NATIONAL AMERICAN INDIAN HOUSING COUNCIL LEGAL SYMPOSIUM
Las Vegas, NV December 10-12, 2009
Leveraging Indian Housing Block Grants: Two Successful Case Studies
Brian L. Pierson Godfrey & Kahn, S.C. 780 N. Water St. Milwaukee, WI 53202 414 287 9456 bpierson@gklaw.com
KIISHKIMAAN
• Lac du Flambeau Reservation, Wisconsin • 24 Units of Elder Housing, located next to Wellness Center and new clinic • Developer: Lac du Flambeau Chippewa Housing Authority (CHA) • Managing Member and Property Manager: CHA
Kiishkimaan
• Construction begun June 2008 • Completion January 2009
Kiishkimaan
• Sources of Financing:
– $771,600 USDA Section 515 Loan – $500,000 Subordinated mortgage loan from CHA at Applicable Federal Rate – $300,000 Federal Home Loan Bank (Proceeds loaned by CHA at Applicable Federal Rate)
Kiishkimaan
• Sources of Financing (cont.)
– $44,286 CHA Deferred Developer Fee – $287,730 CHA capital contribution – $2,074,008 Tax Credit Equity $3,977,624 TOTAL PROJECT COST
Kiishkimaan
• CHA’S DEVELOPER FEE: $518,000 • DEFERRED PORTION $44,286 • NON-DEFERRED DEVELOPER FEE: $474,000
Kiishkimaan
• CHA’S NET INVESTMENT
– $287,730 Capital Contribution – $500,000 Loan – $787,730 – ($474,000) Undeferred Developer Fee
– $313,730 Investment ( Increased by portion of developer fee used to pay consultant, accounting, legal and other expenses that can’t be financed.)
Red Cliff Housing Development Phase I, LLC
• 24 Single Family Homes with Purchase Option After 15 Years • Red Cliff Chippewa Reservation, Wisconsin • Developer: Red Cliff Chippewa Housing Authority (RCCHA) • Managing Member: RCCHA • Property Manager: RCCHA
RCCHA
• Sources of Financing – $750,000 Section 184 Loans (14 homes) – $541,372 HOME Funds (10 homes) – $200,000 Federal Home Loan Bank AHP
RCCHA
• Sources of Financing (cont.)
– $330,502 Loan From RCCHA – $480,000 Loan from RCCHA (for purchase of Leaseholds; no cash outlay) – $3,700,000 Tax Credit Equity $6,000,000 Total Development Cost
RCCHA
• RCCHA’s Total Investment: – $330,000 – ($766,000) – Net: $436,000 – Significant portion goes to pay consulting, accounting, legal and other expenses that can’t be financed. Anything left over is real profit.