Elk Grove
8401 Laguna Palms Way |
Affordable Housing Loan Program for Developers FREQUENTLY ASKED QUESTIONS
(1) What is the process for requesting a City loan for an affordable housing project? A complete Application must be submitted to the Housing Department. The Application and Supplemental documents will be reviewed by Housing staff and a letter will be sent to the applicant regarding the completeness of the application. Applications deemed complete will be reviewed for consistency with the Affordable Housing Loan Program Guidelines and other qualities the project will bring to City program. The Application will then be forwarded to the Affordable Housing Loan Committee for review. The Affordable Housing Loan Committee will provide City Council with a recommendation for each loan request. (2) Is there a minimum or maximum loan amount for projects? There is no minimum or maximum loan amount for projects. As of February 28, 2008, the amount of City funds available for affordable housing project loans is $9,000,000. A portion of this total, approximately $1,700,000, is from the Very Low Income Housing Trust Fund and must be used to develop units for individuals or families at the 50% area median income (AMI) level or lower. (3) How long will it take to obtain a response to a loan request? The recommendation of the Affordable Housing Loan Committee will be forwarded to City Council as soon as possible, in a regularly scheduled meeting. Applicants can expect to hear the recommendation of the Affordable Housing Loan Committee for their project in approximately 60 days from the submittal date of a complete Application. City Council provides the final response to City loan requests. If a project is found to be acceptable, a Conditional Funding Commitment would be provided to the developers until all project entitlements have been received. When all entitlements have been received, City Council will review proposed loan documents in order to provide the Funding Commitment. (4) Will a decision for a Conditional Funding Commitment be provided prior to a TEFRA hearing? The City may hold the TEFRA hearing for a project prior to receiving a Conditional Funding Commitment. However, the TEFRA hearing does not commit the City to a Funding Commitment at a later date. (5) Does the City require payment and performance bonding for all or some of the project construction costs? The City requires evidence from the developer that payment and performance bonds have been secured for the total cost of the project with the City as beneficiary. This is a necessary requirement as the City expects the proposed project to reach construction completion regardless any financial, staffing, or other problems that the developer may experience during the construction period. A project left incomplete by a developer due to financial problems will create an area of blight in the City. (6)Does the City confirm developer estimates of City fees or County fees as provided in project pro-formas or in bond application documents? The City will not take responsibility for any estimates by the developer of City fees or any other fees during the review process. If the developer underestimates a fee during their financial analysis for the project, the City cannot share in the responsibility for those additional costs of the project. (7) Is it possible to use a City loan for land acquisition? Historically, the City has preferred to finance construction development only. (8) Are density bonuses provided to a project containing affordable housing units? Yes, the City provides density bonuses for project containing affordable housing units. Please refer to the City of Elk Grove Zoning Code for detailed information on the density bonuses. Planning staff, not Housing staff at the City will provide comments to developers regarding density bonuses applicable to a proposed project.
If you have additional questions, please contact Jennifer Estrella, Sr. Finance Analyst at (916) 627-3409 or by email at jestrella@elkgrovecity.org.
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