City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: SEPTEMBER 16, 2025 FROM: HOUSING AND HUMAN SERVICES WARD: 1 SUBJECT: AMERICAN RESCUE PLAN ACT LOAN AGREEMENT WITH THE RIVERSIDE HOUSING DEVELOPMENT CORPORATION FOR $644,384.65 IN EMERGENCY RENTAL ASSISTANCE ROUND 2 GRANT FUNDS To REHABILITATE THE 51-UNIT OAKTREE APARTMENTS AT 1946 SEVENTH STREET, INCLUDING 25 AMERICAN RESCUE PLAN ACT-RESTRICTED UNITS ISSUE:
Approval of an American Rescue Plan Act Loan Agreement with the Riverside Housing Development Corporation for $644,384.65 in Emergency Rental Assistance Round 2 grant funds to rehabilitation the 51-unit Oaktree Apartments at 1946 Seventh Street, including 25 American Rescue Plan Act-restricted units.
RECOMMENDATIONS:
That the City Council:
Approve an American Rescue Plan Act Loan Agreement with Riverside Housing Development Corporation for $644,384.65 in Emergency Rental Assistance Round 2 grant funds to rehabilitate the 51-unit Oaktree Apartments at 1946 Seventh Street, including 25 American Rescue Plan Act-restricted units; and Authorize the City Manager, or designee, to execute all documents associated with the American Rescue Plan Act Loan Agreement with Riverside Housing Development Corporation, including making minor and non-substantive changes.
BACKGROUND:
On March 22, 1996, the City entered into a HOME Investment Partnerships Program (HOME) Loan Agreement with Riverside Housing Development Corporation (RHDC) for $450,000 to acquire and rehabilitate the Oaktree Apartments, consisting of 51 rental units, located at 1946 Seventh Street. Under this agreement, 25 units were restricted to low-income households earning at or below 60% of area median income (AMI). For a one-person household, this equates to an income of $47,040, with a maximum rent of $1,344, assuming the landlord pays all utilities. The loan was issued with 0% interest for 30 years, with monthly payments of $1,500, and is scheduled to mature on April 1, 2026.
Federal Emergency Rental Assistance Program Round 2 (ERA2) On May 7, 2021, the City entered into a direct allocation agreement with the U.S. Department of the Treasury (Treasury) to receive $4,554944.74 in ERA2 funds under the American Rescue Plan Act (ARPA), Public Law No. 117-2. These funds were intended to assist renters impacted by the COVID-19 pandemic with rent and utility arrears, forward rent and housing stability services to prevent homelessness.
To date, the City of Riverside has disbursed $4,220,286.54, assisting 571 unduplicated households, as follows:
Rent arrears: 386 households
Forward rent: 189 households
Utility arrears: 262 households
As application volume decreased nationwide, the Treasury issued updated guidance permitting the use of unobligated ERA 2 funds for affordable housing activities. Before funds could be obligated for such purposes, jurisdictions were required to have obligated 75% ($3,731,003.39) of their total ERA2 allocation toward direct financial assistance and eligible administrative or housing stability services. Under ERA2, the affordability period for funded housing projects is 20 years.
DISCUSSION:
RHDC submitted a request for funding to support the rehabilitation of the Oaktree Apartments. The proposed improvements aim to address safety, accessibility, efficiency and overall property aesthetics. The total rehabilitation costs is $1,328,192.
RHDC is requesting a $644,384.65 loan with a 0% interest, a 20-year term, and monthly payment of $2,684.94. Twenty-five (25) units will be restricted to very low-income households earning no more than 50% of AMI (equivalent to $39,200 for a one-person household). The corresponding Low HOME rent is $1,048, assuming the landlord pays all utilities.
Staff recommends approval of this loan request, as it would extend the existing affordability restricts – currently set to expire in April 2026 - for an additional 20 years, ensuring long-term housing stability for very low-income residents.
FISCAL IMPACT:
The fiscal impact of the Loan Agreement is $644,384.65 to the Emergency Rental Assistance Program Round 2 grant. Sufficient funds are available in the following project accounts:
Fund
Account Name
Account No.
Amount
Development Grants
Emergency Rental Assistance II
9274500-440110
$443,441.23
Emergency Rental Assistance II Admin
9274510-440110
$200,943.42
Total
$644,384.65
Prepared by: Michelle Davis, Housing and Human Services Director Certified as to
availability of funds: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Approved by: Kris Martinez, Assistant City Manager
Approved as to form: Rebecca McKee-Reimbold, Interim City Attorney Attachments: ARPA Loan Agreement
Attachment No. 1 – Site Plan
Attachment No. 2 – Legal Description
Attachment No. 3 – Project Description
Attachment No. 4 – Schedule of Performance
Attachment No. 5 – Project Budget
Attachment No. 6 – ARPA Promissory Note
Attachment No. 7 – ARPA Deed of Trust
Attachment No. 8 – ARPA Regulatory Agreement
Attachment No. 9 – Request for Notice of Default
Attachment No. 10 – Release of Construction Covenants
Attachment No. 11 – Home Documentation and Monitoring Requirements Attachment No. 12 – Annual Tenant Certification Report
Attachment No. 13 – Addendum to American Rescue Plan Act Agreement ARPA Loan Agreement with RHDC for the Oaktree Apartments ● Page 2