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Home > News > Press Archive > 07-21-05 ohio apartments

Ohio apartments first to apply HUD Notice 04-21 to acquire funding for preserving affordable senior housing

COLUMBUS, Ohio (July 21, 2005) – An Ohio senior apartment community today ensured the continued safety and comfort of its residents through what appears to be the first application of a recent modification to a Federal Housing Administration loan program.

The Department of Housing and Urban Development ‘s Notice 04-21 changed the way senior housing community owners, like The Meadows near Cincinnati, determine how much they can borrow to renovate or reposition their properties. It opened a door for more than 4,000 affordable senior apartment communities nationwide to pursue funding for modernization. Today’s transaction offers a clear example of the FHA Sec. 223(f) mortgage insurance program’s benefits and utility as a housing preservation tool.

“We were able to provide for repairs and upgrades to a facility that provides for lower-income individuals,” said Ray Kingsbury, vice president of Community Services for Life Sphere. Life Sphere owns The Meadows, a 150-unit subsidized senior apartment complex on the Maple Knoll campus. “I think [the repairs] would have gotten more expensive, and honestly, in these days and times, I don’t know where else the money would come from.”

The Meadows, originally was constructed in 1980 using a HUD Sec. 202 direct loan. It was unable to refinance until Lancaster Pollard submitted the property’s application after HUD Notice 04-21. Today The Meadows accessed a $5.3 million, federally-insured loan that saves it money and assures it will remain comfortable, marketable and affordable. The funding pays for fire safety upgrades, exterior brickwork repairs for future building stability, and reserves to be set aside for future building improvements.

“This transaction represents a perfect example of the intent of FHA program changes.  The new lower interest rate and extended term of the refinance provide more than $650,000 for building improvements with no impact to affordable rents the tenants enjoy,” said Scott Moore, president of the lender, Lancaster Pollard Mortgage Company.

HUD offices confirmed that The Meadows is the first to apply the revision in Ohio. An Internet search and inquiries to HUD failed to turn up any other instances nationwide. “We believe this is one of the first refinancings to close using the new underwriting modifications approved by HUD,” said Mike Petrie, Chairman of the Mortgage Bankers Association.

John Alfano of Ohio’s Association of Philanthropic Homes and Housing for the Aging noted long waiting lists for affordable senior apartments and the difficulties in keeping properties maintained while keeping them affordable. “I think it’s wonderful,” he said of the revision’s first application in Ohio and possibly the country. “We just have to have more. This is a great example. Hopefully others will be able to follow suit.”

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