Rental Assistance Demonstration (RAD) Program
Rental Assistance Demonstration (RAD) Program Spartanburg Housing Authority Daryl Dalton Director of Housing Operations
Who is the Spartanburg Housing Authority (SHA)?
SHA is a medium sized Housing Authority. • We manage 1,132 Public Housing Units in 10 AMPS, 14 different locations. • We manage 1,827 Section 8 Vouchers and 132 Section 8 Projected Based Units. • We administer 331 Section 8 Mod Rehab Units and 383 Tax Credit Units.
Why is SHA participating in the RAD (Rental Assistance Demonstration) Program?
SHA has a backlog of needed repairs. SHA has $37.5 million in needs (Cammie Clagett alone has $12 million) and HUD has $25.6 Billion. Currently SHA cannot borrow against these properties. Once converted to private ownership, owner could borrow against property to make needed repairs.
Breakdown of Funding Needs Exigent Needs
Immediate Health & Safety Needs
Other Immediate
1-5 Years 6-10 Years 11-15 Years 16-20 Years
Cammie Clagett
$2,300 $4,828,800 $2,629,500 $2,584,700
Archibald High Rise
$0,025
$220,000
$975,400
$21,000 $1,352,500 $3,377,900
Other
Total
$1,207,100
$72,000 $12,299,800
$20,000
$ - $5,051,425
$60,000 $1,057,500
$ - $2,299,800
$60,000
Archibald Villages
$-
$444,800
$252,500
$485,000
Tobias Court
$-
$35,400
$460,200
$60,400
$796,500
$35,400
$ - $1,387,900
Prince Hall
$352,500
$714,500 $1,760,000
$382,500
$680,000
$222,500
$ - $4,112,000
Camp Croft
$50,000
$10,000 $1,921,000
$173,200
$470,400
$575,200
$ - $3,199,800
Victoria Gardens
$24,300
$40,800
$398,800
$752,200
$315,900 $1,045,000
$ - $2,577,000
Leland
$23,600
$5,800
$364,200
$531,300
$480,900
$142,600
Spruce
$20,000
$1,500
$102,400
$138,600
$169,800
$36,000
$-
$468,300
Gooch
$10,800
$-
$313,200
$334,800
$63,000
$118,800
$-
$840,600
$38,000
$80,700
$348,800
$508,200
$462,600
$132,000
$35,200
$1,500
$225,600
$323,400
$316,200
$84,000
$-
$985,900
$102,600
$16,200
$605,500
$-
$724,300
Barksdale
$20,000
Watson J C Anderson
$Totals
$22,325 $5,603,200 $3,985,500 $10,083,900 $8,145,500 $3,891,500 $5,281,600
$462,500 $2,010,900
$1,590,300
$534,500 $37,548,025
To pay off CFFP Debt. In 2006 SHA Participated in HUD’s Capital Fund Financing Program (CFFP) and borrowed $5,763,000 to construct JC Anderson Apartments. This has had several negative impacts as follows:
1) Each year SHA now receives approximately $1.2 million for Capital Improvements. Off the top comes $440,940 towards repayment leaving SHA with only $759,060. This debt will not be repaid until 2024. We are not receiving sufficient Capital Funds to adequately maintain our Public Housing properties.
2) SHA cannot demolish or dispose of any Public Housing Units until the CFFP Debt is repaid. This prevents us from demolishing Cammie Clagett until all or a portion of the debt is repaid. There are specific limitations on how the debt must be repaid.
The current balance on our CFFP Loan is $3,810,249.43 our 7 Property Deal will allow us to retire $2.5 million leaving a balance of $1,310,249.43. This remaining balance of should be wiped out with the 72 unit deal at Cammie Clagett.
DEAL 1 No. Property 1 Barksdale 2 Gooch 3 JC Anderson 4 Leland 5 Spruce 6 Tobias 7 Watson Total
No. of Units 44 36 54 46 12 118 28 338
Financing Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC
• 4% Low Income Housing Tax Credits • Private Activity Bonds • Rental Assistance Demonstration Program • 221d4 HUD Loan Permanent Financing • SHA is acting as its own Developer • A SHA affiliate will manage these tax-credit units
JC ANDERSON APARTMENTS Constructed 2008 54 Units $480,952 in needs ($8,906 per unit)
TOBIAS BOOKER HARTWELL APARTMENTS Constructed 1997 118 Units $2,404,762 in needs ($20,379 per unit)
LELAND APARTMENTS Constructed 1984 46 Units $1,576,321 in needs ($34,268 per unit)
FRANK GOOCH APARTMENTS Constructed 1975 36 Units $1,245,667 in needs ($34,602 per unit)
ELLEN C. WATSON APARTMENTS Constructed 1984 28 Units $988,357 in needs ($35,298 per unit)
SPRUCE APARTMENTS Constructed 1984 12 Units $426,845 in needs ($35,570 per unit)
BARKSDALE APARTMENTS Constructed 1984 44 Units $1,714,595 in needs ($38,968 per unit)
Project Name: Print Date: Version Date: Developer: Spreadsheet Version:
SHA 7 LLC 4/16/2014 4/16/2014 Spartanburg Housing Authority 4% LIHTC/PAB/RAD - 221d4 Perm Financing
Project Information Financing Assumptions Syndication Assumptions Number of Units Financial Closing/Construction Start Construction Period (months) Construction Completion Date Stabilization/Conversion to Perm. Financing 8609's
338 10/1/2014 16 2/29/2016 5/31/2016 8/31/2016
Credit % - 30% PV LIHTC Annual Credit Projected
3.25% 834,091
Project Cost First Mortgage - FHA 221(d)4 Acquisition Carryback Note* GP Loan (ACC Reserves) HOME Funds* Deferred Developer's Fee LIHTC Equity (GP Portion) LIHTC Equity (Investor Portion)
28,598,396 9,500,000 10,647,000 1,000,000 362,230 100 7,089,066
Vacancy Rate 7% Effective Gross Income 2,142,781 Operating Expenses with Replacement Reserves 1,428,195 NOI 714,587 DSC Year 1 DSC Year 15
1.22 1.22
Construction Period - Short term TE Bonds to facilitate 4% LIHTC Depreciable Basis + Land # Short TE Bond Issue 54% 12,800,000 FHA 221(d)4 - Const. to Perm. Loan Interest Rate Construction Term (months) - interest only Permanent Period (years) Amortization
9,500,000 5.50% 24 40 40
4% Equity Proceeds- Const. Period
4,829,434
Prorata Draw 66%
Acquisition Carryback Note* # Interest Rate 3.36% (AFR) Amortization 40 Term 42 Start Date 10/1/2014 Maturity 9/30/2056 * available at close; payments from available cash flow beginning at permanent conversion. Carryback Note amount is based on anticipated "as-is" appraised value of the improvements ($31,500/unit) GP Loan # Interest Rate 0% Amortization TBD Term TBD Start Date TBD Available at close; payment from available cash beginning at permanent conversion
Total Tax Credit Investor Percentage
8,340,912 99.99%
LIHTC for Syndication
8,340,078
Price per Credit
48%
0.85
Federal Tax Credit Equity
7,089,066
Financing Closing Closing 20.00% Date
1,417,813 10/1/2014
Construction Period Prorata Pay-ins Construction 48.13% 3,411,621 Date (range) 11/30/14 2/29/2016 Conversion/Stabilization Perm. Conv. 30.46% Date
2,159,632 5/31/2016
Final Certification 8609s 1.41% Date
100,000 8/31/2016
DEAL 2 No. Property No. of Units Financing 1 Cammie Clagett 72 9% LIHTC Total 72
• 9% Low Income Housing Tax Credits • Rental Assistance Demonstration Program • Private Loan Permanent Financing • SHA is partnering with a Non-Profit Developer • Non-Profit Developer will manage the tax-credit units initially
CAMMIE CLAGETT APARTMENTS Constructed 1971 150 Units $12,299,800 in needs ($81,998 per unit)
Concept
Operating Costs Measured at a PUPA Level PUPA = Per Unit Per Annum Our Typical Public Housing - PUPA = $5,200 Our Typical Post RAD Section 8 Project Based Unit - PUPA = $4,200 Differences Less Maintenance Personnel Per Unit (Every unit is new or like new) No Family Self-Sufficiency Requirements No Community Service Requirements
Operating Costs If you are a Housing Authority consider keeping the property in the name of the HA and put it into the deal through a long-term ground lease.
• Possibly remain tax exempt, financial savings. • May still qualify for participation in the South Carolina State Insurance Reserve Fund, financial savings.
Other Important Things • • • • • •
PBV vs PBRA Developer’s Fees Choice Neighborhoods Mod Rehab Portfolio Applications Consider converting current PH in current Tax Credit Deals to increase revenue • Applications (number of units, 60,000) • Utilities can change (recommended) • Existing PH residents over income
Daryl Dalton Director of Housing Operations Spartanburg Housing Authority [email protected] (864) 598-6102
Who is the Spartanburg Housing Authority (SHA)?
SHA is a medium sized Housing Authority. • We manage 1,132 Public Housing Units in 10 AMPS, 14 different locations. • We manage 1,827 Section 8 Vouchers and 132 Section 8 Projected Based Units. • We administer 331 Section 8 Mod Rehab Units and 383 Tax Credit Units.
Why is SHA participating in the RAD (Rental Assistance Demonstration) Program?
SHA has a backlog of needed repairs. SHA has $37.5 million in needs (Cammie Clagett alone has $12 million) and HUD has $25.6 Billion. Currently SHA cannot borrow against these properties. Once converted to private ownership, owner could borrow against property to make needed repairs.
Breakdown of Funding Needs Exigent Needs
Immediate Health & Safety Needs
Other Immediate
1-5 Years 6-10 Years 11-15 Years 16-20 Years
Cammie Clagett
$2,300 $4,828,800 $2,629,500 $2,584,700
Archibald High Rise
$0,025
$220,000
$975,400
$21,000 $1,352,500 $3,377,900
Other
Total
$1,207,100
$72,000 $12,299,800
$20,000
$ - $5,051,425
$60,000 $1,057,500
$ - $2,299,800
$60,000
Archibald Villages
$-
$444,800
$252,500
$485,000
Tobias Court
$-
$35,400
$460,200
$60,400
$796,500
$35,400
$ - $1,387,900
Prince Hall
$352,500
$714,500 $1,760,000
$382,500
$680,000
$222,500
$ - $4,112,000
Camp Croft
$50,000
$10,000 $1,921,000
$173,200
$470,400
$575,200
$ - $3,199,800
Victoria Gardens
$24,300
$40,800
$398,800
$752,200
$315,900 $1,045,000
$ - $2,577,000
Leland
$23,600
$5,800
$364,200
$531,300
$480,900
$142,600
Spruce
$20,000
$1,500
$102,400
$138,600
$169,800
$36,000
$-
$468,300
Gooch
$10,800
$-
$313,200
$334,800
$63,000
$118,800
$-
$840,600
$38,000
$80,700
$348,800
$508,200
$462,600
$132,000
$35,200
$1,500
$225,600
$323,400
$316,200
$84,000
$-
$985,900
$102,600
$16,200
$605,500
$-
$724,300
Barksdale
$20,000
Watson J C Anderson
$Totals
$22,325 $5,603,200 $3,985,500 $10,083,900 $8,145,500 $3,891,500 $5,281,600
$462,500 $2,010,900
$1,590,300
$534,500 $37,548,025
To pay off CFFP Debt. In 2006 SHA Participated in HUD’s Capital Fund Financing Program (CFFP) and borrowed $5,763,000 to construct JC Anderson Apartments. This has had several negative impacts as follows:
1) Each year SHA now receives approximately $1.2 million for Capital Improvements. Off the top comes $440,940 towards repayment leaving SHA with only $759,060. This debt will not be repaid until 2024. We are not receiving sufficient Capital Funds to adequately maintain our Public Housing properties.
2) SHA cannot demolish or dispose of any Public Housing Units until the CFFP Debt is repaid. This prevents us from demolishing Cammie Clagett until all or a portion of the debt is repaid. There are specific limitations on how the debt must be repaid.
The current balance on our CFFP Loan is $3,810,249.43 our 7 Property Deal will allow us to retire $2.5 million leaving a balance of $1,310,249.43. This remaining balance of should be wiped out with the 72 unit deal at Cammie Clagett.
DEAL 1 No. Property 1 Barksdale 2 Gooch 3 JC Anderson 4 Leland 5 Spruce 6 Tobias 7 Watson Total
No. of Units 44 36 54 46 12 118 28 338
Financing Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC Bond + 4% LIHTC
• 4% Low Income Housing Tax Credits • Private Activity Bonds • Rental Assistance Demonstration Program • 221d4 HUD Loan Permanent Financing • SHA is acting as its own Developer • A SHA affiliate will manage these tax-credit units
JC ANDERSON APARTMENTS Constructed 2008 54 Units $480,952 in needs ($8,906 per unit)
TOBIAS BOOKER HARTWELL APARTMENTS Constructed 1997 118 Units $2,404,762 in needs ($20,379 per unit)
LELAND APARTMENTS Constructed 1984 46 Units $1,576,321 in needs ($34,268 per unit)
FRANK GOOCH APARTMENTS Constructed 1975 36 Units $1,245,667 in needs ($34,602 per unit)
ELLEN C. WATSON APARTMENTS Constructed 1984 28 Units $988,357 in needs ($35,298 per unit)
SPRUCE APARTMENTS Constructed 1984 12 Units $426,845 in needs ($35,570 per unit)
BARKSDALE APARTMENTS Constructed 1984 44 Units $1,714,595 in needs ($38,968 per unit)
Project Name: Print Date: Version Date: Developer: Spreadsheet Version:
SHA 7 LLC 4/16/2014 4/16/2014 Spartanburg Housing Authority 4% LIHTC/PAB/RAD - 221d4 Perm Financing
Project Information Financing Assumptions Syndication Assumptions Number of Units Financial Closing/Construction Start Construction Period (months) Construction Completion Date Stabilization/Conversion to Perm. Financing 8609's
338 10/1/2014 16 2/29/2016 5/31/2016 8/31/2016
Credit % - 30% PV LIHTC Annual Credit Projected
3.25% 834,091
Project Cost First Mortgage - FHA 221(d)4 Acquisition Carryback Note* GP Loan (ACC Reserves) HOME Funds* Deferred Developer's Fee LIHTC Equity (GP Portion) LIHTC Equity (Investor Portion)
28,598,396 9,500,000 10,647,000 1,000,000 362,230 100 7,089,066
Vacancy Rate 7% Effective Gross Income 2,142,781 Operating Expenses with Replacement Reserves 1,428,195 NOI 714,587 DSC Year 1 DSC Year 15
1.22 1.22
Construction Period - Short term TE Bonds to facilitate 4% LIHTC Depreciable Basis + Land # Short TE Bond Issue 54% 12,800,000 FHA 221(d)4 - Const. to Perm. Loan Interest Rate Construction Term (months) - interest only Permanent Period (years) Amortization
9,500,000 5.50% 24 40 40
4% Equity Proceeds- Const. Period
4,829,434
Prorata Draw 66%
Acquisition Carryback Note* # Interest Rate 3.36% (AFR) Amortization 40 Term 42 Start Date 10/1/2014 Maturity 9/30/2056 * available at close; payments from available cash flow beginning at permanent conversion. Carryback Note amount is based on anticipated "as-is" appraised value of the improvements ($31,500/unit) GP Loan # Interest Rate 0% Amortization TBD Term TBD Start Date TBD Available at close; payment from available cash beginning at permanent conversion
Total Tax Credit Investor Percentage
8,340,912 99.99%
LIHTC for Syndication
8,340,078
Price per Credit
48%
0.85
Federal Tax Credit Equity
7,089,066
Financing Closing Closing 20.00% Date
1,417,813 10/1/2014
Construction Period Prorata Pay-ins Construction 48.13% 3,411,621 Date (range) 11/30/14 2/29/2016 Conversion/Stabilization Perm. Conv. 30.46% Date
2,159,632 5/31/2016
Final Certification 8609s 1.41% Date
100,000 8/31/2016
DEAL 2 No. Property No. of Units Financing 1 Cammie Clagett 72 9% LIHTC Total 72
• 9% Low Income Housing Tax Credits • Rental Assistance Demonstration Program • Private Loan Permanent Financing • SHA is partnering with a Non-Profit Developer • Non-Profit Developer will manage the tax-credit units initially
CAMMIE CLAGETT APARTMENTS Constructed 1971 150 Units $12,299,800 in needs ($81,998 per unit)
Concept
Operating Costs Measured at a PUPA Level PUPA = Per Unit Per Annum Our Typical Public Housing - PUPA = $5,200 Our Typical Post RAD Section 8 Project Based Unit - PUPA = $4,200 Differences Less Maintenance Personnel Per Unit (Every unit is new or like new) No Family Self-Sufficiency Requirements No Community Service Requirements
Operating Costs If you are a Housing Authority consider keeping the property in the name of the HA and put it into the deal through a long-term ground lease.
• Possibly remain tax exempt, financial savings. • May still qualify for participation in the South Carolina State Insurance Reserve Fund, financial savings.
Other Important Things • • • • • •
PBV vs PBRA Developer’s Fees Choice Neighborhoods Mod Rehab Portfolio Applications Consider converting current PH in current Tax Credit Deals to increase revenue • Applications (number of units, 60,000) • Utilities can change (recommended) • Existing PH residents over income
Daryl Dalton Director of Housing Operations Spartanburg Housing Authority [email protected] (864) 598-6102
