REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
September 1, 2026
FROM
ROB GILLIAM, Acting Director, Community Development and Housing Department
SUBJECT
Title
Loan Agreement with Family Assistance Program and Orenda Veterans Project, Inc. for the Orenda House Project
End
RECOMMENDATION(S)
Recommendation
1. Approve County Loan Agreement, and its exhibits, in an amount not to exceed $755,000, with Family Assistance Program, a California non-profit public benefit corporation, and Orenda Veterans Project, Inc., a California non-profit public benefit corporation, to preserve affordable homeless housing capacity at the Orenda House Project in Apple Valley, for a 15-year term commencing on September 1, 2026.
2. Approve non-financial Regulatory Agreement and Declaration of Restrictive Covenants with Family Assistance Program, a California non-profit public benefit corporation, and Orenda Veterans Project, Inc., a California non-profit public benefit corporation, incorporating the terms of the County Loan Agreement in Recommendation No. 1, to restrict the use to affordable homeless housing at the Orenda House Project, for a 15-year term commencing on September 1, 2026.
3. Authorize the Chief Executive Officer, Deputy Executive Officer, or Director of the Community Development and Housing Department to execute and make any necessary non-substantive amendments to the County Loan Agreement, and its exhibits, and to execute all required documents, including escrow instructions, related to this transaction, subject to review by County Counsel.
4. Direct the Director of the Community Development and Housing Department to transmit any subsequent, non-substantive amendments to the County Loan Agreement, and its exhibits, to the Clerk of the Board of Supervisors within 30 days of execution.
5. Authorize the Auditor-Controller/Treasurer/Tax Collector to post the necessary budget adjustments as detailed in the Financial Impact section (Four votes required).
(Presenter: Rob Gilliam, Acting Director, 382-3983)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote and Fulfill the Countywide Vision.
Create, Maintain and Grow Employment Opportunities and Economic Value in the County.
Foster Sustainable Development Through Strategic Partnerships.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). The proposed County Loan Agreement (Agreement) will commit $755,000 from San Bernardino County’s (County) Supporting Vulnerable Populations Reserve, established as part of the Homeless Initiatives Spending Plan by the Board of Supervisors (Board) on March 28, 2023 (Item No. 21), to Family Assistance Program (FAP), a non-profit public benefit corporation. A portion of this commitment will be credited as rent payments paid on behalf of Orenda Veterans Project, Inc. (Operator).
The Community Development and Housing Department (CDH) requests the following adjustment to the 2026-27 budget:
|
Cost Center/Fund |
Commitment Item |
Description |
Action |
Amount |
|
6210002496 |
53003205 |
Public Assistance |
Increase |
$755,000 |
|
6210002496 |
40909975 |
Operating Transfer In |
Increase |
$755,000 |
|
1161161000 |
55305030 |
Operating Transfer Out |
Increase |
$755,000 |
|
1000 |
37008587 |
Fund Balance Committed Supporting Vulnerable Populations Reserve |
Decrease |
$755,000 |
BACKGROUND INFORMATION
CDH administers housing and community development programs that preserve and expand affordable housing opportunities, strengthen communities, and support residents experiencing or at risk of homelessness. Through strategic investments and partnerships with local jurisdictions, housing providers, and community organizations, CDH works to improve housing stability and maintain critical housing resources throughout the County.
The Orenda House Project (Project), located at 9625 Locust Lane in Apple Valley (Assessor’s Parcel Number 0438-164-13-0000), is a single-family residence containing six beds and owned by FAP. The Operator provides housing and wraparound services including healthcare coordination, nutrition assistance, and life-skills development. Through its community-based approach and focus on housing stability, the Project contributes to improved outcomes and increased self-sufficiency for vulnerable residents, with a focus on veterans.
Under the proposed Agreement, the County will provide a loan of up to $755,000 to FAP, the property owner. The Operator will be a party to the Agreement, as a portion of the loan proceeds will be applied as prepaid rent under a 15-year Memorandum of Understanding (MOU) between FAP and the Operator. The Agreement funds will be disbursed to support three primary purposes: 1) pay off the property’s existing mortgage; 2) address priority accessibility barriers identified in the July 13, 2026 Certified Access Specialist (CASp) evaluation; and 3) provide a prepaid rent credit to support the Operator’s continued operation of the Project.
Loan Disbursement Summary
|
Component |
Description |
Amount |
|
Existing Loan Payment Component |
Pays off the existing mortgage on the property. |
$535,000 |
|
Rehabilitation Component |
Addresses priority accessibility barriers identified in the CASp evaluation. |
$120,000 |
|
Retention Component |
Provides prepaid rent to support ongoing operations of the Project. |
$100,000 |
|
Total |
$755,000 |
The loan will not bear any interest; it will be forgiven in equal annual installments over the 15-year term, contingent upon compliance with affordability, occupancy, and operational requirements. In the event of an uncured default, the outstanding unforgiven loan balance will become due and payable. To safeguard public funds, the Agreement ensures that if the property is transferred before the affordability term expires, the County will receive a portion of the property’s increased value - typically 50% of its share, adjusted for the number of years the property met affordability requirements.
To ensure long-term affordability and protect the County’s investment, a Regulatory Agreement and Deed of Trust will be recorded against the property. Six beds will be restricted for individuals experiencing homelessness and earning or below 80 percent of Area Median Income for 15 years. CDH will monitor the Project throughout the affordability period to ensure compliance with income eligibility, rent restrictions, property standards, and reporting obligations.
Additionally, FAP will enter a 15-year MOU with the Operator, reflecting the prepaid rent credit structure and ensuring the continued provision of housing and supportive services throughout the affordability period. Referrals for occupancy will be coordinated through the County’s Coordinated Entry System to align with countywide homeless response strategies.
The Project is experiencing increasing operating cost pressures, including higher expenses for maintenance, utilities, insurance, and property management. These financial pressures have reduced the Operator’s ability to sustain operations while maintaining safe and stable housing conditions for residents. In response to these pressures, the Operator will continue to pursue a proactive funding strategy by securing rental income, pursuing annual grants, and engaging in ongoing fundraising to support operations and the financial stability of the Project over the 15-year loan term. Current projections highlight the importance of these efforts, as additional revenue generation along with cost management will be key to maintaining stable operations and ensuring the continued success of the Project.
Without the proposed financing assistance, the long-term viability of the Project may be compromised, potentially resulting in the loss of a critical housing resource in an underserved region. To mitigate these risks, the Agreement will require annual financial reporting and implementation of corrective actions to address any operating shortfalls and allow for replacement of the Operator or management agent if performance deficiencies are not timely resolved.
A current appraisal values the property at $810,000. The County’s proposed assistance represents approximately 93% of the appraised value. The County’s investment equates to approximately $125,833 per restricted bed, which remains substantially below the cost of developing new affordable housing. The Project will provide housing for up to six individuals at any given time and is estimated to assist approximately 30 individuals over the 15-year affordability period. In addition, the proposed accessibility improvements include but are not limited to construction of an Americans with Disabilities Act compliant driveway ramp with proper grading and base preparation, modification of the bathroom, as well as installation of an accessible ramp at the home’s primary entry. The improvements will preserve and enhance the functionality of the property for current and future residents.
Approval of this item will preserve housing in a region with limited resources, prevent displacement of vulnerable residents, improve accessibility for individuals with disabilities, and support the continued delivery of essential supportive services. Rehabilitation work is expected to begin in fall 2026 with anticipated completion in spring 2027.
PROCUREMENT
In August 2023, CDH released a Fund Request Form (FRF) through the CDH web portal for proposed projects that increase housing capacity to address homelessness. Funding was made available through the Housing Development Grant Fund (HDGF), which consists of County General Funds allocated via the Supporting Vulnerable Populations Reserve. Applications were accepted on a rolling basis and evaluated based on the criteria established by the Housing Development Guidelines, which were approved by the Board on January 23, 2024 (Item No. 29).
On August 7, 2024, Orenda Veterans Project, Inc. submitted an application through the FRF process for the Project. The Project met the established benchmarks for impact, project readiness, and operational sustainability. The application portal is now closed, as all available HDGF funds have been expended or allocated to projects.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant, Deputy County Counsel, 387-5455) on August 13, 2026; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-7022) on August 17, 2026; Purchasing (Jessica Barajas, Supervising Buyer, 387-2065) on August 18, 2026; and County Finance and Administration (Paul Garcia, Administrative Analyst, 387-4205) on August 19, 2026.