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Date: |
September 1, 2026 |
08 |
Title
Approving the Issuance of Bonds by the California Municipal Finance Authority to Finance or Refinance the Acquisition of and Improvements at Fallbrook Trails Apartments (District: 5)
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Overview
The County of San Diego (“County”) has received a request from the California Municipal Finance Authority (“CMFA” or “Authority”) to approve the Authority’s issuance of multifamily housing qualified 501(c)(3) bonds in an aggregate principal amount not to exceed $30,000,000 (the “Bonds”), for the benefit of 1735 South Mission LP, a California limited partnership, of which AOF/Pacific Affordable Housing Corp. is the sole owner (the “Borrower”). The Borrower has requested that the Authority participate in the issuance of the Bonds to finance or refinance the acquisition, rehabilitation, improvement and equipping of a multifamily rental housing project located at 1735 South Mission Road, Fallbrook, California 92028 (the “Project”).
The Authority is authorized to assist in financing for nonprofit public benefit organizations or for-profit corporations with a public benefit project wishing to issue multifamily housing qualified 501(c)(3) bonds, including the Borrower. In order to initiate such a financing, the Borrower is asking the County, a member jurisdiction in which the project resides to approve the Authority’s issuance of the Bonds. Although the Authority will be the issuer of the Bonds for the Borrower, the financing cannot proceed without the approval of an applicable legislative body.
Pursuant to Section 147(f) of the Internal Revenue Code, a public hearing was held on August 19, 2026. There were no comments from the public at that hearing.
Today’s recommendations will provide the Authority with the required authorization to pursue its determination to issue the Bonds on behalf of the Borrower for the Project.
Body
Recommendation by Chief Administrative Officer:
Adopt a Resolution entitled:
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO APPROVING THE ISSUANCE OF CALIFORNIA MUNICIPAL FINANCE AUTHORITY QUALIFIED 501(C)(3) BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $30,000,000 FOR THE PURPOSE OF FINANCING OR REFINANCING THE ACQUISITION, REHABILITATION, IMPROVEMENT AND EQUIPPING OF FALLBROOK TRAILS APARTMENTS
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Equity Impact Statement
This financing will help in the acquisition, rehabilitation, improvement and equipping of a multifamily rental housing project located within the county. The obligations will assist the Borrower to offer low-income living arrangements for households in San Diego County.
Sustainability Impact Statement
The proposed action would result in economic benefits for the community by allowing the borrower to serve 101 low-income households in San Diego County. This financing will contribute to the County of San Diego’s Sustainability Goal No. 2, providing just and equitable access, by increasing investment in underserved communities of San Diego County.
Fiscal Impact
If approved, the proposal will result in approximately $991 of unanticipated revenue to be used to reimburse the County of San Diego (County) for staff costs associated with this non-County financing. There will be no change in net General Fund cost and no additional staff years.
The Borrower will be responsible for the payment of all present and future costs in connection with the reissuance of the financing related to the Project. The County will incur no obligation of indebtedness as a result of today’s actions.
Business Impact Statement
N/A
Advisory Board Statement
The Debt Advisory Committee, composed of the Chief Financial Officer, the Auditor and Controller, and the Treasurer-Tax Collector, concurs with this recommendation.
Background
California Municipal Finance Authority (“CMFA” or “Authority”)
The CMFA provides tax-exempt financing for qualified projects located throughout the State of California. The Authority’s mission is to support economic development, job creation, and social programs throughout the State. By assisting nonprofit corporations and/or for-profit entities with various tax-exempt financing programs, the Authority is able to support programs that improve the health and welfare of California residents. The Authority finances a broad range of facilities including nonprofit projects such as education, health care and cultural facilities, affordable multi-family and senior housing, manufacturing facilities and equipment, solid waste, water, wastewater treatment facilities and infrastructure projects and government sponsored financing.
Borrower
1735 South Mission LP is a California limited partnership of which AOF/Pacific Affordable Housing Corporation (AOF/Pacific) is the sole owner.
AOF/Pacific was incorporated in 1997 as a nonprofit affordable housing organization and is a subordinate of The American Opportunity Foundation, Inc. With offices located in California and Washington, they are able to participate in a wide range of affordable housing communities with diverse geographic locations including California, Washington, Oregon, Illinois, and Arizona.
Project
The Fallbrook Trail Apartments building was originally completed in 2021 as a 103-unit (101 tenant units and two employee units) two-story, elevator-serviced, low-rise style, residential assisted living / memory care facility that consists of studios, 1-bedroom and 2-bedroom units located in the heart of downtown Fallbrook, CA. The structure is a wood-frame construction on concrete slab foundation with stucco siding and a pitched roof. The building includes multiple resident lounge areas, a full-service commercial kitchen, dining room, community room, and movie room.
In 2025, the building was converted to an affordable and age restricted (55+) community, with 100% of the units at 80% Area Median Income (AMI), and has been maintained as such, pursuant to the terms of the Regulatory Agreement and Amended Regulatory Agreement recorded as document numbers 2024-0157299 and 2025-0188456. The Project will now restrict 20% of the total units at 50% AMI and the remaining 80% will continue to be restricted at 80% AMI. No changes are being made to the age restrictions or the use of two of the 103 units for manager’s units. A new regulatory agreement will be entered between CMFA and the Borrower to reflect the greater restriction.
County Involvement
Section 147(f) of the Internal Revenue Code (the “Code”) requires that an applicable elected body, with respect to the Project, approve the reissuance and delivery of the Bonds following a public hearing therefore. The Board of Supervisors of the County of San Diego (County), as an applicable elected body, is requested to approve the issuance of Bonds. The Borrower shall be responsible for the payment of all present and future costs in connection with the issuance of the Bonds.
The Authority is seeking approval of the resolution from the County pursuant to Section 147(f) of the Code for this issuance.
The Authority published a notice of public hearing in the Daily Transcript on August 12, 2026, to inform members of the general public about public hearings to be held by the Authority, pursuant to Section 147(f) of the Code. The notice listed August 19, 2026 as the public hearing date with respect to the issuance of the Bonds for the Project.
Linkage To The County Of San Diego Strategic Plan
Today’s proposed action supports the Equity: Housing Strategic Initiative in the County of San Diego’s 2026-2031 Strategic Plan by supporting and allowing the issuance of exempt facility bonds by California Municipal Finance Authority for the Borrower to finance or refinance the acquisition, rehabilitation, improvement and equipping of an affordable multifamily rental housing project located within the county.
Respectfully submitted,
Ebony N. Shelton
Chief Administrative Officer
Attachment(s)
1. Attachment A - Resolution
2. Attachment B - Transcript of Public Hearing
3. Attachment C - Proof of Notice of Public Hearing
4. Attachment D - CMFA Project Application for Bonds