Location:
Mt. Sterling, OH
Total Sources:
$4.48 million
Sources of Funding:
FHA mortgage insurance combined with low-income housing tax credit equity.
Other factors:
The existing reserve for replacement and an HDAP loan contributed to funding
Closing Date:
Jan. 11, 2007
Sources:
FHA/GNMA Mortgage $1,590,300
Limited Partner Equity $2,187,000
HDAP Loan $550,000
Existing Rep. Reserve $160,941
Background & Goals
Meadowview Village Apartments is a 40-unit affordable elderly housing facility built in 1984 under the HUD Section 202 Direct Loan Program. Its above-market interest rate of 9.25% created a weighty debt service commitment, and the limited replacement reserves left little room for funding modest, let alone substantial, improvements. Meadowview needed a lower interest rate to save on debt service, and it needed significant equity to upgrade its interior and convert unmarketable studio units into one-bedrooms.
Sources of Funding & Outcome
Because of the substantial nature of the intended facility improvements, the optimum financing structure for Meadowview Village was achieved through a combination of FHA Mortgage Insurance and 9% Low Income Housing Tax Credits (LIHTC). This structure provided the facility with long-term, non-recourse debt, along with a significant amount of equity to achieve the much-needed enhancements. An HDAP loan and existing reserves completed the funding structure.
The financing made $1.9 million available for rehabilitation, generating over $28,000 per unit in repair funds. Meadowview was able to convert its 10 unpopular studio efficiency units into one-bedroom models and update all of its kitchens. Common area improvements, new windows and many energy efficiency, safety and comfort upgrades are all part of the benefits to current and future residents. Property upgrades include new parking, repairs to exterior siding, a reconfigured entry that offers residents better shelter, and landscaping improvements.
Meadowview Village’s new
lower interest rate and reduced debt service allowed for the creation of a debt service savings escrow.
