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Tags:
Affordable Housing,
CSG Press Releases
Twenty Rural Multifamily Communities Rehabilitated with Innovative Financing Structure
Churchill Stateside Group (“CSG”), a real estate financial services company serving developers and investors in the multifamily housing, renewable energy and entertainment tax credit industries, today announced the closing of a $71.16 million affordable housing transaction. The rural housing portfolio consists of 20 affordable housing properties located throughout the state of Georgia. William Rea, Managing Partner of Rea Ventures Group, previously developed the properties and continues to stand behind them today.
The properties are located in 18 markets and the majority were constructed in the 1980’s and 1990’s using the USDA 515 Loan Program and Section 42 low-income housing tax credits. The acquisition and rehabilitation of the 620 units includes construction and permanent financing from Churchill Stateside Group guaranteed by the USDA 538 loan program, subordination and re-amortization of the original USDA 515 loans, short term tax exempt bonds sold by Merchant Capital and equity proceeds from Churchill Stateside Group’s investment in the 4% federal and state LIHTC.
CSG’s affordable housing team provided financing by working with multiple agencies and parties to secure both public and private funding, including:
USDA 538 Guaranteed Rural Rental Housing Loan – $14.25 million construction and permanent financing.
USDA 515 Loan – restructure of $15.95 million of original USDA 515 debt.
Tax Exempt Bonds – $24.65 million in short-term bonds issued by the City of Cordele.
Federal LIHTC – investment of $11.15 million for the acquisition of federal credits awarded by the Georgia Department of Community Affairs.
Georgia State LIHTC – investment of $5.16 million for the acquisition of state credits.
“The preservation of over 600 apartment units is no easy feat. We knew we had to pair up with someone as strong as Rea Ventures for an endeavor this large. Rea put a highly competent team of professionals together who can all say that they contributed to a safe, decent and affordable place for hundreds of Georgia residents to call home” said Brent Watts, Senior Vice President and National Director of Affordable Housing.”
The scope of the rehabilitation plan consists of modernizing interiors with flooring, energy efficient appliances, kitchen and bathroom fixtures, as well as HVAC, plumbing, electrical, and hot water heaters. Externally, improvements include roofs, siding, energy efficient windows and doors, and upgrades to community centers, parking areas, and accessibility updates. The average hard cost of improvements are expected to be $25,000 per unit. During renovations, none of the tenants are expected to be displaced, and of the 620 apartment units, 66% will continue to receive Section 521 Rental Assistance provided by USDA. Upon completion of renovations, each property will offer superior affordable housing options for low-income tenants in the communities they serve.
“Rea Ventures is pleased to have worked with the knowledgeable and attentive team at CSG. Renovating and preserving these affordable rental homes for so many of our residents will have positive and immediate impacts for many families across the state of Georgia. CSG’s team brought a consultative and innovative approach to the entire process and delivered on all 20 transactions in one seamless closing” said William J. Rea, Jr., Managing Partner of Rea Ventures Group.