COUNTY OF SAN MATEO
Department of Housing
April 28, 2009
BOARD MEETING DATE:
May 19, 2009
Honorable Board of Supervisors (Sitting as the Board of Commissioners of the Housing Authority)
Duane Bay, Director, Department of Housing
Resolution authorizing the execution and recordation of a Declaration of Trust for El Camino Village
Adopt Resolution No. 2009-05 authorizing the execution and recordation of a Declaration of Trust for the public housing complex known as El Camino Village.
Commitment: Offer a full range of housing choices.
The U.S. Department of Housing and Urban Development (HUD) requires that a Declaration of Trust be recorded against all property acquired, developed, maintained or assisted with funds from the U.S. Housing Act of 1937, federal law governing public housing agencies. The Declaration of Trust covenants that for a period of thirty years the Housing Authority will not convey or encumber the project, except as expressly authorized by HUD. The requisite Declaration of Trust was not recorded when El Camino Village was completed.
This omission, discovered in 2007, is now impeding closure of a federal audit finding, and blocking the Housing Authority’s “asset repositioning” initiative to modify the ownership, operation and financing structure of the complex to make the complex economically self-sufficient. The recommended action, recordation of a Declaration of Trust, will remedy this situation.
Real property for the development of El Camino Village was acquired using federal funds. HUD requires that a Declaration of Trust be recorded promptly after property acquisition to ensure a superior lien position to any subsequent financing. However, a Declaration of Trust was not recorded.
To complete the construction, the Housing Authority obtained loans from: (a) the County of San Mateo HOME Program; (b) the California Housing Finance Agency’s School Facilities Fee Reimbursement Program; and (c) the Affordable Housing Program under the Federal Home Loan Bank, for which the funding is provided through a member bank, in this case, Downey Savings. To secure these loans, four liens were recorded against the property in the form of deeds of trust and/or regulatory agreements.
The Housing Authority has recently secured approvals from the three funding sources to allow their respective liens to be subordinated to the Declaration of Trust. Therefore it is now possible for the Housing Authority to record the Declaration of Trust as required by HUD.
County Counsel has reviewed and approved the Resolution as to form.
There is no Net County Costs associated with this action.