ALEXANDRIA, VA.—When many affordable housing developers became paralyzed by the recession, Volunteers of America (VOA) kept moving.
The organization closed 22 transactions in the second half of 2010. This included six low-income housing tax credit (LIHTC) deals, three new Department of Housing and Urban Development (HUD) Secs. 202 and 811 projects, six refinancings, and seven HUD green retrofit grants to improve the energy efficiency of seniors housing projects across the country.
The high volume was driven by an urgency to close on funding coming from various economic stimulus programs.
It's also evidence of the nonprofit's willingness to travel down new roads, adding to the type of housing it provides and tracking down fresh funding sources.
VOA ranks as the No. 5 owner and the No. 10 developer in the nation in AFFORDABLE HOUSING FINANCE's Top 50 lists.
Building on history
The faith-based organization is not only one of the largest affordable housing providers, it is one of the oldest, dating back to 1896.
In the early 1900s, VOA provided housing for single men and women and established the nation's first system of halfway houses for released prisoners.
In the 1960s, it increased its real estate development activities, taking part in new federal housing programs.
The national outfit has 37 local affiliates, which in most cases serve as property managers for VOA's housing developments. The affiliates also help the national office enter and build in a number of small and large markets.
“To the field of affordable housing, Volunteers of America brings a unique blend of national scale and sophistication with strong local affiliates in markets throughout the country,” says Bill Kelly, president of Stewards of Affordable Housing for the Future, a network of nine social enterprise nonprofits, including VOA. “The depth and local presence of its service programs enables it to make a real difference in the lives of seniors, families, persons with disabilities, and the formerly homeless."
Through the years, caring for seniors has been a prime focus, including operating nursing homes, assisted-living facilities, and affordable housing for the elderly.
Serving this population continues to be an important part of VOA's work, says Patrick Sheridan, senior vice president of housing development for the organization.
VOA is working to provide more on-site services to its seniors by either partnering with health-care providers or increasing the level of services that it provides on its own.
The nonprofit recently released a study that shows the recent economic downturn and a large aging population have combined to put many families in or near financial crisis.
The first baby boomers will reach 65 next year, with more than 71.5 million Americans in the 65 or older bracket by 2030. That's almost double today's seniors population.
A majority of those surveyed reported that they were unable to make financial, career, or family sacrifices in order to care for an older family member.
In 2011, VOA is also working to deliver new permanent supportive housing.
It recently started construction on two such projects in the last 12 months, according to Sheridan, who has been with VOA for nearly eight years.
The $14.4 million Hope Manor will be home to 80 formerly homeless veterans in Chicago. The development will offer a range of services for residents who suffer from substance abuse, posttraumatic stress disorder, and other mental illnesses.
“We see veterans housing as being one of the highest-need type of properties around the country,” Sheridan says.
VOA has long provided transitional housing for vets, but the move now is toward long-term housing and services.
Hope Manor is being financed with LIHTCs and other funding from the Illinois Housing Development Authority, city of Chicago, Department of Veterans Affairs, and National Equity Fund, Inc.
VOA has also started construction on Chestnut Hill, a 40-unit permanent supportive development in Toledo, Ohio, that will serve the formerly homeless.
Chestnut Hill is financed with Tax Credit Exchange Program funds from the Ohio Housing Finance Agency.
At least three other permanent supportive- housing developments are on the drawing board.
New funding strategies
VOA had several deals that it expected to finance with tax credits in 2008 and 2009. Like other developers, it got caught in the troubles caused by a drop in LIHTC investors buying credits.
The organization utilized the Tax Credit Assistance Program and the exchange program created under the American Recovery and Reinvestment Act of 2009 (ARRA) to rescue several stalled LIHTC deals. VOA received four ARRA awards, totaling more than $13.3 million.
The team also decided not to focus entirely on tax credit development but to take advantage of other funding that was available such as HUD's Sec. 223(f ) program, which insures mortgage loans to help purchase or refinance existing multifamily housing. VOA recapitalized several of its Florida properties under the program.
Even more impressive, the organization did not stop there.
“We started to seek out other funding sources and opportunities,” Sheridan says.
VOA was among 23 groups to receive a new Capital Magnet Fund award from the Treasury Department's Community Development Financial Institutions (CDFI) Fund. Created under the Housing and Economic Recovery Act of 2008, the Capital Magnet program helps finance affordable housing and related economic development activities. It drew 230 applicants.
VOA will use its $5 million award for a revolving fund to cover the predevelopment costs on projects that it is pursuing. The balance of the money will go toward critical gap financing.
The nonprofit, through a community development enterprise that it established, also recently received a $35 million New Markets Tax Credit allocation from the CDFIFund. The award will be used to provide flexible financing for different social service-oriented and possible mixed-use developments that could include affordable housing.
These new funds will help VOA keep moving into the future.