The employers and workforce population of Summit County, Colo., breathe a little easier these days.
On the morning of Aug. 15, ground was broken for the Village at Wintergreen, 196-unit apartment community that features a major workforce housing component.
Wintergreen includes 40 units dedicated to workers earning at 30 to 60% of the AMI. Another 36 units are master-leased to Vail Resorts, a project partner who made the building site available without a costly acquisition. The remaining 120 units are capped to a rental rate set at 100% of the AMI.
The fact that the developer, Madison, Wis.-based Gorman & Co., could make a predominantly workforce project pencil-out is no small feat.
Just ask Gorman’s president and CEO, Brian Swanton. “There are a lot of tools and resources to target households below 60% t of the area median income (AMI). There isn’t a tax credit targeting households at 60 to 120% AMI, yet many of those households struggle to pay the rent. It’s difficult for the rent structure for workforce housing to support an investor return,” explains Swanton. “It’s tough to make the numbers work.”
What makes Wintergreen different?
“Freddie Mac pushed the envelope with a tax credit product targeting workforce housing. This is groundbreaking for Freddie Mac. Through our strategic funding partner, Enterprise Housing Credit Investments, Freddie Mac made a forward commitment to workforce housing. That was critical for us,” says Swanton.
Scott Hoekman, president and CEO of Enterprise Housing Credit Investments, agrees. “Wintergreen is the first project from a $100 million Freddie Mac LIHTC fund that will ultimately invest in 10 to 12 housing developments. We’re happy that Wintergreen is an especially good fit for the fund and the first to benefit from it,” Hoekman says.
The new fund marks Freddie’s return to the LIHTC market. Freddie officials selected Enterprise because of Enterprise’s long history with LIHTC funding, going back to the tax credit’s authorization more than 30 years ago.
For developer Swanton, Freddie’s return to LIHTC funding couldn’t come at a better time. “Summit County desperately needs workforce housing. If this funding product wasn’t available, I don’t think Wintergreen construction would now be well underway,” says Swanton.
Enterprise’s Hoekman is excited by Freddie’s return to LIHTC funding. “This is just the start. We will finish investing in properties to fill this initial fund. Then we hope to move on to the next fund with Freddie Mac,” says Hoekman. Swanton likes the emerging picture too. “Wintergreen is a model. I think we’ve figured out what’s going to work for investors,” he says.
For other U.S. workers facing similar rental housing hardships, the outlook has never been more hopeful. David Leopold, vice president for Targeted Affordable Sales & Investments at Freddie Mac, says, “This is our first low-income housing tax credit fund in nearly a decade, and the Enterprise transaction is the first of many investments that will provide highly targeted affordable housing to some of the country’s most underserved communities.” The employers and workers of Summit County couldn’t be happier with Freddie’s return.
Learn more about how Freddie Mac’s low-income housing tax credit investment fund can help support workforce housing initiatives at Freddie Mac.
