On Tuesday, May 28th the Board of Supervisors unanimously approved two resolutions that, combined, earmarks $1.2 million in County funds as deferred loans in the Loan Oak Senior Apartments as part of Regional Housing Authorities' (RHA) developer funding application package to the California Tax Credit Allocation Committee (TCAC). This application is due July 1, 2019.
The Lone Oak Senior Apartments are proposed to be located on approximately 2 acres of land in Penn Valley. The project is planned to have 31 new units of affordable senior housing, including 24 one-bedroom, and 7 two-bedroom units. The project will house low-income seniors earning between 30-60% of the area median income for Nevada County. If the pending funding application is successful, construction on the complex is estimated to last 12 months, starting in March of 2020 and ending in March of 2021.
RHA has twice previously applied to TCAC in the highly competitive federal 9% low income housing tax credits process in March 2018 and March 2019. These tax credits would allow for construction bonds to be issued that would fund a majority of the project. These bonds are required to make the project financially viable. The project did not receive high enough scores in the previous two funding cycles and did not receive the needed tax credits to begin construction.
For the next round of TCAC tax credit allocations in July 2020, RHA requested the County to increase the loan for the project in the amount of $898,000 to make the County’s application more competitive. These funds originated from in lieu fees collected from other developers and some other existing Housing and Community services funds. Additionally, the Board of Supervisors is now committing an additional $304,768 from the County's HOME Program Income Fund. The program income funds are received from previous down payment assistance provided to low income home buyers who have since sold their homes and paid back their original down payment loans with interest.
TCAC encourages local government agencies to provide financial assistance to aid in the development and construction of low-income rental housing, and it is expected that the loans from the County will provide the leverage needed to be more competitive for the July tax credit allocation application cycle. The loans will be "deferred loans" which would be paid back using residual revenue (net revenue remaining after all other expenses have been paid), with a 3% interest rate and 55 year amortization period (the interest rate and amortization period are determined by regulatory rules). Further, the loans are conditioned upon the developer receiving an award of Federal tax credits from TCAC.
The actions taken by the Board of Supervisors on Tuesday related to supporting this financial commitment to the Loan Oak Senior Housing Project ties into the Board's 2019 Objectives Priority to, "Coordinate with local jurisdictions, developers and other partners to maximize leveraging opportunities with new state funding for affordable and workforce housing development."
For additional information about this process please contact Mike Dent, Director of Child Support, Collections, Housing and Community Services at (530) 265-1410 or by email at firstname.lastname@example.org.