Agenda Item
City Council
Item #: 3.8. 3/14/2023 File #: 23-0116
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, Interim City Manager
FROM: Jeff Adams, Interim Community Development Director
1. SUBJECT
Amendment to six Affordable Housing Agreements with Orange Housing Development Corporation for 10% loan forgiveness on each loan in exchange for early repayment to the City.
2. SUMMARY
Amendment to six Affordable Housing Agreements with Orange Housing Development Corporation for 10% loan forgiveness on the balance of each loan in exchange for early repayment to the City.
The total estimated payment to the City is approximately $1,388,965.91 in HOME Investment Partnerships funds and former Redevelopment Agency set-aside funds. The total loan forgiveness for the six loans is estimated at $154,329.55.
3. RECOMMENDED ACTION
For the six Affordable Housing Agreements with Orange Housing Development Corporation to include:
a. Adams I: 1837-1841 E. Adams Avenue - Agreement 2951
b. Adams II: 1915, 1917, 1919 E. Adams Avenue - Agreement 3076 c. Adams III: 1741-1745 E. Adams Avenue - Agreement 3195 d. Alice Clark Orange Blossom Apartments: 141 East Walnut Avenue - Agreement 2538 e. Rose Street Apartments: 1743 E. Rose Avenue - Agreement 3121 f. Villa Modena: 4431 E. Marmon Avenue - Agreement 3507
1. Authorize staff to update amounts in the First Amendment to reflect the most current balances of each loan as of amendment approval date.
2. Approve the amendment to the six Affordable Housing Agreements with Orange Housing Development Corporation and authorize the City Manager to execute final agreement on behalf of the City after final amounts are determined, no later than March 18, 2023, and discount amounts not to exceed $158,000.
3. Accept into the City’s revenue budget approximately $1,388,965.91 from Orange Housing Development Corporation into the following revenue account numbers:
a. 921.0000.44100.00000-Principal Repayments $888,099.74 b. 921.0000.44151.00000-Interest - Deferred Loans $411,061.75 c. 317.0000.44100.00000-Principal Repayments $ 89,532.13 d. 317.0000.44151.00000-Interest - Deferred Loans $ 272.30 City of Orange Printed on 3/9/2023Page 1 of 3
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Item #: 3.8. 3/14/2023 File #: 23-0116
4. FISCAL IMPACT
The total fiscal impact for this agreement is $154,329.55, the discount amount, from the following funds:
1. Low & Moderate Income Housing Asset Fund (921) $411,061.75
2. HOME Fund (317) 272.30
$154,329.55
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
b: Analyze future fiscal needs and potential revenue opportunities. d: Effectively manage and develop City assets
6. DISCUSSION AND BACKGROUND
Orange Housing Development Corporation (OHDC) is a non-profit organization established in 1990 that provides quality housing for low-income families and senior citizens. OHDC will, on occasion, also serve as a Community Housing Development Organization (CHDO) for third party affordable housing developers. A CHDO is a private non-profit, community-based service organization that qualifies for special set-aside funding from the HOME Investment Partnerships Program (HOME) through the Department of Housing and Urban Development (HUD). A CHDO can be the owner, developer, or sponsor of a housing project.
OHDC approached the City with a proposal for early repayment of six of 12 current outstanding loans that it has with the City in exchange for 10% loan forgiveness on the balance of each of the six loans.
Of the six loans proposed for early repayment, three were funded with HOME funds and three were funded with former Redevelopment Agency set-aside housing funds.
The loans proposed for early repayment are as follows:
Loan Total Balance (as
of January 31,
2023)
Total Discount
(as of January
31, 2023)
Estimated Early
Repayment
Amount
Loan Type
Adams I $23,361.67 $2,336.17 $21,025.50 HOME
Adams II $40,073.82 $4,077.38 $36,066.44 HOME
Adams III $8,661.19 $866.12 $7,795.07 Set-aside
RDA
Alice Clark
Orange
Blossoms
$358,988.89 $35,898.89 $323,090.00 Set-aside
RDA
Rose Street $36,347.20 $3,634.72 $32,712.48 HOME
Villa Modena $1,075,862.69 $107,586.27 $968,276.42 Set-aside RDA
Totals $1,543,295.46 $154,329.55 $1,388,965.91
The early repayment of the loans would not impact any of the original term loans for each of the respective projects, and would require that the original affordability period remain in place:
Project Starting Year of Restriction Ending Year of
Restrictions
Adams I 1997 2027
Adams II 1998 2053
Adams III 1999 2054
Alice Clark Orange Blossoms 1997 2052
Rose Street 1998 2053
Villa Modena 2001 2056
City of Orange Printed on 3/9/2023Page 2 of 3
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Item #: 3.8. 3/14/2023 File #: 23-0116
Project Starting Year of Restriction Ending Year of
Restrictions
Adams I 1997 2027
Adams II 1998 2053
Adams III 1999 2054
Alice Clark Orange Blossoms 1997 2052
Rose Street 1998 2053
Villa Modena 2001 2056
Affordable housing loans are usually repaid over a 55-year period and based on a percentage of residual receipts, or a small percentage of the revenue a project generates after all liabilities have been paid. The early repayment of these loans would benefit the City by making the housing funds available years sooner so that they can be re-invested in new affordable housing projects.
7. ATTACHMENTS
· Amendment to OHDC Affordable Housing Loans Early Payoff City of Orange Printed on 3/9/2023Page 3 of 3
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