An aging affordable housing community is set to undergo substantial rehabilitation in Lorain, Ohio.
Lument announced that it has closed a $28 million Department of Housing and Urban Development/Federal Housing Administration (FHA) Section 221(d)(4) loan to assist TFG Housing Resources and Raise Up with the effort.
The financing will help upgrade the 353-unit Western Horizon property, which was originally built in the 1950s as three separate communities—Leavitt Homes, Westview Terrace, and Westgate Apartments—that have historically operated as public housing.
The transaction utilized a component of the Rental Assistance Demonstration (RAD) program that allows for blending RAD with Section 18 of the National Housing Act to fund the preservation of aging affordable housing. Lument’s Joey Hague, managing director based in Columbus, Ohio, led the transaction.
The units were converted through the RAD program in conjunction with 4% low-income housing tax credits provided by the Ohio Housing Finance Agency. In addition to the FHA mortgage, Lument Securities served as the underwriter for $9.2 million in tax-exempt bonds.
As a result of the RAD conversion, the properties now operate as one and are being rebranded as Western Horizon. Post-renovation, all units will all be assisted by project-based rental assistance with rents restricted to 60% of the area median income.
“TFG Housing Resources is passionate about its mission to create quality affordable housing for families in need, and we are honored to help them advance their work,” Hague said. “The FHA 221(d)(4) program was an ideal fit as it installs fully amortizing 40-year construction to permanent financing at a favorable interest rate, positioning the community for future success.”