loss of control when relying on a third-party subservicer for portfolio data
WHY THE MORTGAGE OFFICE
The Mortgage Office is the leading loan servicing software platform for government and mission-driven lenders. It is not a general-purpose loan origination system or a consumer mortgage platform — it was architected from the ground up to serve the exact use case Foster City needs: portfolio lenders who hold loans in-house and must manage them for compliance, affordability, and long-term program integrity.
Portfolio Types Supported
CDBG rehabilitation loans, HOME down payment assistance, deferred payment loans, forgivable notes, Section 108, revolving loan funds, and affordability covenant tracking
HUD Compliance Tools IDIS-compatible data exports, CAPER report support, income limit tracking, and AMI-based payment calculations
Automated Workflows Payment processing, late notices, annual recertification reminders, maturity alerts, and covenant expiration tracking Document Management Centralized storage for loan files, recorded documents, income certifications, and correspondence with full audit history Reporting & Analytics Pre-built and custom reports for portfolio performance, compliance status, delinquency, and program activity summaries
Security & Access Control Role-based user permissions, full audit log, and SOC 2-compliant data handling suitable for government environments
IN-HOUSE SOFTWARE VS. OUTSOURCED SUBSERVICING
Foster City is seeking a supportive housing program administrator, which suits the services and placement aspect. For affordable housing loans and financial instruments—like deferred loans, forgivable notes, and covenants—the City must decide whether to keep outsourcing subservicing or develop an in-house system.
The chosen program administrator could also use TMO to handle loan servicing operations.
Outsourced Subservicer TMO In-House Platform
Data Ownership Data held by vendor; export can be
difficult or costly
City owns all data; full export and
access at any time
Long-Term Cost Per-loan or per-transaction fees
compound over time
Flat annual software subscription
scales efficiently
Reporting Flexibility Reports generated on vendor’s
schedule and format
Run any report on demand, in real time
Compliance Control City relies on vendor accuracy for HUD submissions
City staff verify and control all
compliance data
Staff Continuity Institutional knowledge lives with the vendor
City builds internal expertise and
reduces third-party dependency
Scalability Costs increase as portfolio grows Same platform serves 5 loans or 500 loans
Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 3
A FLEXIBLE PARTNERSHIP MODEL
Applied Business Software recognizes that smaller municipal housing programs benefit from a phased, supported approach to in-house loan servicing. Rather than requiring the City to stand up a full loan administration operation immediately, we propose the following engagement model:
Phase 1 — Discovery and Portfolio Assessment. A complimentary 60-minute working session with your housing staff to map your current loan portfolio, data sources, and compliance reporting requirements. No obligation, and no sales pressure — the goal is to determine whether TMO is the right fit for Foster City at this stage.
Phase 2 — Proof of Concept / Pilot. For cities new to loan servicing software, we offer a structured pilot engagement in which we load a sample of your portfolio data into TMO and demonstrate live reporting, compliance workflows, and document management with your actual data.
Phase 3 — Implementation and Onboarding. Full platform implementation includes data migration, staff training, and dedicated onboarding support. Our government clients typically reach full operational confidence within 60 to 90 days of kickoff.
THE MORTGAGE OFFICE SOLUTON PRICING
The Mortgage Office is offered as an annual software subscription priced based on active loan volume, making it a predictable, scalable investment that grows with your portfolio rather than compounding per- transaction costs over time. For a municipal affordable housing portfolio of Foster City's current size, the annual licensing cost is a fraction of what a comparable subservicing arrangement would cost over the life of the same loans. Included in the subscription are platform access for all authorized users, standard implementation and data migration support, ongoing software updates, and access to our government client support team. A detailed fee schedule is provided below for your review.
Please note that the pricing outlined here is provided for illustrative purposes. We would welcome the opportunity to connect with your team to better understand your specific portfolio, program structure, and servicing needs before providing a formal cost estimate tailored to the City of Foster City.
PARTNERSHIP WITH QUALIFIED PROGRAM CONSULTANTS
Applied Business Software works alongside a network of affordable housing consultants and program administrators throughout California. If the City of Foster City is interested in a combined solution that addresses both the supportive housing program administration needs described in your current RFP and the loan servicing platform component introduced in this proposal, we welcome the opportunity to connect you with qualified program administration firms that have experience working with TMO as the back-office servicing platform.
This approach allows the City to retain full control and visibility over its loan and financial instrument data through TMO, while partnering with a specialized nonprofit or housing services agency to handle program Loan Servicing Yearly Cost Per User Per Year Monthly Cost Per User Package Details 1 - 3 Users $9,000.00 $750.00
4-10 Users $7,800.00 $650.00
Const & Draw Mgr. Yearly Cost Per User Per Year Monthly Cost Per User Package Details 1-3 Users $2,640.00 $220.00
4-10 Users $2,100.00 $175.00
Loan Origination Yearly Cost Per User Per Year Monthly Cost Per User Package Details 1-3 Users $3,600.00 $300.00 User Subscription Tier of Public Sector Loan Origination Module. Application 4-10 Users $3,000.00 $250.00
Services Bundle Yearly Cost Per User Per Year Monthly Cost Package Details < 200 loans $6,000.00 $500.00
201-500 loans $12,000.00 $1,000.00
501-2,000 loans $24,000.00 $2,000.00
The Mortgage Office - Public Sector Package Pricing Options User Subscription Tier of Public Sector Loan Servicing Package. Core Loan Servicing System (LS, TA, ACH) + CCR/CDFI/EA modules
Construction Module and Draw Manager Module
Bundle required per loan tier. Services include Borrower Portals, Texting, eSign, Tax eFiling, Miniter Insurance Tracking, access to Usio and Geomapping
Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 4 administration, household placement, and supportive services under the terms of the RFP. The two scopes are complementary and can be structured as separate agreements to preserve procurement clarity.
TMO is currently used by cities, counties, CDFIs, and housing finance agencies across California and the country to manage affordable housing loan portfolios ranging from fewer than 50 loans to more than 10,000 active accounts. Our government clients include CDBG and HOME program administrators, state housing finance agencies, and community development departments with portfolios similar in size and structure to Foster City’s.
PROPOSED NEXT STEPS
• Schedule a 30-minute introductory call with The Mortgage Office to discuss Foster City’s current affordable housing portfolio and any loan servicing needs • Arrange a live demonstration of The Mortgage Office for Housing and Community Development staff • Receive a no-obligation portfolio assessment and pricing proposal tailored to the City’s program structure and volume
CONTACT
Applied Business Software, Inc. | The Mortgage Office® Adam Loughran, State & Local Government Division
7755 Center Ave, Huntington Beach, CA 92647
www.themortgageoffice.com | [email protected]
This is an unsolicited proposal submitted for informational purposes. Applied Business Software, Inc. is not responding to the City’s active RFP for the Supportive and Special Needs Housing Program, which seeks a program administrator and supportive services provider. TMO is a loan servicing software platform and this proposal addresses a complementary but distinct program need.