On Tuesday night, the Folsom City Council approved a $2.7 million loan for the development of a new affordable housing project in the city. The loan, conditionally approved through Resolution No. 11234, will support Pacific West Communities, Inc. in the construction of 52 affordable housing units at the proposed Harrington Grove development.
The project, located at 751, 771, and 791 Harrington Way, will include a mix of one-, two-, and three-bedroom units with rent restrictions for households earning between 30% and 80% of the area median income (AMI). The development aims to address the city’s affordable housing needs, particularly for very-low and extremely low-income households.
The Harrington Grove site is strategically positioned near amenities such as grocery stores, retail options, and healthcare facilities. Additionally, it is adjacent to the Humbug Willow Creek Trail, enhancing accessibility for pedestrians and cyclists.
The City’s loan will be funded from the Folsom Housing Fund and will carry a 3% simple interest rate over a 35-year term. Repayments will be based on 50% of the project’s residual cash flow. The loan’s final disbursement is contingent upon the developer securing a 4% Low-Income Housing Tax Credit (LIHTC) award during the August 2024 application round. If the award is not secured, the developer will need to reapply for city funding, which will be re-evaluated.
The total development cost of the project is estimated at approximately $23.4 million. The majority of funding will come from a combination of tax credit equity and a permanent loan, with the city’s loan filling the financial gap.
As of June 2024, the city’s housing fund balance stood at $18.9 million. The approval of the loan, “reflects Folsom’s ongoing commitment to facilitating affordable housing development, a key goal outlined in the city’s Housing Element,” according to the city staff report presented Tuesday night.
The approval marks a significant step forward for the Harrington Grove project, which is still in the early stages of planning and financial structuring. “The development team, including West Development Ventures, LLC and the Central Valley Coalition for Affordable Housing, is experienced and has a successful track record in similar projects. The City Council’s decision aligns with Folsom’s policy,” the report included.
Those wishing to look at the entire presentation from Tuesday night can find it on the city website by clicking HERE
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