Habitat for Humanity hopes to build four units on a 6,600 square foot lot on San Pascual Street.

The nonprofit group will face a key hurdle on Tuesday -- the Santa Barbara City Council will consider issuing a $700,000 loan from the federal government designed specifically for low-income housing.

The remainder of the $1.8 million project at 618 San Pascual Street would be paid for through fundraising, grants and loans from other governmental agencies and money from faith-based groups.

“There’s a zillion different agencies that we coordinate with, but that’s what you have to do if you want to build low-income housing in Santa Barbara,” said Joyce McCullough, executive director of Habitat for Humanity of Southern Santa Barbara County.

Habitat for Humanity plans to build four, two-bedroom condominium units on a 6,600-square-foot parcel of land it purchased last winter. The land had been on the market since 2005 after a fire destroyed a single-family residence there.

The group bought the land for about $500,000 with short-term loans through the city’s Redevelopment Agency and the Housing Trust Fund for Santa Barbara County. Habitat plans to repay those loans by October 2009.

Habitat also plans to apply for a grant through Thrivent Lutheran Ministries, a faith-based nonprofit that provides money for affordable housing, and will launch a broad-based fundraising campaign in coming months.

McCullough said officials hope to break ground by the end of this year or early next year. It would be Habitat’s second project in the city; the first was completed in April and included three houses in the city’s San Roque neighborhood.

Hundreds of families applied for those houses, and they same strict guidelines would apply to the San Pascual condominiums, McCullough said. Families must make between 30 and 60 percent of the area median income, which is $64,000 a year.

The application process also includes a home visit and interviews to determine that the family currently lives in sub-standard housing. Once they are selected, the families must then commit to 250 hours of “sweat equity,” meaning they must help build their own house.

“That’s a pretty big commitment,” McCullough said. “That’s at least a Saturday a week for a year, which is a big deal for working families.”

Habitat for Humanity already met with the financial department at the city, and has worked closely with the Community Development Department on the loan application. Even though administrators they don’t plan to break ground for several months, they needed to get the loan application in before the city’s fiscal year ends at the end of the month, McCullough said.

The Santa Barbara City Council will consider the loan at its 2 p.m. meeting Tuesday in Council Chambers.

“We’re very hopeful this will be approved,” she McCullough said. “I think this is going to be a great project, with a lot of the same collaboration as we had for the first project.”