Richmond, Va. When existing federal low-income housing tax credits (LIHTCs) on the Quarter Mill apartment complex in Richmond, Va., were set to expire, the partners in the ownership entity decided to sell to the highest bidder for conversion to market-rate rentals or condos.
But one of the partners had different plans. Managing partner Bob Schaberg wanted to preserve the 266-unit Quarter Mill complex as affordable rental housing.
“Built in the early 1990s, Quarter Mill is a LIHTC development with a 15-year compliance period,” said Schaberg, president of the development’s management company, Amurcon of Virginia. “It is very well located, and the property is in excellent condition. The owners listed the property with a national broker, and bidding was fierce, as 18 offers were received.”
Schaberg formed a new partnership that included a nonprofit organization and worked with the Virginia Housing Development Authority (VHDA) to develop what became the winning bid for the property.
Funding came via VHDA’s acquisition, rehabilitation, and permanent financing programs, and included tax-exempt bonds as well as a lower interest rate on a portion of the financing provided by VHDA’s REACH Virginia program (Resources Enabling Affordable Community Housing in Virginia). VHDA’s financing was critical in enabling Schaberg’s group to submit the highest bid, and the development is being rehabilitated to remain affordable in a much-sought-after suburban Richmond locale.
“We couldn’t have preserved this affordable housing without VHDA’s competitive bond funds and their low interest rate REACH Virginia financing component,” said Schaberg.
Across the state, VHDA finances a large majority of affordable tax credit housing developments, working with developers on both new construction and multifamily rental rehab projects. VHDA also uses taxable bonds to finance many market-rate developments.
After listening to the specific details of a project, VHDA works to provide financing packages designed to eliminate the need to go elsewhere for interim financing. The authority does not charge some of the fees typically associated with commercial real estate lenders, and because it is a self-supporting state housing authority with an AA+ bond rating, there are no credit enhancement costs.
VHDA works with developers to refinance existing developments, particularly properties that are in danger of being removed from the affordable housing community altogether. In an effort to help localities find ways to attract residents back into struggling downtown areas, the authority also is offering financing for mixed-use, mixed-income projects.