4 - AMEND / RESTATE REGULATORY AMENDMENT_2018-12-18 (2)

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REQUEST FOR HOUSING AUTHORITY ACTION MEETING DATE: DECEMBER 18, 2018 TITLE: APPROVE AMENDED AND RESTATED BOND REGULATORY AGREEMENT FOR CITY GARDENS APARTMENTS {STRATEGIC PLAN NO. 4, 11 EXECUTIVE DIRECTOR RECOMMENDED ACTION RECORDING SECRETARY USE ONLY: MAIW i ...`*,=I ❑ As Recommended ❑ As Amended CONTINUED TO Authorize the Housing Authority Executive Director and Housing Authority Recording Secretary to execute an Amended and Restated Bond Regulatory Agreement with LINC-Bristol Associates for City Gardens Apartments at 2901-2955 North Bristol Street, Santa Ana, CA 92706, subject to non -substantive changes approved by the Executive Director and Authority General Counsel. DISCUSSION City Gardens Apartments at 2901-2955 North Bristol Street, Santa Ana, CA 92706 is collectively an existing affordable housing project comprised of a total of 27 two-story buildings, containing 274 units. The project sits on 9.09 acres and was built in 1965. This 100% affordable housing project consists of 59 studios, 143 one -bedroom units and 72 two-bedroom units. The owner of the project, LINC-Bristol Associates I, is seeking to refinance their current debt in order to undertake repairs and meet the long-term capital needs of the project. The project was financed by bonds issued by the Housing Authority of Santa Ana in 1996 and in order for the owner to refinance, they are requesting an amendment to the Housing Authority's regulatory agreement. Specifically, the owner submitted an application for Federal Housing Administration ("FHA") mortgage insurance under section 223(f) to the U.S. Department of Housing and Urban Development ("HUD"). The owner is seeking to refinance the current debt with an approximate $31,764,500 mortgage. The FHA Lender is Red Mortgage Capital, LLC. The mortgage is for a 35 year term with no recourse to the borrower or the Housing Authority. Loan proceeds will be used to complete approximately $37,178 in repairs and provide an initial deposit of $834,878 into a reserve for replacement fund in order to meet long term capital needs of the project. The application for mortgage insurance is currently in process at HUD, and a firm commitment is anticipated prior to 2018 year end. The projected closing date is January or February 2019. As a condition to providing FHA mortgage insurance, HUD requires its form of rider to be incorporated into the City's regulatory agreement. The project was refinanced in 2006 with a Fannie Mae loan and a Fannie Mae form of rider was incorporated into the City's regulatory agreement as part of the 2006 refinancing. In connection with the 2006 refinancing, LINC-Bristol 4-1