DATE: March 17, 2026
TO: Board of Supervisors
SUBMITTED BY: Steven E. White, Director
Department of Public Works and Planning
SUBJECT: Potential Agreements with Reedley Elderly L.P. and Selma Elderly L.P. (Each Limited Partnership with Self-Help Enterprises Acting in the Role of Developer) to Preserve, Rehabilitate, and Operate 11 Units (22 Units Combined) of Affordable Multifamily Senior Rental Housing for an Estimated 15-55 Years in the Cities of Reedley and Selma
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize Chairman, upon Self-Help Enterprises (in their capacity as the General Partner for the Reedley Elderly L.P.) having secured firm, written commitments and executable documents of all necessary funding sources prior to March 30, 2026, and upon review and approval by the Department of Public Works and Planning (Department) as to final underwriting and subsidy layering analyses, County Counsel as to legal form, and Auditor-Controller/Treasurer-Tax Collector (ACTTC) as to accounting form, to execute the HOME Agreement with Reedley Elderly L.P. to effect a loan of Federal U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnerships (HOME) program funds at anywhere from 0% to 3% simple interest, with loan repayment terms (inclusive of later conversion to a grant) and an Affordability Period and loan period of anywhere from 15 to 55 years, each as may be mutually agreeable to both County and Reedley Elderly L.P., and in support of the County’s underwriting requirements for the preservation, rehabilitation, and operation of 11 units within the 23-unit Reedley Heritage (formerly Reedley Elderly), an affordable multifamily senior rental housing project in the City of Reedley (the Reedley Project), effective upon execution, for an estimated term of 16 to 58 years, so long as the document (A) is similar to the example HOME Agreement provided here and does not contain terms materially adverse to the County, (B) is consistent with the County’s underwriting requirements, (C) is not in conflict with Federal funding requirements, and (D) when available, electronic copies of the final executed document is added to the County’s systems of record; (up to $2,000,000); and
2. Approve and authorize Chairman, only upon his immediately prior execution of the HOME Agreement for Reedley Elderly L.P., and subject to review and approval by County Counsel as to legal form and ACTTC as to accounting form, to execute (and if applicable record) loan and related documents necessary to the Reedley Project, including but not limited to, the Regulatory Agreement and Declaration of Restrictive Covenants, the Promissory Note, the Deed of Trust, any required subordination agreements that align with the final lien order, and other necessary documents and amendments for the purpose of developing the Reedley Project so long as the documents (A) are similar to the example documents provided here, and all documents (B) contain no terms materially adverse to the County, (C) are consistent with the County’s underwriting requirements, (D) are not in conflict with Federal funding requirements, and (E) when available, electronic copies of all final executed documents are added to the County’s systems of record; and
3. Approve and authorize Chairman, upon Self-Help Enterprises (in their capacity as the General Partner for the Selma Elderly L.P.) having secured firm, written commitments and executable documents of all necessary funding sources prior to March 30, 2026, and upon review and approval by the Department of Public Works and Planning (Department) as to final underwriting and subsidy layering analyses, County Counsel as to legal form, and ACTTC as to accounting form, to execute the HOME Agreement with Selma Elderly L.P. to effect a loan of Federal HUD HOME program funds at anywhere from 0% to 3% simple interest, with loan repayment terms (inclusive of later conversion to a grant) and an Affordability Period and loan period of anywhere from 15 to 55 years, each as may be mutually agreeable to both County and Selma Elderly L.P., and in support of the County’s underwriting requirements for the preservation, rehabilitation, and operation of 11 units within the 24-unit Selma Heritage (formerly Selma Elderly), an affordable multifamily senior rental housing project in the City of Selma (the Selma Project), effective upon execution, for an estimated term of 16 to 58 years, so long as the document (A) is similar to the example HOME Agreement provided here and does not contain terms materially adverse to the County (subject to County Counsel’s determination), (B) is consistent with the County’s underwriting requirements, (C) is not in conflict with Federal funding requirements, and (D) when available, electronic copies of the final executed document is added to the County’s systems of record; (up to $2,000,000); and
4. Approve and authorize Chairman, only upon his immediately prior execution of the HOME Agreement for Selma Elderly L.P., and subject to review and approval by County Counsel as to legal form and ACTTC as to accounting form, execute (and if applicable record) loan and related documents necessary to the Selma Project, including but not limited to, the Regulatory Agreement and Declaration of Restrictive Covenants, the Promissory Note, the Deed of Trust, any required subordination agreements that align with the final lien order, and other necessary documents and amendments as necessary for the purpose of developing the Selma Project so long as the documents (A) are similar to the example documents provided here, and all documents (B) contain no terms materially adverse to the County, (C) are consistent with the County’s underwriting requirements, (D) are not in conflict with Federal funding requirements, and (E) when available, electronic copies of all final executed documents are added to the County’s systems of record; and
5. For both projects, if the first and second (Reedley project) and the third and fourth (Selma project) recommended actions are approved, approve and authorize Director of the Department of Public Works and Planning or designee, subject to review and approval by County Counsel as to legal form and ACTTC as to accounting form, to (A) approve limited extensions to the construction timeline for delays beyond the control of Reedley Elderly L.P. or Selma Elderly L.P., respectively, (B) amend the end date of the Agreement’s term in the County’s system of record, with notice to all parties, to align it with Federal administrative requirements and to ensure the conditions of the loan documents are satisfied, (C) complete estoppel certificates, (D) execute (and if applicable record) any required subordination agreements that align with the final lien order, and (E) execute any other necessary documents and amendments as necessary for the purpose of developing the each project.
REPORT
There is no Net County Cost (NCC) inherently associated with the recommended actions. Approval of the first and second recommended actions will support the continuing affordability and rehabilitation of a 1978 affordable housing apartment complex of 23 single-bedroom units (22 affordable) for seniors age 62+ in the City of Reedley currently known as Reedley Elderly by authorizing a future execution of the County’s HOME Agreement to support 11 units ($181,820 per unit of County-administered funds) and loan documents (which include but are not limited to the Regulatory Agreement and Declaration of Restrictive Covenants, Promissory Note, and Deed of Trust) contingent upon reviews by the Department, County Counsel, and Auditor-Controller/Treasurer-Tax Collector (ACTTC), and satisfaction of the County’s regulatory due diligence verifications including secure funding commitments, and satisfactory underwriting and subsidy layering analyses. There is insufficient information at this stage to definitively determine which specific loan terms will satisfy the final analyses. Staff anticipate the recommended language will include a loan of up to $2,000,000 in HOME funds with anywhere from 0% to 3% simple interest, and repayment terms that could be among repayment via residual receipts (split 66%/33% or 50%/50%), deferred interest with a final balloon payment, or whether the only financially viable path is loan forgiveness after the satisfactory conclusion of the Affordability Period. The statutory minimum Affordability Period for the funds is just 15 years. Self-Help Enterprises (SHE) (which is acting as the Community Housing Development Organization (CHDO) Developer for the Reedley Project) has requested a period of 55 years, but the final Affordability Period is subject to the County’s underwriting. The County received the initial 55-year pro forma financial statement necessary to begin the preliminary underwriting process on March 9, 2026, and information gaps resulting from the absence of USDA’s terms prevent staff from undertaking a comprehensive analysis. The County is prohibited from executing any written commitments of HOME funds until all regulatory requirements are met. All parties involved now anticipate no further changes to the California Tax Credit Allocation Committee (CTCAC) readiness deadline of March 30, 2026; and there are no other scheduled meetings of the Board between now and the State’s deadline.
Approval of the third and fourth recommended actions will support the continuing affordability and rehabilitation of a 1979 affordable housing apartment complex of 24 single-bedroom units (23 affordable) for seniors age 62+ in the City of Selma currently known as Selma Elderly by authorizing a future execution of the County’s HOME Agreement to support 11 units ($181,820 per unit of County-administered funds) and loan documents (which include but are not limited to the Regulatory Agreement and Declaration of Restrictive Covenants, Promissory Note, and Deed of Trust) contingent upon reviews by the Department, County Counsel, and ACTTC and satisfaction of the County’s regulatory due diligence verifications including secure funding commitments, and satisfactory underwriting and subsidy layering analyses. There is insufficient information at this stage to definitively determine which specific loan terms will satisfy the final analyses. Staff anticipate the recommended language will include a loan of $2,000,000 in HOME funds with anywhere from 0% to 3% simple interest, and repayment terms that could be among repayment via residual receipts (split 66%/33% or 50%/50%), deferred interest with a final balloon payment, or whether the only financially viable path is loan forgiveness after the satisfactory conclusion of the Affordability Period. The statutory minimum Affordability Period for the funds is just 15 years. SHE (which is acting as the CHDO Developer for the Selma Project) has requested a period of 55 years, but the final Affordability Period is subject to the County’s underwriting. The County received the initial 55-year pro forma financial statement necessary to begin the preliminary underwriting process on March 9, 2026, and information gaps resulting from the absence of USDA’s terms prevent staff from undertaking a comprehensive analysis. The County is prohibited from executing any written commitments of HOME funds until all regulatory requirements are met. All parties involved now anticipate no further changes to the CTCAC readiness deadline of March 30, 2026; and there are no other scheduled meetings of the Board between now and the State’s deadline.
Approval of the fifth recommended action authorizes the Department of Public Works and Planning contingent upon reviews by the Department, County Counsel, and ACTTC, to execute or modify documents necessary to develop each project and ensure the County remains in regulatory compliance and is able to respond timely to anticipated requests for subordination at closing and conversion to permanent financing. The delegation of authority supports the administrative processes and demands for last-minute flexibility inherent in a complex real estate transaction involving CTCAC State tax credits and multiple investors, including the USDA. The Department is not able to identify the County’s numerical lien position, but it is very likely that the County’s lien position will be below all hard debt and below all USDA debts.
The Reedley Project has an anticipated total cost of $7,791,226 million and is located in District 4. The Selma Project has an anticipated total cost of $8,493,666 and is located in District 4.
ALTERNATIVE ACTION(S):
Your Board may approve or reject all or some of the recommended actions, with or without modifications to the actions, add prerequisites, or direct staff to modify the example draft documents as appropriate and consistent with the Federal regulations governing the use of HOME funding.
Should your Board not approve the first and second recommended actions, the County would not be able to attempt to make a firm commitment of HOME funds to the Reedley Project, leaving a financial gap. Should your Board not approve the third and fourth recommended actions, the County would not be able to attempt to make a firm commitment of HOME funds to the Selma Project, leaving a financial gap. Both projects carry the risk of USDA funding not coming through in time. The State CTCAC is expected to revoke the tax credit award for any project that fails to secure firm written commitments of all necessary financing.
FISCAL IMPACT:
There is no Net County Cost (NCC) associated with the recommended actions, but a potential for NCC exists if the County were to exercise the “Termination for Convenience” clause in the example HOME Agreement. The example HOME Agreement would be modified to include all necessary language and reflect the specifics of either the Reedley Project or Selma Project. The Termination for Convenience is required in all contracts involving $10,000 or more of Federal funds. If the County were to terminate the agreement for convenience during construction or during the 15-year minimum affordability period, the respective project would fail to meet Federal HOME regulations and the County would have to repay all expended HOME funds (those involved in this agreement and any HOME funds charged for staff time as direct project costs). As the draft Termination for Convenience language obligates the County to pay certain funds already encumbered, the County would likely only have NCC with which to pay the expenditures. Separate and more favorable termination language protects the County in circumstances of non-allocation of Federal funds or when terminating for cause.
Preliminary underwriting for both the Reedley Project and Selma Project is underway, but substantial changes are expected. The fiscal review also includes the customary underwriting projection of expenses increasing by 3% while revenues increase by 2%, resulting in negative cashflow prior to the end of CTCAC’s mandatory 55-year affordability period. For both projects, there remains an element of risk that the project will not generate sufficient revenues to repay the County and could even require additional reinvestment during the affordability period. Due to regulation, this would not be possible with HOME funds beyond the initial year of the project. Any additional HOME funds for either project would trigger Federal Prevailing Wages under the Davis-Bacon and Related Acts. Any and all funds repaid on the loans to the Reedley Project and/or the Selma Project will return to the County’s HOME account as Program Income. Program Income generated by these projects must be reused in the same manner as HOME funds and before any Federally-acquired HOME funds are expended. Sufficient appropriations and estimated revenues for the combined total of $4 million in loans, staff’s Project time, and administrative expenses are included in the Department’s Org 55122008 FY2025-26 Adopted Budget and will be included in subsequent budget requests.
The County’s $2 million loan to each respective project will help defray total estimated project costs of approximately $7.8 million for Reedley and $8.5 million for Selma, providing about a quarter of the funds needed for each project and supporting about three quarters of the total construction funds needed. The $2 million for the Reedley Project and/or $2 million for the Selma Project support the long-term affordability of roughly 50% of each Project’s affordable units. Due to the complex financing and time-sensitive nature of affordable housing developments, it is customary for the Project’s other funding sources and amounts to fluctuate as the developer secures financing from a variety of public and private funding sources, so the numbers presented here are expected to vary.
The Reedley Project and Selma Project both include funds conditionally committed by California’s Low-Income Housing Tax Credit (LIHTC) Program administered by CTCAC. The County’s funding is necessary for the State’s funding to be issued and for the loan finalization and closing process to commence. Final lien position of the County’s loan will likely be different during construction and the Affordability Period; but it is customary to structure lien position by the amount of funds invested by the entities involved. Unfortunately, although the County’s anticipated $2 million dollar loan to each project is larger than any single loan from USDA, the combination of USDA’s two loans together will be slightly larger than the County’s and they are anticipated to be second only to the tax credit investor, leaving the County in the lowest lien position on each project.
The recommended example agreement also allows both County Counsel and the Department of Public Works and Planning to collect fees consistent with the County’s Master Schedule of Fees from the respective L.P. to reimburse for actual time spent reviewing legal and loan documents after the initial closing, as well as to perform required annual project monitoring activities and physical inspections throughout the Affordability Period (15-55 years). Consistent with HOME regulations, the County will require these operational costs be included in final underwriting with a Year 1 cost cap at $3,000 with increases of no more than 3% per year.
DISCUSSION:
The County administers HOME activities on behalf of the Urban County Area, as established by the most recent Joint Powers Agreement authorized by the Board on August 8, 2023. HOME provides formula entitlement grants to states and local governments that are used-often in partnership with local nonprofit groups-to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership, or by providing direct rental assistance or downpayment assistance to low-income households. HOME is the largest Federal block grant to State and local governments designed exclusively to create and preserve affordable housing for low-income households.
On February 19, 2025, the Department issued a Notice of Funding Opportunity (NOFO) requesting applications for affordable housing projects for new construction or rehabilitation. Five (5) applications were received, and all applications were selected for funding. SHE submitted an application to the County for HOME funds on March 5, 2025, for both the Reedley Project and Selma Project, which are both existing multifamily rental developments for senior citizens located at 172 S. East Avenue, Reedley, CA 93654 and 2745 Wright Street, Selma, CA 93662. SHE’s applications for the Reeley Project and Selma Project met the NOFO criteria and the Department issued separate reservation letters to both projects on March 13, 2025 indicating that $1,000,000 in HOME funds had been reserved, contingent upon final underwriting and subsidy layering analysis, securing all other funding necessary to complete the project, and satisfaction of applicable provisions of the National Environmental Policy Act (NEPA). On March 14, 2025, SHE requested the County increase the reservation to $2 million in order to make SHE’s application for Reedley Elderly more competitive with CTCAC. (Due to specific circumstances impacting Selma, no request for revisions to Selma’s letter occurred at that time.) The Department issued a revised letter for $2 million in HOME funding for Reedley Elderly on March 14, 2025, with the same three conditions. On April 16, 2025, at SHE’s request, the Department wrote to SHE a concurrence letter affirming that the NEPA requirements imposed by the County should not be considered in violation of CTCAC’s requirement that the local funds involved not be contingent on any subsequent approvals other than securing all financing and satisfactory underwriting. The Reedley Project was selected as a recipient of the State’s Round 1, 9% LIHTC funds on June 18, 2025. SHE requested and received a revised reservation letter for the Selma Project, to reflect the project was applying to the State’s Round 2, 9% LIHTC funds and to increase the amount to $2 million. The Department issued the revised $2 million reservation letter on June 20, 2025, and the Selma Project was selected to receive tax credits on September 30, 2025. Both projects were listed in the County’s 2025-26 (Year 1) Action Plan for HOME funding, brought before the Board on August 5, 2025.
The Reedley Project consists of 23 one-bedroom rental units, of which 22 are restricted under LIHTC requirements to senior (62 years of age or older) households at varying income levels that will range from 30% to 50% of the County’s Area Median Income (AMI) at time of leasing. The Selma Project is nearly identical, with 24 one-bedroom units, of which 23 are restricted to affordable rents. The units of both properties are currently occupied, and the County requires that the owners of the property follow a Federally-compliant Uniform Relocation Plan, which provides financial assistance and moving/storage services to tenants during renovations and will permit them to return to their units upon completion of the renovations. The single unrestricted unit at each property is reserved for the on-site manager. Reedley’s two residential buildings are single-story, and residents will have access to an updated community room, a remodeled existing laundry room, and a newly-created second laundry room. Selma’s three residential buildings are also single-story, and residents will have access to an updated community room, a remodeled existing laundry room, and a newly-created second laundry room.
If a project receives a committed HOME Agreement, the County’s loan will be further secured by a Promissory Note, Deed of Trust, and Regulatory Agreement, each carrying restrictions that will remain with the land during the Affordability Period, which will range from 15-55 years, depending on underwriting. HOME regulations require a minimum affordability period of 15 years. LIHTC requirements (which can exist separately and in parallel to the HOME affordability requirements) obligate a 55-year affordability period for the units. SHE is seeking a 55-year affordability period from the County for each property. Granting the 55-year period will delay the repayment of HOME funds to the County’s program by 40 years. If agreed to during final underwriting, allowing a 55-year Affordability Period will support a positive cash flow for the Project, making the County’s investment for 55 years less than $3,306 per HOME-assisted unit per year. This investment also obligates the County to monitor the owner’s compliance regarding the habitability of the assisted properties and units throughout the Affordability Period and ensure all HOME regulations (including but not limited to tenant income limits, lease requirements, rent caps, and property standards) are followed. Any failure to comply with HOME regulations during the Affordability Period could result in HUD requiring the County to repay all HOME funds associated with the respective project (including costs for staff time that are not included in the HOME Agreement).
In the event of foreclosure, both the example HOME Agreement and the example Regulatory Agreement include a clause allowing the foreclosing lender to complete the first sale post-foreclosure without County approval. The obligations contained in the example Agreement and the example Regulatory Agreement would continue to bind any and all successive owners. The Department does not object to this language in this instance due to the experience of the L.P. and the annual monitoring by the Department of the Project’s audited Statement of Cash Flows, Distribution of Net Cash Flow, Balance Sheet, and Profit and Loss Statements.
As is customary with projects of this nature, the County is being asked to subordinate its loan to all lenders investing a higher amount of dollars in each respective project than the County’s contribution by executing one or more subordination agreements. The County being in the last and lowest position means that for purposes of loan payoff, the County can only collect its full debt owed once the property owner has satisfied all superior debts. It is important to note that for each project, the cost of the rehabilitation greatly exceeds the appraisal of the apartment complex and the amount of funds invested exceeds the anticipated value of the rehabilitated apartment complex. In the event the property is sold, there will be insufficient funds to reimburse all lenders. If either project fails to exist as affordable housing throughout the minimum Affordability Period of 15 years required by regulation, or fails during an extended Affordability Period granted by the County, the funds used for the Project will have to be repaid by the County to HUD, regardless of whether the County receive HOME funds back from the owner of the property.
The draft nature of the example documents for these projects and requested delegation of your Board’s authority to execute the final documents once conditions are met is due to the complex financing and time-sensitive nature of Tax Credit-funded housing development and rehabilitation projects. It is not unusual for terms and funding sources to change as the developer solidifies financing from a variety of public and private funding sources. As of March 12, 2026, both projects are substantially behind in readiness and both are awaiting underwriting and final loan documents from USDA, without which the respective project cannot proceed. USDA was impacted by the 43-day Federal shutdown in late 2025 and has also had staffing shortages; and SHE also did not submit final necessary complete applications to USDA until January and February of this year. The Reedley Project’s original tax credit deadline was in December 2025, and the Reedley Project is already operating under a very rare CTCAC extension until March 30, 2026. The Selma Project’s original readiness deadline is also March 30, 2026. The developer has represented to the County that CTCAC cannot extend their deadline again for Reedley, as revisions to extensions must be authorized by the CTCAC committee, which does not meet again until May. The developer has represented that CTCAC is unwilling to offer any extension (even a customary 14-day flex to the later deadline) on the Selma Project. To maintain Project feasibility, all parties, including USDA, the County, and the projects’ investors, must finalize and execute all documents prior to the March 30th CTCAC readiness deadline.
CEQA/NEPA for Reedley Project
The Department completed Environmental Review No. 2557H01 under the provisions of the National Environmental Policy Act (NEPA) on January 14, 2026, for the Reedley Project. Based on the environmental review, the Project converts to exempt per 58.34(a)(12). The Project is considered categorically exempt from California Environmental Quality Act (CEQA) review. CEQA Guidelines Section 15332 state that infill development projects are categorically exempt from CEQA. The project site has a High Density Residential Planned Land Use Designation and a HDR (High Density Residential) zone district. The project is consistent with the General Plan and zoning. The project occurs in the city limits of Reedley and is on a 0.894-acre site surrounded by urban uses, developed with urban uses. A Notice of Exemption (NOE) was filed with the Fresno County Clerk on January 23, 2026.
CEQA/NEPA for Selma Project
The Department completed Environmental Review No. 2565H02 under NEPA on March 6, 2026 for the Selma Project. Based on the environmental review, the Project converts to exempt per 58.34(a)(12). The Project is considered ministerially exempt from CEQA review. CEQA Guidelines Section 15268 state that ministerial projects are categorically exempt from CEQA. This project is a "by right" use consistent with the City of Selma General Plan Land Use Designation of High Density Residential for the project site and requires ministerial approval only for a building permit. An NOE was filed with Fresno County Clerk on February 20, 2026.
REFERENCE MATERIAL:
BAI #16, August 5, 2025
BAI #40, August 8, 2023
ATTACHMENTS INCLUDED AND/OR ON FILE:
Fair Housing and Consolidated Plan-Housing Element Attachment
On file with Clerk - Example HOME Agreement
On file with Clerk - Example Promissory Note
On file with Clerk - Example Regulatory Agreement and Declaration of Restrictive Covenants
On file with Clerk - Example Deed of Trust
CAO ANALYST:
Dylan McCully