This notice is to provide an opportunity for public comment on the proposed substantial amendment to Fairfax County’s One-Year Action Plan for FY 2025 (“FY 2025 Action Plan”) activity budgets to allow for early defeasance of Fairfax County’s remaining Section 108 loan debt. The Section 108 program, administered by the U.S. Department of Housing and Urban Development (HUD), provides federal Community Development Block Grant (CDBG) recipients with the ability to leverage their annual block grant allocations to access low-cost, flexible financing for economic development, housing, public facility, and infrastructure projects.
In 2011, Section 108 loan proceeds of $6,535,000 were used by the Fairfax County Redevelopment and Housing Authority (FCRHA) for affordable housing development and preservation; reconstruction of Washington Plaza in Reston and Olley Glen; and road and storm drainage improvements in five Conservation Areas (Bailey’s, Fairhaven, Gum Springs, James Lee, and Jefferson Manor). The loan application was approved by the Board of Supervisors (Board), who pledged future CDBG funds for the payment of annual interest and principal premiums due on the note.
The County’s remaining Section 108 loan requires interest and principal payments through FY 2031; as of November 1, 2024, the remaining principal balance is $2,063,000. Currently, the Board appropriates approximately $425,000 in CDBG funds in the annual budget for debt service on this loan. The County has an opportunity to use FY 2025 funding for early defeasance, or payoff, of this debt.
If the proposed debt defeasance is completed in Spring 2025, the County will save approximately $170,000 in interest over the remaining term of the debt. This will also allow future CDBG grant funding to be allocated to other eligible affordable housing and community development activities. Additionally, the defeasance will enable the County to meet its HUD CDBG timelessness test obligation on May 2, 2025. The proposed amendment will have no adverse impact on current projects and activities already part of the FY 2025 Action Plan.
PROPOSED SUBSTANTIAL AMENDMENT
Fairfax County is planning to use $2,510,238 in CDBG funding (an increase of approximately $2.1 million) as described in the proposed amendment to the CDBG “Section 108 Loan Payments” activity of the FY 2025 Action Plan, to support full defeasance of one remaining loan under Section 108 of the Housing and Community Development Act of 1974, as amended.
Fairfax County will decrease the current $5,321,830 in CDBG funding, as described in the CDBG “FCRHA and Fairfax County Properties – Rehabilitation and Acquisitions” activity of the FY 2025 Action Plan by a commensurate amount, to support the completion of the Section 108 loan defeasance described above. After this substantial amendment, the remaining CDBG budget available in this activity will be sufficient for all anticipated FY 2025 activity projects.
View the Proposed Substantial Amendment under this public comment period.
The current Fairfax County One-Year Action Plan for FY 2025 may be accessed at: http://www.fairfaxcounty.gov/housing/data/consolidated-plan.
Public Comments are Welcome
The Fairfax County Department of Housing and Community Development welcomes comments and feedback on the draft report from members of the community. The public review and comment period will run from November 26, 2024, through January 13, 2025. Comments may be submitted in the following ways: