The organization plans to build 26 lower-income units along with a community room, a laundry room and services offices. The units would be studios as well as one-bedroom, two-bedroom and three-bedroom apartments.
RCD plans to buy the property in early 2014 and apply for a building permit late next year. Construction would start in 2015.
The total cost of the project is $14.7 million.
The loan is a 55-year, zero interest, residual receipts note. The funds are coming from Community Development Block Grants, commercial linkage fees and housing impact and in-lieu fees.
A staff report states more than $200,000 will remain in housing fund reserves after the loan is made.