National Church Residences and National Equity Fund (NEF) have teamed to create the $50 million Affordable Housing Investment Fund.
NEF is providing $45 million for the fund that will be used by the nonprofit developer to acquire existing affordable senior housing communities so they can be renovated and preserved. The first investment was finalized Dec. 31, 2015, using $3.68 million to purchase Big Bethel Village in Atlanta.
The fund gives National Church Residences, a leading affordable housing developer and owner, the ability to act rapidly when it spots opportunities to acquire and preserve affordable housing for seniors.
The fund will be a flexible debt/equity product that serves as an acquisition bridge facility, according to officials. It comes at a time when many housing resources have been cut, including funds for key Department of Housing and Urban Development (HUD) programs.
“The resources needed to create new affordable senior housing continue to shrink. The traditional source for funding, the HUD 202 program, was recently zeroed out in the federal budget,” explained Michelle Norris, president of the National Church Residences Development Corp., in a statement. “Preserving the affordable senior housing communities that already exist is so important, especially since 10,000 people per day are turning age 65."
Sec. 202 is HUD’s supportive housing program for low-income seniors. Construction of new units has not been funded under the program since 2012.
“Our elderly population is not only growing at a rapid rate, but the number of seniors living in poverty is rising,” said Joe Hagan, president and CEO of NEF. “By continuing to support the availability of affordable, safe, and decent housing through our partnership with National Church Residences, we’re helping to provide viable options for our seniors to enjoy healthier, more fulfilling lives.”
National Church Residences, which contributed $5 million in the fund, seeks to deploy the money within three years. In addition to Big Bethel Village, the fund is expected to be used to invest in Antioch Tower in Cleveland and Clinton Place in Mt. Clemens, Mich., during the first quarter of 2016.
“Thanks to this new 'quick strike’ financing resource, we can be more responsive to acquisition opportunities. We are open for business!” Norris said.
Headquartered in Columbus, Ohio, National Church Residences is one of the largest affordable housing developers and owners in the nation with 340 communities in 28 states and Puerto Rico.
NEF is a leading syndicator of low-income housing tax credits (LIHTCs). Based in Chicago, it has invested $11.4 billion in 2,300 LIHTC developments, creating approximately 140,000 affordable homes.