The Housing and Community Development Department (HCD) received an application for HOME funding from the Orlando Neighborhood Improvement Corporation (ONIC) to rehabilitate an existing 142-unit multi-family rental development known as Palm Grove Gardens Apartments. The project is located at 3922 W.D. Judge Dr., Orlando, FL, 32808. The requested funds will be used to rehabilitate one hundred twenty-six (126) units for low- and very-low income households. 

The Housing Review Committee (HRC) reviewed ONIC-New Palm Grove Gardens application on July 10, 2017 and recommended rehabilitation assistance be provided to this project utilizing HOME funds. This assistance will be provided in the form of a deferred loan for five (5) years at a zero percent (0%) interest rate. Upon the successful completion of the 5-year affordability period, the City will cancel the note and issue a satisfaction of mortgage. A restrictive covenant will be recorded in the Orange County Public Records to ensure the units remain affordable during the 5-year period.

The total costs of the rehabilitation is $1,320,643. Of this total, the City will provide $873,600 in HOME funding with the balance of $447,043 funded by the developer.

Twenty six (26) units will be provided to very low income households: two (2) units of which are 1-bedroom/1 bath, nineteen (19) units of which are 2-bedroom/1 bath, and five (5) units of which are 3-bedroom/2 bath.

One hundred (100) units will be provided to low income households:  ten (10) units of which are 1-bedroom/1 bath, sixty-nine (69) units of which are 2-bedroom/1 bath and twenty-one (21) units of which are 3-bedroom/2 bath.

No tenants will be displaced due to the rehabilitation activity. The project is scheduled to be completed and fully occupied by September of 2018.

ONIC-New Palm Grove Gardens is re-financing the permanent mortgage for Palm Grove Gardens and the lender requires the City of Orlando to subordinate its loan position. The property is currently 95% leased and maintains a waiting list. The property's appraised value as of June 27, 2017 is $5,670,000. As the second mortgage holder, it is possible the City would not be repaid if the property were to go into foreclosure between now and the end of the affordability period.

Authorize the Mayor/Pro Tem and City Clerk to execute the attached HOME Deferred Loan Agreement in the amount of $873,600, subordination agreement, and related documents between the City of Orlando and ONIC-New Palm Grove Gardens, LLC after review and approval of the City Attorney Office.