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City Committee Favors Granting of Loan to Local Developer to Buy Condominium Unit

Published on Wednesday, September 22, 2021 | 5:44 am
 

Pasadena’s Economic Development and Technology Committee has approved the granting of a housing loan to local nonprofit developer Heritage Housing Partners (HHP) for the purchase of a homeownership unit in Summit Grove condominium at 106 E. Orange Grove Boulevard.

The members of the committee unanimously approved the proposal in its meeting on Tuesday, September 21.

Heritage, which earlier developed the Summit Grove condominium project with the city’s financial assistance, submitted a loan request to the city on Aug. 25 to acquire the deed-restricted three-bedroom unit for $315,600.

Upon staff recommendation, the committee agreed to lend the developer an amount not exceeding $331,200, without interest, for the acquisition and resale of the unit to a low-income household.

The affordable homeownership projects developed pursuant to the City’s inclusionary ordinance are subject to deed restrictions which provide the City with the right of first refusal to purchase the property upon the homeowner’s submission of a Notice of Intent to Sell.

If the right of first refusal is not exercised, the homeowner may sell the property at market price.

In this case, the City would receive an equity share of the sale but the deed restrictions would be extinguished resulting in the loss of the affordable unit to the market.

To preserve the housing affordability of the deed-restricted units, the City has assisted HHP in acquiring 12 deed-restricted affordable units so far, since 2012.

Nine of those units have already been successfully resold to qualified low to moderate-income first-time buyers while three are still in the process of being resold, according to city documents.

City staff reported that the acquisition financing extended to the HHP is fully repaid from the resale of the properties and the HHP has been able to purchase and resell the units within the required 12 month period.

Under the loan agreement, the HHP must use the loan to acquire the three-bedroom unit no later than November 30, 2021 and the amount should be repaid to the city within 12 months after the loan was granted.

Aside from the Summit Grove, HHP’s completed projects in Pasadena include the Haskett Court, the Fair Oaks Court, the Herkimer Gardens, the Decker Court and the Gill Court.

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