St. Cloud, Minn.—By combining soft debt with innovative construction to keep down costs, the Al Loehr Veterans and Community Studio Apartments is able to serve its mission of housing veterans and others at risk of homelessness.

Named after a former St. Cloud mayor and World War II veteran, the Al Loehr project provides 60 units of single-room occupancy (SRO) housing for people who are homeless or in danger of becoming homeless. It was developed by the St. Cloud Housing and Redevelopment Authority (St. Cloud HRA).

In a time of high land costs, valuable help came in the form of a no-cost, 50-year land lease from the U.S. Department of Veterans Affairs, which owns the 5.6 acres of land where the building was built. The lease, called an Enhanced-Use Lease, carries a stipulation that at least 51 percent of the residents have to be veterans.

The $6.5 million project was financed largely through a $6 million deferred loan from the Minnesota Housing Finance Agency’s Publicly Owned Transitional Housing Program. Additional funding came from a $240,000 soft loan from the Greater Minnesota Housing Fund and a $210,000 state housing trust fund grant.

St. Cloud HRA estimates that the project could save $30,000 a year in operating costs by using a geothermal heating and cooling system instead of a traditional forced-air system.

The project includes 20 SRO units with monthly rents between $278 and $358 that are reserved for residents earning no more than 30 percent of area median income (AMI); 40 SRO units with rents of $383 a month and reserved for residents at or below 50 percent of AMI; and one two-bedroom manager unit.

Construction was completed April 12, 2006, and lease-up began in June. Four tenants had moved in and 15 applications were being processed at press time. The Al Loehr apartments are expected to be fully occupied by early 2007, according to Harvey Schmitt, housing dirictor at Catholic Charities, which manages the project.

One benefit of the project’s funding structure—the prevalence of soft debt and the free land—is that the project’s managers don’t have to lower their standards in a rush to fill the units. “We don’t have to hurry up, rent up, and cross our fingers hoping for the best with a number of applications,” said Rick Podvin, a Catholic Charities services coordinator on the project. “We can hit the appropriate target for this building and do it right the first time.”

Residents who don’t qualify to live in Al Loehr can be offered temporary housing at one of two transitional housing properties for veterans that Catholic Charities operates in the area.

Catholic Charities hopes that its cautious approach toward approving applications for residency will help provide a basis for stability both for the project and for veterans who have been homeless or who face imminent homelessness. “They can stay [at Al Loehr] as long as they abide by the rules and regulations,” said Schmitt.