Regina, Moody undergo IRP decoupling
Toledo, Ohio — Red Capital Markets, Inc., and Red Mortgage Capital, Inc., the investment banking and mortgage banking entities, respectively, of Red Capital Group, structured the financing of two multifamily apartment properties here.
Regina Manor Apartments, built in 1968, and Moody Manor Apartments, built in 1973, together house 299 units. The projects qualify under the Department of Housing and Urban Development’s (HUD) Mark-to-Market program for properties where the project-based Sec. 8 rents are above market rate.
The borrowers, both limited liability corporations, needed to structure the refinancing in a manner that would help fund a significant amount of renovations required at the properties.
The financing included Sec. 223(a)(7) loans processed by Red Mortgage Capital and bond underwriting by Red Capital Markets. National City Community Development Corp. syndicated 4% low-income housing tax credits (LIHTCs), while the Ohio Housing Finance Agency issued $7.4 million in tax-exempt bonds.
The transaction – one of the few 4% tax credit transactions combined with Mark-to-Market Federal Housing Administration-insured mortgages – has been completed with the decoupling of an Interest Reduction Payment, according to Red Capital.
Nonprofit groups join forces
Rochester, N.Y. — Two prominent affordable housing developers in the area, Rural Opportunities, Inc. (ROI) and Housing Opportunities, Inc. (HOP), announced their strategic affiliation at a recent celebration of ROI’s 36th anniversary. Together the two nonprofits will create a single organization with a portfolio of more than 2,200 rental units in 48 properties and assets of more than $112 million.
“Together, we will form a stronger, more productive organization,” said Stuart Mitchell, ROI president and CEO. The two organizations have been considering the alliance for nearly two years.
HOP Executive Director Susan Ottenweller will lead the housing development professionals from both organizations as ROI senior vice president for real estate development.
The combination of the rural experience of ROI and the urban experience of HOP will allow the merged organization to better compete for limited resources in meeting the affordable housing needs of families in Rochester and across western New York state.
GBAHC acquires Barclay Greenmount
Baltimore — Greater Baltimore AHC, Inc. (GBAHC), a nonprofit developer, acquired the 139-unit Barclay Greenmount Apartments here. The site is composed of 80 project-based Sec. 8 properties.
GBAHC plans extensive renovations at Barclay in July, costing up to $9.7 million.
With this acquisition, GBAHC now owns three properties with 495 affordable apartments in the city. At press time, it was in the process of acquiring a 34-building, 72-unit Sec. 8 development in the Franklin Square community.
MHDC funds 37 housing developments
Kansas City, Mo. — The Missouri Housing Development Commission (MHDC) is funding 37 housing projects across the state, totaling 2,080 affordable housing units.
“This year we have emphasized community development through renovations of historic buildings and the preservation of current housing,” said Gov. Matt Blunt.
Funding includes federal and state LIHTCs, MHDC fund balances and federal HOME funds. Requests from developers far exceeded the funds available. MHDC received 122 applications for that round.
Pinnacle builds Los Suenos
Miami — Pinnacle Housing Group broke ground on Los Suenos, a 179-unit apartment building in the city’s Wynwood neighborhood. Completion is expected in October 2006. Approximately 13% of the one- to three-bedroom apartments will be affordable for residents earning no more than 30% of the area median income (AMI). The rest will be targeted to residents earning 60% of AMI or less.
All apartments will be energy efficient, and the site will feature a community center, fitness center and security card-entry system.
The 13-story high-rise was designed by local architect Kobi Karp and will feature a 20-foot-tall sculpture by Miami Beach artist Romero Britto.
The $33 million project is being financed by Citibank and Alliant Capital. The city of Miami and Miami-Dade County are also contributing nearly $4 million from their affordable housing funds.
HUD faults Idaho HFA
HUD’s Office of Inspector General issued a report Jan. 26 criticizing operations and conflicts of interest at the Idaho Housing and Finance Association (IHFA). HUD said an audit of IHFA found that the state agency had allowed $3.8 million in excessive owner distributions, had improperly handled projects’ residual receipts and replacement reserves, and had a conflict of interest in The Housing Co., a nonprofit owner of subsidized multifamily projects.
In its response, IHFA agreed with many of the report’s findings, but it disagreed with the amount of excessive distributions and with other financial details, and it said The Housing Co. had been formed with HUD’s approval.
For a copy of HUD’s report, including IHFA’s response, see www.hud.gov/oig/ig601001.pdf.
Single-family housing gets NMTCs
Pasadena, Calif. — Heritage Housing Partners (HHP) purchased two real estate properties here and in nearby Glendale that will be transformed into 61 for-sale single-family houses for low- and moderate-income homebuyers.
HHP partnered with the Clearinghouse Community Development Financial Institution (CDFI) and Commercial Capital Bank to develop the finance package by leveraging city housing subsidiaries with New Markets Tax Credits (NMTCs) and county and state funding sources.
This project represents the first use of public subsidies leveraged with NMTCs to create for-sale affordable housing in the nation, said Doug Bystry, president and CEO of Clearinghouse CDFI.
The Pasadena project, located in the northwestern area of the city, will break ground in the spring. The Glendale project will commence in fall 2007.
VOA preserves Greenbriar
Sacramento, Calif. — The second phase of the renovation of Greenbriar Apartments, a 138-unit, project-based Sec. 8 development, has begun. The project is a public-private partnership that includes nonprofits Volunteers of America (VOA) and the Sacramento Housing and Redevelopment Agency (SHRA).
This phase is being financed with $8.3 million in tax-exempt bonds issued by SHRA and 4% LIHTCs.
VOA said that the rehab of the garden-style project will take a year.