Item 13 - Affordable Housing Project at 1411 N Broadway

Home Browse Search

Loan Agreement for WISEPlace Permanent Supportive Housing March 7, 2023 Page 2 3 2 8 1 Development Project-Based Vouchers (“PBVs”) from the Housing Authority for the development of Permanent Supportive Housing (PSH) at the Site by Jamboree Housing Corporation and WISEPlace. The project will have 47 new affordable studio units and 1 managers unit. These 47 units are specifically designated for permanent supportive housing for persons who are experiencing chronic homelessness at extremely low- income levels (at or below 30% of the Area Median Income). Fourteen (14) units will serve individuals experiencing chronic homelessness with a mental illness, financed by the Mental Health Services Act (“MHSA”), and these services will be provided on site by WISEPlace and the Orange County Health Care Agency. As a condition of the City’s award of funds, staff is now returning to the City Council for approval of their Loan Agreement. In addition, staff is recommending approval of a Subordination Agreement to subordinate the City’s Loan Agreement to a senior loan from Bank of America; two (2) Subordination Agreements with the County of Orange and Orange County Housing Finance Trust, respectively, to subordinate their two (2) junior loans to the City’s Loan Agreement; and a future Subordination Agreement with any other senior lender as needed after the project is complete. DISCUSSION After the City Council approved the pre-commitment of funding Jamboree Housing Corporation and WISEPlace applied for 9% Low-Income Housing Tax Credits with additional funding through the County of Orange, and Orange County Housing Finance Trust. In September of 2022, Jamboree Housing Corporation and WISEPlace secured all of their financial commitments including 9% Tax Credits and are prepared to close on their financing and begin construction of the Project. In accordance with the pre- commitment letter, staff is now recommending approval of a Loan Agreement for $5,256,327 in HOME-ARP funds, a Subordination Agreement with Bank of America as the senior lender, and two (2) Subordination Agreements with the County of Orange and OCHFT, respectively, as junior lenders, for the development of the Project. HOME-ARP Loan Agreement The HOME-ARP Loan Agreement is attached as Exhibit 3. The following loan terms are incorporated into the Loan Agreement: •Borrower: North Broadway Housing Partners LP (c/o Jamboree Housing Corporation and WISEPlace). •Loan Amount: $5,256,327 principal amount from the HOME-ARP funds. •Interest Rate: 3% simple interest per year. •Term: fifty-five (55) years from the date of issuance of the Certificate of Completion for the Project. •Terms of Repayment: Repaid from fifty percent (50%) of residual receipts (pro- rata with payments due in connection with other financing provided) calculated by taking the Annual Project Revenues from the Property for each year, less deductions for Annual Operating Expenses.