SACRAMENTO, Calif. — The developers of a South Sacramento affordable housing project reported losing a bank loan for 216 low-income housing units, leading them to propose splitting the project into two phases.
Sacramento city councilmembers first approved the 'Kind Project South' in 2022 with a planned location at 7141 Woodbine Ave. along with a $8.4 million loan from the city.
Developers, who include Fulcrum Property Corp. and Urban Elements Inc. reported interest rates rose dramatically in 2022-23 and a bank loan they had lined up for the project was rescinded.
They have since reported securing financing with River City Bank to build 108 units, or half of the original 216 low-income housing units.
The city's $8.4 million loan would support only the first phase and Urban Elements Inc. founder Julie Young told ABC10 no additional funding would be required for the second phase of the project.
City officials anticipate cash flow from the first 108 low-income housing units will be enough to repay their loan and no further subsidy would be needed for the next phase.
But timing for the second phase of the project is uncertain and will be dependent on the operational and financial success of Phase 1, according to the developer's latest proposal.
Phase 1 of the project is expected to be completed in Fall 2025, Young said.
The Sacramento city council will hear the resolution to modify the project's plans at its Tuesday, April 9 meeting.
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