COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Services Agency

Office of Housing

DATE:

June 1, 2004

BOARD MEETING DATE:

June 29, 2004

TO:

Honorable Board of Supervisors

FROM:

Maureen Borland, Human Services Agency

Steve Cervantes, Director, Office of Housing

SUBJECT:

First Amendment to the Agreement with the HIP Housing Development Corporation to Assist in the Rehabilitation of the 11 South Delaware Apartments

Recommendation

Adopt a Resolution authorizing the approval of a First Amendment to the Agreement with HIP Housing Development Corporation to assist in the Rehabilitation of the 11 South Delaware Apartments, to add $150,000 for a new total of $450,000. The term of the Agreement remains the same, 12/2/2003 to 12/1/2033.

Background

Previously known as HAND, HIP Housing Development Corporation (HHDC) is the nonprofit development branch of HIP Housing, the latter which concentrates on providing a spectrum of housing services to clients. HHDC is structured as a Community Housing Development Organization (CHDO) under the HOME Investment Partnerships (HOME) Program to enable it to receive CHDO set-aside funds under HOME. HHDC is currently under contract with the County for $300,000 of HOME funds to upgrade a recently purchased 11-unit apartment building at 11 South Delaware Avenue, San Mateo.

Discussion

HHDC applied for supplementary funds under the County’s FY 2004-05 HOME Program to cover additional rehabilitation work required by the first lender, the California Housing Finance Agency. The Board of Supervisors approved $150,000 of additional HOME funds for the project on May 4, 2004 as part of its overall approval of the FY 2004-05 Action Plan to HUD. This First Amendment adds the supplementary funding to the Original Agreement and restates the business terms of the funding.

Consistent with Office of Housing policy, total funding of $450,000 is structured as a loan, secured by a deed of trust, with repayment based on availability of project surplus cash. Upon maturity of the 30-year note, any outstanding balance will be due and payable.

Repayment based on surplus cash is shared with the City of San Mateo, which has, to date, invested $660,000 toward the purchase of the apartment building. The City is now considering additional funding for this project. Repayment for both jurisdictions’ funding will be made in proportion to the respective jurisdictions’ financing.

Vision Alignment

The Agreement with HIP Housing Development Corporation keeps the commitment of: Offer a full range of housing choices; and goal number 9: Housing exists for people of all income levels and for all generations of families. The agreement contributes to this commitment and goal by allowing a nonprofit developer to maintain affordable housing in perpetuity.

Fiscal Impact

The total County obligation under this Agreement is $450,000. HIP Housing was awarded $300,000 of HOME funds for FY 2003-04. This First Amendment adds $150,000 of HOME funds for FY 2004-05, which is included in the Recommended Office of Housing Budget for FY 2004-05. There is no Net County Cost.