Housing Trust of Sonoma County

Description

Housing Trust of Sonoma County helps to produce homes accessible to low and moderate income people in Sonoma County through the development of dedicated revenue sources to leverage private and public funds to help create:

1. Rental Apartments serving households with incomes up to 80% of the area median income;
2. Special Needs and Homeless facilities and programs serving households with incomes up to 80% of the median; and
3. Ownership homes serving households with incomes as high as 120% of the median.

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Frequently Asked Questions

Why establish a Housing Trust Fund - what are the benefits?
"Housing trust funds are a local expression of the commitment to build and preserve housing and to find new ways of doing so. Most trust funds establish priorities depending on the community's needs and have competitive application procedures. Funds are often used to leverage additional funding: on average, each dollar spent by a trust fund has leveraged an additional seven. A majority of trust funds focus on helping create and preserve very-low and low-income housing." -from Building 2001: Housing Element Blueprint Ideas and Solutions for Sustainable and Affordable Future Bay Area Housing.

How do we do it?
Housing Trust of Sonoma County is developing permanent funding sources to meet the housing need throughout Sonoma County. Government and business funding is being sought to complement our private fundraising.

We are creating lending programs that provide predevelopment funding for projects. This includes a loan fund goal of up to $1 million dollars to provide short-term development assistance for eligible pre-development activities such as site control, technical assistance, site acquisition, and project feasibility.

We also are developing financing programs that support workforce-housing options in Sonoma County to assist very low, low and moderate-income households.

Who do we serve?
All Housing Trust of Sonoma County financial assistance targets the unmet housing need identified by the Bay Area Association of Governments. The greatest need is for very low and low-income housing. In light of this, 25% of the funding will be used for rental housing affordable to very low and low income households, 25% to special needs housing such as facilities serving the homeless and very low or low income disabled or youth, and 25% to low or moderate income ownership housing. These percentages represent the minimum allocations annually within the three basic categories. The remaining 25% of the funding can be allocated according to greatest need in any given year.

• Rental Housing
  
  • Lending programs that provide junior mortgage financing allowing beneficial construction and permanent financing.
    
  • Work with Sonoma County employers and governmental jurisdictions to explore development of housing on their lands. Leasehold site control can significantly lower development costs, resulting in lower rent levels.
    

• Special Needs Housing
  
  • Develop criteria for funding the acquisition, development, rehabilitation and operation of facilities providing services to very low and low-income homeless, people with disabilities, and youth.
    
  • Help to fund the acquisition and rehabilitation of existing rental complexes that provide rental units to very low or low-income households at affordable rent levels. This is particularly important as owners of apartment complexes "opt out" of FHA mortgages, causing substantial rent increases unless favorable financing can be found to protect the very low and low-income tenants.
    

• Ownership Housing
  • Develop a "silent second" mortgage program where the difference between an affordable sales price and the market rate is financed by a second mortgage from the Sonoma County Housing Trust or its designee. No payment would be required until the low or moderate-income household moved, sold the home, or retired the first mortgage. After the costs of sale were deducted from the sales proceeds, the equity would be split between the seller and the Trust, based on the equity contributions of each party.
    
  • Provide the administrative support and up-front costs for participation in a wide variety of below market rate mortgage financing targeted to first time homebuyers or the workforce. Such programs include HUD/FHA programs, California Housing Finance Agency (CalHFA), Fannie Mae, Farmer's Home Administration, mortgage revenue bonds and mortgage credit certificates. Others such as the Public Employee Retirement System loans or union funded programs which assist low and moderate-income households should also be considered.
    
  • Implement employer-specific funding programs established by individual companies for their employees. These companies, in compliance with federal regulations, subject to reasonable underwriting criteria, would develop the lending criteria.

Our Organizational History
Housing Trust of Sonoma County was formally established as a philanthropic nonprofit 501(c) 3 organization in July 2002, following authorization on July 11, 2002 by the Sonoma County Housing Coalition Consensus Council. The formal Trust organizing efforts were the initial result of direction given by about 150 individual and organization Delegates attending the two-day Housing Convention held at Friedman Center on August 24-25, 2001. By unanimous consent the Convention determined that the center piece of our new countywide affordable housing efforts should concentrate on forming a regional housing trust, similar in form and function to the one incorporated in Santa Clara County in 1997 in association with the Silicon Valley Community Foundation. To that end, the Consensus Council approved the following:

1. First, a new Expendable Fund contract was signed at Community Foundation of Sonoma County on September 11, 2002 with an initial contribution of $10,000 dated August 22 from the SALT Fund at Marin Community Foundation, and a pledge of $5,000 from Advance Fibre Communications, which was received in 2002;
2. Second, authorization was given to incorporate as both a 501(c)3 and be further regulated as a 509(a)3 support organization (S.0.) of the Sonoma County Housing Coalition;
3. Third, authorization was given to submit grant applications and send letters to qualify for funding from both the Community Foundation for start-up funding to incubate the new Trust, and to the Board of Supervisors for commitments to allocate matching funds for several donations and contributions being discussed with several private individuals and companies.

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Funding
Financial resources into and out of the Trust are directed by a separate Board of Directors appointed by Sonoma County Housing Coalition and other appointing authorities all working under the bi-annual policy guidance of delegates that attend the bi-annual Housing Convention. At the first Convention in 2001 the decisions made by an estimated 150 Delegates were to allocate a minimum of 25% each of all monies received annually by the Housing Trust into the following three broad categorical housing tenures, or types of projects and programs:

1. Rental Apartments serving households with incomes up to 80% of the median; and
2. Special Needs and Homeless facilities and programs serving households with incomes up to 80% of the median; and
3. Ownership homes serving households with incomes as high as 120% of area median income;

The remaining 25% of funds received annually would be allocated to any one, two, or all three categories based primarily on the criteria of maximizing the LEVERAGE in attracting and delivering the most outside private, public or philanthropic awards and contributions from sources out of the countywide area of Sonoma.

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