The Community Development Trust (CDT) is committing $100 million to assist projects using the Rental Assistance Demonstration (RAD) program.
Since the inception of RAD in 2012, CDT has provided approximately $20 million in commitments to support a number of communities taking part in the federal program.
RAD is central to the Department of Housing and Urban Development’s (HUD’s) preservation strategy. It allows public housing and other select properties to convert to long-term Sec. 8 rental assistance contracts. This helps public housing authorities and private owners obtain private debt and equity to address capital needs.
CDT’s new initiative comes as RAD is tripling in size. An initial cap of 60,000 units was recently increased to 185,000 units.
“We believe there is tremendous value in the RAD program, and through our $100 million commitment we are prepared to expand our investment of capital to public housing developments, both new and rehabilitated,” says Joseph F. Reilly, president and CEO of CDT. “Our involvement increases public housing financing options and positively impacts the lives of residents. Working with our partners we look forward to our continued involvement in the RAD program and this new opportunity to transform these communities.”
Reilly says the $100 million is a general program commitment and can be used in different ways.
“Although we anticipate most of the requests will be permanent loans, CDT can also invest equity in RAD deals as well as shorter-term loans,” he says.
The average request has been between $2 million and $4 million. CDT has committed $20 million to five deals. The remaining $80 million could go to another 30 to 35 transactions.
CDT recently approved a long-term forward commitment for a permanent first mortgage of $4.4 million for the Ribicoff Cottages, a 55-unit development in New Haven, Conn. This is a two-phase project that requires demolition of the existing structures, originally built in the 1950s, and the construction of the new 106-unit Ribicoff Apartments. Once the second phase is complete, the community will consist of one-, two-, three-, and four-bedroom units of townhouses and small cottages. This mixed-income community will serve a range of low- and middle-income families working in New Haven and surrounding neighborhoods.
There will be a shared community garden and building, which will serve as the location of the supportive housing program. A case manager will work with the Housing Authority of New Haven (HANH) to provide residents with on-site educational services designed to strengthen the families residing in the development. The partnership that owns the Ribicoff Apartments is comprised of entities controlled by The Glendower Group and Red Stone Equity Partners. Red Stone is also the tax credit syndicator. The Glendower Group, in conjunction with HANH, will serve as the management company for the Ribicoff Apartments.
A private real estate investment trust, CDT is a national investor in affordable housing. Working with local, regional, and national partners, it makes long-term equity investments and originates and acquires long-term mortgages. In its 15 years, CDT has invested more than $1 billion in debt and equity capital to properties in 42 states and regions, helping to preserve and create more than 35,000 units of affordable housing.
Connect with Donna Kimura, deputy editor of Affordable Housing Finance, on Twitter @DKimura_AHF.