REPORT TO HOUSING AND HUMAN SERVICES COMMISSION
SUBJECT
Title
Consider Request from Charities Housing for Forgiveness or Extension of $100,000 CDBG Loan for HomeSafe Santa Clara
Report
BACKGROUND
In 2000, the City awarded a Community Development Block Grant (CDBG) loan to Charities Housing Development Corporation (Charities) and HomeSafe Santa Clara LP to develop a shared housing community that would serve 24 low/very-low income survivors of domestic violence, called HomeSafe. The City entered into a loan agreement with Charities for $100,000 and issued a loan in December 2000 (Attachment 2). The 55-year loan was funded with federal CDBG funds and the property is deed restricted for fifty-five years to provide affordable housing. HomeSafe serves survivors of domestic violence with incomes at or below 80% of the Area Median Income.
The loan repayment directive is:
* A principal loan amount of $100,000 with accrued interest (3% per year) being deferred for the loan term of fifty-five (55) years and due in full in 2055.
As of June 26, 2024, the loan with the City of Sunnyvale has a principal and interest balance of $170,668.
HomeSafe received other construction loans of approximately $1.5 million from the County and cities within the County. Subsequent to the initial construction, other loans have been awarded for maintenance and upgrades to the development.
In recent months, Charities has concluded that the current shared housing model does not have long-term sustainability and believe the most viable action is to demolish HomeSafe and construct a new 70-unit affordable housing development that will set aside 24 units for domestic violence survivors.
On May 1, 2024, Charities requested the City consider the following three potential loan disposition strategies (Attachment 3):
1. Forgive $100,000 loan at time of HomeSafe demolition;
2. Extend loan maturity date for fifty-five (55) years to match new funding and subordinate to new funding sources; or
3. Make no ch...
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