Loan Review Process and Underwriting Guidelines

This document summarizes the Loan Review Process and Underwriting Guidelines for the San Luis Obispo 
County Housing Trust Fund (the “HTF”). Its purpose is to convey our current standards, process and practices to 
prospective borrowers and investors. It is neither comprehensive nor exhaustive and will evolve over time. In 
addition, there are more specific guidelines for our state LHTF and matching funds.

The Loan Review Process describes the general steps that the HTF takes when working and communicating with 
prospective borrowers, reviewing applications and approving loans. The Underwriting Guidelines describe how 
we review and evaluate loan applications and the standards upon which we base our lending recommendations 
and decisions. 

The process and guidelines described in this document are driven by the mission and values of the HTF. Our 
mission is to increase the supply of affordable housing for extremely low, very low, low and moderate income
residents of San Luis Obispo County, including households with special needs. This mission is served by 
providing financing for the development, preservation, improvement and acquisition of housing that will remain 
affordable for the longest possible time. In addition, forty percent (40%) of the HTF’s resources are committed to 
benefiting households with special needs
. 
Our core values are Leadership, Partnership & Stewardship. We strive to be a leader in the affordable housing 
field in our community and State. We partner with others to create and preserve affordable housing within our 
community. We also act as a prudent steward of the resources that we receive and manage. 

The HTF was created to provide an additional source of financing for affordable housing projects. We fill a niche 
between bank loans and government housing programs. It has always been our policy to cooperate with banks 
and other private lenders rather than compete with them. If a project can qualify for a bank loan, we believe that 
it should obtain bank financing. If the bank can only provide a portion of the needed financing, we should partner with the bank to make the full amount available. 

While the HTF does not directly compete with banks, we are not a lender of last resort nor do we require rejection 
letters as part of our application package. When it appears that an applicant may qualify for bank financing, we 
will request that they approach a bank for financing. Rather than delay the project while the bank processes the 
loan, we can process it concurrently to help expedite the project. 

1. Loan Review Process
Applications for financing from the HTF typically go through a four-step process that begins with an initial 
inquiry, which may be made by telephone, email or in person. If the proposed project meets basic eligibility and 
targeting criteria and sufficient funds are available or will be available, the HTF extends an invitation for a 
complete application. The next step in the process is for staff to review and underwrite the application package. 
This is followed by a review and consideration of the request by our loan committee, which is called the 
Commission. The final step in the process is consideration by the HTF’s Board of Directors. This process can 
take as little as one month or may take many months to complete.