Housing Department CITY COUNCIL Bridge Financing for Heritage Housing Partners - Inclusionary Purchase Options Jim Wong, Senior Project Manager October 15, 2012

Housing Department Bridge Financing – HHP Inclusionary Purchase Options Background: Inclusionary ownership housing units are covenanted to provide City w/ Right of First Refusal (ROFR) to purchase in event owner sells property – this enables Inclusionary unit to remain in City’s affordable housing stock The unit would be purchased at affordable price and resold to low/moderate income buyer If City exercises ROFR, it may assign its purchase option to a nonprofit devoted to developing or preserving affordable housing 2

Housing Department Bridge Financing - HHP Inclusionary Purchase Options Background: Owners of three Inclusionary units have notified City of their intent to sell (333 N. Hill and 215 S. Marengo) Heritage Housing Partners have expressed desire to assume the City’s purchase options for the three properties Pasadena-based nonprofit HHP is uniquely qualified w/ a successful track record in developing, marketing and selling affordable ownership housing 3

Housing Department Bridge Financing – HHP Inclusionary Purchase Options Bridge Financing: Provide HHP w/ up to $720,000 bridge financing to implement the three purchase options Bridge loan secured by a 1 st trust deed on each property, repaid back to City upon HHP resale to low/moderate income buyer 90-day loan term, 0% interest HHP’s resale transaction costs not to exceed 4% of affordable sales price (compared w/ 6% real estate broker fee) 4