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Subordination Agreement and Lease Rider for FX Residences <br /> June 16, 2026 <br /> Page 3 <br /> Authority's ownership of the property and does not change the underlying public purpose <br /> of the project. <br /> Approval of the Subordination Agreement and Lease Rider will allow HomeAid to receive <br /> HCD's permanent loan financing and complete the transition from construction financing <br /> to long-term permanent financing. The Housing Authority's existing Affordability <br /> Restrictions and general public benefits associated with FX Residences will remain <br /> unchanged. Moreover, approval of these documents will help ensure the long-term <br /> financial stability and continued operation of the project as permanent supportive <br /> housing serving vulnerable residents. <br /> If the Housing Authority does not approve the Subordination Agreement and Lease <br /> Rider, HCD will be unable to provide its NPLH loan of$3,006,567 for the project. This <br /> will jeopardize the project's permanent financing structure, impair HomeAid's ability to <br /> refinance their existing construction loan obligations, and negatively impact the long-term <br /> viability of FX Residences. While the Housing Authority's loan will become subordinate to <br /> HCD's senior loan, subordination was contemplated as part of the original financing <br /> structure and authorized by the Housing Authority on December 7, 2021. As such, staff <br /> recommends approval of the proposed Subordination Agreement and Lease Rider. <br /> FISCAL IMPACT <br /> There is no fiscal impact associated with approval of the Subordination Agreement and <br /> Lease Rider. The proposed actions do not increase the Housing Authority's existing <br /> loan commitment to FX Residences, require the expenditure of additional Housing <br /> Authority funds, or modify the terms of the Housing Authority's $1,656,947 loan. <br /> EXHIBIT(S) <br /> 1. Housing Authority Staff Report from December 7, 2021 <br /> 2. Subordination Agreement <br /> 3. Lease Rider <br /> Submitted By: Michael L. Garcia, Executive Director, Community Development Agency <br /> Approved By: Alvaro Nunez, City Manager <br />