Fremont City Council Meeting: 06/09/26 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5742) DOC ID: 5742
Updated: 6/5/2026 11:19 AM by Alberto Quintanilla Page 1 Osgood Road Family Apartments Loan Extension – Adopt a Resolution Authorizing the City Manager to Extend the Term of the Existing City Loan Agreement with MP Irvington LLC, an Affiliate of MidPen Housing Corporation Contact Persons:
Name: Lucia Hughes Joel Pullen
Title: Housing Manager Community Development Director
Div/Dept: Housing Community Development
Phone: 510-494-4506 510-494-4436
E-Mail: [email protected] [email protected]
Executive Summary: MidPen Housing Corporation (MidPen), a non-profit housing organization, is the developer of Osgood Family Apartments affordable housing project located at 41965 and 42021 Osgood Road owned by its affiliate MP Irvington LLC (the Borrower). The City received a request from MidPen to extend the term of the acquisition and pre-development loan agreement with the City to allow for additional time to secure sufficient financing for the project, which MidPen plans to construct in two phases.
Staff is seeking City Council approval 1) to amend the loan agreement in order to clarify that the project will proceed in two phases with distinct performance timelines; and 2) to extend the loan term for the project.
Background: On November 2, 2021, as part of the Notice of Funding Availability (NOFA) process, the City Council approved an acquisition and pre-development loan of $14 million to MidPen for the Osgood Road Family Apartments affordable housing project. The loan agreement was structured as one project, with an initial loan term of three years, which expired on June 30, 2025, the latest start date for construction. The agreement provided for two extension options of 180-days each, which the City granted by operating memorandum, extending the term to June 26, 2026. Due to continuing funding challenges, MidPen needs to further extend the City’s loan, which cannot be granted administratively. Staff is seeking Council approval to extend the loan term to June 30, 2028, with a 180-day period to be issued administratively for Phase 1, if needed, and an additional 180-day period thereafter (to June 30, 2029) for Phase 2.
Discussion/Analysis: Following extensive planning, community outreach, and conceptual design work, the project was officially entitled on August 27, 2024. It will proceed as a two-phased development, with Phase 1 including Council Staff Report (ID # 5742) Meeting of June 9, 2026 Updated: 6/5/2026 11:19 AM by Alberto Quintanilla Page 2 119 units and Phase 2 providing 110 units. In total, the development will offer 229 affordable apartments, consisting of 1-, 2-, and 3-bedroom options. These units are designated for eligible families earning between 30% and 60% of the Area Median Income (AMI).
The predevelopment period for the project has been prolonged because of the highly constrained and competitive affordable housing funding environment, especially for projects serving households with incomes at or below 60% of AMI.
Since securing entitlements, in the period between 2024 and 2026, MidPen evaluated multiple financial options. MidPen’s original financing plan identified the Affordable Housing and Sustainable Communities (AHSC) program as a prime financing path based on the planned Irvington BART station. With the delay of the Irvington BART station, this funding program has not been feasible. In addition to AHSC, the Multifamily Housing Program (MHP) was identified as a potential source of funding. The MHP focuses on supporting deeply affordable units, particularly those intended for individuals who were formerly homeless. A key requirement for these units is access to adequate operating funding, with project-based vouchers as the primary mechanism to ensure financial viability. Unfortunately, the unavailability of the vouchers means that sufficient operating funds cannot be secured, making it impossible to utilize MHP funding for the project at this time.
Historically, State affordable housing investments have been fragmented across multiple agencies, resulting in lengthy delays between initial funding awards and subsequent tax credit or bond awards. Developers have had to submit multiple applications to different sources to sufficiently fund projects.
To address inefficiencies, streamline processes and reduce costs, on July 1, 2026, the State will launch its first standalone housing agency, the California Housing and Homelessness Agency. With this reorganization, the State will create a new finance committee, the Housing Development Finance Committee (HDFC), to administer all multifamily affordable housing subsidy programs under the Governor’s control and the 4% Low Income Housing Tax Credit (LIHTC) and tax-exempt volume capped bond debt will be automatically available to projects that received an award from HDFC. As a result of these changes, there will be a single application process to obtain affordable housing funding.
Despite these positive changes, implementation will require time. The earliest round of applications for State tax credits and bonds through HDFC Council Staff Report (ID # 5742) Meeting of June 9, 2026 Updated: 6/5/2026 11:19 AM by Alberto Quintanilla Page 3 is anticipated to occur in mid-2027, with funding awards expected in Fall 2027. If MidPen is successful in securing funding, construction of the first phase of Osgood Family Apartments could begin in early 2028. If the initial application round is unsuccessful, MidPen plans to reapply during the next round in 2028, potentially receiving funding and commencing construction by late 2028. Once the first phase of the project is underway, it is expected that the second phase will follow soon after, with a targeted start date of June 2029.
Staff has completed the review of the documents necessary for the borrower to demonstrate that it satisfies the conditions for the loan extension, including but not limited to, a certification of no default, an updated schedule of performance, and a statement from MidPen that there is no adverse change in the financial condition of the borrower. Staff is recommending a two-year loan extension, with a new expiration date of June 30. 2028, plus one additional 180-day period to be issued administratively if needed for Phase 1 of this project, to allow for unforeseen delays to start construction.
To ensure that progress continues for both phases of the project without delay, MidPen will be actively pursuing funding for Phase 2, while the application for Phase 1 to the State is pending. When Phase 2 is ready to apply to the State for financing, the State’s single application system will have been operational for one year, eliminating any anticipated wait-time for system implementation. Accordingly, staff recommends establishing a construction start deadline of June 30, 2029, for Phase 2 of the project.
Fiscal Impact: The City Council is being asked to approve an extension of the loan term for the Osgood Family Apartments affordable housing project.
All City funding required for the project was allocated during the Council meeting held on November 2, 2021. No additional financial commitment from the City is anticipated as part of this approval.
Environmental Review: The City’s approval of the extension of loan term is exempt from the California Environmental Quality Act (CEQA) pursuant to, without limitation CEQA Guidelines Section 15061(b)(3) and/or 15378(b)(2), (4) and/or (5), each as a separate and independent basis. The action is a governmental fiscal or administrative action which will have no potential to adversely affect the environment, directly or indirectly. Furthermore, the proposed project was previously found to meet the criteria in Government Code Section 65913.4, amended via Senate Bill 35, thereby making it ministerially exempt from the requirements of CEQA.
Council Staff Report (ID # 5742) Meeting of June 9, 2026 Updated: 6/5/2026 11:19 AM by Alberto Quintanilla Page 4
ATTACHMENTS:
• Draft Resolution MidPen Loan Extension - Final
Recommendation: Adopt a resolution authorizing the City Manager or designee to amend the loan agreement and other implementing documents and take such other actions as required to clarify that the project will proceed in two phases with distinct performance timelines; and, extend the term of the acquisition and predevelopment loan agreement with MP Irvington LLC to June 30, 2028, with a 180-day period to be issued administratively for Phase 1, if needed, and an additional 180-day period thereafter (to June 30, 2029) for Phase 2.