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Eden Housing Affordable Senior Housing July 30,2007 40f6 ,. For the balance of the acquisition (i.e., closing costs) and a portion of the construction costs, the Agency will loan $1,978,000. . Eden will leverage the City and Agency loans to the greatest extent possible with HUD Section 202 Senior Housing funds, low-income housing tax credits and other funding sources such as the Federal Home Loan Bank's Affordable Housing Program (AHP) and Alameda County Green Building grant. . If Eden does not receive HUD Section 202 funding in 2007 or tax credit financing in 2008, the City and Agency will allow Eden to continue applying to secure both or either funding sources through 2009. Eden already submitted a HUD 202 funding application in June 2007. · If Eden receives HUD Section 202 funding, there will be no residual receipts, or income stream, to "pay-back" the Agency/City loan and Eden will apply to the State for 4% tax credit financing, which provides less equity than the 9% tax credits but is also less competitive. HUD provides only enough to fill the gap between annual rental income and operating expenses (see Attachment B, Cash Flow Analysis). Consequently, there is no annual positive cash flow expected. ,. If Eden does not receive HUD 202 funding, then Eden will apply for 9% tax credit financing and a portion of residual receipts will be used to help repay the Agency and City loans. · If Eden receives HUD Section 202 funding, then HUD will require the City and Agency to subordinate certain provisions of the OP A, the Regulatory Agreement, deeds of trust and the promissory note to HUD's documents pursuant to a Rider (see Attachment C, HUD-Required Provisions Rider). In this case, the City and Agency agreements and legal documents will be amended accordingly without requiring Council approval. This is a typical HUD requirement. The City and Agency have previously agreed to similar HUD conditions for the recently completed Broadmoor Plaza affordable senior rental housing and Fuller Gardens affordable rental project for developmentally disabled persons. The proposed project will contribute to meeting the City's Housing Element fair share housing allocation, which is mandated by the State and set by the Association of Bay Area Governments (ABAG) for new housing units. The proposed 50 affordable rental units will count as new housing units towards the City's 2007-2014 ABAG Regional Housing Needs Assessment goals, which are currently in draft form only. This project will also help further the housing goals in the City's Five Year HUD Consolidated Plan and the Redevelopment Agency Implementation and Joint Project Area Plans. In addition, Eden's proposed project furthers the City's mixed use/residential vision under the City's East 14th Street South Area Development Strategy. While the project is not in the proposed Transit-Oriented Development Strategy area, it is nearby and compatible with the strategy.