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Home My WebLink AboutAgendaPacket_ Final_SKHHP_AdvisoryBoard_2025_11_6 SKHHP Advisory Board November 6, 2025 3:30 – 5:30 PM Zoom Meeting Zoom Link: https://us06web.zoom.us/j/89734407973?pwd=cnlISFU4dXFJaFN5TGIwTWlxZHlNZz09 Meeting ID: 897 3440 7973 Password: 981696 Phone: 253-215-8782 Time Agenda 3:30 Welcome / Introductions / Opening 3:35 October 2, 2025 Meeting Minutes 3:40 SKHHP Executive Board October Meeting Update 3:45 SKHHP Housing Capital Fund Application Evaluation 5:00 SKHHP Housing Capital Fund Recommendation 5:20 Updates / Announcements • SKHHP Advisory Board December Special Meeting 5:30 Closing Page 1 of 1 SKHHP Advisory Board Meeting October 2, 2025 MINUTES I. CALL TO ORDER Dorsol Plants called the meeting to order at 3:34 PM. ROLL CALL/ESTABLISHMENT OF QUORUM Advisory Board members present: Kent Hay, Hamdi Abdulle, Angela Weikel, Dr. Damarys Espinoza, Kathleen Hosfeld, Menka Soni, Rumi Takahashi, Phoebe Anderson-Kline, Ziquora Banks. Other attendees: Claire Goodwin, SKHHP; Dorsol Plants, SKHHP; Ryan Makinster, Habitat for Humanity SKKC; Amanda McElvaney; WaFd Bank. II. SEPTEMBER 4, 2025 MEETING MINUTES Kathleen Hosfeld motioned to approve the September 4, 2025 minutes, seconded by Kent Hay. Motion was approved. (9-0) IV. SKHHP LEGISLATIVE FORUM UPDATE Dorsol Plants reported on the SKHHP Legislative Forum held on September 19, 2025. Kathleen Hosfeld provided her perspective on the event. V. SKHHP HOUSING CAPITAL FUND APPLICATION REVIEW Claire Goodwin and Dorsol Plants reviewed the six applications submitted for the 2025 SKHHP Housing Capital Fund. The Board engaged in a detailed discussion of each project and developed a list of questions for SKHHP staff to submit to the applicants VIII. UPDATES & ANNOUNCEMENTS Dorsol Plants informed the Board that the evaluation forms for the 2025 Housing Capital Fund applications are due on October 23, 2025. IX. CLOSING/ADJOURN Claire Goodwin adjourned the meeting at 5:26 PM. ____________________________ Dorsol Plants, Program Coordinator Page 1 of 22 Memorandum South King Housing and Homelessness Partners TO: SKHHP Advisory Board FROM: Claire V. Goodwin, SKHHP Executive Manager DATE: November 6, 2025 RE: 2025 SKHHP Housing Capital Fund – Project Application Summaries OVERVIEW 2025 represents the fourth annual funding round of the SKHHP Housing Capital Fund made possible by pooling resources among SKHHP member jurisdictions. Ten member cities pooled funds for the Housing Capital Fund this year and contributions totaled $3,926,340. Contributions sourced from SHB 1406 totaled $883,725 and those sourced from HB 1590 totaled $3,042,615. With the remaining unused funds from the 2024 funding round and the 2024 interest earnings from those cities pooling funds this year, SKHHP is making $3,974,000 available in the 2025 funding round. This is represented under scenario 2 in Table 1. SKHHP received six applications for funding representing over $11.4 million in requests to develop or preserve 494 units of housing. Summaries of the projects are described in this memo. Included as an attachment is a comparison chart of the construction start dates. Given a variety of factors impacting SKHHP’s funding available this year, the Advisory Board will be asked to develop a recommendation for four funding scenarios. Those are included in the table below. Table 1: Project Applicants with Funding Eligibility Project sponsor and name Location # of units Project type Amount requested HB 1590 eligibility SHB 1406 eligibility Archdiocesan Housing Authority – Franciscan Apartments Burien 39 Rehabilitation Rental $2,500,000 ✓ ✓ African Community Housing & Development – African Diaspora Cultural Anchor Village SeaTac 129 New Construction Rental $3,500,000 ✓ ✓ St. Stephen Housing Association – Steele House Renton 6 New Construction Rental $1,820,850 ✓ ✓ Mental Health Housing Foundation – Steel Lake Federal Way 20 New Construction Rental $1,500,000 ✓ ✓ Bellwether Housing – Renton Sage Renton 284 Rehabilitation Rental $1,210,102 ✓ Multi-Service Center – Maple Lane Estates Kent 16 Rehabilitation Rental $922,000 ✓ TOTAL REQUEST BY ELIGIBILITY $11,452,952 $9,320,850 $11,452,952 TOTAL AVAILABLE: Scenario 1 (2025 contribution) $3,474,000 $2,552,000 $922,000 TOTAL AVAILABLE: Scenario 2 (2025 contribution + Maple Valley) $3,974,000 $3,052,000 $922,000 TOTAL AVAILABLE: Scenario 3 (2025 contribution + Maple Valley + TWG) $5,914,000 $4,992,000 $922,000 TOTAL AVAILABLE: Scenario 4 (2025 contribution + TWG) $5,414,000 $4,492,000 $922,000 Page 2 of 22 BACKGROUND At the October 2, 2025 SKHHP Advisory Board meeting, the Advisory Board began the review of the six project applications submitted to the 2025 funding round of the SKHHP Housing Capital Fund. A recommendation on which projects to fund is anticipated at the November 6, 2025 Advisory Board meeting for the Executive Board’s consideration at their November 21, 2025 meeting. PROCESS ATTACHMENTS 1. Comparison of construction start dates Advisory Board recommendation (November 6, 2025) Executive Board finalizes recommendation (November 21, 2025) Member Councils approve funding recommendation (January-March 2026) Page 3 of 22 1. Archdiocesan Housing Authority – Franciscan Apartments Funding request: $2,500,000 Eligibility of SKHHP Funding Sources (1590/1406): HB 1590 and SHB 1406 Address: 15237 21st Ave SW, Burien, 98166 PROJECT SUMMARY Franciscan Apartments consists of a three-story residential building containing 38 one-bedroom units of rental housing for seniors aged 62 and over who earn up to 50% Area Median Income (AMI). The property was originally constructed in 1983 under HUD’s Section 202 Supportive Housing for the Elderly program and is in need of rehabilitation. All housing units are subsidized through a Section 8 Housing Assistance Payments (HAP) contract. The proposal consists of replacing a failing copper domestic supply line; roof replacement and HVAC improvements; rehabilitation of every unit including new cabinetry, countertops, flooring, paint, low flow plumbing fixtures and energy efficient lighting and appliances; rehabilitation of four ADA units’ bathrooms to comply with ADA standards; elevator repair; rehabilitation of common areas; and loan repayment to the Catholic Communities Foundation from the original construction loan on the property. In addition, the ground floor will be reconfigured to create one additional ADA rental unit. The proposal uses a “rolling rehab” model for tenant relocation to minimize impacts to residents. The property is within 0.2 miles of shopping, a post office, a convenience store, a coffee shop, Lake Burien, and public transportation. Franciscan Apartments are considered an independent living community, although a part-time on-site manager and two maintenance workers serve as staff. Archdiocesan Housing Authority (AHA), a Washington nonprofit, is the current owner and manager of the property. Catholic Community Services of Western Washington’s (CCS) Real Estate Development Center is the Developer. AHA is applying for financing under HUD’s Section 221(d)(4) program to finance rehabilitation of the building. CCS, on behalf of AHA, is applying for secondary financing through SKHHP and King County. SKHHP 1590 funds could support the entire request and would be used to support: • Repayment of an existing loan on the property which must be repaid as part of the rehabilitation. • Rehabilitation and construction, softs costs, and other development costs. OBSERVATIONS, ISSUES, AND CONCERNS • The Sponsor is an experienced owner and developer of affordable housing in the region with six other projects in active use and four projects in the pipeline. • Owner submitted two other applications for funding this funding round for other projects, however, Franciscan Apartments is the priority. • The underwriting benchmark in the SKHHP Addendum related to DSCR is lower than required due to an FHA loan underwriting standard; and operating expenses per unit per year (PUPY) are $7,578 compared to the $8,000 benchmark due to an Allied Residential quote for services as senior housing typically has a lower PUPY. Page 4 of 22 • A detailed relocation plan created to meet HUD regulations was included in the application. The project would use a “rolling rehab” model and tenants will generally not be relocated into the same unit. Instead, they will start with a “stack” of vacant units and rehabilitate those and then move tenants into a newly renovated unit. The moves into the renovated unit are permanent. The sponsor says they have successfully used this technique in two other three-story buildings since 2024. Up to 13 residents may be temporarily relocated off-site. • A few years ago, the property was upgraded with mini split heat pumps and water efficient toilets. Most of the cabinets and counter tops are original and are nearing the end of their useful lives. The property has copper domestic water piping and is reaching the end of its useful life. • The existing loan on the property which must be paid off as part of the rehabilitation, is a loan made by Catholic Communities Foundation (CCF). The CCF loan was made when AHA prepaid the Section 202 loan which was the original financing that supported construction of the project in the 1980s. As the HUD loan had high interest rates, the ability to prepay the loan reduced the debt on the building. CCF has loan policies to protect the corpus and CCF cannot make a subordinate loan subject to cash flow as it would impermissibly put the corpus at risk. As part of the rehabilitation financing, the HUD loan would be senior. • A Resident Services Coordinator Program helps residents continue to live independently and provides assistance and connection with social opportunities, programs and resources. • Other elements related to accessibility include brighter, energy efficient lighting, thermostatic controls on showerheads, and grab bars in all units. Two units will be provided with accessibility features for persons with hearing or visual impairments. These features include strobe fire alarms and flashing doorbells. • Common areas include Resident Services Coordinator office space, community room, laundry, public restrooms and a library. These areas will be modernized as part of the rehabilitation. • There are no known environmental issues on the property. An asbestos study is required by HUD, and any areas of concern will be remediated during renovation. The same applies to any mold uncovered during construction. • The average resident age in the building is 78 and the average annual income is $16,447. • There are multiple languages spoken at the building including English, Vietnamese, Spanish, Amharic, Romanian and Russian. • The wait list is five to six years long. • Turn-over at property is one to two units per year. • All tenants remain eligible once admitted to the building. Under HUD regulations tenants above income limits will be charged full unassisted rent but may remain in their unit. Should SKHHP fund this project, we will need to add a special condition to match HUD’s position. • The project is subject to Davis Bacon wage rates triggered by Section 221(d)4 financing. • As the project is financed with Section 221d(4) funds, the scope of work ultimately must be approved by HUD. • The project has an existing HAP contract for 38 units. The new unit added will not be covered by the HAP contract, but will still be income-restricted up to 50% AMI. • Property uses HUD-approved house rules. • AHA self-manages the property, however before rehabilitation begins, they intend to transfer the property management duties to a third-party such as Allied Residential. Page 5 of 22 • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including connections and direct experience with populations the project is proposing to serve, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to transit and other amenities, environmental benefit due to its proximity to dense tree canopy, leverage of private and public investment, and preservation. Total Units By Size and Affordability AMI 1-bedroom Total Units 50% 39 39 Total Units 39 39 PROJECT SCHEDULE Activity Date Site Control 1981 Building Permits Issued 5/1/2026 Begin Construction 7/1/2026 Issued Certificate of Occupancy Ongoing – as units are rehabilitated End of Construction 11/1/2027 FUNDING SOURCES AND USES Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2025) $2,500,000 Applied Lument $5,418,000 Committed King County $1,400,000 Applied Reserves $347,800 On-Hand TOTAL $9,665,800 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $1,099,638 -- Construction $7,281,585 -- Soft Costs $816,904 -- Other Development Costs $467,673 -- TOTAL $9,665,800 $247,841 Page 6 of 22 DEVELOPMENT TEAM Sponsor: Archdiocesan Housing Authority Developer: Real Estate Development Center, Catholic Community Services Western WA Architect: Blue Brook Architecture Property Management: Catholic Housing Services Page 7 of 22 2. African Community Housing & Development – African Diaspora Cultural Anchor Village Funding request: $3,500,000 Eligibility of SKHHP Funding Sources (1590/1406): HB 1590 and SHB 1406 Address: 15005 Military Road S, SeaTac, 98188 PROJECT SUMMARY The African Diaspora Cultural Anchor Village is a 129-unit new construction 4% Low-Income Housing Tax Credit rental project with a mix of studios to four-bedrooms for households earning 30-60% AMI. 55 units will be set-aside for families with children and 13 units set-aside for households with a physical disability. The project aims to respond to community members’ desire for a central anchor for South King County’s African Diaspora immigrant and refugee community. This project is a partnership between African Community Housing & Development (ACHD) and Mercy Housing Northwest. Four parcels represent the project across 2.2 acres acquired by ACHD in 2023. The parcels are located in SeaTac, 0.4 mile north of the Tukwila International Boulevard Link light rail station, making this a prime transit-oriented development location. Existing structures include two houses and commercial structures to be demolished. ACHD is seeking a Binding Site Plan and Development Agreement with the City of SeaTac to have all four parcels considered as a single development allowing for consistent zoning standards to be applied throughout the site and reducing the overall parking count. The seven-story building will house residential units on levels three through seven while the first two levels will include a community center event space, retail space, and office space for ACHD. Level two will include a childcare center and classroom space for ACHD after-school programming. Additionally, there will be outdoor gardening and recreation space. Level three will have a courtyard in addition to the residential units. Below ground parking will be provided on part of Level 1. SKHHP 1590 funds could support the 13 units set aside for individuals with a physical disability. OBSERVATIONS, ISSUES, AND CONCERNS • Based on the third-party construction report ordered by SKHHP, the construction budget is 28% below the average cost of recent buildings of this type. This suggests that the project has a medium to high risk of final construction costs exceeding the budget and requiring significant use of the contingency. • Several underwriting benchmarks were not met: a LOI to support the lower DSCR at 1.15 compared to the 1.20 benchmark is forthcoming; construction contingency was budgeted at 5% when 10% is required; and operating expenses excluding reserves and resident services totaled $7,738 when $8,000 was required. • This will be ACHD’s first major development project. • ACHD is a new developer so there is no history to draw on in terms of capital development success or challenges. A Joint Development Agreement between ACHD and Mercy Housing is anticipated by early 2026. ACHD has five projects in the pipeline in predevelopment – three are homeownership projects. Page 8 of 22 • The vinyl tile sampled from the living room of the accessory dwelling unit intended to be demolished at 15039 Military Rd S was found to contain asbestos. ACHD reports that they have received multiple bids from demolition contractors that include the asbestos remediation scope of work and they will ensure all permits are granted prior to commencing. • The Sponsor is making several substantially large financial requests to public funders. • There is a Development Agreement with the City of SeaTac forthcoming requesting eliminating the 20-ft max set-back requirement, reducing the percentage of the building that requires overhead weather protection to just above entryways, and requesting a variance on reducing the parking count and building heights on existing zoning. • The City of SeaTac is a central hub for the African Diaspora immigrant and refugee community, who are facing increasing displacement pressures. • The vision for this project came together during a series of community meetings from 2018- 2021. • The African Diaspora immigrant and refugee community experiences a variety of barriers to housing. ACHD reports that racism and xenophobia have led to inequitable treatment when accessing housing opportunities and have played a role in negative interactions with landlords and property managers. Large average family sizes and lack of affordable family-sized units in King County has meant that families are often forced to rent multiple units or to send older children to live with relatives. • Approximately 20 ADA units are anticipated for the project. • The project is anticipated to provide 174 parking stalls. • Property management will be addressed by Mercy Housing Management Group. • An on-site resident services program will be run by Mercy Housing Northwest. • ACHD is considered a “By and For Organization” by the Department of Commerce’s Housing Division. Department of Commerce describes By and For Organizations as the following: “By- and-For Organizations are operated by and for the communities they serve. Their primary mission and history is serving a specific community. They are culturally based, directed, and substantially controlled by individuals from the population they serve. At the core of their programs, these organizations embody the community’s central cultural values. In the affordable housing context, these communities must have demonstrated disproportionate representation in homelessness, housing instability, and housing affordability.”1 • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including collaboration with local community-based organizations, connections and direct experience with populations the project is proposing to serve, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to transit and other amenities, providing rental housing for households earning 0-30% AMI, geographic distribution, leverage of private and public investment, and racial equity. 1 Department of Commerce’s Capacity Building, Outreach, and Support Program: https://www.commerce.wa.gov/multifamily-rental- housing/cbos-team/ and https://app.smartsheet.com/b/form/06feee2dc8644602a884beb5cb4081e2 Page 9 of 22 Total Units By Size and Affordability AMI Studio 1-bedroom 2-bedroom 3-bedroom 4-bedroom Total Units 30% 1 2 4 6 1 14 40% 1 5 12 13 3 34 50% 2 8 13 16 4 43 60% 1 6 14 14 2 37 Manager Units -- -- 1 -- -- 1 Total Units 5 21 44 49 10 129 PROJECT SCHEDULE Activity Date Site Control 12/1/2023 Building Permits Issued 9/25/2026 Begin Construction 10/12/2026 Issued Certificate of Occupancy 6/1/2028 Begin Lease-Up 6/2/2028 Projected First LIHTC Year Start 6/1/2028 FUNDING SOURCES AND USES Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2025) $3,500,000 Applied 4% LIHTC $36,191,383 Will Apply 3/2026 King County (2024) $950,055 Committed King County (2025) $9,531,499 Applied Commerce HTF $12,000,000 Applied CHIP $1,000,000 Applied Perm Debt $12,929,768 State Appropriation $3,880,000 Committed Amazon $9,500,000 Will Apply Deferred Fee $2,500,000 Contributed Fee $2,000,000 RESIDENTIAL TOTAL $93,982,705 ACHD Sponsor Loan (Non-Residential) $18,184,525 4% LIHTC (Non-Residential) $2,686,201 Will Apply 3/2026 TOTAL $114,853,431 Page 10 of 22 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $6,852,926 -- Construction $62,578,467 -- Soft Costs $15,097,811 -- Other Development Costs $9,453,501 -- RESIDENTIAL TOTAL $93,982,705 $728,548 Non-Residential Costs $20,870,725 -- TOTAL $114,853,430 -- DEVELOPMENT TEAM Sponsor: African Community Housing & Development Developer: Mercy Housing Northwest Architect: SMR Architects Construction: WG Clark Legal: Perkins Coie Property Management: Mercy Housing Management Group Page 11 of 22 3. St. Stephen Housing Association – Steele House Funding request: $1,820,850 Eligibility of SKHHP Funding Sources (1590/1406): HB 1590 and SHB 1406 Address: 3001 NE 16th St., Renton, 98056 PROJECT SUMMARY Steele House is proposed as a demolition and new construction rental project of six three-bedroom townhomes for families exiting homelessness or at risk of homelessness who earn up to 50% AMI. The property was purchased in 2016 and includes a duplex built in 1943 operating as transitional housing. The transitional housing program will end before the project begins so no relocation will be needed before demolition of the duplex. Most case management and supportive services will take place on-site, at the families’ housing unit. St. Stephen Housing and Way Back Inn merged in December 2024 and have become a single non-profit organization under the name St. Stephen Housing Association. The boards of both organizations have combined and former Way Back Inn Board Members, who have assisted in the Steele House project’s pre-development work, will remain involved to guide expansion plans. The project is located across the street from the Bezos Academy – North Highlands location, Meadow Crest Early Learning Center, and a playground. McKnight Middle School, Renton Highlands Park and Ride, multiple restaurants and retail stores along Sunset Boulevard, and a Rite Aid Pharmacy are all located within 0.5 mile radius. A grocery store is located within 0.6 mile radius. This is the second time the project sponsor has applied to the SKHHP Housing Capital Fund and the City of Renton has committed $500,000 to the project since the previous application was received. SKHHP funds sourced through HB 1590 are eligible to be used to support the entire SKHHP request. OBSERVATIONS, ISSUES, AND CONCERNS • St. Stephen Housing Association is a small developer and there are no other projects for which they applied this funding round. • All underwriting benchmarks were met in the SKHHP Addendum. • The project budgets $15,745 in operating expenses per unit per year which is a generous budget ($8,000 per unit per year is the minimum benchmark). • The proposal has been discussed for the past eight years including at the sponsor’s annual fundraisers. • Demolition will include lead paint remediation and asbestos testing of sheet vinyl. • Pending successful awards from SKHHP and Commerce, the project would be ready to begin construction in April 2026. • St. Stephen reports that the project will focus on Black, Indigenous, and People of Color (BIPOC) families, who are disproportionately impacted by homelessness due to systemic factors, and the goal will be to have four or five of the homes serving BIPOC households. Page 12 of 22 • All families offered housing through the project will be currently experiencing homelessness - Sponsor will use a tenant selection process that prioritizes families with children who are experiencing homelessness and have a household income below 30% AMI. • The Sponsor has a long-standing history of working with homeless families and is well- established within the local crisis housing community. • At least one member of St. Stephen’s Board, the Sponsor’s primary development consultant, and 20% of St. Stephen’s staff have lived experience of homelessness. • St Stephen will affirmatively market the housing opportunity to residents considered least likely to apply. The project will be listed in the Homeless Management Information System (HMIS), but units will not be filled through Coordinated Entry. • Sponsor’s marketing strategy will involve collaborating with local housing and community organizations to inform them of available units and encourage referrals. • Families are interviewed to verify eligibility, including verification of children in the household, homeless status and income level. Sponsor’s housing stability planning with families is focused on identifying ways of increasing income and reducing barriers. Families work with their Case Manager to craft an individualized Housing Stability plan and will be re-evaluated over the course of the family’s stay. Case Managers help families connect to mainstream resources like employment, job training, education programs and financial counseling, food and financial assistance, childcare assistance, transportation, utilities, and other household and family needs. The Sponsor will accompany households to housing, court, school and other provider appointments. The Sponsor works with other providers to provide wrap-around care so that families get all the support they need. • Prior to merging, the Sponsor developed City Park Townhomes in Auburn in 2001 with funding from the Department of Commerce’s Housing Trust Fund, the King County Housing Finance Program, the Gates Foundation, and support from the City of Renton. • The operations staff will include one Housing Coordinator and one Maintenance Technician. • The timeframe for securing funding commitments for services will depend on the completion of the project’s construction, as many funding sources require evidence of progress or final project approval. Sponsor intends to pursue a diverse range of funding sources for services including from King County’s Operations, Rental, and Services funding, grants from the King County Regional Homelessness Authority, and funding opportunities from the City of Renton. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including connections and direct experience with populations the project is proposing to serve, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to transit and other amenities, environmental benefit due to its proximity to parks, providing rental housing for households earning 0-30% AMI, geographic distribution, leverage of private and public investment, and racial equity. Total Units By Size and Affordability AMI 3-bedroom Total Units 50% 6 6 Total Units 6 6 Page 13 of 22 PROJECT SCHEDULE Activity Date Site Control 1/21/2025 Building Permits Issued 4/15/2026 Begin Construction 4/16/2026 Begin Lease-up 3/2/2027 Issued Certificate of Occupancy 4/16/2027 FUNDING SOURCES AND USES Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2025) $1,820,850 Applied Sponsor Seller Note $295,000 Committed City of Renton $500,000 Committed Commerce HTF $1,000,000 Applied Sponsor Operations and Service Agreements $125,285 Committed Medina Foundation Grant $75,000 Committed TOTAL $3,816,135 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $295,000 -- Construction $2,527,168 -- Soft Costs $635,332 -- Other Development Costs $358,635 -- TOTAL $3,816,135 $636,023 DEVELOPMENT TEAM Sponsor: St. Stephen Housing Association Developer: Madden-Kim Consulting Architect: Daniel UMBACH Architect Property Management: St. Stephen Housing Association Page 14 of 22 4. Mental Health Housing Foundation – Steel Lake Funding request: $1,500,000 Eligibility of SKHHP Funding Sources (1590/1406): HB 1590 and SHB 1406 Address: 29020 and 29026 Military Road, Federal Way, 98003 PROJECT SUMMARY Mental Health Housing Foundation’s (MHHF) Steel Lake Affordable Housing is a 20-unit rental project for individuals with severe and persistent mental illness with incomes at 30% and 50% AMI. This is the first phase of a two-phased new construction project. The second phase would add an additional ten units for a total of 30 units. The first phase will construct four two-bedroom units and sixteen one- bedroom units, including one manager unit. The project will be owned, developed, and operated by MHHF. A live-in property manager will occupy one of the one-bedroom units, and all maintenance needs will be addressed through a shared superintendent and maintenance staff. Residents live independently, receiving services from community behavioral health providers offsite. The majority of tenants in the portfolio have case managers which may make home visits. When issues arise with tenants that may benefit from contact with the case manager, MHHF makes contact with the case manager. Due to municipal zoning restrictions, this project was originally planned as a permanent supportive housing (PSH) project but pivoted to the current proposal to comply with the City of Federal Way’s policy that PSH projects with more than three units be distanced at least 5,400 ft from each other.2 The new building will be a two-story walk-up with ten apartments on each level. The site will include a community gathering space, shared laundry facilities, management offices, outdoor seating areas, and parking. Two large grocery stores, drugstore and other shops and amenities are located across the street, as well as access to public transit. Laurelwood Park with open space is within 0.5 mile. MHHF acquired the parcels in December 2024. MHHF was organized and incorporated as a non-profit in 1990 to support those living with mental illness in their efforts to live independently. The founders were concerned about the lack of affordable housing for individuals with serious and persistent mental illness in King County. The organization has grown to own seven housing projects, with a total of 90 housing units, that vary from single family shared homes to small apartment buildings. SKHHP funds sourced through HB 1590 are eligible to be used to support the entire SKHHP request. OBSERVATIONS, ISSUES, AND CONCERNS • MHHF is a small developer with eight properties totaling 90 units and there are no other projects for which they applied this funding round. • All underwriting benchmarks were met in the SKHHP Addendum. 2 City of Federal Way permanent supportive housing and transitional housing code: https://www.codepublishing.com/WA/FederalWay/html/FederalWay19/FederalWay19215.html#19.215.070 Page 15 of 22 • The amount budgeted for operating expenses per unit per year was $8,750 ($8,000 was the minimum benchmark). • MHHF has longstanding relationships with multiple behavioral health agencies in King County, including Sound Behavioral Health, Navos, and Valley Cities, and will utilize those to seek referrals for residents of Steel Lake. • MHHF works closely with mental health care providers to let them know when an apartment is available. Marketing is done through a mix of social media and in person connection. Tenants are referred to MHHF by their mental health care provider. • Construction is anticipated to begin March 2027 which is further out than other projects. • The Sponsor received a waiver from Commerce to exceed the Housing Trust Fund cap on any single project at $5 million – MHHF’s request is $5.7 million. • Sponsor secured a $31,000 pre-development grant from Enterprise Community Partners, a commitment up to $60,000 in State funded technical assistance, an Impact Capital loan to purchase the site, and $44,000 commitment from MHHF to support the project’s operating reserves to be deposited once construction is complete. • Neighborhood notification is not required by the City of Federal Way, but the City’s planning staff have encouraged doing so. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including connections and direct experience with populations the project is proposing to serve, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to transit and other amenities, environmental benefit due to its proximity to a park, providing rental housing for households earning 0-30% AMI, geographic distribution, and leverage of private and public investment. Total Units By Size and Affordability AMI 1-bedroom 2-bedroom Total Units 30% 10 2 12 50% 5 2 7 Manager Units 1 -- 1 Total Units 16 4 20 PROJECT SCHEDULE Activity Date Site Control 12/23/2024 Building Permits Issued 2/1/2027 Begin Construction 3/15/2027 Begin Lease-up 1/1/2028 Issued Certificate of Occupancy 3/15/2028 Page 16 of 22 FUNDING SOURCES AND USES Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2025) $1,500,000 Applied Commerce HTF $5,732,155 Applied Federal Home Loan Bank $1,700,000 Applied King County $2,393,679 Applied Sponsor Pre-Development Grants $123,749 Committed CHIP $378,483 Applied TOTAL $11,828,066 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $710,000 -- Construction $8,910,608 -- Soft Costs $1,480,283 -- Other Development Costs $727,175 -- TOTAL $11,828,066 $591,403 DEVELOPMENT TEAM Sponsor: Mental Health Housing Foundation Developer: GS Consulting Architect: SMR Architects Legal: Fremont Law PLLC Property Management: Mental Health Housing Foundation Page 17 of 22 5. Bellwether Housing – Renton Sage Funding request: $1,210,102 Eligibility of SKHHP Funding Sources (1590/1406): SHB 1406 Address: 4455 NE 12th St., Renton, 98059 PROJECT SUMMARY Bellwether Housing’s Renton Sage Apartments consists of 284 rent restricted units across 29 buildings serving residents earning between 50-80% AMI in Renton. The property was acquired by Bellwether in 2022 with private funding from Amazon and a loan from Citibank to preserve naturally occurring affordable housing (NOAH). The proposal seeks funding to replace the roofs on six of the property’s 29 buildings – benefiting 52 households in this phase. Four building roofs have already been replaced and one is currently being replaced. An application to the Department of Commerce’s Housing Trust Fund was submitted this funding round to request additional funds to replace the remaining roofs of 18 residential buildings plus two leasing office buildings. The roof repairs must be completed before addressing other needs at the property. Bellwether has been in coordination with the King County Housing Authority to utilize their funding to do additional work, including energy-efficient insulation, ventilation upgrades, and installation of heat pumps. Roof replacement is the largest expense of the rehabilitation needs. Funding would be used for demolition of the existing roofing and repair of decaying structural joists as needed to install new insulation, sheathing, and roofing. The project is located within 0.2 miles from a bus stop connecting directly to the Renton Transit Center and within 0.4 miles of a large grocery store, several restaurants, a preschool, a dentist, and other amenities. An elementary school is located 0.6 miles away. Current covenants on the projects include 57 units at 50% AMI from the Washington State Housing Finance Commission; 78 units at 60% AMI and 149 units at 80% AMI from Amazon. A SKHHP award would apply rent restrictions for 50 years on 52 units (or the equivalent number of units where the number of roofs are replaced using SKHHP funds) with a covenant on the entire property. OBSERVATIONS, ISSUES, AND CONCERNS • The underwriting benchmark listed in SKHHP Addendum was not met on construction contingency at 12% compared to the 15% benchmark. Sponsor reports that because the project scope is limited to the replacement of the roofs and because they will have already completed five roofs replacements, they thought it was appropriate to reduce the contingency. • Bellwether has submitted applications for funding for two other rehabilitation projects and one new construction project. • The financial request to SKHHP exceeds the amount of SHB 1406 funds available and is the cost to replace six roofs. Five roofs would likely be able to be replaced with a $922,000 award. • The scope of work includes all aspects related to replacing a roof including, but not limited to: o Removal and disposal of existing roofing materials. o Removal and disposal of all existing roof sheathing and joist bay batt insulation. o Removal and disposal of all existing downspouts, straps and anchors. Page 18 of 22 o Removal and disposal of existing perimeter mansard parapet framing and (2) layers asphalt shingles. Sawcut end of roof joist flush for new parapet per drawings. o Remove and replace existing damaged roof framing members. o Drywall repairs as needed. o Air seal perimeter roof joists with rigid insulation and foam. o Provide and install all new metal cap flashing, single ply roofing membrane, vent pipe flashing, roof plywood sheathing, vapor barrier, and rigid tapered insulation. o Remove existing utility and bathroom ceiling exhaust fans and dispose. o Provide and install new ventilation fan, connect to existing power and switch, connect new metal ducting through roof, provide membrane flashing, and vent hood. • Asbestos-containing materials (ACMs) are present in the popcorn ceilings and wallboard joint compound, in addition to a limited number of units with vinyl flooring. If disturbed, remediation must occur prior to rehabilitation and be covered under the construction contingency. Disturbance of ACMs is any activity that disrupts the matrix, crumbles, or pulverizes ACMs or presumed ACMs, and includes activities such as sanding, grinding, or other methods that break, crumble, or disintegrate intact ACMs. • A visual inspection found less than one square foot of minor mold growth around the window of an assessed apartment. Bellwether has been replacing the fans and humidistats in the bathrooms and laundry rooms and are installing new ventilation where none was previously to properly remove moisture. To date, Bellwether has fixed 138 units and reports seeing substantial improvement. • Renton Sage houses 1.6% of Renton’s residents who earn up to 80% AMI (17,235). • The entire property contains 132 one-bedroom units and 152 two-bedroom units which are suitable for families. • The property serves a number of households coming directly from homelessness with referrals for qualifying households coming from community contacts including Renton Housing Authority, Mary’s Place, YMCA, and Vision House. • Bellwether has eight projects with 1,489 units placed in service. • 55% of Bellwether’s residents across their portfolio identify as BIPOC. The average income of a Bellwether household is less than 40% AMI. • Bellwether has found that in South King County, low-income individuals and families face increasingly limited housing options due to rising rents. • Bellwether has contracted with FPI Management/Asset Living to manage the property. • There is a full time on-site Property Manager/Community Director, Assistant Community Director, Leasing Manager, Maintenance Supervisor, and two Maintenance Technicians. A part- time Business Manager and Compliance Manager will work off-site. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including connections and direct experience with populations the project is proposing to serve, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to transit, childcare centers, and other amenities, geographic distribution, environmental benefit due to its proximity to a park, preservation, and racial equity. Page 19 of 22 Total Units By Size and Affordability AMI 1-bedroom 2-bedroom Total Units 50% 28 29 57 60% 34 48 82 80% 70 75 145 Total Units 132 152 284 PROJECT SCHEDULE Activity Date Site Control 9/20/2022 Building Permits Issued Issued separately for each roof Begin Construction 4/1/2026 FUNDING SOURCES AND USES Proposed Funding Sources by Amounts and Status Funding Source Proposed Amount Status SKHHP (2025) $1,210,102 Applied Commerce HTF $5,000,000 Applied Amazon $39,760,000 Original loan for acquisition Citi Community Capital $44,700,000 Original construction loan TOTAL $90,670,102 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $84,460,000 -- Construction $6,085,900 -- Soft Costs $124,202 -- Other Development Costs $0 -- TOTAL $90,670,102 $319,261 DEVELOPMENT TEAM Sponsor: Bellwether Housing Developer: Bellwether Housing Legal: Kantor Taylor Property Management: Asset Living/FPI Page 20 of 22 6. Multi-Service Center – Maple Lane Estates Funding request: $922,000 Eligibility of SKHHP Funding Sources (1590/1406): SHB 1406 Address: 1622 Maple Lane, Kent, 98030 PROJECT SUMMARY The Multi-Service Center’s (MSC) Maple Lane Estates contains 16 two-bedroom, one-bathroom units across four buildings serving households earning 30% and 50% AMI. The buildings were constructed in 1992 and MSC has owned the property since 1994. The renovations are proposed to include replacement of siding, gutters, downspouts, railings, windows, sliding glass doors, front entry door replacement, recoating tenant decks, painting, exterior HVAC alterations, re-grading areas adjacent to siding and replacement of exterior entry doors. SKHHP has funded the rehabilitation of two MSC projects as the sole funder: Victorian Place II in Des Moines and the White River Apartments in Auburn. This funding round, public funders at the County and State levels are making additional funding available specifically for rehabilitation. Those RFPs are anticipated to be released in January and this project would likely be eligible for those funds. OBSERVATIONS, ISSUES, AND CONCERNS • The underwriting benchmark was not met on maximum rents which are 4% under market rents with 10% under market rents as the benchmark; revenue escalation is at 4% rather than 2% as the Sponsor cited increasing rents each year. • SKHHP is listed as the only potential funder but Commerce and King County will be making funding available for preservation and rehab this funding round with RFPs forthcoming in January. • Should the project not receive SKHHP funds, the Sponsor could apply to others this round if desired. • MSC submitted requests for funding for two other projects, but didn’t indicate the priority level of those compared to Maple Lane Estates. • The proposed scope may be too ambitious for the amount of funding budgeted based on a previous SKHHP funded project. • Maple Lane is not connected to HMIS. • MSC owns and operates 1,168 units of affordable housing. MSC provides multiple housing program services such as rental assistance, emergency housing, transitional housing, and permanent supportive housing. • Allied Residential provides the day-to-day management of the Maple Lane Estates Apartments to rent, lease, and operate. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including connections and direct experience with populations the project is proposing to serve, addressing the needs of populations most disproportionately impacted by housing costs, providing rental housing for households earning 0-30% AMI, advancing economic opportunity due to its proximity to transit, environmental benefit due to its proximity to open spaces, and preservation. Page 21 of 22 Total Units By Size and Affordability AMI 2-bedroom Total Units 30% 5 5 50% 11 11 Total Units 16 16 PROJECT SCHEDULE Activity Date Site Control 11/16/1993 Building Permits Issued 4/30/2027 Begin Construction 5/1/2027 Issued Certificate of Occupancy 12/31/2027 FUNDING SOURCES AND USES Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP (2025) $922,000 Applied Property Cash Flow $30,969 TOTAL $952,969 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit Acquisition $4,000 -- Construction $869,510 -- Soft Costs $72,459 -- Other Development Costs $7,000 -- TOTAL $952,969 $59,561 DEVELOPMENT TEAM Sponsor: Multi-Service Center Construction: American West Contracting Legal: Kantor Taylor PC Property Management: Allied Residential Page 22 of 22 Attachment 1: Comparison of Construction Start Dates by Project 2025 SKHHP Housing Capital Fund Recommendation Claire V. Goodwin, SKHHP Executive Manager November 6, 2025 SKHHP Advisory Board Advisory Board Recusals & Disclosures Name Organization Conflict of Interest Hamdi Abdulle ACHD Organization applied to the fund Phoebe Anderson-Kline MSC Organization applied to the fund Name Organization Disclosure Kent Hay City of Auburn City refers clients to one of the applicants Rumi Takahashi SMR Architects Organization worked with two applicants 2 Housing Capital Fund Timeline Nov 2025 •Advisory Board makes a recommendation •Executive Board finalizes recommendation Jan-March 2026 •SKHHP Member Councils approve recommendation 3 New Information 4 •Additional contribution to Housing Capital Fund •Maple Valley: $500,000 (HB 1590) •Formal action anticipated Nov. 17 •TWG update •Executive Board waiting on outcome of application to Amazon •No project without Amazon award •Property is currently on the market •Potential to reallocate $1,940,000 (HB 1590) 2025 Applications Received 5 Project sponsor and name Location # of units Project type Amount requested HB 1590 eligibility SHB 1406 eligibility Archdiocesan Housing Authority – Franciscan Apartments Burien 39 Rehabilitation Rental $2,500,000  African Community Housing & Development – African Diaspora Cultural Anchor Village SeaTac 129 New Construction Rental $3,500,000  St. Stephen Housing Association – Steele House Renton 6 New Construction Rental $1,820,850  Mental Health Housing Foundation – Steel Lake Federal Way 20 New Construction Rental $1,500,000  Bellwether Housing – Renton Sage Renton 284 Rehabilitation Rental $1,210,102  Multi-Service Center – Maple Lane Estates Kent 16 Rehabilitation Rental $922,000  TOTAL REQUEST BY ELIGIBILITY $11,452,952 $9,320,850 $11,452,952 TOTAL AVAILABLE: Scenario 1 (2025 contribution)$3,474,000 $2,552,000 $922,000 TOTAL AVAILABLE: Scenario 2 (2025 contribution + Maple Valley)$3,974,000 $3,052,000 $922,000 TOTAL AVAILABLE: Scenario 3 (2025 contribution + Maple Valley + TWG)$5,914,000 $4,992,000 $922,000 TOTAL AVAILABLE: Scenario 4 (2025 contribution + TWG)$5,414,000 $4,492,000 $922,000 Evaluation Results Project Average Score African Community Housing & Development – African Diaspora Cultural Anchor Village 87 Bellwether Housing – Renton Sage 86 St. Stephen Housing Association – Steel House 86 Multi-Service Center – Maple Lane Estates 80 Archdiocesan Housing Authority – Franciscan Apartments 77 Mental Health Housing Foundation – Steel Lake 77 6 Items to Consider 7 •Need funding recommendation on all projects •Dollar amount and source •Funding rational •Additional special conditions •Prefer to contract for at least ~$1M •Shovel-ready vs early planning stages •Dependence on other funding commitments •Full funding vs partial funding Full Funding vs Partial Funding 8 •The project would close the funding gap by reducing the developer fee, securing a better interest rate, reducing the project's scope, fundraising, or applying for additional funding. •King County lacks fund source to support *Archdiocesan Housing Authority – Franciscan Apartments •The project could experience delays if only partially funded. •Must consider bigger picture of other funding sources •Partial award would show support –could apply again next year *African Community Housing & Development – African Diaspora Cultural Anchor Village •The project could not move forward with partial funding. •Possibility to work with Commerce or Renton on modified funding request *St. Stephen Housing Association – Steel House Full Funding vs Partial Funding 9 •The project would seek other sources of funding, such as applying for a State budget direct appropriation, requesting additional HTF funding, deferring a portion of the developer fee, and engaging in private fundraising. •Partial award would show support –could apply again next year •County lacks funding source currently *Mental Health Housing Foundation – Steel Lake •The project would reduce its scope and replace fewer roofs. •Possibility to work with Commerce on modified funding request (no waiver) *Bellwether Housing – Renton Sage •The project could not move forward with partial funding. •Could apply to the January preservation rounds at both King County and Commerce as the project has previously been funded by both and is located within ½ mile of transit stop Multi-Service Center – Maple Lanes Estates Archdiocesan Housing Authority – Franciscan Apartments Franciscan Apartments - Summary Developer: Archdiocesan Housing Authority Amount Requested: $2,500,000 Number of Units: 39 Population Served: Seniors aged 62+ who earn up to 50% AMI Eligible SKHHP Funding Source: HB 1590 and SHB 1406 Location: Burien Housing Type: Rehabilitation - Rental 11 Franciscan Apartments – Units by Size and Affordability Franciscan Apartments Funding Sources and Uses African Community Housing & Development – African Diaspora Cultural Anchor Village African Diaspora Cultural Anchor Village - Summary Developer: African Community Housing & Development Amount Requested: $3,500,000 Number of Units: 129 Population Served: African Diaspora immigrant and refugee households at 30-60% AMI with set-aside for households with a physical disability Eligible SKHHP Funding Source: HB 1590 and SHB 1406 Location: SeaTac Housing Type: New Construction - Rental 15 African Diaspora Cultural Anchor Village – Units by Size and Affordability African Diaspora Cultural Anchor Village Funding Sources and Uses St. Stephen Housing Association – Steele House Steele House - Summary Developer: St. Stephen Housing Association Amount Requested: $1,820,850 Number of Units: 6 Population Served: Families exiting homelessness or at risk of homelessness up to 50% AMI Eligible SKHHP Funding Source: HB 1590 and SHB 1406 Location: Renton Housing Type: New Construction - Rental 19 Steele House – Units by Size and Affordability Steele House Funding Sources and Uses Mental Health Housing Foundation – Steel Lake Steel Lake - Summary Developer: Mental Health Housing Foundation Amount Requested: $1,500,000 Number of Units: 20 Population Served: Individuals with severe and persistent mental illness at 30% and 50% AMI Eligible SKHHP Funding Source: HB 1590 and SHB 1406 Location: Federal Way Housing Type: New Construction - Rental 23 Steel Lake – Units by Size and Affordability Steel Lake Funding Sources and Uses Bellwether Housing – Renton Sage Renton Sage - Summary Developer: Bellwether Housing Amount Requested: $1,210,102 Number of Units: 284 total (52 for the rehab request) Population Served: Households earning 50%, 60% and 80% AMI Eligible SKHHP Funding Source: SHB 1406 Location: Renton Housing Type: Rehabilitation - Rental 27 Renton Sage– Units by Size and Affordability Renton Sage Funding Sources and Uses Multi-Service Center – Maple Lane Estates Maple Lane Estates - Summary Developer: Multi-Service Center Amount Requested: $922,000 Number of Units: 16 Population Served: Households earning 30% and 50% AMI Eligible SKHHP Funding Source: SHB 1406 Location: Kent Housing Type: Rehabilitation - Rental 31 Maple Lane Estates – Units by Size and Affordability Maple Lane Estates Funding Sources and Uses Construction Start Dates Comparison Discussion & Recommendation 35 •Funding recommendation on all projects •Dollar amount and source •Funding rational •Additional special conditions •SKHHP Executive Manager to include administrative special conditions in funding recommendation to Executive Board and expand on funding rational Funding Rational – Franciscan Apartments •Hold 36 Funding Rational – African Diaspora Cultural Anchor Village •Hold 37 Funding Rational – Steel House •Community connections 38 Funding Rational – Steele Lake •Hold 39 Funding Rational – Renton Sage •Hold 40 Funding Rational – Maple Lane Estates •Hold 41 Next Steps Executive Board to consider Advisory Board recommendation on November 21 and adopt final recommendation(s) SKHHP staff seek concurrence on Executive Board’s funding recommendation to member city councils January – March 2026 42 ACHD AHA Bellwether MHHF MSC St Stephen Supporting Equity 5 3 3 4 4 4 Feasibility, timeliness, and 2 2 3 3 4 3 Relevance of the project to local housing needs and 5 4 4 4 4 5 Suitability of the project sponsor and development 3 4 4 4 5 4 Consistency with 3 4 3 4 3 4 Sound operating budget Project Readiness Property and Assessment Management Capacity: 4 3 4 4 4 4 Property and Assessment Management Capacity: 4 4 4 3 4 4 Property and Assessment Management Capacity: Adequacy of supportive services provided (if 4 4 3 3 3 4 Relocation/displacement 4 4 4 4 3 4 Nature of Location Collaboration Community Connections 5 3 3 3 4 4 Disproportionate Impact Economic Opportunity Environmental Benefit Extremely low-income and 4 3 3 4 4 4 Geographic Distribution Leverage of Private and 3 4 4 3 2 3 Preservation Racial Equity Transit-Oriented 4 3 3 3 3 3 Total 87 77 86 77 80 86 SKHHP Advisory Board 2025 Funding Recommendation Table A: Funding Scenario 1 (2025 Contribution) Table B: Funding Scenario 2 (2025 Contribution + Maple Valley Contribution) Table C: Funding Scenario 3 (2025 Contribution + Maple Valley Contribution + TWG Award) Table D: Funding Scenario 4 (2025 Contribution + TWG Award)