Planning commission recommends amended loan terms for Corona Del Rey affordable housing project

The Planning and Housing Commission on April 15 recommended that the City Council and the Corona Housing Authority approve a package of amended agreements for Corona Del Rey, a 162‑unit affordable housing complex, after a staff presentation and commissioner questioning.

Miss Roper, the city’s housing and homeless solutions manager, told commissioners the project dates to 1996 and serves a mix of low‑ and moderate‑income households. "Corona Del Rey is comprised of 162 bedroom affordable housing units and we are excited that this project has continued to serve low to moderate income," she said, noting 96 units are at or below 80% of area median income, 32 are at 60% and 32 are at 50%.

The commission heard staff and the project sponsor describe four documents the body was being asked to recommend: an amended and restated promissory note, a second amendment to the operation and maintenance agreement, an assignment of agreement to a single‑asset entity, and a subordination agreement with JPMorgan Chase NA. Key negotiated deal points include extending the city loan maturity to 2078 and aligning repayment mechanics so that future residual receipts can reduce the city loan balance.

Staff said the city’s existing loan balance (original principal draws plus accrued interest) is approximately $1.7 million. Miss Roper explained the city’s loan originally carried a 15% interest rate; the amendment would change the city loan to a more typical affordable‑housing rate (staff framed it as moving toward about 3%) once the permanent senior Chase/Freddie Mac loan closes. "We're just changing the interest rate from 15 to 3. No closing costs—nothing. We're just changing," Miss Roper said.

Kevin Chin, vice president of development for National Core, the project's sponsor, told the commission the permanent senior loan being arranged with Chase/Freddie Mac is a market‑rate instrument and not 3%, citing an estimate near 5.62% and noting combined title, closing and legal fees he estimated at about $200,000–$250,000 to be paid from the new loan proceeds.

Commissioners pressed staff on long‑term capital adequacy, the size of reserve accounts, and transparency of documents. Staff described three reserve accounts and a new supplemental replacement reserve: a capital replacement reserve with an annual required deposit of $48,000 (about $300 per unit), a supplemental reserve to be seeded by an approximately $830,000 deposit on closing of the Chase loan, and draw‑approval rights that involve the city, the agency and the lender. Miss Roper said residual receipts historically went to Fund 291 for affordable housing but were not previously required to reduce the city loan balance; the amended language would apply future residual receipts toward loan reduction on a 50% (city)/25% (county)/25% (National Core) split.

Several commissioners and the sponsor also warned that the permanent loan terms and the lender’s margin are time‑sensitive; staff said final loan documents were close to complete and requested the recommendation so the city could meet the lender’s rate‑lock timetable. National Core representatives said the lender indicated it could change margins if financing did not close by month‑end.

Commissioner Witte moved to recommend the amended and restated promissory note, the second amendment to the operation and maintenance agreement, the assignment agreement, and a subordination agreement between JPMorgan Chase NA and the City of Corona Housing Authority as outlined in the staff report; Miss Longwell seconded. The commission approved the recommendation 5‑0.

The recommendation will go to the City Council and the Corona Housing Authority; staff said the amended city agreements would be attached to the council agenda with redlines for council review and that the permanent Chase loan documents are handled separately by the lender. The council consideration referenced in the discussion was scheduled for April 15.