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CalHFA board approves three multifamily financing actions for Bay Area and Monterey projects
Summary
The California Housing Finance Agency board approved permanent financing and gap loans for Julien Street Studios in San Jose and Vera Avenue Apartments in Redwood City, and increased the permanent loan for Terracina at The Dunes in Marina to cover COVID-era cost increases; votes were recorded for each resolution.
Acting Chair Fred White presided as the California Housing Finance Agency board approved three separate financing decisions affecting multifamily projects in Santa Clara, San Mateo and Monterey counties.
The board approved a permanent first-lien loan of $44,900,000 and a $4,000,000 subordinate MIP gap loan for Julien Street Studios, a proposed new-construction, mixed-income, modular 7-story development in San Jose. Stephanie McFadden, CalHFA’s Director of Multifamily, said the 305-unit project would include roughly 301 restricted units at income targeting between 30% and 70% of area median income (AMI) and noted the project will use modular construction and multiple sources of subsidy, including federal and state tax credits. McFadden described two required exceptions for the deal: a density-bonus agreement recorded senior to CalHFA’s deed of trust (with a standstill preserving CalHFA restrictions), and investor-driven terms allowing more than 50% of surplus cash to repay deferred developer fee within a 15-year period to preserve tax-credit basis. Board members questioned the developer-fee exception and noted concerns about local participation; the motion to approve (moved by Preston, seconded on the record) passed on roll call (board recorded a majority of yes votes) and the resolution was adopted as announced (‘Resolution 20 five-fourteen’).
The board also approved financing for Vera Avenue Apartments, a 178-unit modular 7-story mixed-income development in Redwood City. McFadden said 176 of the units would have rent restrictions between 30% and 70% AMI and staff requested a $28,500,000 permanent loan plus a $4,000,000 MIP subordinate gap loan. The developer explained that the site was previously in conservatorship and the project reuses an infill location near downtown. After discussion about modular construction and local support, the board moved and seconded approval and adopted the item as ‘Resolution 20 five-fifteen’; Director Sotelo announced an abstention on the record.
For Terracina At The Dunes (a 142-unit family project in Marina built during the COVID period), CalHFA staff described construction-era cost inflation and higher variable construction loan interest rates that increased total development costs by roughly $3.5 million. The developer requested a $3,700,000 increase to the permanent loan commitment (bringing the total to $21,250,000). McFadden said underwriting and an updated appraisal support the increase and noted CalHFA will apply a slightly higher interest rate; staff projected a new overall rate around 5.76%. The board voted to approve the 21% increase (recorded as ‘Resolution 25-16’).
Votes at a glance: - Julien Street Studios — motion to approve moved by Preston; board approved (recorded as “Resolution 20 five-fourteen”). - Vera Avenue Apartments — motion approved with one recorded abstention (recorded as “Resolution 20 five-fifteen”). - Terracina At The Dunes — loan amount increased and approved (recorded as “Resolution 25-16”).
Board members pressed staff for additional cash-flow and cash-distribution detail tied to the developer-fee exception and asked staff to continue evaluating local participation practices and AMI alignment across programs. McFadden and staff committed to follow up with clarifying materials and to report back as projects proceed to closing.
