HomeMy WebLinkAbout03 of 2025 - Wealth Building Notice of Funding Availability Funding AllocationsSALT LAKE CITY COMMUNITY REINVESTMENT AGENCY
RESOLUTION 03 of 2025
AFFORDABLE HOUSING - RESIDENTIAL WEALTH BUILDING PILOT
PROGRAM FUNDING ALLOCATIONS
RESOLUTION OF THE BOARD OF DIRECTORS OF THE SALT LAKE CITY COMMUNITY
REINVESTMENT AGENCY APPROVING CITYWIDE AFFORDABLE HOUSING PROJECT
FUNDING ALLOCATIONS.
WHEREAS, the Salt Lake City Community Reinvestment Agency (CRA) was created to
transact the business and exercise the powers provided for in the Utah Community Reinvestment
Agency Act (the Act).
WHEREA S, the Act provides that tax increment funds may be used for the purpose of
increasing the affordable housing supply within the boundaries of Salt Lake City.
WHEREAS, on February 8, 2022, the CRA Board of Directors ("Board") approved the Housing
Funds Allocation Policy ("Funds Policy"), Resolution R-1-2022, which establishes policies with
respect to dedicating and directing resources for the development and preservation of housing
based on funding source ("Housing Funds").
WHEREAS, on June 13, 2023, the Salt Lake City Council ("Council") adopted Housing SLC,
a plan to guide the City's housing-related efforts over the next 5 years, highlighting the need for
shared-equity models and homeownership opportunities.
WHEREAS, on October 17, 2023, the Council adopted Thriving in Place, the City's anti
displacement strategy, which calls for a broad set of tools to address the multiple factors that
drive displacement and to create long-term solutions that can help residents and communities
remain in place.
WHEREAS, on June 11, 2024, the Board adopted the FY 2024-2025 Budget, allocating
$2,000,000 of Housing Development Fund and $835,469 from West Side Community Initiative
money to support wealth-building through affordable housing. At the same time, the CRA board
allocated $417,382 of Salt Lake City School District tax increment for initiatives that provide
family and workforce housing with three or more bedrooms.
WHEREAS, through a Notice of Funding Availability ("NOFA"), the CRA administered a
funding application and review process to fund affordable housing developments and proposals
that help low-and-moderate-income individuals and families access affordable wealth building
opportunities. This Residential Wealth Building Pilot Program was administered pursuant to the
CRA's Housing Funding Priorities for Fiscal Year 2024-2025 set forth in R-2-2024 ("Funding
Priorities") that resulted in two eligible requests for funding totaling $4,000,000 (the "Wealth
Building Applications").
17
WHEREAS,on February 13, 2025, a Selection Advisory Committee reviewed the Wealth building Applications, and recommended funding allocations and preliminary terms as further described in on Exhibit A.
WHEREAS,based on the Selection Advisory Committee's recommendations, CRA staff recommends that the Board approve the funding allocations and preliminary terms described in Exhibit A.
WHEREAS,following the Board's approval of the funding allocations and preliminary terms as set forth on Exhibits B 1 and B2, the CRA shall provide a conditional commitment period during which the approved applicant shall have the opportunity to obtain needed financial, legal, and regulatory approvals, as well as satisfy other conditions determined by the CRA, to finalize the terms.
WHEREAS,applicants that successfully meet the requirements in Exhibit B 1 and B2 shall be invited to close on the funding.
NOW, THEREFORE, BE IT RESOLVED by the Board that it approves the funding allocations and preliminary terms as further described in Exhibits B 1 and B2, subject to revisions that do not materially affect the rights and obligations of the CRA hereunder. For approved applicants that successfully meet the required conditions, the Board authorizes the Executive Director to negotiate and execute the conditional commitment letter, the funding agreements, and other relevant documents consistent with the funding allocations and preliminary terms contained on Exhibits B 1 and B2 and incorporating such other terms and conditions as recommended by the City Attorney's office.
Passed by the Board of Directors of the Salt Lake City Community Reinvestment Agency, this 18th day of March, 2025
18
Approved as to form:
The Executive Director:
__ does not request reconsideration __ requests reconsideration at the next regular Agency meeting.
Darin Mano, Chair
Erin Mendenhall, Executive Director
Attest:
City Recorder
Jennifer Huntsman, Senior Attorney
Date:
Jennifer Huntsman (Mar 27, 2025 15:31 MDT)
Jennifer Huntsman
Mar 27, 2025
Darin Masa* Man* (+r 1, 2025 11:50 MDT)
*arin 3asaR 3anR
rin Men en#a'' (+r 1, 2025 1х:21 MDT)
4
EXHIBIT A: THE SELECTION ADVISORY COMMITTEE RECOMMENDED RESIDENTIAL
WEALTH BUILDING FUNDING ALLOCATIONS
The Selection Advisory Committee recommends that funding be allocated to projects as outlined
below:
PROJECT/
APPLICANT
Rent to Own Program
at the Northwest
Pipeline Building
Housing Assistance
Management
Enterprise (HAME)
Down Payment
Assistance Loan Fund
Fact Sheet -
Community
Development
Corporation of Utah
(CDCU)
TOTAL
ELIGIBLE
PROJECT FUNDING
ADDRESS TYPE REQUEST
SCHOOL
HOUSING WESTSIDE DISTRICT
PRELIMINARY DEVELOPMENT COMMUNITY FAMILY TOTAL FUNDING
TERMS* LOAN FUND INITIATIVE HOUSING RECOMMENDATION
2% interest rate, 40-
year term, cash flow 315 E200
S Rent-to-Own $2,000,000 repayments,
repayment through
$835,469 $417,382 $1,252,851
unit sales.
Down
Payment Grant; CRA receives
Multi-Site Assistance $2,000,000 a portion of interest $1,164,531 $835,469 $2,000,000
Program payments (3%)
$4,000,000 $2,000,000 $835,469 $417,382 $3,252,851
19
EXHIBIT Bl:
HAME RENT-TO-OWN PROGRAM AT THE NORTHWEST PIPELINE BUILDING
PROPOSED TERM SHEET
Purpose
To allocate $1,252,851 million in funds to Housing Assistance Management Enterprise (HAME)
for the development of 56 units of rent-to-own housing at the Northwest Pipeline Building (315 E
200 S).
Parties
Housing Assistance Management Enterprise ("HAME" or "Recipient"), the Housing Authority of
Salt Lake City ("HASLC"), and the Salt Lake City Community Reinvestment Agency ("CRA").
Program Description
HAME shall close on the funds by March 31, 2027, to develop the site in the Central City
neighborhood. Any funds not closed by this date shall be returned to the CRA. HAME will develop
the project to create affordable, rent-to-own units, with a minimum of 56 residential units.
Eligible Activities
The funds shall be used for hard construction costs, site improvements, and related soft costs.
Proposed Funding Terms
$1,252,851 will be allocated in the form of a conditional loan for the development of affordable,
rent-to-own housing units as part of the affordable housing project named above.
•2% interest rate
•Match term of permanent senior debt, up to 40-year term
•NOi cash flow repayments during the rental phase
•Net financing proceeds following unit sales
Affordability and Compliance
•During the rental period, all units will be affordable to households earning at or below 80%
of AMI (56 units).
o The proposed current unit mix in the rental period includes:
■60% of AMI: 12 Units (21 %)
•80 of AMI: 44 Units (79%)
•During the ownership period, at least 20% of units must be dedicated to households at or
below 80% of AMI. The remaining units will be affordable at or below 150% of AMI.
o The proposed current unit mix in the ownership period includes:
■ 80% of AMI: 15 units (27%)
•120% of AMI: 22 units (39%)
■ 150% of AMI: 19 units (34%)
20
•Total monthly housing costs (including mortgage, property taxes, insurance, utilities, and
HOA dues) may not exceed 30% of a household's gross income.
Ownership Requirements
•Units must be developed, platted, and rented initially as individual units in conjunction with
HASLC's Family Self Sufficiency (FSS) program, enabling eventual individual unit
ownership.
•Upon conversion to for-sale units, each unit shall be restricted for primary owner
occupancy through deed restriction, ground lease agreements, or similar restrictive-use
agreements.
o Rental of entire units designed for owner-occupancy shall not be permitted.
o Short-term rental of any portion of each unit (for periods of 30 days or less) shall
not be permitted.
Homeowners Association (HOA) Oversight
The CRA shall have the right to review and approve HOA governance documents.
Sustainability
The project must comply with CRA Sustainable Development Policy which requires that all new
construction projects will achieve a Designed to Earn the ENERGY STAR score of 90 or more,
participate in the City's Elevate Buildings Program, and be designed to operate without onsite
fossil fuel combustion.
Reporting and Accountability
Recipient shall provide quarterly progress reports through construction, rental, and sale of the units
to the CRA detailing the use of funds, project development status, and HOA formation progress.
Conditions to Fund
HAME must meet the following conditions to close on the loan:
•Evidence of site/location control as demonstrated through ownership, option, sale
agreement, or long-term lease.
•Disclosure of identity of interest relationships with each project.
•Sufficient and appropriate sources of project financing for each project, including letters of
commitment for additional funding.
•Per unit sales price for the 20% of affordable units does not exceed 80% AMI, including all
housing costs . CRA review and approval of proforma including capital stack for
construction of units and projected sale prices.
•Evidence that CRA funds will be repaid in appropriate timeframe.
•CRA review and approval of Building plans.
•Evidence and CRA approval of a home-owner selection plan/tenant selection process.
•Use of funds strictly for Eligible Activities related to the project.
•HAME obtains all required city approvals and building permits for each project.
21
•Project secures all necessary funding to construct, rent, and sell the units within the required
affordability levels.
Events of Default
The following occurrences will constitute an event of default:
•Failure to meet project obligations or completion deadlines.
•Failure to construct one or more of the projects within the timeframe provided in the
funding agreement.
•Failure to maintain the affordability, including resale price restrictions, as required under
the restrictive use agreements and covenants.
•Failure to provide regular development reports.
•Failure to comply with any other City, State, or Federal requirements.
•Misuse or misappropriation of funds.
•Insolvency, bankruptcy, or cessation or project activities.
•Any material misrepresentation or breach of the terms of the grant agreement.
Remedies
Remedies if HAME fails to cure in the event of a default may include, but are not limited to:
•If HAME does not meet the initial conditions for funding, the CRA will not distribute
funds.
•Any unspent or improperly used funds must be returned to the CRA.
•Once funds are distributed and upon an event of default, the CRA may:
o File a breach of contract claim, which may include claims for:
■ Liquidated damages
■ Injunctive relief, and/or
■ Specific performance
o File a direct action against HAME to comply with their obligations.
o Any other remedies available at law or equity.
22
EXHIBIT 82:
CDCU DOWN PAYMENT ASSISTANCE LOAN FUND
PROPOSED TERM SHEET
Purpose
To allocate $2,000,000 million in funds to the Community Development Corporation of Utah
(CDCU) for the administration and delivery of a first-time homebuyer down payment assistance
program.
Parties
Community Development Corporation of Utah ("CDCU" or "Recipient") and the Salt Lake City
Community Reinvestment Agency ("CRA").
Program Description
CDCU shall make all reasonable efforts to disperse all loan funds by March 31, 2027, to administer
a first-time homebuyer program for Salt Lake City as a whole and for Salt Lake City's Westside.
This shall be accomplished by providing homeowners with a silent second mortgage product, used
for down payment assistance, closing costs, and interest-rate buydowns.
Eligible Activities
CRA funds will be used for a revolving loan fund for the purpose of providing first-time
homebuyers with down payment assistance in Salt Lake City municipal boundaries and west ofl-
15 in Salt Lake City.
CDCU will notify CRA of any additional sources of program financing, including letters of
commitment for additional funding.
Proposed Funding Terms
$2,000,000 will be allocated in two accounts based on their source of funding.
•Amount: A total of $2,000,000
o City-wide funds: $1,164,531
o Westside (west ofl-15): $835,469
The CRA will disburse funds to CDCU on a per-homebuyer basis. Each installment will equal the
amount required to fund the home buyer's silent second mortgage product, down payment
assistance, or interest-rate buydown, contingent upon adherence to the requirements and conditions
outlined below.
CRA funds contributed to the program's revolving loan fund, will become property of CDCU. Any
funds not distributed through this program will revert back to the CRA on June 30, 2027. Mortgage
and interest payments made back into the revolving loan fund will be split between the CRA (3%)
and CDCU (2%).
23
Affordability and Compliance
The target population is low-to-moderate income, first-time homebuyer households at or below
80% of area median income. Total monthly housing costs (including mortgage, property taxes,
insurance, utilities, and HOA dues) may not exceed 45% of a household's gross income. The loan
will be underwritten according to CDCU Loan Policies and Procedures and will require borrower
to attend one-on-one home purchase counseling, which includes a budget and credit session as well
as post-home purchase counseling to ensure homebuyer success.
CDCU will charge 2% origination fee for administering the program. This amount can be financed
with the DPA loan. The interest rate for participants will be 5.0%. The term of loans to participants
will match first mortgage (typically 30 years). No payments from participants will be required until
the transfer of property or end of term.
Ownership Requirements
•Units shall be restricted for primary owner-occupancy through deed restriction or similar
restrictive-use agreements.
o Rental of entire units designed for owner-occupancy shall not be permitted.
o CDCU shall require a right-of-first-refusal deed restriction allowing CDCU to
purchase the home back and use the returning second mortgage funds to provide
funding for the next LMI homebuyer.
Sustainability
As funds spent on Eligible Activities will generally be used to acquire existing housing units and
loan amounts will be less than $200,000 per loan recipient, the CRA anticipates that the
Sustainable Development Policy will be inapplicable to most loans under the Down Payment
Assistance program. However, . in the event that funds are spent on Eligible Activities involving
new construction, CDCU shall require that development to follow the CRA Sustainable
Development Policy.
Reporting and Accountability
•CDCU shall provide quarterly progress reports through the administration of the program.
•Quarterly reports should include, but are not limited to, the following items:
o Number of down payment assistance loan applications
o Number of down payment assistance loan applicants who meet threshold
requirements
o Number of down payment assistance loan commitments made
o Number of down payment assistance loans closed
o Details of each down payment assistance loan funded
•Location of property
■ Total mortgage amount of each property
•Size of unit (bedrooms, bathrooms, lot size)
•Requested amount
•Funded amount
•Household size
24
•Household income/ AMI level
o Compliance of purchased unit
•Percent of units compliance
•Report of units not in compliance, if any
Conditions to Fund
The funding is provided with the following pre-conditions that CDCU must meet to receive
funding:
•Evidence and CRA approval of an affordability compliance process.
•Use of funds strictly for Eligible Activities related to the project.
Events of Default
The following occurrences will constitute an event of default:
•Failure to meet program obligations or deadlines in the judgment of CRA.
•Failure to monitor/maintain the affordability requirements to the satisfaction of the CRA.
•Failure to provide quarterly development reports.
•Failure to comply with any other City, State, or Federal requirements.
•Any use or appropriation of funds not in strict compliance with this term sheet or other
agreement with the CRA.
•Insolvency, bankruptcy, or cessation or project activities.
•Any material misrepresentation or breach of the terms of the grant agreement.
Remedies
Remedies if CDCU fails to cure in the event of a default may include, but are not limited to:
•If CDCU does not meet the initial conditions for funding, the CRA will not distribute funds.
•Any unspent or improperly used funds must be returned to the CRA.
•Once funds are distributed and upon an event of default, the CRA may:
o File a breach of contract claim, which may include claims for:
•Liquidated damages
•Injunctive relief, and/or
•Specific performance
o File a direct action against CDCU to comply with their obligations.
o Any other remedies available at law or equity.
25
Resolution 03 of 2025 Wealth Building Notice of
Funding Availability Funding Allocations
Final Audit Report 2025-04-01
Created:2025-03-20
By:Michelle Barney (Michelle.Barney@slc.gov)
Status:Signed
Transaction ID:CBJCHBCAABAAwqZeA-p1N86lOPen9UAgODBA81A9O3LG
"Resolution 03 of 2025 Wealth Building Notice of Funding Availa
bility Funding Allocations" History
Document created by Michelle Barney (Michelle.Barney@slc.gov)
2025-03-20 - 8:01:20 PM GMT
Document emailed to jennifer.huntsman@slc.gov for signature
2025-03-20 - 8:03:47 PM GMT
Email viewed by jennifer.huntsman@slc.gov
2025-03-27 - 9:29:43 PM GMT
New document URL requested by jennifer.huntsman@slc.gov
2025-03-27 - 9:29:49 PM GMT
Signer jennifer.huntsman@slc.gov entered name at signing as Jennifer Huntsman
2025-03-27 - 9:31:30 PM GMT
Document e-signed by Jennifer Huntsman (jennifer.huntsman@slc.gov)
Signature Date: 2025-03-27 - 9:31:32 PM GMT - Time Source: server
Document emailed to darin.mano@slc.gov for signature
2025-03-27 - 9:31:34 PM GMT
Email viewed by darin.mano@slc.gov
2025-03-28 - 7:16:14 PM GMT
Signer darin.mano@slc.gov entered name at signing as Darin Masao Mano
2025-04-01 - 5:49:58 PM GMT
Document e-signed by Darin Masao Mano (darin.mano@slc.gov)
Signature Date: 2025-04-01 - 5:50:00 PM GMT - Time Source: server
Document emailed to Erin Mendenhall (erin.mendenhall@slc.gov) for signature
2025-04-01 - 5:50:02 PM GMT
Email viewed by Erin Mendenhall (erin.mendenhall@slc.gov)
2025-04-01 - 10:19:37 PM GMT
Document e-signed by Erin Mendenhall (erin.mendenhall@slc.gov)
Signature Date: 2025-04-01 - 10:21:22 PM GMT - Time Source: server
Document emailed to Keith Reynolds (Keith.Reynolds@slc.gov) for signature
2025-04-01 - 10:21:24 PM GMT
Email viewed by Keith Reynolds (Keith.Reynolds@slc.gov)
2025-04-01 - 10:28:40 PM GMT
Document e-signed by Keith Reynolds (Keith.Reynolds@slc.gov)
Signature Date: 2025-04-01 - 10:28:57 PM GMT - Time Source: server
Agreement completed.
2025-04-01 - 10:28:57 PM GMT