A 195-unit development in Sacramento, Calif., is the first in the country to utilize funding under a new federal Sec. 811 rental assistance program aimed at helping disabled individuals live independently.

The program is allowing 11 people to have a home of their own instead of living in a nursing home or other institution.

The Sec. 811 demonstration program is one of the tools behind the recent turnaround of the affordable housing community.

The renamed Garden Village apartments has been completely rehabbed by Domus Development in Sacramento, Calif.

Garden Village has blossomed out of a troubled apartment complex that was in need of major repairs, and at risk of losing its affordability. Built around 1977, the project was created as a market-rate development and later turned into affordable housing. Some rehab work was done about 15 years ago but the renovations were not extensive. As a result, the roof leaked. There was mold, and the property was only about half occupied as it spiraled downhill in recent years.

Domus Development, an affordable housing developer, acquired the property in 2012 from U.S. Bank, which was hoping to avoid foreclosing on the complex and its residents. Once Domus acquired the development, it began to put together a strategy to redevelop the property.

“We were able to rescue the property from further decline,” says Meea Kang, founding partner of Domus.

Originally known as Willow Pointe, the development was a sea of 210 one- and two-bedroom apartments, according to Bernadette Austin, project manager. Domus decided to convert some of these small units into three-bedroom apartments. The move reduced the total number of units to 195.

“We had a desire to diversify the tenant population,” Kang says. “We felt family housing would help to bring a different energy to the complex in terms of making it safer and more family oriented.”

Before its rehab, the complex was in need of major rehabs and in danger of losing its affordability.

The old property had a rusty playground structure and two empty swimming pools. Domus has created two new playgrounds, rebuilt one of the pools, and added a community center.

Located just outside the city in Sacramento County, the property is close to the area’s Little Saigon neighborhood. The team was able to introduce several Asian families to the complex, further diversifying the population.

Besides changing the social makeup, the complex, which is comprised of 19 buildings, has undergone a complete rehabilitation.

To finance the $17.4 million project, Domus assembled several layers of funding that includes 9% low-income housing tax credits from the California Tax Credit Allocation Committee (TCAC). Syndicated by Alliant Capital, the housing credits generated approximately $9.45 million. The Sacramento Housing and Redevelopment Agency provided a $1.8 million soft loan from HOME funds, and U.S. Bank is the construction lender. Citi Community Capital is the permanent lender.

Sec. 811 demonstration

The Domus team learned about the new Sec. 811 demonstration program when Garden Village was already in construction.

“Because our property has HOME funds, we had already taken steps to make sure federal funds could come into the project,” Kang says. “We were teed up.”

To finance the $17.4 million project, Domus assembled several layers of funding including 9% low-income housing tax credits.

The Sec. 811 program aims to transition people who had been living in institutional settings into permanent housing. The rental assistance is targeted to units restricted to 50% of the area median income or below.

Garden Village became the first development in the country to move residents into their own apartments under the program. The project is receiving $450,000 over five years for 11 apartments.

The Department of Housing and Urban Development (HUD) and Health and Human Services (HHS) are collaborating on the pilot program.

“Partnering with HHS gives us the chance to mainstream the idea of linking affordable housing programs and social service delivery programs, an idea whose time has come because it is so important to provide housing and supportive services in an integrated manner,” says Ben Metcalf, HUD’s deputy assistant secretary for multifamily housing.

Participating residents may have been convalescing in a care facility, but when they are ready to leave they don’t have a place to go, says Austin.

In California, the program is a collaborative effort involving the California Housing Finance Agency, Department of Housing and Community Development, Department of Health Care Services, Department of Development Services, and TCAC.

Qualifying residents must be eligible to receive community-based, long-term care services of “state plan services” provided under Medi-Cal and be referred by a California Community Transitions coordinator or a Department of Development Services Regional Center.

At Garden Village, Home and Health Care Management is the HUD 811 service provider, and LifeSTEPS is conventional social service provider. Affordable Housing CDC is the managing general partner and nonprofit partner. NP Construction is the general contractor. Domus Management Co. is the property manager.

“We’re so happy with the partnerships that we’ve had,” Kang says. “This is when government and private-sector rolled up their sleeves and got it done.”