This story was originally published in Affordable Housing Finance.
A 56-unit permanent supportive housing development will undergo significant rehabilitation after becoming the first project to close on National Housing Trust Fund (HTF) financing in Georgia.
The Rosalynn Apartments has provided independent housing opportunities and support services to formerly homeless individuals living with disabilities, primarily chronic mental illnesses, since its opening in 2000. With the property quickly approaching 20 years, it was in need of rehabilitation, says Jon Toppen, managing partner of nonprofit Tapestry Development Group, the lead developer on the project.
Located in Chamblee, the development is named after Rosalynn Carter, the former first lady and the honorary chairwoman of 3Keys, the nonprofit owner of the community and one of the largest permanent supportive housing owners in Georgia.
The two nonprofit organizations have developed a close relationship over the years, with Tapestry bringing its extensive development experience to help 3Keys rehab its properties.
Like other permanent supportive housing properties, the Rosalynn Apartments is not able to support a high level of debt because it needs to keep rents low for residents. It would have also had a difficult time competing for low-income housing tax credits.
Instead, the team was able to win a $2.7 million HTF grant from the Georgia Department of Community Affairs (DCA). As a result, Rosalynn Apartments is the first project in the state to close a deal with HTF financing. Those funds will cover the bulk of the costs of the $3.4 million project, which will focus on upgrading the residential units. Interior and exterior amenities will also be improved.
Additional funds were secured from a mix of sources, including philanthropic grants, net operating income, an energy rebate, developer contributions, and Tax Credit Assistance Program funds from DCA.
The rehabilitation of the development likely could not have been done without the HTF award, and the property would have continued to deteriorate, says Toppen.
It’s possible that the team could have cobbled together other funding, but it would have been a smaller amount and as a result a much smaller rehabilitation effort.
“We needed a solution, and 3Keys was committed to keeping the property long term,” Toppen says.
The HTF is the first new housing resource since 1974 targeted to building, preserving, and operating rental housing for extremely low-income households, those with incomes at or less than 30% of the area median income (AMI). The HTF is funded by an annual assessment on the volume of business done by Fannie Mae and Freddie Mac.
Georgia received approximately $4.4 million in fiscal 2017, which the state pledged to allocate to create housing affordable to households with incomes no more than 30% of the AMI.
At Rosalynn Apartments, about 90% of the residents qualified, but there were a few households that were earning over 30% of the AMI, Toppen says.
Rather than displace those residents, the team worked out an arrangement that allows 90% of the units to be funded through the HTF while other sources cover the remaining 10% of the units.
This story was originally published in Affordable Housing Finance.
