TO: Mayor and Members of City Council
THRU: Kelly Strickland, Assistant City Manager
FROM: Christopher Cauley, Director of Economic and Community Development
Jeffrey Morin, Housing Program Manager
DATE: August 11, 2025
RE:
Title
Authorize West Cumberland Apartments, Phase 2, Affordable Housing Loan Commitment
end
COUNCIL DISTRICT(S):
Council District(s)
District 7
b
Relationship To Strategic Plan:
GOAL IV: The City of Fayetteville will be a highly desirable place to live, work and recreate.
• 4.5: To ensure a place for people to live in great neighborhoods
• 4.6: To reduce poverty and homelessness
Executive Summary:
City Council is asked to approve the issuance of a Loan Commitment Letter in the amount of $1,000,000 for the development known as West Cumberland Apartments, Phase 2. This commitment will be good until August 11, 2026, with a six-month extension allowed at the City Manager’s discretion.
West Cumberland Apartments, Phase 2 is a 72-unit affordable housing community, which will include five (5) HOME-assisted rental units
Background:
SEML Development, LLC., a private developer, is constructing a 72-unit affordable housing community, which will include five (5) HOME-assisted rental units. The project site is a currently vacant parcel located near 8103 Raeford Road, and this phase represents a continuation of an existing development.
The funding request of $1,000,000 would be provided from the City’s annual allocation of HOME funds. The loan would carry a 1% interest rate and be fully amortized over 20 years.
On April 22, 2024, City Council approved the 2024-2025 U.S. Department of Housing and Urban Development (HUD) Annual Action Plan (AAP), which included the issuance of a conditional commitment letter for this project. The commitment included $600,000 from HOME Investment Partnership funds and $400,000 from HOME-ARP to support the project’s Low-Income Housing Tax Credit (LIHTC) application to the North Carolina Housing Finance Agency (NCHFA). This original proposal also planned for a 48-unit development which was adjusted to 72 units prior to application to the NCHFA.
Since that time, it has been determined that the project would be better served if the entire $1,000,000 commitment came exclusively from Home Investment Partnership Funds (HOME) and the final commitment letter will be revised to include the new 72-unit size.
Issues/Analysis:
The loan commitment letter will serve as the basis for drafting legal documents to secure the City’s investment. These documents will be executed at loan closing, with the City represented by Banks Law Firm as outside legal counsel.
Budget Impact:
The City of Fayetteville receives annual entitlement funding from the HOME Program. The program currently has approximately $3 million available, with approximately $2 million already committed to projects previously approved or reviewed by City Council.
Options:
• Authorize a loan commitment letter and subsequent loan documents in the amount of $1,000,000 from HOME Funds to West Cumberland Apartments, Phase 2.
• Do not authorize the loan commitment letter and documents.
• Direct Staff to some other action.
Recommended Action:
Staff recommends that Council move to authorize a loan commitment letter and subsequent loan documents in the amount of $1,000,000 from HOME Funds to West Cumberland Apartments, Phase 2.
Attachments:
West Cumberland Phase 2 Commitment Letter