Eye Street Housing Plan Pairs a 55-Year Loan With a 20-Year HOME Affordability Requirement

Two timelines in one housing agreement

Bakersfield’s financing plan for 16 apartments at 1302 Eye Street contains two different clocks: a 55-year city loan and a 20-year HOME affordability period after completion. What’s the Scoop With Broach compared the September 16 council packet’s staff report, loan terms and development budget to identify what the public contribution buys and how it is supposed to come back.

The packet proposes up to $2.63 million in federal HOME money for Golden Empire Affordable Housing Inc. II. Eleven apartments would be HOME-assisted; five would use other project financing. The development calls for one-bedroom homes, with eight units serving households at or below 30 percent of area median income and eight at or below 50 percent. The different loan and affordability periods do not establish that rents may become unrestricted after year 20: other agreements or restrictions may also apply.

The budget and our calculation

Exhibit B pairs the HOME loan with $600,000 from Kern Regional Center, producing a projected $3.23 million development budget. Dividing $2.63 million by $3.23 million puts the HOME share at 81.4 percent. The whole-project budget divided by 16 homes is $201,875 per apartment. These are financing-plan ratios, not audited final construction costs or an allocation of identical costs to every unit.

Repayment is conditional on residual receipts

The loan carries 3 percent simple interest over 55 years. Its annual payment mechanism gives the city half of residual receipts after specified expenses, debt service and reserves; a negative calculation produces no residual-receipts payment. The agreement applies payments to interest before principal. A loan authorization therefore does not mean the city will receive equal annual principal installments.

The agreement calls for annual reporting, including financial statements and residual-receipts information. Those records will be necessary to distinguish a properly calculated zero payment from an unexplained failure to pay. City staff identifies federal HOME allocations as the funding source and says the agreement does not affect the General Fund. That funding source does not eliminate the obligation to account for the public money.

October is a scheduled start, not a verified groundbreaking

The attached schedule targets construction beginning in October 2026, completion in November 2027 and full occupancy in January 2028. Those dates make the financing relevant now, but this review did not verify construction activity, disbursements or occupied apartments.

The accountability question is whether subsequent public reporting will connect the loan balance, annual residual-receipts calculation, affordability compliance and actual delivery dates. This is an independent analysis of the agenda packet, not a claim that the attached agreement was executed on those terms. We did not obtain the final executed loan, inspect the property or interview the developer. The packet establishes the proposed terms and benchmarks against which later performance can be checked.