With Chair Owen abstaining, Vice Chair Downey led discussion and a staff presentation on item 13.2: the proposed transfer of the 8-unit Earl Street Apartments at 400 Earl Street to Humanity Housing of North Bay (variously abbreviated in the transcript). Staff said the property is restricted at 50% AMI and that the housing authority currently holds loans on the property that mature in December 2028.

Staff presented a financing scenario in which the buyer would obtain a roughly $600,000 first mortgage, assume the housing authority loans, and procure an investor to cover the remaining gap toward the $1.2 million purchase price. At one point staff referenced total principal and interest on the housing authority loans of about $533,000 (with a principal amount noted as roughly $341,000), then on subsequent slides described assuming housing authority loans of $533,000; the recommended resolution text filed with the clerk lists assumption of loans in the principal amount of $341,000 and calls for subordination of the housing authority loans to a first mortgage of approximately $600,000. Staff also reported a projected debt service coverage ratio of 1.3 under the proposed financing.

Commissioners asked staff to clarify the flow of sale proceeds, what debts exist on the property that would be paid at closing, and the role of an investor in covering the gap between mortgage plus assumed loans and the purchase price. Staff said the first mortgage would typically pay off the seller’s existing first mortgage and that it is common for the housing authority to subordinate behind a commercial lender. The authority noted that underwriting, appraisal and lender thresholds remain subject to the lender’s review.

After public comment (no additional substantive commenters), Vice Chair Downey moved and a commissioner seconded staff’s recommendation to approve the transfer, assumption and subordination as outlined. The clerk recorded four ayes, one abstention, and one absence; the motion passed. Staff will proceed with the conditional sale and the subordination documentation as described in the recommendation.