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HomeMy WebLinkAboutContract 60897LOAN AGREEMENT FOR PERMANENT SUPPORTIVE HOUSING (PSH) Dated as of December 14, 2023 between The CITY OF FORT WORTH, a home -rule municipality of the State of Texas and JOURNEY HOME HOUSING, LLC, a Texas limited liability company OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX CSC No. 60897 LOAN AGREEMENT PERMANENT SUPPORTIVE HOUSING (PSH) This Loan Agreement ("Loan Agreement" or "PSH Loan Agreement") is made and entered into this 14th day of December, 2023, by and between the City of Fort Worth ("Lender" or "City") and Journey Home Housing, LLC ("Borrower" or "Developer"), for the purposes and consideration hereinafter set forth. WHEREAS, Developer desires to borrow money for the development and construction of Journey Home Housing Apartments, an affordable housing development for moderate, low, very low-income, and homeless residents with a total of 96 one -bedroom units to be located at 7550 Crowley Road, Fort Worth, TX 76134 (the "Project"); WHEREAS, Developer received the commitment of a forgivable loan in the amount of $1,350,000.00 from the Fort Worth Housing Finance Corporation for the development of PSH which is a portion of the development costs of the Project, and has obtained other financial commitments to match the Corporation funds dollar for dollar in the amount of $1,350,000.00; WHEREAS, Developer received the commitment of a forgivable loan in the amount of $4,928,000.00 in HOME -ARP Funds for the development of PSH which is a portion of the development costs of the Project; WHEREAS, Developer received the commitment of a grant in the amount of $3,984,000.00 in Fiscal Recovery Funds from Tarrant County for the development of PSH which is a portion of the development costs of the Project; WHEREAS, City desires to extend a forgivable loan to Developer from its Directions Home funding in the amount of $1,262,801.00; WHEREAS, City has determined that this Project will help further its goal of development of quality, accessible, affordable housing in the City for low and very low-income residents. NOW, THEREFORE, in consideration of the mutual covenants and obligations and responsibilities contained herein, including all Exhibits and Attachments, and subject to the terms and conditions hereinafter stated, the Parties understand and agree as follows: 1. The Directions Home PSH Loan Subject to the terms and conditions of this PSH Loan Agreement, Lender will lend Borrower the original principal amount of $1,262,801.00, and as represented by a note evidencing the indebtedness ("PSH Note"), and if not forgiven, Borrower agrees to pay the PSH Note. Borrower: Journey Home Housing, LLC Mailing address: 2400 Cypress Street Fort Worth, TX 76102 OFFICIAL RECORD Attn: Toby Owen CITY SECRETARY Phone: (817) 632-7440 FT. WORTH, TX PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 2 Journey Home Housing, LLC — Journey Home Housing Apartments Email: Type of entity: State of organization: Federal Tax ID No.: Lender: Mailing address: Phone: Loan officer: Email: Title Company: Name: GF No.: Closer: Email: Mailing address: Phone: Fax: Directions Home PSH Note: TOwen@joumeyhome.org A Texas limited liability company Texas 87-4555365 City of Fort Worth 200 Texas Street, Fort Worth, Texas 76102 817-392-2235 Tara Perez, Directions Home Manager Tara. Perez(Rfortworthtexas. 2ov Fidelity National Title Agency, Inc./Baker Firm FT-44122-9001222302155-LE Lindsay Evans, Escrow Officer levans@fidelity-usa.com 4541 Bellaire Drive S., Fort Worth TX 76109 817-377-4100 817-377-411 t Date: December 14, 2023 Original Principal Amount: $1,262,801.00 Maturity date: The termination of the Affordability Period as defined in the HOME -ARP Contract, City Secretary Contract No. 60566, between Borrower and Lender Lien Priority: 4th Lien after ARPA Loan Origination Fee: None Interest: 0% annual interest; Default interest rate 6% Amortization: N/A; deferred forgivable loan Use of Loan Proceeds: Approved construction hard costs related to the development of 96 Permanent Supportive Housing Units, as defined below, in the Journey Home Housing Apartments, a new 96-unit Permanent Supportive Housing affordable multifamily housing development. Approved hard construction costs shall be those shown on the approved construction budget. Collateral: Real property commonly known as 7550 Crowley Road, Fort Worth, TX 76134 Personal Property: As described in the Deed of Trust Security Agreement in the Original Principal Amount ("PSH Deed of Trust"). PSH Loan Documents: This PSH Loan Agreement, the PSH Note, the PSH Deed of Trust, UCC Financing Statement, Assignment of Architectural Agreements and Plans and Specifications, Assignment PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 3 Journey Home Housing, LLC — Journey Home Housing Apartments of Construction Contract, and any other documents related to or evidencing the indebtedness. Financial Covenants: As set forth in the PSH Loan Documents Fort Worth Housing Finance Corporation ("FWHFC") Loan: Lender: City of Fort Worth ("City") Loan Amount: $1,350,000.00 Maturity Date: At the end of the 20-year Affordability Period as defined in the FWHFC PSH Loan Agreement Lien Priority: 1 sr lien Project Coordinator: Leticia Rodriguez Email: Leticia.Rodri Quezafortworthtexas. Rov City of Fort Worth Funding HOME -ARP Loan: Lender: City HOME -ARP Loan Amount: $4,928,476.00 HOME -ARP Contract: City Secretary Contract No. 60566 Maturity Date: The termination of the Compliance Period as defined and more particularly described in the HOME -ARP Contract, City Secretary Contract No. 60566 between Borrower and Lender Lien Priority: 2nd lien after FWHFC Loan Project Coordinator: Leticia Rodriguez Email: Leticia.Rodri Ruez(cbfortworthtexas. aov American Rescue Plan Act, Subtitle M (State and Local Fiscal Recovery Funds ("ARPA") Loan: Lender: City of Fort Worth ("City") Loan Amount: $421,999.00 ARPA Contract: City Secretary Contract No. Maturity Date: At the end of the 20-year Affordability Period as defined in the ARPA Contract Lien Priority: 3rd lien after FWHFC Loan Project Coordinator: Leticia Rodriguez Email: Leticia.Rodri�zueZOwfortwortlltexaS.2ov Permanent Supportive Housing Unit or PSH Unit Means a housing unit for which supportive services are provided to assist homeless persons with disabilities to live independently as further described in Exhibit "B" — Requirements For Permanent Supportive Housing Units. This project contains 96 PSH Units. PSH Tenants PSH Tenants must meet the HUD definition of chronically homeless. PSH Tenants will be selected from the prioritized Continuum of Care for TX-601 Fort Worth/Arlington/Tarrant County ("CoC") permanent supportive housing list maintained by the Tarrant County Homeless Coalition ("TCHC"). Additional PSH Loan Requirements: PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 4 Journey Home Housing, LLC — Journey Home Housing Apartments Borrower must comply with all of the terms and conditions of the HOME -ARP contract including any performance requirements such as HOME -ARP Compliance Requirements throughout the Compliance Period more particularly described in the HOME -ARP Contract, unless a different period is noted in the respective agreement. A Default under the HOME -ARP contract shall be an event of default under this PSH Loan Agreement. Clauses and Covenants A. Conditions Precedent to PSH Loan Agreement The obligation of Lender to make the PSH Loan Agreement is conditioned on: 1. Match funds provided as a non-refundable capital contribution to the Borrower for the purpose of funding construction in the amount of the PSH Funds must be made by the Amon G. Carter Foundation; 2. The execution and delivery of the PSH Loan Documents; 3. The execution and delivery to Lender of the PSH Loan Documents; 4. The accuracy, in all material respects, of all representations and warranties in the PSH Loan Documents; 5. No default existing under the PSH Loan Documents; 6. Payment by Borrower of all expenses incurred by Lender in connection with the PSH Loan Agreement and the PSH Loan Documents; and 7. Lender's receipt, in a form acceptable to Lender, of: a. Certification from Borrower's authorized representative for any Borrower that is an entity attaching (i) a copy of Borrower's organizational documents, (ii) the approval of Borrower's governing authority for the execution and delivery of the PSH Loan Documents, and (iii) specimen signatures from all Borrower representatives authorized to execute the PSH Loan Documents; b. Certification from governmental authorities for any Borrower that is an entity confirming Borrower's existence, if applicable, and Borrower's account status with the Texas Comptroller of Public Accounts; C. Appraisal of the Real Property; d. Survey of the Real Property endorsed in favor of Lender; e. Environmental assessment of the Real Property; f. Commitment for issuance of a title insurance policy in the amount of the PSH Loan insuring the validity of Lender's first lien on the Real Property and confirming that no liens exist on the Real Property other than those liens permitted by the Loan Documents, specifically including the second lien to the City; g. If applicable, financing statement reports on the Personal Property issued by all applicable filing officers confirming no financing statement are filed on the Personal Property other than those financing statement permitted by the PSH Loan Documents. h. The most recent pro forma for the project; i. Proof of insurance required by the PSH Loan Documents; j. Payment and performance bond in favor of Lender as co -obligee in a form PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 5 Journey Home Housing, LLC — Journey Home Housing Apartments acceptable to Lender in the amount of the total construction cost for the project. At Lender's discretion, other forms of assurance, including a guarantee from Borrower or other parties or entities on Borrower's behalf, may be acceptable so long as such assurance meets the Lender's requirements. Any guarantee in favor of the Lender shall be acceptable to Lender in amount, duration, form and substance; k. Current financial statement on Borrower; and 1. Evidence of verification of ad valorem tax exemption reasonably acceptable to Lender, if applicable; together with all other documents, instruments, and certificates reasonably requested by Lender. B. Borrower's Representations To induce Lender to enter into this PSH Loan Agreement and to make the PSH Loan, Borrower represents to Lender that: 1. Borrower: a. Has the power and authority needed to execute and deliver the PSH Loan Documents and to perform Borrower's obligations under the PSH Loan Documents; b. Possesses all permits, registrations, approvals, consents, licenses, trademarks, trademark rights, trade names, trade name rights, and copyrights needed to conduct Borrower's business; C. Was validly formed and exists under the laws of the State of Texas; d. Is in good standing under the laws of the State of Texas and all other jurisdictions where the nature of Borrower's business makes qualification necessary; and e. Is qualified to do business under the laws of the State of Texas and all other jurisdictions where the nature of Borrower's business makes qualification necessary; 2. The execution, delivery, and performance of the PSH Loan Documents executed by Borrower have been duly authorized and do not and will not (a) contravene or violate any legal requirement; (b) result in the breach of, or constitute a default under, any instrument to which Borrower is a party or by which any of Borrower's property may be bound or affected; or (c) result in a requirement to create any lien on any of Borrower's property other than liens granted to Lender on the Collateral; 3. The PSH Loan Documents are legal, valid, and binding obligations of the parties executing the documents; 4. The Borrower has good and indefeasible title to the Real Property and has good title to the Personal Property, free and clear of all liens except for those disclosed in the PSH Loan Documents or reflecting on the title policy delivered to Lender and liens for ad valorem taxes, general and special assessments, and other governmental charges not yet due or payable; 5. The financial statements delivered to Lender fairly present the financial condition and the results of Borrower's operations as of the dates and for the periods indicated, and no PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 6 Journey Home Housing, LLC — Journey Home Housing Apartments material adverse change has occurred in the assets, liabilities, financial condition, or business of Borrower since the dates of the financial statements; 6. The pro forma for the project delivered to Lender fairly presents the financial condition and the results of Borrower's operations as of the dates and for the periods indicated, and no material adverse change has occurred in the assets, liabilities, financial condition, or business of Borrower since the dates of the pro forma; 7. Borrower has no knowledge of any litigation or administrative claim, action, or proceeding, pending or threatened, against Borrower or directly involving the Collateral before or by any governmental authority that, if adversely determined, could have a material adverse effect on Borrower or the Collateral; 8. There is no outstanding adverse judgment, writ, order, injunction, award, or decree affecting Borrower or the Collateral; 9. Borrower is not in default under any agreement to which Borrower is bound or to which any of the collateral is subject that could have a material adverse effect on Borrower or the Collateral; 10. All information and documentation, including the financial statement and the pro forma, supplied to Lender and all statements made to Lender by or on behalf of Borrower are correct and complete in all material respects as of the date made; 11. Borrower has no knowledge of the Real Property being used for the production, release, or disposal of hazardous wastes or materials; 12. The Real Property is taxed and billed separately from any other property for ad valorem tax purposes; 13. No part of the Real Property is located within a flood zone; 14. Borrower's financial records have been prepared and maintained in accordance with good accounting practices consistently applied and reflect all moneys due or to become due from or to Borrower; and 15. Borrower has filed all required tax returns and paid all taxes shown thereon to be due, except those for which extensions have been obtained and those that are being contested in good faith and for which appropriate reserves have been established and disclosed in writing to Lender. C. Affirmative Covenants Borrower will: 1. Cause the use PSH Loan proceeds to construct ninety-six (96) PSH units; 2. Apply all proceeds from the sale, collection, or other disposition of the Collateral to amounts owing on the PSH Note unless the PSH Loan Documents authorize an alternate use of the proceeds; 3. Comply with all PSH Loan requirements; 4. Comply with requirements included herein; 5. Cause Borrower to operate the Project and all activities related to the Project in accordance with all applicable legal requirements; 6. Keep at Borrower's address, or such other place as Lender may approve, accounts and records reflecting the operation of the Project and activities related thereto and copies of all written contracts, leases, and other instruments that affect the Collateral; PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 7 Journey Home Housing, LLC — Journey Home Housing Apartments 7. Prepare Borrower's financial records in compliance with good accounting practices consistently applied; 8. Permit Lender during the term of this Agreement and for five years thereafter to examine and make copies of Borrower's books, records, contracts, leases, and other instruments at any reasonable time upon at least 48 hours prior written notice; 9. Deliver to Lender, at Lender's request from time to time, Borrower's tax returns and internally prepared and, annually audited, financial statements of Borrower prepared in accordance with good accounting practices consistently applied, in detail reasonably satisfactory to Lender and certified to be true and correct by an officer of Borrower and accompanied by an opinion of an independent certified public accountant; 10. Execute, acknowledge as required, and deliver to Lender, at Lender's request from time to time, at Borrower's expense, any document reasonably needed by Lender to (a) correct any defect, error, omission, or ambiguity in the PSH Loan Documents; (b) comply with Borrower's obligations under the PSH Loan Documents; (c) make subject to and perfect the liens and security interests of the PSH Loan Documents in any property intended to be covered thereby; and (d) protect, perfect, or preserve the liens and the security interests of the PSH Loan Documents against third persons or make any recordings, file any notices, or obtain any consents requested by Lender in connection therewith; 11. Notify Lender promptly (a) on acquiring knowledge of the occurrence of any event of default under the PSH Loan Documents or HOME -ARP Agreement; (b) if any of Borrower's property is surrendered in satisfaction of a debt or obligation, and (c) of any litigation, arbitration, mediation, or proceedings before any governmental agency that could have a material adverse effect on Borrower or the Collateral; 12. Pay promptly on demand all reasonable expenses in connection with (a) the negotiation, preparation, execution, filing, recording, rerecording, modification, and supplementation of the PSH Loan Documents; (b) the collection of the PSH Note; (c) the protection of the Collateral; (d) the collection, enforcement, sale, or other disposition of the Collateral; and (e) the performance by Lender of any of Borrower's obligations under the Loan Documents; 13. Use the PSH Note proceeds for the purposes permitted in this Loan Agreement; 14. Do all things necessary to preserve Borrower's existence, qualifications, rights, and franchises in all jurisdictions where Borrower does business; 15. Prepare and coordinate necessary documentation for obtaining and maintaining the ad valorem tax exemption with respect to the Real Property, and communicate and coordinate with local taxing authorities in connection with same; and 16. Require Borrower through its loan agreement and loan documents to acknowledge and agree to comply with all requirements included herein, including all federal requirements, and City Requirements throughout the Affordability Period, unless a different period is expressly noted in the respective agreement. D. Negative Covenant Borrower will not: 1. Use or allow the use of the Collateral in any manner that (a) constitutes a public or private nuisance; (b) makes void, voidable, or cancelable, or increases the premium of, any PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 8 Journey Home Housing, LLC — Journey Home Housing Apartments insurance required by the PSH Loan Documents; or (c) lessens the value of the Collateral, other than as a result of ordinary wear and tear from the Collateral's intended use or casualty; 2. Purchase, acquire, or lease any property from, or sell, transfer, or lease any property to, any equity owner, manager, director, officer, agent, or employee of Borrower, or any person or entity controlled by, controlling, or under common control with Borrower, except on terms then customarily available between unrelated parties in substantially similar transactions, except as approved by Lender; 3. Lend money to, or guarantee the payment or performance of any liability or obligation of any person or entity except as necessary for the purpose of providing affordable housing in the City of Fort Worth or such other purpose in connection with Borrower's business; 4. Materially change the nature of Borrower's business or enter into any business that is substantially different from Borrower's existing business; 5. Incur any indebtedness other than the PSH Note, except as otherwise described above and other short-term indebtedness to trade creditors incurred in the ordinary course of Borrower's business; 6. Create or permit any mortgage, security interest, or lien on any Collateral other than mortgages, security interests, or liens existing at the date of this Loan Agreement and disclosed to Lender or listed in the title policy issued in conjunction with the original closing of the PSH Loan; 7. Purchase or redeem any of Borrower's ownership interests, declare or pay any dividends, or make any distribution to the holders of any of Borrower's ownership interests; 8. Sell, transfer, convey, or lease any Collateral except for sales and leases in the ordinary course of business and on the conditions provided in the PSH Loan Documents. City must be provided notice within 30 days of the transfer's completion by the new owner. The new owner shall be required to assume all obligations of Borrower hereunder; 9. Acquire all or substantially all of the assets or ownership interests of any third party except as necessary for the purpose of providing affordable housing in the City of Fort Worth or such other purpose in connection with Borrower's business; or 10. Liquidate or dissolve, or become a party to any merger or consolidation. E. Default and Remedies 1. A default exists if — a. Borrower fails to timely pay the PSH Note when such payment is required; b. A party, other than Lender, fails to perform any obligation or covenant in any of the PSH Loan Documents or the HOME -ARP loan documents; C. Any warranty, covenant, or representation made by a party, other than Lender, in any of the PSH Loan Documents is false in any material respect when made; d. A receiver is appointed for any party other than Lender executing any of the PSH Loan Documents, or for any of the security for payment and performance under this agreement; e. Any collateral or security for payment or performance under this Agreement is assigned for the benefit of creditors; f. A bankruptcy or insolvency proceeding is commenced by a party other than Lender executing any of the PSH Loan Documents; g. A bankruptcy or insolvency proceeding is commenced against a party other PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 9 Journey Home Housing, LLC — Journey Home Housing Apartments than Lender executing any of the PSH Loan Documents, and the proceeding continues without dismissal for 120 days, the party against whom the proceeding is commenced admits the material allegations of the petition against it, or an order for relief is entered; h. Any of the following parties is dissolved, begins to wind up its affairs, is authorized by its governing body or persons to dissolve or wind up its affairs, or any event occurs or condition exists that permits the dissolution or winding up of the affairs of any of the following parties: Borrower, a nonprofit corporation, or any other obligated party executing any of the PSH Loan Documents; i. Any security or collateral for this Agreement is impaired by uninsured loss, theft, damage, or destruction, or by levy and execution, or by issuance of an official writ or order of seizure, unless it is promptly replaced with collateral of like kind and quality or restored to its former condition; j. The Project is not completed within two years after issuance by the City of Fort Worth of necessary permits to commence construction. 2. If a default exists, Lender may — a. Declare the unpaid principal balance, earned interest, and any other amounts owed on the PSH Note immediately due; and b. Exercise against Borrower, the collateral or security for payment or performance, and any other party executing the PSH Loan Documents any rights and remedies available to Lender under the PSH Loan Documents. 3. Unless specifically provided otherwise in this Agreement, in the event that an event of default or breach of this Agreement remains uncured after 45 calendar days following written notice by Lender (or such other notice period as may be specified herein) or, if Borrower has diligently and continuously attempted to cure following receipt of such written notice but reasonably required more than 45 calendar days to cure, and such breach remains uncured for such period as may be determined by both Parties mutually and in good faith, Lender shall have the right to terminate this Agreement immediately upon provision of written notice to Borrower. In this event, Borrower shall forfeit all rights to the PSH Funds. In the event that this Agreement is terminated for any reason, Borrower must repay any PSH Funds received hereunder within 30 days of the effective date of termination. If Borrower fails to repay any such Funds, the Lender shall have the right to exercise all legal remedies available to it under this Agreement. Borrower acknowledges that no funds will be disbursed by Lender at any time that Borrower is in default under this Agreement, any agreement related to the use of the PSH Funds, or any other agreement between Lender and Borrower and City specifically using the HOME -ARP Funds, or Borrower that uses City funds as the funding source. F. Payment of Funds to Developer 1. Sufficient PSH Loan funds will be disbursed to Developer at Closing of the PSH Loan and the HOME -ARP Loan to pay approved closing costs for both the PSH Loan and the HOME -ARP Loan. G. General Provisions PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 10 Journey Home Housing, LLC — Journey Home Housing Apartments 1. Any notice required or permitted under this PSH Loan Agreement must be in writing. Any notice required herein will be deemed to be delivered (whether actually received or not) when deposited with the United States Postal Service, postage prepaid, certified mail, return receipt requested, and addressed to the intended recipient at the address provided in this Loan Agreement. Notice may also be given by regular mail, personal delivery, courier delivery, facsimile transmission, or other commercially reasonable means and will be effective when actually received. Any address for notice may be changed by notice delivered as provided herein. Lender: Fort Worth Housing Finance Director Attention: Assistant General Manager Neighborhood Services Department 200 Texas St. Fort Worth, TX 76102 Telephone: 817-392-7540 With a copy to: City of Fort Worth Attention: Leslie L. Hunt City Attorney's Office 200 Texas St. Fort Worth, TX 76102 Telephone: 817-392-7600 City of Fort Worth Attention: Project Coordinator Neighborhood Services Department 200 Texas St. Fort Worth, TX 76102 Telephone: 817-392-7540 BORROWER: Journey Home Housing, LLC Attention: Toby Owen, Manager 2400 Cypress Street Fort Worth, TX 76102 Telephone: 817-632-7440 2. The PSH Loan Documents, including any of their exhibits and attachments, constitute the entire agreement of the parties. There are no representations, agreements, warranties, or promises by Lender pertaining to the PSH Loan that are not in those documents. 3. This PSH Loan Agreement may be amended only by an instrument in writing signed by the parties. 4. Borrower may not assign this PSH Loan Agreement or any of Borrower's rights under it without Lender's prior written consent, and any attempted assignment is void. This Loan Agreement binds, benefits, and may be enforced by the parties and their successors in interest. PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 11 Journey Home Housing, LLC — Journey Home Housing Apartments However, Borrower may assign its rights hereunder to any Affiliate who assumes in writing all of Borrower's obligations hereunder but only after delivering at least 30 days written notice of such assignment to Lender. Any such assignment will not release Borrower from its obligations under this Agreement. Any attempted assignment of this Agreement to other than an Affiliate without Lender's written consent shall be void, and shall constitute a breach of this Agreement. 5. Except as otherwise provided in the PSH Loan Documents, Borrower waives all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of protest, to the extent permitted by law. 6. No remedy, right, or power conferred on Lender in this Loan Agreement is intended to be exclusive of any other remedy, right, or power now or hereafter existing at law, in equity, or otherwise, and all remedies, rights, and powers are cumulative. 7. Interest on the PSH Note will not exceed the maximum amount of non -usurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the principal of the PSH Note or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any excess will be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the PSH Note or, if the principal of the PSH Note has been paid, refunded. This provision overrides any conflicting provisions in this and all other PSH Loan Documents. 8. It is not a waiver of default if the non -defaulting party fails to declare immediately a default or delays taking any action. Pursuit of any remedies set forth in this Loan Agreement does not preclude pursuit of other remedies in the other PSH Loan Documents or provided by law. 9. There are no third -party beneficiaries of this PSH Loan Agreement. 10. If any provision of this PSH Loan Agreement is determined to be invalid or unenforceable, the validity or enforceability of any other provision will not be affected. 11. The rule of construction that ambiguities in a document will be construed against the party who drafted it will not be applied in interpreting this PSH Loan Agreement. 12. The parties' relationship is an ordinary commercial relationship, and the parties do not intend to create the relationship of principal and agent, partnership, joint venture, or any other special relationship. Lender in exercising Lender's rights and performing Lender's obligations under the PSH Loan Documents owes no fiduciary duty to Borrower. 13. If this agreement is executed in multiple counterparts, all counterparts taken together will constitute this Loan Agreement. 14. If Lender agrees to waive or defer any of the requirements of this PSH Loan Agreement as a condition precedent to the advance of the proceeds of the PSH Note, Borrower will provide any deferred information or documentation within 30 days after the advance. 15. In the event of any conflict among the provisions of this PSH Loan Agreement and any of the PSH Loan Documents, the more restrictive provision will control. 16. When the context requires, singular nouns and pronouns include the plural. 17. The term PSH Note includes all extensions and renewals of the PSH Note. H. Indemnification and Release. BORROWER, TO THE EXTENT PERMITTED BY APPLICABLE LAW, COVENANTS AND AGREES TO INDEMNIFY, HOLD HARMLESS AND DEFEND, AT ITS OWN EXPENSE, LENDER AND ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS OF ANY HIND OR CHARACTER, INCLUDING BUT NOT LIMITED TO CLAIMS FOR PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 12 Journey Home Housing, LLC — Journey Home Housing Apartments PROPERTY LOSS OR DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER HIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE EXECUTION, PERFORMANCE, ATTEMPTED PERFORMANCE OR NONPERFORMANCE OF THIS PSH LOAN AGREEMENT AND/OR THE OPERATIONS, ACTIVITIES AND SERVICES OF THE PROJECT DESCRIBED HEREIN, WHETHER OR NOT CAUSED IN WHOLE OR IN PART, BY ALLEGED NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF LENDER, BUT NOT FROM THE LENDER'S, OR LENDER'S OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS ACTUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AND BORROWER HEREBY ASSUMES ALL LIABILITY AND RESPONSIBILITY OF LENDER AND ITS OFFICERS, AGENTS, SERVANTS, AND EMPLOYEES FOR ANY AND ALL CLAIMS OR SUITS FOR PROPERTY LOSS OR DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER HINDS OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE EXECUTION, PERFORMANCE, ATTEMPTED PERFORMANCE OR NONPERFORMANCE OF THIS CONTRACT AND AGREEMENT AND/OR THE OPERATIONS, ACTIVITIES AND SERVICES OF THE PROJECT DESCRIBED HEREIN, WHETHER OR NOT CAUSED IN WHOLE OR IN PART BY ALLEGED NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF LENDER, BUT NOT FROM THE LENDER'S, OR LENDER'S OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS ACTUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. BORROWER, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FURTHER COVENANTS AND AGREES TO AND DOES HEREBY INDEMNIFY AND HOLD HARMLESS LENDER FROM AND AGAINST ANY AND ALL INJURY, DAMAGE OR DESTRUCTION OF PROPERTY OF LENDER, ARISING OUT OF OR IN CONNECTION WITH ALL ACTS OR OMISSIONS OF BORROWER, ITS OFFICERS, MEMBERS, AGENTS, EMPLOYEES, CONTRACTORS, SUBCONTRACTORS, INVITEES, LICENSEES, OR PROJECT PARTICIPANTS, OR CAUSED, IN WHOLE OR IN PART, BY ALLEGED NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF LENDER, , BUT NOT FROM THE LENDER'S, OR LENDER'S OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS ACTUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IT IS THE EXPRESS INTENTION OF THE PARTIES, BOTH LENDER AND BORROWER, THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION INCLUDES INDEMNITY BY BORROWER TO INDEMNIFY AND PROTECT LENDER FROM THE CONSEQUENCES OF LENDER'S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS ALLEGED TO BE THE SOLE OR CONCURRING CAUSE OF THE INJURY, DAMAGE OR DEATH, BUT NOT THE LENDER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 13 Journey Home Housing, LLC — Journey Home Housing Apartments BORROWER, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AGREES TO AND SHALL RELEASE LENDER, ITS AGENTS, EMPLOYEES, OFFICERS AND LEGAL REPRESENTATIVES FROM ALL LIABILITY FOR INJURY, DEATH, DAMAGE OR LOSS TO PERSONS OR PROPERTY SUSTAINED IN CONNECTION WITH OR INCIDENTAL TO PERFORMANCE UNDER THIS CONTRACT, EVEN IF THE INJURY, DEATH, DAMAGE OR LOSS IS CAUSED BY LENDER'S SOLE OR CONCURRENT NEGLIGENCE, BUT NOT THE LENDER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. BORROWER SHALL REQUIRE ALL OF ITS FIRST TIER CONTRACTORS TO INCLUDE IN THEIR CONTRACTS A RELEASE AND INDEMNITY IN FAVOR OF LENDER IN SUBSTANTIALLY THE SAME FORM AS ABOVE. I. Governmental Powers of Lender. It is understood that by execution of this PSH Loan Agreement, the Lender does not waive or surrender any of its governmental powers or immunities. J. Venue and Jurisdiction. Venue for any action, whether real or asserted, at law or in equity, arising out of the execution, performance, attempted performance or non-performance of this Agreement shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This PSH Loan Agreement shall be construed in accordance with the laws of the State of Texas. K. Force Majeure. If either Party becomes unable, either in whole or part, to fulfill its obligations under this PSH Loan Agreement of the PSH Loan Documents due to acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemies, wars, blockades, insurrections, riots, pandemics and epidemics, earthquakes, fires, floods, restraints or prohibitions by any court, board, department, commission or agency of the United States or of any States, civil disturbances, or explosions, inclement weather, or some other reason beyond the Party's control (collectively, "Force Majeure Event"), the obligations so affected by such Force Majeure Event will be suspended only during the continuance of such event and the completion date for such obligations shall be extended for a like period. The impacted Party will give the other Party written notice of the existence, extent and nature of the Force Majeure Event as soon as reasonably possible after the occurrence of the event. Failure to give notice will result in the continuance of the obligation regardless of the extent of any existing Force Majeure Event. The Parties will use commercially reasonable efforts to remedy its inability to perform as soon as possible. L. Entirety of Agreement. This PSH Loan Agreement and the PSH Loan Documents, including the Exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 14 Journey Home Housing, LLC — Journey Home Housing Apartments agreement between the Lender and the Borrower, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this PSH Loan Agreement shall not be amended unless executed in writing by both Parties. M. Borrower and Lender Property. Borrower agrees that Lender shall under no circumstances be responsible for any property belonging to Borrower or its assignees, including any officers, members, agents, employees, contractors, subcontractors, vendors, tenants, licensees or invitees that may be lost, stolen or destroyed or in any way damaged and BORROWER, TO THE EXTENT PERMITTED BY APPLICABLE LAW HEREBY INDEMNIFIES AND HOLDS HARMLESS LENDER AND ITS OFFICERS, AGENTS, AND EMPLOYEES FROM ANY AND ALL CLAIMS OR SUITS PERTAINING TO OR CONNECTED WITH SUCH PROPERTY, SAVE AND EXCEPT THOSE ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LENDER, ITS OFFICERS, AGENTS OR EMPLOYEES. N. Survival. Any provision of this PSH Loan Agreement that pertains to compliance requirements, performance requirements, compliance with other City of Fort Worth or PSH loans, indemnity obligations, reporting requirements, auditing, monitoring, tenant income eligibility, record keeping and reports, City ordinances, compliance with any federal obligations, and any default and enforcement provisions necessary to enforce such provisions, shall survive the termination of this PSH Loan Agreement for the longer of (i) 5 years after the termination date of this PSH Loan Agreement, or (ii) 5 years after the termination of the Affordability Period unless a different survival period is specifically set forth herein, and shall be enforceable by Lender against Borrower. O. Waiver of Immunity by Borrower. If Borrower is a charitable or nonprofit organization and has or claims an immunity or exemption (statutory or otherwise) from and against liability for damages or injury, including death, to persons or property, Borrower hereby expressly waives its rights to plead defensively such immunity or exemption as against Lender. This section shall not be construed to affect a governmental entity's immunities under constitutional, statutory or common law. [SIGNATURES TO FOLLOW] PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 15 Journey Home Housing, LLC — Journey Home Housing Apartments THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Executed in 3 duplicate originals to be effective as of December 14, 2023. JOURNEY HOME HOUSING, LLC, a Texas Limited Liab' y Company, By: Name: 19y Owen Title: Manager City of Fort Worth, a home -rule municipality/of/the State of Texas By: Fernando Costa, Assistant City Manager OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 16 Journey Home Housing, LLC — Journey Home Housing Apartments adggOn4�� Ot F�R� -4O�a ATTEST: ;,A.°(°�Q09,�� oa ° � ..�A.0 aq4 �'EXASa4p bnnoaq� City Secretary M&C 22-0456 Dated June 14, 2022 Form 1295: 2022-886452 APPROVED AS TO FORM AND LEGALITY: �Le ie . Hunt 25, 2CST) Leslie L. Hunt, Senior Assistant City Attorney City of Fort Worth Contract Compliance Manager: By signing I acknowledge that I am the person responsible For the monitoring and administration of this contract, including Ensuring all performance and reporting requirements. it., 9*— Chad LaFoque (Jan 25, 202412:26CST) Chad LaRoque, Housing Development and Grants Manager OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX PSH LOAN AGREEMENT — City of Fort Worth Directions Home Funds Page 16-1 Journey Home Housing, LLC — Journey Home Housing Apartments Insurance Rider to Loan Agreement Loan Agreement Date: December 14, 2023 Borrower: Journey Home Housing, LLC Lender: City of Fort Worth This Insurance Rider is part of the Loan Agreement. Borrower will maintain coverage in the form of commercial crime insurance or bond in the amount of $11,060,257.00, which is the total amount of the PSH Loan, to insure against loss from the fraud, theft or dishonesty of any of Borrower's officers, agents, trustees, directors or employees. The proceeds of such insurance or bond shall be used to reimburse Lender for any and all loss of the PSH Loan proceeds occasioned by such misconduct. To effectuate such reimbursement, such coverage shall include a rider stating that reimbursement for any loss or losses shall name the Lender as a Loss Payee or in the case of a bond, as Dual Obligees. Borrower shall furnish to Lender, in a timely manner, but not later than 30 days after the closing of the PSH Loan, certificates of insurance as proof that it, except for the commercial crime insurance listed above which must be maintained by Borrower, has secured and paid for policies of commercial insurance as specified herein. If Lender has not received such certificates as set forth herein, Borrower shall be in default of this Loan Agreement and Lender may at its option, terminate this Loan Agreement. In that event of default and termination, Borrower shall return the PSH Loan proceeds to Lender with 15 days of written notice of termination and Lender shall release its PSH Deed of Trust and the parties shall have no further obligations to each other under this Loan Agreement. If Borrower fails to return the PSH Loan proceeds to Lender within 15 days of written notice of termination of this Loan Agreement, Lender may exercise all of its remedies under the PSH Loan Documents. Such insurance shall cover all insurable risks incident to or in connection with the execution, performance, attempted performance or nonperformance of this Loan Agreement. Borrower shall maintain, or require its general contractor to maintain, the following coverages and limits thereof: Commercial General Liabilitv (CGL) Insurance $1,000,000 each occurrence $2,000,000 aggregate limit Workers' Compensation Insurance Part A: Statutory Limits Part B: Employer's Liability $100,000 each accident $100,000 disease -each employee $500,000 disease -policy limit Note: Such insurance shall cover employees performing work on any and all projects including but not limited to construction, demolition, and rehabilitation. Borrower or Borrower's contractors shall maintain coverages, if applicable. In the event the respective PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 17 Journey Home Housing, LLC — Journey Home Housing Apartments contractors do not maintain coverage, Borrower shall maintain the coverage on such contractor, if applicable, for each applicable contract. Business Automobile Liabilitv Insurance $300,000 each accident on a combined single -limit basis $300,000 Aggregate Insurance policy shall be endorsed to cover "Any Auto" defined as autos owned, hired and non -owned. Pending availability of the above coverage and at the discretion of Lender, the policy shall be the primary responding insurance policy versus a personal auto insurance policy if or when in the course of Borrower's business as contracted herein. Additional Requirements Such insurance amounts shall be revised upward at Lender's reasonable option and no more frequently than once every 12 months, and Borrower shall revise such amounts within 30 days following notice to Borrower of such requirements. Borrower will submit to Lender documentation that it has obtained insurance coverage and have executed bonds as required in this Loan Agreement prior to payment of any monies provided hereunder. Where applicable and appropriate, insurance policies required herein shall be endorsed to include Lender as an additional insured as its interest may appear. Additional insured parties shall include employees, officers, agents, and volunteers of Lender. The Workers' Compensation Insurance policy shall be endorsed to include a waiver of subrogation, also referred to as a waiver of rights of recovery, in favor of Lender. Any failure on part of Lender to request certificate(s) of insurance shall not be construed as a waiver of such requirement or as a waiver of the insurance requirements themselves. Insurers of Borrower's insurance policies shall be licensed to do business in the state of Texas by the Department of Insurance or be otherwise eligible and authorized to do business in the state of Texas. Insurers shall be acceptable to Lender insofar as their financial strength and solvency and each such company shall have a current minimum A.M. Best Key Rating Guide rating of A: VII or other equivalent insurance industry standard rating otherwise approved by Lender. Deductible limits on the foregoing insurance policies shall be at commercially reasonable levels, and in no event exceed $100,000 per occurrence. In the event there are any local, federal or other regulatory insurance or bonding requirements for the project, and such requirements exceed those specified herein, the former shall prevail. Borrower shall require its contractors to maintain applicable insurance coverages, limits, and other requirements as those specified herein; and, Borrower shall cause contractors to provide Borrower with certificate(s) of insurance documenting such coverage. Also, Borrower shall require its PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 18 Journey Home Housing, LLC — Journey Home Housing Apartments contractors to have Lender and City endorsed as additional insureds (as their interest may appear) on their respective insurance policies where applicable and appropriate. Borrower shall require its builder to maintain builders risk insurance at the value of the construction. PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 19 Journey Home Housing, LLC — Journey Home Housing Apartments EXHIBIT "A" Legal Description Common Address: 7550 Crowley Road, Fort Worth, TX 76134 Property Legal Description: Being 8.954 acres of land situated in the SA & M.B. RAILROAD COMPANY SURVEY, ABSTRACT NO. 1463, Tarrant County, Texas, City of Fort Worth, Tarrant County, Texas, and being a portion of that certain tract of land conveyed to S.L KALIL, Jr. by deed recorded in Volume 5606, Page 372., Deed Records, Tarrant County, Texas, said 8.954 acres being more particularly described by metes and bounds as follows: BEGINNING at a 1/2" iron found at the Northeast comer of the herein described tract and the Southeast comer of a tract of land conveyed to M3:X Development Corporation by deed recorded in County clerk's Instrument No. D204242691, Deed Records, Tarrant County, Texas, said iron being in the West line of Crowley Road (R O.W. varies); THENCE S 00. 01' 49" W, along the West line of said Crowley Road, 254.12 feet to a "Y" in concrete found at a reentrant comer of said Kalil tract and the Northeast comer of a tract of land conveyed to Kenneth O. Westberg, et ux, Jeannie Nicole by deed recorded in Volume 10958, Page 56, Deed Records, Tarrant County, Texas; THENCE along the common lines of said Kalil and Westberg tracts as follows: N 89' 32' 08•w, 139.95 feet to a 1/2' iron found; S 00. 28' 20" W, 329.88 feet to a 5/8' iron found at a reentrant comer of said Kalil tract in the North line of lot 1, Block 1, SOUTH SIDE MASONIC LODGE ADDITION, an Addition to the City of Fort Worth, Tarrant County, Texas, according to the Plat recorded in Volume 388-109 , Page 140, Plat Records, Tarrant County, Texas; THENCE along the common line of said Kalil tract and said lot 1 as follows: N 89" 54' 11- W, 75.21 feet to a 1/2' iron found; S 010 23' 53" W, 199.96 feet to a 1/2" iron found at the Southeast comer of said Kalil tract and the Northeast corner of a tract of land conveyed to Benjamin M. Hamrick and wife, Clara Coroldine Hamrick by deed recorded in Volume 8492, Page 1244, Deed Records, Tarrant County, Texas; THENCE N 89° 57' 20" W, along the common line of said Kalil and Hamrick tracts, 379.74 feet to a 5/8" iron found at the Southwest comer of said Kalil tract in the t line of a tract of land conveyed to laurel Land of Fort Worth, Inc. by deed recorded in Volume 10690, Page 1339, Deed Records, Tarrant County, Texas; THENCE N 01 ° 28' 00" W, along the common line of said Kalil and Laurel Land tracts, passing the Northeast comer of said laurel Land tract, continuing in all a distance of 786.62 feet to a %2' iron found at the Southwest comer of said M3:X tract; PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 20 Journey Home Housing, LLC — Journey Home Housing Apartments THENCE S 89° 36' 46" E, along the common line of said Kalil and M3:X tracts, at 187.25 feet passing a 1/2" iron found, continuing in all a distance of 622.77 feet to the POINT OF BEGINNING and containing 8.954 acres of land. A portion of the above described tract of land Now Know As Lot 1, Block A, T & G Crowley Road, according to the Plat thereof recorded under Clerk's File No{s). D21112 6008, Plat Records, Tarrant County, Texas. PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 21 Journey Home Housing, LLC — Journey Home Housing Apartments EXHIBIT "B" REQUIREMENTS FOR PERMANENT SUPPORTIVE HOUSING UNITS JOURNEY HOME HOUSING, LLC Capitalized terms not defined herein shall have meanings assigned to them in the Loan Agreement. Borrower acknowledges and agrees to the terms of this Exhibit and shall acknowledge and agree to the following. The purpose of the PSH Units is to reduce the population of chronically homeless persons in the City by combining rental assistance with supportive services so that formerly homeless tenants can maintain stable housing. Borrower will retain the Supportive Services Provider ("SSP") for the PSH Tenants if the rental assistance does not include supportive services. The scope of the supportive services shall be determined by Borrower but at a minimum shall include on -site case manager with experience in providing case management to homeless and formerly homeless persons. 1. Borrower is responsible for securing resources for rental assistance and supportive services for the PSH Tenants. These resources must be in place by the time of initial lease -up of the project. 2. PSH Tenants must meet the HUD definition of chronically homeless. PSH Tenants will be selected from the prioritized Continuum of Care for TX-601 Fort Worth/Arlington/Tarrant County ("CoC") permanent supportive housing list maintained by the Tarrant County Homeless Coalition ("TCHC"). 3. If requested, Borrower will provide SSP onsite office space at no cost to be used exclusively by either the SSP's staff member or staff members of other agencies providing supportive services, as well as a telephone line and internet access sufficient for staff members to access the Homeless Management Information System ("HMIS') maintained by the CoC. The staff members will coordinate with Property Manager on scheduling office space needs. 4. Property Manager will coordinate with the staff member of the agency providing the rental assistance or TCHC regarding selection and placement of PSH Tenants ensuring that tenant selection criteria for the PSH Units is appropriate and consistent with the purpose of the PSH Program as well as the property management practices for the project and any requirements related to the rental assistance. Property Manager will not unreasonably deny housing to eligible homeless persons who otherwise meet the rental assistance providers' standards for services. 5. Borrower will promptly notify the TCHC and any agency providing rental assistance in writing of the specific date when lease -up of the project will begin so that a referral and coordination process for potential tenants for the PSH Units can be initiated. 6. Borrower must contact TCHC and the agencies providing the rental assistance for referrals when a PSH Unit is available. PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 22 Journey Home Housing, LLC — Journey Home Housing Apartments 6.1 At the time of initial lease -up and any time afterwards when the Property Manager is notified by a PSH Tenant of their intent to vacate, the Property Manager will hold the PSH Unit available for referral from the CoC for 60 days from the date TCHC and the agency supplying the rental assistance is notified in writing by the Property Manager of the PSH Unit's availability. 6.2 When a PSH Tenant vacates a PSH Unit without notice, the Property Manager will hold the PSH Unit available for referral from the CoC for 45 days from the date TCHC and the agency supplying the rental assistance are notified in writing of the PSH Unit's availability. 6.3 Borrower and Property Manager must make all reasonable good faith efforts to process lease applications in a timely manner to avoid exceeding the applicable 45- or 60-day referral periods and must document such efforts. 7. Borrower shall promptly notify in writing and coordinate with TCHC and the agency supplying the rental assistance in cases of any PSH Tenant's financial hardship, lease violation, or any other circumstances deemed appropriate by Developer or Property Manager, to avoid involuntary termination of PSH tenancies to the maximum extent consistent with sound management of the project. 8. Borrower is responsible for all notices of PSH Unit availability or otherwise required by the any agreement for rental assistance of the PSH Tenants. PSH LOAN AGREEMENT - City of Fort Worth Directions Home Funds Page 23 Journey Home Housing, LLC — Journey Home Housing Apartments 1/18/23, 1:51 PM M&C Review CITY COUNCIL AGENDA Create New From This M&C DATE: 6/14/2022 REFERENCE NO.. CODE: G TYPE: Official site of the City of Fort Worth, Texas Faro **M&C 22- 19ARPAAWARDING 0456 LOG NAME: PERMANENT SUPPORTIVE HOUSING PROJECTS PUBLIC CONSENT HEARING: NO SUBJECT: (CD 3 and CD 8) Authorize Forgivable Loans in the Aggregate Amount of $11,641,276.00 from Federal and City Sources to Three Developers for the Development of 128 Permanent Supportive Housing Units, Authorize Execution of Related Contract and Loan Documents, Waive or Defer Certain City Fees Related to the Development of Two of the Projects, and Find a Public Purpose and that Adequate Controls are in Place RECOMMENDATION: It is recommended that the City Council: 1. Award $4,028,476.00 of HOME Investment Partnerships American Rescue Plan Program funds in the form of a forgivable loan to New Leaf Community Services or an affiliate for the development of 48 units of permanent supportive housing; 2. Award (i) $4,928,000.00 of HOME Investment Partnerships American Rescue Plan Program funds, (ii) $421,999.00 of American Rescue Plan Act, Subtitle M (State and Local Fiscal Recovery Funds) funds, and (iii) $1,262,801.00 of Directions Home capital funds to Presbyterian Night Shelter of Tarrant County or an affiliate in the form of forgivable loans for the development of 72 units of permanent supportive housing; 3. Award $1,000,000.00 of American Rescue Plan Act, Subtitle M (State and Local Fiscal Recovery Funds) funds to OPG Clifton Riverside Partners, LLC or an affiliate in the form of a forgivable loan for the development of 8 units of permanent supportive housing; 4. Authorize execution of related contract and loan documents with New Leaf Community Services, Presbyterian Night Shelter of Tarrant County and OPG Clifton Riverside Partners, LLC, or any affiliates of the same; 5. Waive or defer certain City fees related to the New Leaf Community Services and Presbyterian Night Shelter developments in the approximate amount of $400,000.00; 6. Authorize the City Manager, or his designee, to amend contracts and loan documents as necessary for completion of the projects provided any amendments are within the scope of the projects and comply with City policies and all applicable laws and regulations governing the use of federal grant funds; and 7. Find that the expenditures and waiver or deferral of City fees serves the public purpose of providing decent, safe, and affordable housing to extremely low-income residents in the City and that adequate controls are in place through the loan documents to ensure the public purpose is carried out. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to award three projects forgivable loans funded from three funding streams: American Rescue Plan Act ("ARPA") State and Local Fiscal Recovery Funds (SLFRF), HOME Investment Partnerships American Rescue Plan Program (HOME - ARP) and Directions Home capital funds to provide a total of 128 permanent supportive housing (PSH) units. Backaround The City of Fort Worth is part of the local Continuum of Care (CoC), and one of the priorities of the CoC is to address the current level of chronic homelessness. Tarrant County Homeless Coalition apps.cfwnet.org/council_packet/mc_review.asp? I D=30008&cou nciIdate=6/14/2022 1 /6 1/18/23, 1:51 PM M&C Review (TCHC) evaluated the homelessness situation in the CoC area, which encompasses Tarrant and Parker counties, and identified strategies, resources, and the estimated number of new physical units of PSH needed. In addition to other strategies, TCHC determined one of the greatest needs is for physical units designated for the chronically homeless. On December 14, 2021, to help address this need in the City of Fort Worth, Mayor and Council approved a substantial amendment to the City's 2021-2022 Annual Action Plan for the use of $10,537,030.00 in HOME -ARP Federal Grant funds to be awarded by the United States Department of Housing and Urban Development for the purpose of funding the development of PSH (M&C No. 21- 0968) through a competitive Notice of Funding Availability process ("NOFA"). The Fort Worth Housing Finance Corporation (FWHFC), which had previously set aside $5,000,000.00 for the development of PSH in the city, allocated $2,550,000.00 of the set -aside funds to be included with the HOME -ARP funds in the NOFA (Resolution No. FWHFC 2019 07). FWHFC PSH funds require a dollar for dollar match from private foundations. These funds were combined with a goal to develop 125 PSH units in the City. On March 8, 2022, the Neighborhood Services Department (NSD) released the NOFA. However, it was noted that the 125 PSH units was not sufficient to meet the City's need for PSH units. On April 12, 2022, the City Council allocated an additional $5,000,000.00 of general ARPA funds for the development of PSH units (M&C 22-0270). This amount was included in the NOFA to be awarded for PSH development, and the unit goal increased to 165. Scoring - NSD staff and a philanthropic representative scored the six applications that were submitted. Based on scores, responsiveness to Minority/Women Business Enterprise (M/WBE) requirements, and project feasibility, three projects are being recommended by staff for funding. One project was non -responsive due to failure to meet the M/WBE requirement, and two were found to be lacking in one or more key areas of evaluation. Area of Evaluation Project Description Agency Experience Project Delivery/Occupancy Financial Capacity/Leveraging Total Score Agency Name The Phan Foundation New Leaf Community Services Presbyterian Night Shelter OPG Clifton Riverside Partners, LLC Atlantic Housing Foundation Inc. Tarrant County Samaritan Housing Available Points Project Name 30 15 25 30 100 Doors of Opportunity 8843 Camp Bowie West Journey Home Housing Clifton Riverside Quail Ridge Apartments Permanent Supportive Housing for Chronically Homeless Individuals # of PSH M/WBE Status Units 32 RESPONSIVE 48 RESPONSIVE 72 RESPONSIVE 8 RESPONSIVE 0 NON -RESPONSIVE 60 RESPONSIVE Applicant Score 60 89 88 83 54 82 apps.cfwnet.org/council_packet/mc_review.asp?ID=30008&councildate=6/14/2022 2/6 1/18/23, 1:51 PM M&C Review Accordingly, staff is recommending awarding 3 developments, which will create a total of 128 PSH units, forgivable loans as listed below. A second NOFA will be issued to develop at least 37 PSH units with the funds that were not allocated through the first NOFA. The total number of PSH units from both NOFAs will be at least 165. Recommended Awards The following three projects are recommended for funding: New Leaf Community Services New Leaf Community Services will create 48 new units of PSH at 8843 Camp Bowie West (CD 3). Partners in the project include 1-21- Development Advisors LLC. In addition to the HOME -ARP funding recommended through this M&C, staff will be recommending that an allocation of funds also be made from the FWHFC, as listed below. HOME -ARP (This M&C) $4,028,476.00 Requesting from Fort Worth Housing Finance Corporation $1,200,000.00 Foundation Matching Funds $1,200,000.00 Total NOFA Funding Allocations $6,428,476.00 Staff recommends execution of all necessary documents with New Leaf Community Services or an affiliate for a forgivable loan in the amount of $4,028,476.00 on the following terms and conditions: Loan Terms: 1. Loan term to commence on execution of loan documents and terminate at the end of the 20- year Affordability Period defined in the contract. Loan will be forgiven at the end of the Affordability Period provided that borrower has complied with all of the terms of the contract and the loan documents; 2. Performance of the HOME -ARP requirements and payment of the HOME -ARP loan, if required, will be secured by a deed of trust and HOME -ARP Deed Restriction on the real property through the Affordability Period; 3. Interest rate of zero percent so long as borrower complies with all of the terms of the contract and loan documents; 4. HOME -ARP loan to be subordinate to any financing provided by Fort Worth Housing Finance Corporation. HOME -ARP loan may also be subordinated to other financing if such financing meets appropriate underwriting criteria, City policies and applicable HOME -ARP requirements; and 5. Designate HOME -ARP assisted units according to the HOME -ARP regulations with a 20-year Affordability Period. The expenditure of HOME -ARP funds is conditioned upon the followina:. 1. Satisfactory underwriting in accordance with federal guidance for use of funds and City policies for funding of PSH units; 2. All financing including any grants to be acceptable to City to show long term viability of the project; 3. Satisfactory completion of an environmental review pursuant to 24 CFR Part 58; 4. Receipt of authorization to use grant funds from HUD; and 5. Closing on all other financing for the project Presbyterian Night Shelter Presbyterian Night Shelter of Tarrant County will create 72 new units of PSH at 7600 Crowley Road (CD 8). Partners in the project include 1-21- Development Advisors LLC and Construction Advisory Specialists. In addition to the funding recommended through this M&C, staff will be recommending that an allocation of funds also be made from the FWHFC, as listed below. HOME -ARP (This M&C) $4,928,000.00 apps.cfwnet.org/council_packet/mc_review.asp? I D=30008&cou nciIdate=6/14/2022 3/6 1/18/23, 1:51 PM M&C Review ARPA SLFRF (This M&C) $421,999.00 Directions Home Capital Funds (This M&C) $1,262,801.00 Requesting from Fort Worth Housing Finance Corporation $1,350,000.00 Foundation Matching Funds $1,350,000.00 Total NOFA Funding Allocations $9,312,800.00 Staff recommends execution of all necessary documents with Presbyterian Night Shelter of Tarrant County or an affiliate for a forgivable loan in the amount of $6,612,800.00 on the following terms and conditions: Loan Terms: 1. Loan term to commence on execution of loan documents and terminate at the end of the 20- year Affordability Period defined in the contract. Loan will be forgiven at the end of the Affordability Period provided that borrower has complied with all of the terms of the contract and the loan documents; 2. Performance of the HOME -ARP, ARPA SLFRF and Directions Home requirements and payment of the HOME -ARP, general ARPA and Directions Home loans, if required, will be secured by a deed of trust and HOME -ARP, ARPA SLFRF and Directions Home Deed Restrictions on the real property through the Affordability Period; 3. Interest rate of zero percent so long as borrower complies with all of the terms of the contract and loan documents; 4. HOME -ARP, ARPA SLFRF and Directions Home loans to be subordinate to any financing provided by Fort Worth Housing Finance Corporation. HOME -ARP, ARPA SLFRF and Directions Home loans may also be subordinated to other financing if such financing meets appropriate underwriting criteria, City policies and applicable HOME -ARP, ARPA SLFRF and Directions Home requirements; and 5. Designate HOME -ARP assisted units according to the HOME -ARP regulations with a 20-year Affordability Period. The expenditure of Directions Home, qeneral ARPA and HOME -ARP funds is conditioned upon the following_ 1. Satisfactory underwriting in accordance with federal guidance for use of funds and City policies for funding of PSH units; 2. All financing including any grants to be acceptable to City to show long term viability of the project; 3. Satisfactory completion of an environmental review pursuant to 24 CFR Part 58; 4. Receipt of authorization to use grant funds from HUD; and 5. Closing on all other financing for the project There is a business equity goal of 25\% for this project because part of the funding is City general funds. OPG Clifton Riverside Partners OPG Clifton Riverside Partners, LLC will create 8 units new units of PSH within a larger project at 2406 E. Belknap (CD 8). Partners in the project are Overland Property Group and Across, LLC. ARPA SLFRF (This M&C) $1,000,000.00 Staff recommends execution of all necessary documents with OPG Clifton Riverside Partners, LLC or an affiliate for a forgivable loan in the amount of $1,000,000.00 on the following terms and conditions: Loan Terms: Loan term to commence on execution of loan documents and terminate at the end of the 20- year Affordability Period defined in the contract. Loan will be forgiven at the end of the Affordability Period provided that borrower has complied with all of the all the terms of the contract and the loan documents; apps.cfwnet.org/council_packet/mc_review.asp? I D=30008&cou nciIdate=6/14/2022 4/6 1/18/23, 1:51 PM M&C Review 2. Performance of the ARPA and any City requirements and payment of the ARPA loan, if required, will be secured by a deed of trust and deed restrictions on the real property through the Affordability Period; 3. Interest rate of zero percent so long as borrower complies with all of the terms of the contract and loan documents; and 4. ARPA loan to be subordinate to any financing provided by Fort Worth Housing Finance Corporation and any permanent financing. ARPA loan may also be subordinated to other financing if such financing meets appropriate underwriting criteria, City policies and applicable ARPA requirements. The expenditure of ARPA funds is conditioned upon the following: 1. Satisfactory underwriting in accordance with federal guidance for use of ARPA funds and City policies for funding of PSH units; 2. All financing including any grants to be acceptable to City to show long term viability of the project; 3. Satisfactory completion of an environmental review pursuant to 24 CFR Part 58; and 4. Closing on all other financing for the project. By approval of this M&C, the City Council finds that the following actions are necessary to achieve the vital public purpose of providing decent, safe, and affordable housing to extremely -low-income residents: (i) providing forgivable loans to the three developments listed above for the development of PSH units in the City, and (ii) the waiver or deferral of certain related City fees for the New Leaf Community Services and Presbyterian Night Shelter developments, including all fees charged by the Development Services Department (waived), park dedication fees (conditionally deferred), and transportation impact fees, for which a variance was granted by Development Services Department, in the collective approximate amount of $400,000.00; however the actual amount could vary. New Leaf Community Presbyterian Night Services PSH Project Shelter PSH Project Park Fees (Deferred) $58,824.00 $71,543.00 Transportation Impact Fees $50,832.00 $76,248.00 (Waived) Estimate of Other Development $54,064.00 $73,929.00 Services Department fees (Waived) Total Fees Waived or Deferred $163,720.00 $221,720.00 Staff has reviewed and verified, and Council by approval of this M&C finds, that the waiver or deferral of the fees is necessary for the financial feasibility of the two identified developments. The City Council further finds that adequate controls are in place through the loan documents to ensure the public purpose is carried out. Park fees will be payable in the event the property is transferred to a for -profit entity and will no longer be operated solely as a PSH housing development. The conditional imposition of the Park fees will be secured by liens on the properties. Because of the high priority the City Council has placed on the development as PSH and the fact that the New Leaf Community Services and Presbyterian Night Shelter of Tarrant County developments will be operated on a not -for -profit basis, Development Services and Park & Recreation departments support the deferring or waiving of fees so these projects may be developed. NSD thanks and recognizes the Development Services and Park & Recreation departments for their commitment to PSH. FISCAL INFORMATION/CERTIFICATION: The Director of Finance certifies that upon approval of the above recommendations, funds are available in the current operating and capital budgets, as appropriated, of the Grants Operating Federal Fund HOME -ARP and American Rescue Plan Act projects and the General Capital Projects Fund Development of PSH project. Prior to an expenditure being incurred, the Neighborhood Services Department has the responsibility of verifying the availability of funds and to ensure that only apps.cfwnet.org/council_packet/mc_review.asp? I D=30008&cou nciIdate=6/14/2022 5/6 1/18/23, 1:51 PM M&C Review expenditures allowed under the ARPA SLFRF, HOME -ARP and Directions Home programs are charged to these funding sources. TO Fund Department Account Project Program Activity Budget Reference # Amount ID ID Year (Chartfield 2) FROM Fund Department Account Project Program Activity Budget Reference # Amount ID ID Year (Chartfield 2) Submitted for Citv Manager's Office by_ Fernando Costa (6122) Originating Department Head: Victor Turner (8187) Additional Information Contact: Tara Perez (2235) ATTACHMENTS New Leaf Form 1295.pdf (CFW Internal) OPG Clifton Riverside Form 1295.pdf (CFW Internal) Perm Supp Housing Funding availability.docx (CFW Internal) Presbvterian Niaht Shelter Form 1295.pdf (CFW Internal) PSH FID table.xlsx (CFW Internal) apps.cfwnet.org/council_packet/mc_review.asp? I D=30008&cou nciIdate=6/14/2022 6/6 FORT WORTH Routing and Transmittal Slip Neighborhood Services Department DOCUMENT TITLE: ARPA Journev Home Housina LLC Directions HOME Loan Aareement M&C 22-0456 CPN DATE: TO: 1. Chad LaRoque 2. Leslie L. Hunt 3. Ronald Gonzales 4. Jannette Goodall 5. Allison Tidwell CSO # INITIALS DOC# DATE OUT DOCUMENTS FOR CITY MANAGER'S SIGNTURE: All documents received from any and all City Departments requesting City Manager's signature for approval MUST BE ROUTED TO THE APPROPRIATE ACM for approval first. Once the ACM has signed the routing slip, David will review and take the next steps. NEEDS TO BE NOTARIZED: ❑ Yes ❑ No RUSH: ❑ Yes ❑ No SAME DAY: ❑ Yes ❑ No NEXT DAY: El Yes ❑ No ROUTING TO CSO: X Yes ❑ No Action Required: ❑ As Requested ❑ For Your Information x Signature/Routing and or Recording ❑ Comment ❑ File ❑ Attach Signature, Initial and Notary Tabs X Attach Signature Return to: Please call Virginia Villalobos at ext. 7744 for pick up when completed. Thank you.