To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Approval of Subordination Agreements to Permit the Refinancing of the Senior Loan for 144 Oak Circle in Walnut Creek
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Conservation and Development Director, or designee, to execute a subordination agreement with Mohamed Abdelrehim, Lamia Elkhatib, and CrossCountry Mortgage, LLC, in connection with a resale restriction agreement for the affordable housing unit located at 144 Oak Circle (APN: 172-340-016) in the unincorporated Walnut Creek area, to permit the refinancing by the property owner, County File CDSD21-9559.
FISCAL IMPACT:
There will be no fiscal impact. The cost of the loan refinance will be borne by the property owner.
BACKGROUND:
On March 1, 2022, the Board of Supervisors (Board) approved the Oak Road Townhouse Condominium Project, a 125-unit housing project located in unincorporated Walnut Creek. The project was subject to the requirements of the County Inclusionary Housing Ordinance. The planning approval included the requirement for the developer to build on-site 10 affordable moderate-income (120% AMI) for-sale units (“inclusionary units”) and pay a partial in-lieu fee as compliance with the County Inclusionary Housing Ordinance requirements. At the same meeting, the Board approved an Inclusionary Housing Agreement with SummerHill Oak Road LLC memorializing the construction and sale agreement of the inclusionary units constructed within the project.
On May 18, 2022, the executed Inclusionary Housing Agreement was recorded as a lien against the property. The requirements of the Inclusionary Housing Agreement included provisions referenced in Chapter 822-4.410 of the County Ordinance Code, regarding the sale of the inclusionary units in the project. One of the 10 inclusionary units was the unit located at 144 Oak Circle and was purchased by Mohamed Abdelrehim and Lamia Elkhatib (“Owners”) Upon purchase of the inclusionary unit located at 144 Oak Circle, the Owners executed legal documents with Contra Costa County that included a Buyer’s Occupancy and Resale Restriction Agreement, a Promissory Note, and Deed of Trust, dated December 5, 2024, covering the subject property at 144 Oak Circle in Walnut Creek. The terms of the Occupancy and Resale Restriction Agreement included provisions for purchase, occupancy, and sale, including the refinance of the inclusionary unit.
The Owners of the 144 Oak Circle property have submitted to the County a request to refinance notice, and County staff received additional documents from their potential lender, CrossCountry Mortgage, LLC (“Cross Country Mortgage”), regarding their new loan. For the Owners to obtain a new loan from Cross Country Mortgage, the County must subordinate its deed of trust to the deed of trust that will be recorded against the 144 Oak Circle property to secure the new loan from Cross Country Mortgage. Through this action, the Director of Conservation and Development, or designee, is authorized to execute subordination agreements and estoppels that are consistent with the subordination terms in the County’s Buyer’s Occupancy and Resale Restriction Agreement for the property.
CONSEQUENCE OF NEGATIVE ACTION:
Without the Board’s approval, the Owners will not be able to obtain a loan refinance for their property.