How Streamlined Affordable (EDI / SB 35 / AB 2011) Works in San Bernardino
San Bernardino sits at an interesting intersection for affordable housing development. As a city that has navigated significant fiscal distress and emerged from Chapter 9 bankruptcy, it carries both the challenges of a constrained municipal budget and the advantages of substantial HUD entitlement funding through HOME and CDBG. For sponsors pursuing ministerial approval pathways under SB 35 or AB 2011, this means the City of San Bernardino Planning Division can process qualifying projects on a by-right basis, bypassing the discretionary review gauntlet that often adds twelve to eighteen months and material uncertainty to conventional entitlements. Projects that meet the affordability thresholds, prevailing wage requirements, and site eligibility criteria under these statutes move through a defined checklist rather than a political process. That is the core operational advantage these pathways offer in this market.
The typical sponsor profile that successfully closes these deals in San Bernardino is a mission-driven nonprofit developer or an experienced for-profit affordable developer with LIHTC track record in TCAC Region 6. San Bernardino County's Housing and Community Development division is an active participant in project structuring, and sponsors who have pre-existing relationships with county staff tend to navigate the soft debt sequencing more efficiently. The Housing Authority of the County of San Bernardino (HACSB) is a meaningful source of project-based vouchers, and PBV commitments are often essential to underwriting the income layer at the bottom of the rent schedule. Sponsors who engage HACSB early, ideally before TCAC application, are better positioned to demonstrate income feasibility on deeply affordable units.
AB 2011 and SB 35 differ in their precise eligibility triggers, but both require prevailing wages for most project types, and that cost assumption needs to be baked into proforma development budgets from the first underwriting pass. In San Bernardino, where land costs are more moderate than coastal markets but construction labor costs have converged with regional norms, prevailing wage exposure is the single largest variable that separates fundable deals from deals that look good on paper but cannot close.
The Capital Stack in San Bernardino
Most deals in this program range in total development cost from roughly $8 million to $40 million, with the capital stack assembled from multiple overlapping public, quasi-public, and private sources. The senior construction loan typically comes from a bank with a community reinvestment act platform, a mission-focused CDFI, or occasionally a life company with an affordable allocation. Below the senior, the equity layer is driven by either 4 percent or 9 percent Low Income Housing Tax Credits through TCAC. Nine percent credits are competitive statewide; 4 percent credits pair with tax-exempt bond financing through CDLAC and offer a more reliable allocation pathway for deals that can meet bond volume cap requirements.
In San Bernardino specifically, the active state soft debt programs include HHAP through the Inland Empire regional allocation, NPLH for projects serving formerly homeless populations, AHSC for transit-oriented or infill sites that meet Sustainable Communities criteria, and MHP for family projects with moderate income layers. Each of these programs has distinct application cycles and underwriting requirements. Sponsors who try to sequence all of these simultaneously without a financing plan that accounts for realistic timing on each source tend to run into predevelopment capital constraints that stall deals before they reach TCAC application.
On the local side, San Bernardino's HOME and CDBG entitlement allocations represent meaningful gap financing, particularly for smaller deals. San Bernardino County Housing and Community Development is a complementary source for projects in unincorporated areas or for county-sponsored initiatives. HACSB project-based vouchers, while technically an operating subsidy rather than a capital source, directly affect the debt sizing by improving underwritten net operating income. TCAC Region 6 scoring rewards projects targeting extremely low-income populations, rural or underserved areas, and service-enriched models, so sponsors should structure affordability layers and amenity commitments with regional scoring dynamics explicitly in mind.
Active Lender Types for San Bernardino Affordable Deals
The lender ecosystem for these deals in San Bernardino reflects the broader Inland Empire affordable market. Mission-focused CDFIs are consistently the most active construction lenders for deals that carry significant soft debt or where the senior loan needs to be patient with a complex closing timeline. These lenders underwrite to project cash flow and mission fit rather than to conventional credit metrics, and they have established track records working alongside TCAC equity and state soft debt programs. Community banks with active CRA affordable platforms are the other primary construction lender type and tend to be more rate-competitive when the deal profile is clean and the senior loan-to-cost ratio stays within conservative parameters.
For permanent financing, agency lenders including Freddie Mac and Fannie Mae have affordable product lines that work well for stabilized projects with PBV commitments or strong in-place LIHTC income. HUD Section 221(d)(4) and Section 223(f) programs are available for deals that can absorb the longer processing timeline and benefit from the non-recourse, fully amortizing structure. Life insurance companies with affordable allocations are less common in this market than in coastal California but are worth canvassing for larger permanent loan scenarios. The key lender selection criterion in this market is not rate alone. It is the lender's familiarity with TCAC equity structures, their appetite for CDLAC bond deals, and their operational capacity to manage a complex multi-source closing.
Typical Deal Profile and Timeline
A representative deal in this program in San Bernardino might involve a 60 to 100-unit 100 percent affordable project on an infill site in Downtown San Bernardino, the Westside, or the Waterman corridor, with a total development cost in the $15 million to $28 million range. The capital stack would include a CDFI or bank construction loan, 4 percent LIHTC equity supported by tax-exempt bond financing, city HOME gap funding, and either HHAP or NPLH depending on the target population. HACSB PBVs would underwrite the deeply affordable units.
From site control through construction completion and stabilization, sponsors should plan for a 36 to 48 month cycle under favorable conditions. The ministerial approval pathway can compress the entitlement phase to as little as 60 to 90 days for qualifying projects, but TCAC and CDLAC application cycles, soft debt approvals, and lender closing processes add time that cannot be shortened by statutory approval timelines. Lenders expect to see experienced development teams, a clean site with no unresolved environmental issues, a HACSB PBV letter of interest or commitment, and a financing plan that identifies all capital sources with realistic award timeline assumptions.
Common Execution Pitfalls in San Bernardino
First, sponsors routinely underestimate prevailing wage cost exposure in early proformas. SB 35 and AB 2011 both trigger prevailing wage for most project configurations, and in San Bernardino's construction environment, that cost differential relative to market-rate wage assumptions can push a deal out of feasibility if it is not modeled correctly from day one.
Second, TCAC Region 6 scoring is competitive in ways that differ from coastal regions. Projects that do not explicitly target extremely low-income households or incorporate meaningful supportive services may score lower than sponsors expect relative to competing applications. Understanding regional scoring dynamics before committing to a site or a unit mix is essential.
Third, San Bernardino's HOME and CDBG allocations are meaningful but not unlimited, and the city's entitlement calendar does not always align with TCAC or CDLAC application cycles. Sponsors who assume local soft debt will be available on their preferred timeline sometimes find themselves one program cycle behind, which can delay construction start by twelve months or more.
Fourth, site-specific issues in certain submarkets, particularly in the Westside and older industrial-adjacent corridors, include Phase I and Phase II environmental findings that require remediation or regulatory closure before lenders will commit. Sponsors should complete environmental due diligence before advancing predevelopment costs on any site in these areas.
If you have a site under control or a project in predevelopment in San Bernardino, contact Trevor Damyan at CLS CRE to walk through your capital stack assumptions, lender options, and sequencing strategy. For a broader overview of the EDI, SB 35, and AB 2011 program framework across California, visit the full streamlined affordable financing guide at clscre.com.