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Amy Roland Mercy Housing Inc

VIEWS: 5 PAGES: 15

  • pg 1
									   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
• 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

                                                            2
Mercy Housing - LIHTC Properties



                Northglen




Western Manor


                            Crestview Village   3
Crestview Village
              LaVista, NE
     •   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)
                            4
Western Manor
         Lincoln, NE

     • 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

                          5
Northglen
Lincoln, NE

 •  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

                                  6
             New Community Buildings


                                         Western Manor




                                         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.
Resident Services currently take place
in a 1,000 SF end unit at Crestview                                                             7
Crestview Community Building




                               8
          Existing Financing
Western Manor - Built 1972
• 7% HUD 236 Mortgage
                              Northglen – Built 1970
  maturing August 1, 2013
                              • 7.5% HUD 236 Mortgage
• Mercy Housing acquired in
                                maturing August 1, 2011
  1995 w/ $1.4M LIHPHRA
  Grant                       • Mercy Housing acquired in
                                1995 w/ $1.07M LIHPHRA
Crestview – Built 1970 &’71
                                Grant
• 8.5% HUD 236 Mortgage
  maturing February 1, 2012
• Mercy Housing acquired in
  1996 w/ $4.7M LIHPHRA
  Grant
                                                        9
          Refinancing Urgency

•   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.


                                                        10
             Sources & Uses
            Crestview Village
Sources:                     Uses:
ANB First       $2,147,000   Acquisition $5,200,000
LP Equity       $6,736,000   Rehab Costs $5,936,000
Seller’s Note $4,910,000     Design/Eng     $293,000
MHMP Loan         $585,000   Financing Fees $521,000
Existing Reserves $246,000   Other Costs    $615,000
Deferred Fee      $121,000   Developer Fee $972,000
Total Sources $14,745,000    Relocation     $393,000
                             Reserves       $815,000
                             Total Uses $14,745,000
                                                       11
         Collective Financing Sources
                Mercy Soft     Deferred
                 Loans       Developer Fees
                   3%             1%

American Nat.
 Bank Loans
    11%
                                              LIHTC Equity
                                                 (~.69)
                                                  50%
Seller Notes
    29%



                 TCAP
                  6%
                                                       12
          Major Issues
• Conflicts between HUD Programs
and Tax Credit Structure
        – 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
                                           TCAP
                                           Deadlines
• Enhanced Voucher Saga

                                                       13
           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
                                                 14
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

                                        15

								
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