BACKGROUND
The HOME Program was created under Title II (the HOME Investment Partnerships Act) of the National Affordable Housing Act of 1990. The objectives and intent of the HOME Program are to provide decent affordable housing to lower-income households; strengthen the ability of state and local governments to provide housing; expand the capacity of non-profit housing providers; and leverage private sector participation. In addition, Congress intended the HOME program to operate in a way that will help the participating jurisdiction undertake its own affordable housing strategy. HOME program regulations are available at 24 CFR §92.
HOME Program funds are federal funds allocated by the California Department of Housing and Community Development (HCD) to qualifying entities and are to be used for projects that meet the criteria listed above. The City of Roseville has approximately $2 million in HOME Program Income (PI) funds which is generated by First-Time Home Buyer and Owner-Occupied Rehabilitation loan payoffs funded using HOME program dollars.
In April 2020, Placer County Health and Human Services established the Hampton Inn on North Sunrise Boulevard in Roseville as a Project Roomkey site. Project Roomkey was part of the State of California’s response to the COVID-19 pandemic and was created as a solution to provide emergency shelter to unhoused individuals and families in order to minimize the strain on the healthcare system during the pandemic. Due to the program’s success, Governor Gavin Newsom implemented Project Homekey- a statewide initiative to convert underutilized hotels to permanent housing facilities. Placer County applied to the State for Project Homekey funds in 2021 and was awarded $23.5 million for acquisition and rehabilitation of the Hampton Inn.
Placer County released a Request for Proposal and chose Advocates for Mentally Ill Housing, Inc. (AMIH) to own and operate Sunrose Apartments. AMIH will provide supportive services on-site for the residents along with Placer County Health and Human Services, Adult System of Care Division. Although the building is in good condition due to its relatively recent construction, units are currently being renovated to include a kitchenette. AMIH is also providing furnished units as necessary that include a double bed, a dining table and chairs, and living area seating. Existing meeting rooms and offices will be utilized for a computer lab, supportive services offices as well as an urgent care facility for immediate substance abuse needs, operated by Placer County Health and Human Services.
In November 2022, the City issued a Notice of Funding Availability (NOFA) for $1,500,000 in HOME Program Income funds to be awarded to qualified affordable housing developers/project sponsors. AMIH was the sole responder to the NOFA and after review and evaluation of their proposal, the Sunrose Apartments was selected to proceed with a funding recommendation. On June 21, 2023, City Council approved an application to HCD to loan $1,500,000 of HOME Program Income to AMIH to complete rehabilitation of housing units at Sun Rose Apartments. Additionally, City Council authorized the Mayor to execute a standard agreement and other related documents necessary to participate and comply with the HOME Investment Partnerships Program in August of 2024. Over the last year and a half, Housing Division staff has been working with HCD through the application process to receive the necessary approvals to loan HOME Program Income funds to AMI Housing.
The Sunrose Apartments will consist of 82 studio units, plus one manager’s unit, for persons experiencing homelessness and youth experiencing homelessness or at-risk of homelessness. Fifty (50) units will be occupied by the chronically homeless population, twenty-seven (27) units will be occupied by persons experiencing homelessness, five (5) units will be occupied by youth experiencing homelessness or at-risk of homelessness. The project is located within a half-mile of public transit, a grocery store, health facility, pharmacy, and youth-specific services.
As outlined in the initial reservation request, staff is presenting the negotiated Regulatory and Loan Agreements to secure the terms of the loan and the affordability of the project which will qualify the units to count toward Roseville’s Regional Housing Needs Allocation (RHNA). The agreements are attached for review and approval. The loan terms for the $1,500,000 loan include guaranteed affordable rents for 55 years and a residual receipts loan accruing on the outstanding principal balance at a rate of three percent (3%) per annum. These regulatory and loan terms are consistent with previously developed City-assisted affordable housing projects.
HOME funds can be difficult to disburse due to the restrictions on usage and the lengthy application process to use the funds. Expending $1,500,000 in one tranche would demonstrate the City’s ability to expend and meet our agreement terms with HUD while also contributing to our RHNA credit requirements by the State.