Timeline
Related documents
What is Being Proposed?
The Housing and Homelessness Committee recommends extending the loan term for El Dorado Family Apartments, a affordable housing project located at 12129 El Dorado Avenue in Council District 7. Specifically, the committee is asking the City to extend the maturity date of a HOME loan (BA0517) to November 13, 2061, aligning it with when the property's affordability restrictions expire. The City Attorney is also being asked to prepare necessary legal documents to support this extension.
Why?
The document does not explicitly state the rationale, but the action appears designed to preserve long-term affordability at this housing project. By extending the loan term to match the affordability restrictions expiration date, the City is ensuring the property remains subject to affordable housing requirements for the extended period.
Key Details
Property: 12129 El Dorado Avenue, CD 7 New loan maturity date: November 13, 2061 Loans involved: HOME loan BA0517 and CRA loan CRA872559-002 Fiscal impact: None to the General Fund Committee vote: Unanimous approval (5-0, all members voting YES)
Impact
This action preserves affordable housing for residents in Council District 7 at no cost to the City's general budget. The extension ensures that El Dorado Family Apartments will remain affordable for an extended period, supporting the City's housing stability goals.
What is Being Proposed?
The Los Angeles Housing Department is requesting City Council approval to modify the terms of two existing City loans for the El Dorado Family Apartments in Sylmar. Specifically, LAHD wants to extend the HOME loan maturity date to November 13, 2061, and subordinate both the City HOME loan and the CRA loan to allow the property owner to refinance its first mortgage with new financing.
Why This is Needed
The property owner is seeking to refinance its first mortgage, which has a balloon payment of approximately $1.8 million due in May 2027. A new 30-year loan at 6.33% interest would eliminate this balloon payment and stabilize the project's finances. However, the new senior lender requires that all existing City loans be subordinated (moved to second and third-lien positions) and mature after the new loan. By extending the HOME loan maturity and agreeing to subordinate City loans, the City reduces its financial risk from the 2027 balloon payment and strengthens the project's long-term viability.
Key Details
The El Dorado Family Apartments is a 60-unit affordable housing complex serving families earning 30-60% of Area Median Income. The City's HOME loan currently totals $10.4 million in outstanding principal and interest, with a CRA loan of $2.9 million also outstanding. The refinancing will generate approximately $60,000 in operating cash for property maintenance and reserves, extending affordable housing without additional City subsidy.
Impact
This action protects the City's financial exposure while preserving 60 affordable family units in the community through 2061. There is no fiscal impact to the General Fund, and the modification benefits current and future residents by ensuring the property's long-term stability and habitability.