Agenda Item Wording:
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Community Housing Development Organization Re-certification - Authorize re-certification of Self-Help Enterprises as a Community Housing Development Organization (CHDO); authorize an award for $226,944 in Fiscal Year 2025/2026 HOME funds, as a 55-year residual receipt loan, toward construction of an 80-unit affordable senior housing development known as Crescent Meadows; and authorize the City Manager to execute a letter of commitment for Self-Help Enterprises for Crescent Meadows for an amount up to $1 million (combined Fiscal Year 2025/2026, Fiscal Year 2026/2027, and Fiscal Year 2027/2028 HOME funding), contingent upon available funding.
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Prepared by:
Margie Perez, Housing Specialist, margie.perez@visalia.city, (559) 713-4460;
Melody Murch, Assistant Finance Director, melody.murch@visalia.city, (559) 713-4379;
Renee Nagel, Finance Director, renee.nagel@visalia.city, (559) 713-4375
Department Recommendation:
Staff Recommends that Council:
1) Authorize the City Manager to execute an agreement re-certifying Self-Help Enterprises, Inc. (SHE) to serve as a Community Housing Development Organization (CHDO) for the City of Visalia HOME funds; and
2) Authorize an award for $226,944 in FY 25/26 HOME funds, contingent upon actual program income received, as a 55-year residual receipt loan for construction of the 80-unit affordable senior housing development known as Crescent Meadows; and
3) Authorize the City Manager to execute a letter of commitment to Self-Help Enterprises for the Crescent Meadows project to provide an amount up to $1 million in HOME funding, contingent upon actual available funds for FY 25/26 = $226,944; FY 26/27 and FY 27/28 = $773,056; and
4) Authorize the City Manager to execute necessary contracts and loan agreements for the Crescent Meadows project, including provisions required to maintain ownership and use.
Summary:
The HOME Final Rule requires that each time the City commits HOME CHDO funds, it must re-certify a nonprofit’s qualifications to be a CHDO and its capacity to own, sponsor, or develop housing per 24 CFR 92.300(a). According to the HOME program requirements, CHDO certifications are based upon meeting the definition of a CHDO and capacity assessment. These certifications are required at the time of commitment and the CHDO is expected to remain a CHDO throughout the project's period of affordability. To satisfy the CHDO requirement, a participating jurisdiction must reserve not less than 15% of the HOME allocation for investment only in housing to be owned, developed, or sponsored by CHDO’s. This reservation must occur within 24 months after the date that HUD notifies the participating jurisdiction of HUD's execution of the HOME grant Agreement. CHDO set-aside funds that are not reserved for designated CHDOs within 24 months will be returned to HUD.
SHE is the only State certified CHDO within Tulare County. The City has reviewed SHE’s CHDO re-certification documentation and has determined the SHE has the capability to own, develop, or sponsor a housing development project, and is eligible for City Authorization for CHDO re-certification. CHDO funds must be committed to CHDO development projects requiring acquisition, construction, or rehabilitation components to be considered a “development” project.
On April 21, 2025, Council approved the 5-year Consolidated Plan (ConPlan) that included approximately $1 million in HOME funds for the development of a HOME-CHDO senior affordable housing project over the span of 3 years (FY 25/26, FY 26/27, and FY 27/28). The requested letter of commitment will memorialize the allocations in the ConPlan. Annual amounts will be brought to Council for appropriation as part of the Annual Action Plan adoption for each program year. The amount of CHDO funding to be provided to SHE is contingent upon the availability of HOME funding.
Background Discussion:
In the FY 2025 Annual Action Plan approved by Council on April 21, 2025, approximately $227k of HOME-CHDO funding was appropriated for a Community Housing Development Organization (CHDO) senior housing project. An additional $773k is estimated to be available in the next 2 HOME grant program years (2026/27 and 2027/28) for a total of up to $1 million spanning the next 3 years. SHE has submitted a proposal requesting HOME CHDO funding of approximately $1 million to be used for an 80-unit senior affordable housing development known as “Crescent Meadows”. The Crescent Meadows project will provide affordable housing to low-income seniors age 62-years and older at 80% of the area median income level and lower. One June 11, 2025, the Crescent Meadows project completed the Site Plan Review process and has been approved to move forward with an application for a building permit.
Staff recommends awarding the FY 25/26 funds (estimated $227k, contingent upon program income received) to the Cresent Meadows project, as well as the City's commitment (contingent upon availability) to award FY 26/27 and FY 27/28 funds ($773k estimated) which will be available in the next 2 years. Award of these funds would restrict 11 of the 80 project units to occupancy by residents who are at or below 60% of Area Median Income (AMI), and provide local investment in this low-income housing project, which is an important factor in the application process for additional project funding. SHE has already been awarded grant funding of $28 million towards this project and has applied for State Homekey+ funding to bridge the gap between this amount and the estimated total project cost of $36 million.
To provide the requested funding, staff is asking Council's authorization to negotiate and execute the necessary contracts and agreements, as well as to provide a letter of commitment for the 2026/27 and 2027/28 funding (contingent upon availability) to be used by SHE in support of their application for any additional state or federal funding. A more detailed description of this request and the Crescent Meadow project follows.
Project and Funding Background:
The City of Visalia, as a Participation Jurisdiction (PJ) receives HOME Investment Partnership Program (HOME) funding on an annual basis from the U.S. Department of Housing and Urban Development (HUD). Within 24 months after the date HUD notifies the PJ of HUD’s execution of the HOME agreement, the PJ must reserve not less than 15% of the HOME allocation for investment only in housing to be owned, developed, or sponsored by a Community Housing Development Organization (CHDO) per 24 CFR 92.300(a). Each time an award is made to a CHDO, the PJ must certify the organization meets the definition of CHDO and must document that the organization has the capacity to own, develop, or sponsor housing. HOME-CHDO set-aside eligible activities include:
• Acquisition and/or rehabilitation of rental housing; and
• New construction of rental housing; and
• Acquisition and/or rehabilitation of homebuyer properties; and
• New construction of homebuyer properties; and
• Direct financial assistance to purchasers of HOME-assisted housing that has been developed with HOME funds by the CHDO.
CHDO set-aside funds that are not reserved for designated CHDOs within 24-months will be recaptured by HUD.
On April 21, 2025, Council approved the 5-year Consolidated Plan (ConPlan), which planned the use of FY 2025/26, FY 2026/27, and FY 2027/28 HOME CHDO funds toward development of a HOME CHDO senior housing project. On April 21, 2025, Council approved an estimated $227k in HOME funding based on the estimated 2025/26 annual HOME allocation and program income to be received for a HOME CHDO senior housing development project as planned in the current 5-year ConPlan. As stated in the FY 2025 Annual Action Plan (AAP), any increase or decrease of the FY 2025 HOME annual allocation and/or program income will be an adjustment to the HOME CHDO senior housing project. In the FY 2025 AAP, the CHDO 15% was combined with additional HOME funds to fund a CHDO senior housing project that had not yet been identified and staff planned to return to Council with a potential HOME CHDO senior housing project for Council’s review and approval.
CHDO Certification: The HOME Final Rule requires that each time the City commits HOME CHDO funds, it must re-certify a nonprofit’s qualifications to be a CHDO and its capacity to own, sponsor, or develop housing per 24 CFR 92.300(a). According to the HOME program requirements, CHDO certifications are based upon meeting the definition of a CHDO and capacity assessment. These are required at the time of commitment and the CHDO is expected to remain a CHDO throughout the project's period of affordability. To satisfy the requirement to reserve not less than 15% of the HOME allocation for CHDO projects, funds are reserved when a PJ enters into a written agreement with the CHDO committing the funds to a specific local project.
The City has reviewed SHE’s CHDO re-certification documentation and has determined the SHE has the capability to own, develop, or sponsor a housing development project, and is eligible for City Authorization for CHDO re-certification. CHDO funds must be committed to CHDO development projects requiring acquisition, construction, or rehabilitation components to be considered a “development” project.
Self-Help Enterprises: Self-Help Enterprises, Inc. (SHE) has been headquartered in Visalia since its founding in 1965 and developed single family housing for low-income Visalians as early as 1969. SHE is currently the only designated CHDO for the City of Visalia. The City has looked for other potential CHDO’s within the region and SHE was found to be the sole organization both interested and eligible for designation as a CHDO within Tulare County. SHE has a strong connection to the low and moderate -income residents of Visalia and has been a great asset as a City designated CHDO. SHE is a private, non-profit, 501(c)(3) tax exempt corporation established under the laws of the State of California to improve the living conditions and community standards of low-income families. The primary emphasis of the organization since its formation has continuously been the creation of new housing opportunities and the preservation and improvement of existing housing. SHE utilizes the HOME-CHDO funds and program income generated by the repayment of HOME-CHDO funded housing and development loans for the development of additional affordable housing, such as, the 5 single-family homes recently constructed on NW 5th Avenue, and the Loft’s Project at Fort Visalia.
Crescent Meadows: Crescent Meadows is a new affordable senior rental community being developed by Self-Help Enterprises (SHE) in partnership with Visalia Senior Housing (VSH). The proposed project is located at the northwest corner of Ferguson Ave. and N. Dinuba Blvd. Crescent Meadows offers 80 units comprised of one and two bedrooms. The project will be affordable senior housing serving individuals 62 years of age and older, and 24 units will be set aside for individuals experiencing homelessness, or at-risk of homelessness, and will be designated as PSH. The project includes a community center which will provide office space for an on-site manager and resident services staff. Crescent Meadows will be an all-electric project which includes renewable solar PV to offset 100% of the residential and common area electrical, resulting in a project that is also affordable to operate and zero net energy. SHE will also incorporate extensive water conservation measures including highly efficient drip irrigation systems, and low water use landscaping. Site amenities include pickleball courts, accessible drop off/pick up locations, community spaces, and a loop walking trail that connects with the existing Visalia trail system to allow for safe and accessible recreation. Project partnership with Family Healthcare Network will allow aging-in-place support to extend the length of time residents can remain independently housed.
HOME Funds: The 5-year (FY 2025/26 - 2029/30) approves approximately $1 million in HOME funds for the development of a senior housing project spanning over 3-years. SHE is requesting approximately $1 million in HOME funds which will restrict eleven (11) HOME floating assisted units to senior households at or below 60% AMI level. Staff recommends providing all available FY 2025/26, FY 2026/27, and FY 2027/28 HOME funds to satisfy this request, contingent upon the final award amount in each Annual Action Plan as approved in the 5-year Consolidated Plan. Staff estimates an available $227k in the current FY 25/26, and an additional $773k in FY 26/27 and FY 27/28 for a total commitment of approximately $1 million in HOME funds. The total proposed HOME funding will provide 3% of the total project construction budget, multiplying the investment of these HOME-CHDO funds more than 20 times.
HOME Loan Terms: At the time of the final written agreement, a loan agreement will be executed, referencing all the requirements of HOME funds, including the execution of a Note, which will be provided as a 3% loan to be repaid over a 55-year term from any available residual receipts of the project. If there are no annual residual receipts the loan balance will be forgiven on an annual basis at 1/55 each year. A Deed of Trust and a Restrictive Covenant will be recorded against the property to maintain affordability of the units for 55 years. Eleven (11) floating units will be designated as “HOME assisted” and will be monitored by the City during the term of the covenant. In addition to the HOME affordability requirements, Low-Income Housing Tax Credit funding will maintain a 55-year affordability covenant.
Project Process: This project has already completed project design, and the site plan review process. The tax credit application was awarded in April 2025. Tax Credit funding requires construction to begin within 6 months of the award. As a result, the project's anticipated construction start date is October 2025 and anticipated completion date is September 2027. The project is aiming to achieve full occupancy by December 2027.
Fiscal Impact: The HOME funding requested for award to this project is $227k of the projected HOME funds and program income to be received during FY 2025/2026 as approved in the FY 2025/26 Annual Action Plan. The additional estimated $773k in FY 2026/27 and FY 2027/28 HOME funds will be requested for appropriation during the adoption of the FY 2026/27 and FY 2027/28 Annual Action Plans in the Spring of 2026 and 2027. The letter of commitment total of $1 million is contingent upon the future award of HOME funds, and no General Fund money is included or requested for this project.
Prior Council Action:
April 21, 2025 - Council approval of the 5-year (FY 2025/26 - 2029/30) Consolidated Plan and FY 2025/26 Annual Action Plan including the use of HOME funds for a HOME-CHDO affordable senior housing project.
Other: None.
Alternatives: None recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
Move to:
1) Authorize the City Manager to execute an agreement, re-certifying Self-Help Enterprises, Inc. (SHE) to serve as a Community Housing Development Organization (CHDO) for the City of Visalia under the terms, regulations, of the HOME Program; and
2) Authorize award for approximate $226,944 in FY 25/26 HOME funds contingent upon actual program income received, as a 55-year residual receipt loan, toward construction of an 80-unit affordable senior housing development for Crescent Meadows; and
3) Authorize the City Manager to execute a letter of commitment to Self-Help Enterprises for the Crescent Meadows project to provide an amount up to $1 million in HOME funding, contingent upon actual available funds for FY 25/26, FY 26/27, and FY 27/28; and
4) Authorize the City Manager to execute necessary contracts and loan agreements, including provisions required to maintain ownership and use.
Environmental Assessment Status: Currently in progress.
CEQA Review: N/A
Deadline for Action: 7/21/2025
Attachments:
Attachment A - SHE’s Letter of Request
Attachment B - CDLAC Award Letter
Attachment C - Crescent Meadows Project Summary
Attachment D - COV Draft Commitment Letter
Attachment E - SHE CHDO Application & Checklist
Attachment F - Draft SHE CHDO Agreement