GOVERNMENT ASSISTED HOUSING
One of The Finch Group’s (TFG) core businesses is the development, operation and management of Government Assisted Housing (affordable, subsidized and low income housing). TFG has been involved in the development and operation of over 60 affordable, subsidized properties, containing (i) over 10,000+ units, $500M+ in debt and $200M+ in equity. Those developments have involved the use of many governmental programs designed to assist in the development and operation of affordable housing, including: the U.S. Department of Housing & Urban Development (“HUD”) BMIR, 202, 221(d)(3), 221(d)(4), 223(f), 236, 241, HOME, Rent Supplement, Rental Assistance Payments, Section 8 (in all its permutations), and Upfront Grant programs; the low-income housing tax credit authorized by Section 42 of the Internal Revenue Code (“IRC”); IRC Section 103 tax exempt private activity bonds; and the IRC historic tax credit; and various state programs.
Below are some of TFG’s prominent Government Assisted Property rehabilitation transactions, with links to each property’s complete case study.
Ginger Ridge Apartments, Calumet City (Cook County), Ill. – a 469 unit, $33±M dollar development. This 934 property was acquired from HUD for $1 in 1996 and received a $17±M Up Front Grant from the Department. Additional financing was obtained through a Fannie Mae credit enhanced Illinois Housing Development Authority tax exempt bond. After an extensive rehabilitation the property was placed in service in two parts in 1998 and 1999. Its 15 year LIHTC compliance period ends as of December 31, 2014. This redevelopment won the HUD National Best Practices Award for 1999.
Now, in 2015/2016 TFG has once again been retained by the 501(c)(3), owner of Ginger Ridge, to refinance, “re-syndicate,” rehabilitate and revitalize the property. Closing is anticipated to happen in mid-2016.
CHARLOTTE HARBORTOWN HOMES
Charlotte Harbortown Homes, a 553 unit development, was originally completed in 1974, financed by the New York State Urban Development Corporation (“UDC”), and supervised by the New York State Division of Housing and Community Renewal (“HCR”).
In 2003 Charlotte Lake River Houses, Inc., and its sponsor, The Finch Group (together “TFG”) set out to create a plan for physical improvements to the property, which would not only satisfy HUD’s requirement but also reposition the property to become a viable housing option for mature adults and families within the new Harbortown section of the Charlotte area, in Rochester, New York. TFG as the prior owner of Charlotte Lake River Homes, refinanced and “re-syndicated” the property and placed the “new” property in service in 2005.
Arbor Park Phases 1, 2 and 3, Cleveland, Ohio – is a combined 629 unit, $115±M dollar development with three separate but identical ownerships. TFG purchased this severely distressed (HUD was the actual first mortgagee) property in January, 1999, orchestrated a “friendly” foreclosure, refinanced the property using HUD 221 (d)(4) insurance, obtained a $25,160,000 HUD Upfront Grant and an additional $9M in funding from the City of Cleveland to assist in the tearing down of the original 820 units and totally rebuilt the property. The original 15 year LIHTC compliance periods end as of December 31, 2018, 2019 and 2020. This development has won numerous awards from HUD, the Congressional Black Caucus, the State of Ohio and the City of Cleveland.
In March, 2010, at a HUD foreclosure TFG took over ownership and management of Livingston Park. TFG diligently created a development plan that would (i) provide quality housing to its residents of limited financial means and (ii) provide a real opportunity to invest in its citizen’s social capital. One example of this is that the children of Livingston Park will have exceptional educational opportunities as they are zoned for the Shaker Heights school system. Shaker Heights is viewed by many as the preeminent suburb of Cleveland and has a very “highly rated” school system.
Livingston Park Apartments, Cleveland, Ohio – a 195 unit, $12±M dollar development. With the full support of the City of Cleveland and HUD, TFG took over the management of a failed LIHTC property in 2009, purchased the property in 2010, obtained new LIHTC, totally rehabilitated the property and placed it in service in 2011.
Rockport Apartments, Cleveland, Ohio – a 144 unit, $12.5M dollar development. TFG obtained the note (November, 2011) on this previously conventionally financed property and, working with the City of Cleveland, Cuyahoga County and HUD, foreclosed upon, refinanced and rehabilitated the property. Using a duel approach which included short term tax exempt bonds and a 40 year 221 (d)(4) HUD insured loan TFG was able to obtain LIHTC’s. The final Certificate of Occupancy was issued on January 2, 2013 and, as of March 31, 2013, the property is 70+% occupied. The selected placed in service date is 2013. Today the property is stable and fully occupied.