Predevelopment and acquisition financing came from a variety of lenders — the Housing Partnership Fund, Century Housing Corporation, the Low Income Housing Fund, and the Enterprise Foundation, and construction financing was through Wells Fargo. The California Housing Finance Agency was instrumental in making this deal happen.

Kathy Weremiuk, loan officer with CalHFA, said that the way the financing worked out allowed “LINC to combine both the state Multifamily Housing Program (MHP) funds and the 4% federal tax credit funds.” These two programs together provided 80% of the permanent financing (50% came from the state MHP program funds, 30% came from federal tax credit funds and 20% came from a CalHFA loan). The total project cost was $7.6 million.

 
LINC can acquire and refurbish units for a total cost that is somewhere between one-half and two-thirds of the cost of developing the same complex from scratch. Construction costs and site development expenditures represent only a portion of the overall costs of a development. In many cases, the infrastructure cost (roads, water, sewer, and other public services) can add significantly to a project’s budget.

For example, the cost for Beechwood Manor, with expiring Section 236 use restrictions, is about $83,000 per unit. “If we were to have bought the land and gone through the design, entitlement, and finance processes, it could easily cost more than $140,000 per unit, defeating the affordability goal,” Johnson said.

Another type of housing that LINC has been involved with is manufactured housing. Working closely with the Torres Martinez Tribe, which owns and manages a 26,000-acre reservation around the Salton Sea, LINC is building a 300-space mobile home that will allow farm workers, who constitute a large percentage of the rural area’s population, to own their homes. This $6 million community development is being accomplished through a series of private and public partnerships utilizing a wide range of financing vehicles, and draws upon Department of Housing and Urban Development (HUD), Department of Agriculture and Riverside County funds, representing the first time USDA funds have ever been used to fund affordable housing on the West Coast, according to Johnson. The USDA loan guarantee program provides the lowest possible interest rates and the longest possible amortization.   Continue »

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