REPORT TO THE CITY COUNCIL
FROM: JENNIFER K. CLARK, AICP, Director
Planning and Development Department
PHIL SKEI, Assistant Director
Planning and Development Department
BY: VANESSA NAVARRO, Senior Management Analyst
Community Development Division
SUBJECT
Title
***RESOLUTION - Adopting Substantial Amendment 2025-02 to the Fiscal Year 2025-2026 Annual Action Plan; authorizing submission to the U.S. Department of Housing and Urban Development to apply for a $15 million Section 108 Loan to fund a loan pool for non-profit developers of affordable housing for land acquisition and acquisition of manufactured homes to support the development of affordable housing; and authorizing the City Manager or designee to sign all necessary implementing documents required by HUD (Subject to Mayor’s Veto)
Body
RECOMMENDATION
Staff recommends the City Council obtain the views and comments from interested persons regarding Substantial Amendment 2025-02 and Section 108 Loan Application for land acquisition and acquisition of manufactured homes to support the development of affordable housing; thereafter adopt Substantial Amendment 2025-02 to the 2025-2026 Annual Action Plan; and authorize submission of Substantial Amendment 2025-02 and Section 108 Loan Application to HUD.
EXECUTIVE SUMMARY
HUD Section 108 Loan proceeds will be used to fund an Affordable Housing Development Loan Pool. Funds will be made available city-wide with a preference in high-opportunity areas. To secure this financing, HUD requires an approved Substantial Amendment to the 2025-2026 Annual Action Plan and an authorized submission of a Section 108 Loan Application.
BACKGROUND
In its 2025-2029 Consolidated Plan, City residents identified affordability as the primary housing issue facing low-and moderate-income residents. The consolidated plan also identified the need for increasing access to safe and affordable housing through development and acquisition. To meet this need, the City of Fresno is proposing to apply for a Section 108 Loan Guarantee to fund a loan pool for non-profit developers of affordable housing for land acquisition and acquisition of manufactured homes to support the development of affordable housing through Substantial Amendment 2025-02 to the 2025-2026 Annual Action Plan.
The total amount available via the Section 108 Loan Guarantee program is equal to five times the City’s current annual CDBG entitlement less any unpaid principal on prior loans. The City can borrow up to $15,494,680 calculated as follows:
$35,494,680 (five times the City’s current annual CDBG entitlement of $7,098,936)
- $20,000,000 (less prior loan for the development of the Senior Activity Center)
$15,494,680 (amount available)
The City is proposing to make a substantial amendment to its Program Year 2025 Annual Action Plan to apply for a $15 million Section 108 Loan for land acquisition and acquisition of manufactured homes to support the development of affordable housing
To access the $15 million Section 108 financing, the City proposes to pledge a portion of its future CDBG grants (Program Years 2026-2046) as collateral for repayment. The City proposes to use the maximum repayment period allowable, twenty years, to minimize the potential reduction of CDBG grant funds in any given year. In the event the United States Congress terminates the CDBG program prior to loan payoff, the City pledges the subject land and improvements as collateral. An appraisal will be completed to ensure that the property and improvements have a current loan-to value ratio that does not exceed HUD’s 80% threshold. In the event the property and improvements do not meet this requirement, the City will work with HUD to find additional collateral to secure the loan.
To submit a substantial amendment to HUD, the City must follow its Citizen Participation Plan which includes publishing the draft substantial amendment for a 30-day public comment period. The list below provides the citizen participation component of the process.
Citizen Participation
• August 30, 2026: Public Notice distributed via Fresno Bee
• August 31, 2026: Public notice distributed on social media, through the Housing and Community Development Division (HCDD) email distribution list
• August 31, 2026: Draft documents published to HCDD webpage for 30-day public comment period
• September 30, 2026: End of 30-day public comment period
• October 8, 2026: Public Hearing
ENVIRONMENTAL FINDINGS
This is not a project for purposes of CEQA pursuant to CEQA guidelines Section 15378 and is exempt for NEPA purposes pursuant to 24 CFR 58.34.
LOCAL PREFERENCE
Local preference is not applicable because of the use of federal funding.
FISCAL IMPACT
Adoption of Substantial Amendment 2025-02 will allow the City to apply for $15 million in Section 108 Loan funds for land acquisition and the acquisition of manufactured homes to support the development of affordable housing.
Attachment: Resolution - Substantial Amendment 2025-02