Approximately $117 million in financing has closed for the acquisition and rehabilitation of 44 affordable housing properties throughout rural Georgia.

Located in 30 counties across the state, the properties have 1,362 units that serve low-income households.

WWJ, Inc., an affiliate of Boyd Management, acquired the aging U.S. Department of Agriculture (USDA) Rural Development Sec. 515 portfolio from multiple sellers.

Greystone, a national multifamily mortgage loan provider, worked with Rural Development, Athens Housing Authority, Georgia Department of Community Affairs, and Fannie Mae to coordinate the financing.

The challenge was that many of the properties are small, making them difficult to finance on their own. As a result, the properties were pooled into a single large bond transaction, says Tanya Eastwood, managing director of Greystone's Affordable Housing Initiatives group.

However, this transaction came with another challenge—the properties are spread out across the state. There is no statewide bond issuer for deals of this type in Georgia, so that meant the team had to work with 30 different municipalities to get approval for the Athens Housing Authority to take on the bond issuance, says Eastwood.

The result is the properties will undergo extensive rehabilitation, and their affordability will be preserved for 30 years, she says.

The financing involved in the transaction was a combination of both public and private funding and included:

  • Fannie Mae: $26.9 million in Fannie Mae DUS® loans spread over 37 properties (seven consolidations);
  • Tax-exempt bonds:  Issuance of more $47.2 million in multifamily private activity tax-exempt bonds by the Athens Housing Authority;
  • Low-income housing tax credits:  Purchase of 4 percent state and federal housing credits by a Community Affordable Housing Equity Corporation affiliate, generating more than $31.7 million in capital contributions;
  • Sec. 515 debt:  Assumption and subordination of more than $35.9 million of original USDA RHS 515 debt. The Sec. 515 program is a direct loan program designed to provide subsidized loans to developers of affordable housing in rural markets. In addition, of the 1,362 units, 98 percent continued to receive Sec. 521 Rental Assistance by the USDA Rural Housing Service; and
  • Other: Other funding sources included additional financial support in the amount of more than $2.2 million.

“Affordable housing communities across the country are suffering from significant age, and many are in drastic need of renovation and modernization,” says Eastwood, adding that properties risk being removed from the affordable housing stock unless there are collaborative efforts from all agencies and partners involved.
The rehabilitation plan consists of substantial improvements for all apartment units within the 44 communities. Planned interior improvements will include new flooring, energy-efficient appliances, hot water heaters, upgraded HVAC, kitchen cabinets and countertops, as well as fixture upgrades. Electrical improvements will include the replacement of all interior and exterior light fixtures, new GFI outlets, and new smoke detectors. Planned exterior improvements include new insulated double-pane windows, doors, gutters, siding, and a new roof system. Landscape enhancements will also be implemented.

The renovation project will have a positive economic impact at both the local and state levels. More than $34 million will be spent in construction costs, the majority of which will be spent directly with Georgia contractors on physical goods and improvements. Further, the contractors and subcontractors will stay in local hotels, eat at local restaurants and purchase hardware and personal items at local stores. The general contractor estimates that the rehab for each of the properties can lead to 226 workers, 322 motel nights, 3,167 meals and several local employees hired.