Housing Authority conditionally approves consolidated loan, extension for five Burbank Housing sites

The Santa Rosa City Housing Authority on Aug. 25 conditionally approved consolidation, extension and modification of loans on five Burbank Housing properties to allow the nonprofit to pursue tax-exempt bonds and low-income housing tax credits for rehabilitation.

The authority approved a consolidated loan balance of $20,128,213.38 (combined principal and interest through July 31, 2025) and agreed to extend loan and regulatory agreement terms to June 30, 2083. The vote covered five near-term staff resolutions and passed 6–0 with Chair Newton absent.

The proposal, presented by Rebecca Lane, program specialist with the Department of Housing and Community Services, covers 2862 and 2866 Apple Valley Lane; 2870 and 2874 Apple Valley Lane; Papago Court Apartments; Pollen Creek Apartments; and Olive Grove Apartments. Lane said the five properties would be submitted as a single “Apple Valley Scattered Sites” application to the California Debt Limit Allocation Committee (CDLAC) and the California Tax Credit Allocation Committee (TCAC). She told commissioners the consolidated rehabilitation estimate is roughly $22.9 million and that the combined existing loan principal balance is $13,868,471.76 with accrued interest of $6,259,741.62 through July 31, 2025, for a total of $20,128,213.38.

“The consolidated loan of $20,128,213.38 would begin accruing interest at the applicable federal rate, which is currently 3.64 percent, and would have a floor of 3 percent,” Lane said.

Burbank Housing representative Jocelyn Lin, who attended the meeting, described the request as standard for tax-credit financing and said the 55-year affordability requirement imposed by TCAC informed the requested term. “The tax credit period is 55 years,” Lin said. “The reason we requested 57 is because closing at construction and the credit start date can differ, so we tacked on two additional years.”

Commissioners pressed for financial detail. Commissioner Smith asked how accrued interest works; Lane explained the authority’s loans are structured as 3 percent simple-interest soft loans where residual receipts are applied first to accrued interest and then to principal. Commissioner Conte and others asked about the risk of default and whether the authority could step in. Lane said the loan and regulatory documents include remedies that would allow the housing authority to cure certain defaults and that multifamily defaults have been rare in the authority’s portfolio.

Commissioners also asked about cash flow and collateral. Lane said Olive Grove is currently producing surplus cash and made a residual-receipts payment of over $100,000 in 2024; other sites have had limited surplus because maintenance and replacement reserves have been used for upkeep. Lin said property needs assessments completed in 2024–25 identify critical rehabilitation needs and that some older sites require significantly more work, which is why Olive Grove (the newest) was included to help cross-subsidize rehabilitation of the older properties.

The housing authority resolution conditions the consolidation, extension and modification on Burbank Housing successfully receiving both tax-exempt bonds and low-income housing tax credits in the application round; if the scattered-site application is not awarded those financing sources, the consolidation will not proceed. Lane said the CDLAC/TCAC application deadline is Sept. 9, 2025, and the requested loan documents would align regulatory agreements and loan terms to 06/30/2083.

Vote at a glance - Item: Five conditional resolutions to consolidate/extend/modify loans for Apple Valley scattered sites (2862 & 2866 Apple Valley Ln; 2870 & 2874 Apple Valley Ln; Papago Court; Pollen Creek; Olive Grove) - Motion/Second: not specified in the public record - Vote: Wimmer — yes; Smith — yes; Owen — yes; Conte — yes; Capio — yes; Downey — yes; Chair Newton — absent - Outcome: approved (6 ayes, 1 absent)

What happens next The loan consolidation and modified documents are conditional and will only be executed if Burbank Housing is awarded tax-exempt bond allocation and low-income housing tax credits in the upcoming CDLAC/TCAC rounds. If awarded, the consolidated loan would carry interest at the applicable federal rate at closing with a 3 percent floor and extend affordability restrictions through June 30, 2083.

Funding and regulatory context Staff said the estimated hard rehabilitation cost across the five sites is approximately $22.9 million and that property needs assessments support roughly $100,000 per unit on average, with variation by site. Staff also noted the authority does not propose new direct funding in this action; the request is to restructure existing housing authority loans to enable the developer to secure outside financing for rehabilitation.

Speakers quoted in this article spoke during the Aug. 25, 2025 meeting of the Santa Rosa City Housing Authority.