Innovative Financing Approaches

Restoration Gardens

Restoration GardensProject Objective

Provide affordable housing targeted to youth aged 18-24 years

Provide support services to ensure a positive housing experience

Provide furnished apartments Provide safe, inviting environment

with 24 hour support/security

Advantages

Commitment of 100% Section 8 Project Based Vouchers

Vacant former school purchased at tax sale by neighborhood charity that supported the project objectives

Strong political support with award of non-traditional funding sources – HOWPA, State Bond Bill, Baltimore City Bond Bill

Advantages

Two nonprofit organizations committed to the project – Empire Homes a property management

and service company and its parent worked for years on the concept, created strong support and connected to the nonprofit controlling the building

Homes for America a developer/owner

Challenges

Could not access traditional sources (9% LIHTC, Rental Housing Funds)

Plan to use 4% LIHTC and Tax Exempt Bonds collapsed when market collapsed

Needed a primary funding source to supplement the many small grants and awards in a market with few resources

The Solution

Maryland DHCD determined the project qualified for the multi-family/special needs set aside of the Neighborhood Stabilization Program and awarded $3.5 million

Baltimore City filled the remaining gap with supplemental CDBG funds from the housing stimulus

Restoration Gardens Financing ContentSources

DHCD - NSP $3,500,000

Baltimore City CDBG-R $700,000

HUD – HOPWA $500,000

6 Other Sources $849,485

Total $5,549,485

Restoration Gardens UsesAcquisition $134,445

Rehabilitation $3,762,462

Architect & Engineering $341,172

Financing Fees $1,176,214

Reserve $135,172

Total $5,549,485

Is Restoration Gardens Replicable?

We believe in current markets permanent housing for youth is viable. Requires initiative, a member of the team that knows the population and tenacity in seeking out non-traditional funding sources.

Restoration Gardens

City Arts

City ArtsProject Objective

Create affordable artist housing and 11 homes for NEDS

Create a gallery to show work of residents and community

Stimulate activity in community

Advantages

Baltimore City owned land at below market price

Strong neighborhood support

Advantages

3 Non-Profit Partners Homes for America – Developer,

Guarantor and Managing Partner Jubilee Baltimore – Strong connections to

artist community and community association

TRF Development Partners – Townhouse developer 8 new homes, rehabilitated existing homes

City Arts Challenges

LIHTC pricing dropped from $.95 to $.68

Large gap with no sources available Limited first mortgage capital

available in the market

The Solution

Federal stimulus provided funds to DHCD to fill the gap (TCAP)

Bank of America stepped up to buy the LIHTC and provide a first mortgage loan

City ArtsSources and Uses

Sources

Tax Credit Equity $9,312,495

TCAP $2,635,000

Bank of America First Loan $1,300,000

MEEHA Energy Loan $135,399

Sources Total $13,382,894

Uses

Acquisition $156,235

Construction $9,395,081

Architect & Engineering $1,097,107

Financing Fees $2,387,583

Reserve $346,888

Uses Total $13,382,894

Community Impact

Stimulated significant development Long vacant building redeveloped to

provide a charter school for the arts Badly deteriorated row housing

demolished by Baltimore City Baltimore City implemented Vacants

to Value program in the neighborhood

Is City Arts Replicable?

City Arts II is in predevelopment now on land acquired from Baltimore City under the Vacants to Value program. The current markets support this type of housing. Because the public purpose is serving artists, strengthening the community, and stimulating development fewer deep subsidies are needed.

City Arts