Subject:
Title
Consider approving the Harrisonburg Redevelopment & Housing Authority (HRHA)'s ARPA funded loan be converted to a grant.
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Presented By: Liz Webb, Housing Coordinator
Recommendation and Review
In December 2022, City Council approved a $2 million Housing Development Fund as part of ARPA appropriations. The goal of the Fund was to support preservation and new construction of affordable housing, including affordable homeownership opportunities.
The Notice of Funding Opportunity (NOFO) was issued on August 8, 2023 and applications closed on October 6, 2023. Applications were evaluated by a committee comprised of the Housing Coordinator, the Director of Community Development, the Deputy City Attorney, the Grants & Programs Analyst, Atlantic Union Bank, and Chesterfield County. The evaluation criteria were available to applicants as part of the NOFO. Priorities included overall project feasibility and readiness, contribution to affordable housing, effective use and leveraging of funds, and consistency with identified housing needs. Ten applications were received.
In December 2023, the evaluation committee recommended two awards: a $700,000 grant for 11 homeownership units to Habitat for Suter Street, and a $1.3 million loan for 16 rental units to HRHA for the Commerce Village Annex. HRHA's application was for $1.5 million in the form of a loan with interest-only payments for 30 years at 3% interest.
As City staff was finalizing HRHA's funding agreement in June 2024, Michael Wong, Executive Director of HRHA, communicated that he would like the City to consider conversion of HRHA's loan to a grant with all funds available up front, stating this would reduce HRHA's project costs and lessen its administrative burden for reporting to the City and paying the City interest. Upon receiving the agreement in July 2024, Michael Wong communicated that "Due to the reduced funding allocated to us, our ability to support interest payments is limited due to...
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