SAN JOSE — A low-income housing complex in San Jose has been bought by the Santa Clara County Housing Authority after the federal government took ownership of the property by foreclosing on a delinquent loan.
Las Golondrinas, a 50-unit apartment hub at 77 Kentucky Place in the Little Portugal area of east San Jose, has been bought by an affiliate of the County Housing Authority, documents filed on Oct. 17 with the Santa Clara County Recorder’s Office show..
The Housing Authority affiliate paid $4.5 million for the residential property, a purchase that bolsters the Santa Clara County agency’s mission to preserve affordable homes in the South Bay.
The Las Golondrinas purchase marks at least the third time in two years that the Housing Authority has bought a low-income residential property whose delinquent financing had been foreclosed.
In 2023, the Housing Authority paid $4.15 million for the 59-unit Girasol Housing complex at 1710 Alum Rock Ave. in East San Jose.
A few days later, the housing agency paid $2.65 million for the 43-unit Jardines Paloma Blanca housing complex at 132 North Jackson Ave.
In the recent Las Golondrinas deal, the U.S. Housing and Urban Development Department took ownership of the 77 Kentucky Place property this month due to a delinquent $4.5 million loan for the site.
The prior owner, a nonprofit that operated as Las Golondrinas Housing Corp., ceased making payments on the loan in 2005, stated a notice of default that HUD filed against the property.
Primarily because of 20 years of no payments, the total due on the loan as of Oct. 15 was $9.6 million, HUD stated in the default notice.
HUD paid $8.6 million for the apartment complex through the foreclosure proceeding.
This suggests that the $4.5 million the Housing Authority paid for the Las Golondrinas apartments was a favorable price.
The residential deals help the Housing Authority push beyond a financial blunder it committed when it bought a North San Jose building that at one point it intended to use as its headquarters.
In 2020, the Housing Authority bought an office building at 3553 North First Street for $37.35 million, saying that it planned to use the prominent property for its head offices.
But within two years, that property deal morphed into a $13 million loss when the Housing Authority decided it would pivot to a different strategy for its headquarters. In 2022, the county agency sold the building for $24.5 million.
The agency stated at the time of the purchases in 2023 that the acquisitions fit into the authority’s efforts to create and preserve affordable housing, a mission statement that is posted on its website.
“The Santa Clara County Housing Authority is creating safe and livable communities by executing a robust array of development activities, including land acquisition, new construction developments, and major renovations and refinances of its housing portfolio,” the county agency stated on its website.