Property Type: Section 202 Affordable Senior Housing 
Location: Columbus, Ind.
Project Objective: Refinance/Renovation
Financing Amount: $2.78 million
Source of Funding: Fixed- rate notes insured by the FHA Sec. 223(f) program

Background and Challenges
When The Villas was originally constructed, 25 percent of its 99 units were efficiencies. Over the years, the efficiency units had become less marketable, even though demand for affordable housing in the area was strong. The Villas needed away to improve occupancy through capital improvements and wanted to lower the interest rate on its outstanding debt.

Financial Solution
Lancaster Pollard proposed a structure combining a Section 223(f) insured loan and the use of existing residual receipts to convert efficiency units to one-bedroom units, without taking any units out of service.

Outcome
The new loan will reduce debt service by $49,000 per year, while the $522,030 in improvements should improve the facility’s occupancy and operations.

Sixteen efficiency units will be converted to 16 one-bedroom units. Additional improvements include new interior doors for apartments, bathroom remodeling, enlarging the community kitchen, and other additions.