City Loan for Affordable Housing Complex OK'd for Downtown Lot

Next year, ground will be broken on a vacant lot in downtown Novato on a Habitat for Humanity project that will transform it into a 10-unit affordable housing complex.

The Novato City Council on Tuesday approved a $427,438 loan from the city’s Affordable Housing Trust Fund for a Habitat for Humanity affordable housing project on a three-quarter-acre lot at 1112 Fourth Street, between Olive and Vallejo avenues.

The city loan will be used to provide mortgage assistance to low- and very low-income families — those earning $55,500 to $88,800, or 50-80 percent of the area median income as determined by the state Department of Housing and Community Development.

Also, the families will be required to provide 500 hours of hands-on work during the construction of their home and attend a homeowner development program that teaches financial literacy.

The 10 units will be applied to the state’s 2007-2014 Regional Housing Needs Allocation requirement for the city.

“Our goal is to provide homeownership opportunities for Novato’s working families,” said Councilwoman Madeline Kellner. “As costs to develop escalate, and as infill sites become harder to find, it is crucial to find a partner like Habitat for Humanity that has a proven record of success in affordable housing development.”

The council approved the development in 2007 for a neighborhood that contains a housing mix of single-family, duplexes and other multi-family homes. Habitat for Humanity is under contract to purchase the lot, which had been identified by the city as a future site for housing. The grand opening is scheduled for 2015.

 “The dream of homeownership is precious to those families who call Novato ‘home’,” said Phillip Kilbridge, executive director for Habitat for Humanity Greater San Francisco. “It allows families who may also work in Novato to stay local and establish long-lasting roots in this vibrant community. We are incredibly proud of our partnership with the city and of the success it has produced, and will produce for local working families.”

The city loan, which represents the balance in the Housing Trust Fund, requires that the units remain affordable for a minimum of 55 years, and the city is repaid if any unit sells after that time.

In its 23-year history of providing affordable home ownership to families, Habitat's Bay Area chapter has not experienced a mortgage default. Additionally, the city has requested that Novato families, and those who work in Novato, are given preference in the selection process. 

This is the third collaboration between the city of Novato and Habitat. In 2010, the city approved a loan of $65,000 to purchase a single-family foreclosed home at 1674 Center Road, and in 2011 it OK'd $130,000 for foreclosed homes at 5 Dusel Drive and 7 Boulevard Court. Novato families were selected for all three homes.

The Affordable Housing Trust Fund was created in 1988 to assist lower-income households purchase homes in Novato. In the past two years, the city has released more than $622,000 from this fund, and since 2005, more than $37 million has been invested by the city to create affordable housing options in Novato. 

Source: Peggy Flynn, public communications coordinator, city of Novato

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