what’s old is new: preservation projects
DESCRIPTION
What’s Old is New: Preservation Projects. Amy Rowland, VP of Real Estate Development – Mercy Housing Mountain Plains Region Housing Innovation Marketplace January 25, 2011. Founded in 1981 by the Sisters of Mercy of Omaha as a response to the need for affordable housing - PowerPoint PPT PresentationTRANSCRIPT
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What’s Old is New: Preservation Projects
Amy Rowland, VP of Real Estate Development – Mercy Housing Mountain Plains Region
Housing Innovation MarketplaceJanuary 25, 2011
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• Founded in 1981 by the Sisters of Mercy of Omaha as a response to the need for affordable housing
• Currently active nonprofit developer/owner in 16 states • Works from 5 Geographic Business Centers across US• More than 38,000 homes developed nationwide, serving
over 130,000 people• Emphasis on provision of resident services• Denver-based national corporate office• Mercy Housing Mountain Plains covers CO, AZ, UT, SD
and NE
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Mercy Housing - LIHTC Properties
3Crestview VillageCrestview Village
Western ManorWestern Manor
NorthglenNorthglen
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Crestview VillageLaVista, NE
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• 154 units (2 sites)• 23 units are Section 8• HUD 236• Family rental• Acquired in
1996/Built in 1971• Minor rehab in 1996• One story 1
bedrooms units• Two story 2,3 & 4
bedroom townhomes• Upgrades: $35k/unit
New Community Building (3,900 SF)
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• 82 units• 78 units w/ Section 8• HUD 236• Family rental• Acquired in 1995/Built
in 1973• Has never undergone a
major rehab• Upgrades: $37k/unit
New Community Building (2,500 SF)
New Entry Porches
Western Manor Lincoln, NE
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• 60 units• 12 units are Section 8• HUD 236• Family rental• Acquired in 1995/Built in
1970• Has never undergone a
major rehab• Upgrades: $40k/unit
New Community Building (2,500 SF)
4 fully-accessible units new siding & decks
NorthglenLincoln, NE
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7Resident Services currently take place in a 1,000 SF end unit at Crestview
The Community Buildings will house management and leasing activities, restrooms, a business center and a community room for activities such as crafts, after school programs, and life building classes.
At Western Manor, 50 out of 115 residents participated in an onsite activity or class in July 2009.
New Community Buildings
Western Manor
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Crestview Community Building
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Western Manor - Built 1972• 7% HUD 236 Mortgage
maturing August 1, 2013• Mercy Housing acquired in
1995 w/ $1.4M LIHPHRA Grant
Crestview – Built 1970 &’71• 8.5% HUD 236 Mortgage
maturing February 1, 2012• Mercy Housing acquired in
1996 w/ $4.7M LIHPHRA Grant
Northglen – Built 1970• 7.5% HUD 236 Mortgage
maturing August 1, 2011• Mercy Housing acquired in
1995 w/ $1.07M LIHPHRA Grant
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Existing Financing
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• Critical Rehabilitation Needs• Depleted Reserves• Negative Cash Flow • Tax Credit Availability
– 2008 – 2010 Disaster Credits– Tax Credit Assistance Program (TCAP)
• Prepaying HUD loan prior to loan maturity qualified non-subsidized residents to access enhanced vouchers.
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Refinancing Urgency
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Sources:ANB First $2,147,000LP Equity $6,736,000Seller’s Note $4,910,000MHMP Loan $585,000Existing Reserves $246,000Deferred Fee $121,000Total Sources $14,745,000
Uses:Acquisition $5,200,000Rehab Costs $5,936,000Design/Eng $293,000Financing Fees $521,000Other Costs $615,000Developer Fee $972,000Relocation $393,000Reserves $815,000Total Uses $14,745,000
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Sources & UsesCrestview Village
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Collective Financing Sources
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Major Issues
– Owner Distribution limitation of LIHPHRA makes repayment of Seller Notes, Investor Fees and Deferred Developer Fees impossible
– HUD decision-making process vs. critical LIHTC and TCAP deadlines
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• Conflicts between HUD Programs and Tax Credit Structure
• Enhanced Voucher Saga
TCAP Deadlines
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Enhanced Vouchers
• Covers tenants without PB Vouchers• Complicated, not like Section 8 Vouchers• No local experience at HA’s• Timing problems with local receipt of vouchers
vs. our HUD approvals• Result – minority of tenants will be able to use
vouchers to stay in our projects, which was a major intent of our restructuring
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Lessons Learned• Perseverance & tenacity are
required - patience will not be rewarded
• Hire a lawyer with HUD-experience early (DC-based)
• 1+1+1 = 3!• Beware assumptions re:
qualified tenants• Asset Mgmt. tip - Keep on
top of allowable rent increases for HUD deals
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