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Home My WebLink AboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2023-14RESOLUTION NO. FWHFC-2023-14 FORT WORTH HOUSING FINANCE CORPORATION A RESOLUTION APPROVING A FORGIVABLE LOAN TO THE HOUSING AUTHORITY OF THE CITY OF FORT WORTH, DBA FORT WORTH HOUSING SOLUTIONS OR AN AFFILIATE FOR THE DEVELOPMENT OF DEEPLY AFFORDABLE HOUSING FOR HOMELESS FAMILIES AT 8401 WEST FREEWAY IN THE LAS VEGAS TRAIL NEIGHBORHOOD; AUTHORIZING EXECUTION OF CONTRACTS AND RELATED LOAN DOCUMENTS; WHEREAS, the City Council of the City of Fort Worth ("City") has adopted development and revitalization of the City's neighborhoods and affordable housing stock as a strategic goal, and City residents and the City Council have determined that quality accessible affordable housing is needed for moderate, low and very low-income City residents; WHEREAS, the City Council created the Fort Worth Housing Finance Corporation (the "Corporation") in 1979 pursuant to the Texas Housing Finance Corporations Act, Chapter 394 of the Texas Local Government Code, to facilitate neighborhood revitalization and housing initiatives in the City, including but not limited to issuing tax exempt bonds, developing, rehabilitating and promoting housing, and assisting low to moderate income City citizens in acquiring quality, accessible, affordable housing through lending and construction activities; WHEREAS, the Housing Authority of the City of Fort Worth, commonly known as Fort Worth Housing Solutions ("FWHS") will partner with Ojala Holdings, LP ("Developer") to convert a former 96-unit motel known as Express Inn into a 55-unit affordable housing project located at 8401 West Freeway in the Law Vegas Trail Neighborhood that will be called Casa de los Suenos (the "Project"); WHEREAS, the Board of Directors of the Corporation (the "Board") previously agreed to partner with FWHS to develop a plan for the revitalization of the Project along with the surrounding neighborhood that would be included in FWHS's applications for available grants for the project from various federal programs, as well as other sources which are available to assist with the redevelopment of public housing and surrounding neighborhoods; WHEREAS, addressing the significant increase in family homelessness by providing deeply affordable housing with services for families exiting homelessness is critical; WHEREAS, the 55 units will be comprised of twelve 1-bedroom units, twenty-three 2- bedroom units, and twenty 3-bedroom units, ranging from 416 square feet to 818 square feet, an average of 644 square feet per unit; WHEREAS, the Tenants occupying the deeply affordable units must be homeless households composed of at least one adult and one child referred through the Tarrant County Continuum of Care Coordinated Entry; RESOLUTION NO. FWHFC-2023-14 Page 2 of 7 WHEREAS, the Project will contain amenities such as a dog park, playground, multi- function sport court, resident garden, laundry center, business center, community space, and an activated green courtyard; WHEREAS, the Project is a collaborative effort between the City of Fort Worth, Tarrant County, the Corporation, Fort Worth Housing Solutions, and Ojala Holdings. The anticipated project cost is approximately $11.9 million, including Community Development Block Grant funding from the City in the amount of $1,500,000.00; WHEREAS, FWHS has requested to be the initial borrower of the Corporation funds instead of Ojala Holdings, LP so that there is less risk that the funds will be subject to taxation by the Internal Revenue Service; WHEREAS, FWHS has requested a forgivable, no interest loan in the amount of $500,000.00 from the Corporation for general construction for the Project ("Loan Funds") and the Corporation has sufficient funding available to loan the requested amount to FWHS; WHEREAS, FWHS will execute loan agreements, promissory notes, and deeds of trust in favor of the Corporation for the Loan Funds and simultaneously loan the Loan Funds to Ojala Holdings, LP for the development of the Project; WHEREAS, to collateralize the loan from the Corporation to FWHS and ensure compliance with all loan requirements, FWHS will (1) assign its loan documents (from the loan from FWHS to Ojala Holdings, LP) to the City and (2) assign its obligations under the Corporation's loan documents to Ojala Holdings, LP; and WHEREAS, the Board desires to approve a forgivable, no interest loan in the amount of $500,000.00 to FWHS, subject to availability of funds, to develop the Project. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION: 1. THAT the Board authorizes the execution and delivery of a loan agreement (the "Construction Loan Agreement") and related loan documents by and between the Corporation and FWHS, for a forgivable, no interest loan in the amount of $500,000.00, subject to availability of funds (the "Construction Loan"), for the benefit of the Project subject to the terms set out on Attachment I. 2. THAT the Board authorizes the execution and delivery of a loan agreement (the "Loan Agreement") and related documents by and between the Corporation and FWHS, for a forgivable, no interest loan in the amount of $500,000.00, subject to availability of funds (the "Loan"), for the benefit of the Project subject to the terms set out on Attachment II. 3. THAT the Board authorizes the acceptance of an assignment to the Corporation by FWHS of the loan documents for the Construction and Loans to be made by FWHS to Ojala Holdings, LP for the benefit of the Project. 4. THAT the Board authorizes the assignment of the Construction and Loan obligations from FWHS to Ojala Holdings, LP to ensure compliance with all Corporation loan requirements. RESOLUTION NO. FWHFC-2023-14 Page 3 of 7 5. THAT Fernando Costa, General Manager of the Corporation, or Victor Turner, Assistant General Manager of the Corporation, or their duly appointed successors, are each authorized to execute and deliver the Loan Agreements for and on behalf of the Corporation along with any related documents or agreements necessary to implement the Construction and Loan Agreements or the Construction and Loans, and each is authorized to extend, modify and amend the Loan Agreements, the terms of the Loans or the terms of any related documents or agreements, provided any such extensions, modifications and amendments are within the scope of the project, and in conformance with the goals and purposes of the Corporation, as may be amended from time to time. 6. THAT this Resolution takes effect from the date of its adoption. AND IT IS SO RESOLVED. Adopted April 25, 2023. FORT WORTH HOUSING FINANCE CORPORATION By: _ ar os Flores President Attest: Jannette S. Goodall Corporate Secretary RESOLUTION NO. FWHFC-2023-14 Page 4 of 7 ATTACHMENT Construction Loan Terms Lender: Fort Worth Housing Finance Corporation (the "Corporation" or "FWHFC") Borrower: The Housing Authority of the City of Fort Worth, commonly known as Fort Worth Housing Solutions ("FWHS") Project: Casa de los Suenos Location: 8401 West Freeway Loan Amount: $500,000.00 Origination Fee: None Interest Rate: 0%; default interest rate 6% Amortization: Loan to be forgiven 40 years after the Project's conversion, provided Borrower has complied with all Loan terms Loan Term: Begins on date loan documents are executed and matures 40 years following conversion of the Project. Performance Project must remain affordable for 20 years. Commences Period: upon conversion (on date project is leased up, 90% of units for 90 days or other similar measure approved by Lender) Lien Priority: Subordinate loan to commercial construction lender and grant funds Payments: None as long as no default in Loan terms and no payment is received by FWHS from Ojala Holdings, LP (FWHS will repay the Corporation to the extent any funds are paid to it by Ojala Holdings, LP) Loan Documents: Loan Agreement, Promissory Note, Deed of Trust, and Guaranty if applicable General Contractor: Acceptable to FWHFC Guarantees: Payment and completion guarantees in form and substance acceptable to FWHFC. If personal guarantees are required by FWHFC, must be acceptable to FWHFC in amount, duration, form, and substance Recourse: Non -recourse as to Borrower Financing/ Must establish that project will be financially viable for entire loan term. RESOLUTION NO. FWHFC-2023-14 Page 5 of 7 Underwriting: Will include evaluation of ownership structure, project operations, sources and uses of funds including cash flow analysis, developer/project owner's most recent financial statements, and if applicable, financial statements from team members and guarantors Other Conditions: Borrower to pay all costs of Loan closing Borrower to provide lender's title policy Development must receive/pass Environmental Review Acceptable environmental remediation, if required All financing acceptable to Lender Lien priority acceptable to Lender Approval of final construction plans for project Survey acceptable to Lender Appraisal acceptable to Lender P & P bond or LOC or satisfactory equivalent from General Contractor Receipt of all required governmental approvals Approval of current financial statements from Guarantor Approval of final project budget Borrower counsel opinion in form and content satisfactory to Lender Borrower to furnish acceptable equity Must comply with all loan requirements from senior and subordinate lenders Monitoring: Project to be monitored at least annually Reports: Annual audit, copies of all reports to local, state or federal agencies, voucher providers. Any additional reports required by Lender RESOLUTION NO. FWHFC-2023-14 Page 6 of 7 ATTACHMENT II Loan Terms Lender: Fort Worth Housing Finance Corporation (the "Corporation" or "FWHFC") Borrower: The Housing Authority of the City of Fort Worth, commonly known as Fort Worth Housing Solutions ("FWHS") Project: Casa de los Suenos Location: 8401 West Freeway Loan Amount: $500,000.00 Origination Fee: None Interest Rate: 0%; default interest rate 6% Amortization: Loan to be forgiven 40 years after the Project's conversion, provided Borrower has complied with all Loan terms Loan Term: Begins on date loan documents are executed and matures 40 years following conversion of the Project. Performance Project must remain affordable for 20 years. Commences upon conversion Period: date or project is leased up, 90% of units for 90 days or other similar measure approved by Lender) Lien Priority: Subordinate loan to commercial construction lender, and FWHFC Construction Loan Payments: None as long as no default in Loan terms and no payment is received by FWHS from Ojala Holdings, LP (FWHS will repay the Corporation to the extent any funds are paid to it by Ojala Holdings, LP ) Loan Documents: Loan Agreement, Promissory Note, Deed of Trust, and Guaranty if applicable General Contractor: Acceptable to FWHFC Guarantees: Payment and completion guarantees in form and substance acceptable to FWHFC. If personal guarantees are required by FWHFC, must be acceptable to FWHFC in amount, duration, form, and substance Recourse: Non -recourse as to Borrower RESOLUTION NO. FWHFC-2023-14 Page 7 of 7 Financing/Underwriting: Must establish that project will be financially viable for entire Performance Period. Will include evaluation of ownership structure, project operations, sources and uses of funds including cash flow analysis, developer/project owner's most recent financial statements, and if applicable, financial statements from team members and guarantors Other Conditions: Borrower to pay all costs of Loan closing Borrower to provide lender's title policy Development must receive/pass Environmental Review Acceptable environmental remediation, if required All financing acceptable to Lender Lien priority acceptable to Lender Approval of final construction plans for project Survey acceptable to Lender Appraisal acceptable to Lender P & P bond or LOC or satisfactory equivalent from General Contractor Receipt of all required governmental approvals Approval of current financial statements from Guarantor Approval of final project budget Borrower counsel opinion in form and content satisfactory to Lender Borrower to furnish acceptable equity Must comply with all loan requirements from senior and subordinate lenders Monitoring: Project to be monitored at least annually Reports: Annual audit, copies of all reports to local, state or federal agencies, voucher providers. Any additional reports required by Lender Tenants: Tenants occupying the deeply affordable units for homeless families funded by Lender must be homeless households composed of at least one adult and one child referred through the Tarrant County Continuum of Care Coordinated Entry