TO: Mayor and Members of City Council
THRU: Kelly Strickland, Assistant City Manager
FROM: Albert Baker, Interim Director, Economic & Community Development
Jeffrey Morin, Housing Program Manager
DATE: June 23, 2025
RE:
Title
Approval to Issue an Updated Conditional Funding Commitment Letter for Aspen Pointe, a Low Income Housing Tax Credit Development
end
COUNCIL DISTRICT(S):
Council District(s)
District 8
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:
Council is asked to approve the issuance of an updated Conditional Funding Commitment Letter for the proposed low income housing tax credit development, Aspen Pointe. The update would reflect the reduction of overall affordable units from 48 to 32.
Background:
On April 28, 2025 City Council approved the 2025-2029 U.S. Department of Housing and Urban Development (HUD) Five-Year Consolidated Plan and Annual Action Plan (AAP). This included the issuing of Conditional Commitment Letters for the projects listed below in the amount of $600,000 from Home Investment Partnership Funds (HOME) to support Low Income Housing Tax Credits (LIHTC) applications submitted to the North Carolina Housing Finance Agency (NCHFA).
|
Project Name |
Council District |
Total Development Cost |
Number of Units |
HOME Units |
|
Rosselle Commons |
District 2 |
$16,458,934 |
60 |
11 |
|
Hidden Grove |
District 7 |
$16,103,921 |
57 |
7 |
|
Aspen Pointe |
District 8 |
$15,102,458 |
48 |
4 |
Since that time, in an effort to reduce cost, the developer of Aspen Pointe, SEML, has updated their application to the NCHFA with a reduced total number of affordable units from 48 to 32, while keeping the commitment to producing four (4) HOME rental units on behalf of the City.
The property is a 12.92-acre vacant parcel adjacent to 8086 Raeford Road near West Park and the Vue apartments. Funding in the amount of $600,000 would come from the City’s annual allocation of HOME funds. The development requires a 1% interest loan fully amortized over 20 years and due in full at year 20.
Issues/Analysis:
The updated Conditional Commitment Letter will complete the updated application submitted to the North Carolina Housing Finance Agency.
The developer has submitted the updated application to the State of North Carolina Housing Finance Agency and is awaiting an updated Conditional Commitment Letter from the City of Fayetteville.
Without updated Conditional Commitment Letter, the application will be incomplete and the City will potentially lose the opportunity to gain four (4) HOME funded low income units, it will also lose the addition of the other 28 low income units.
Final funding will only be awarded to developers that are successful in being awarded Low Income Housing Tax Credits (LIHTC) in August of 2025. Routinely, Fayetteville receives one (1) LIHTC award per year.
The reduction in total units does not affect the four (4) HOME-funded units awarded to the city nor does it affect the loan terms listed in the Notice of Funding.
Budget Impact:
The City of Fayetteville annually receives entitlement funding from the HOME Program which currently has approximately $6M with approximately $4.2M committed to projects approved or reviewed by City Council.
Options:
• Authorize the updates to the conditional funding commitment letter for Aspen Pointe.
• Do not authorize the updates to the conditional funding commitment letter for Aspen Pointe.
• Direct Staff to some other action.
Recommended Action:
Staff recommends that Council move to authorize the issuance of the updated conditional funding commitment letter for Aspen Pointe.
Attachments:
Updated Aspen Pointe Conditional Funding Commitment Letter