LUTHER SENIOR CENTER
The non-profit owner of the Luther Senior Center was determined to continue the mission that began in 1969 in which limited-income residents could benefit from affordable, basic housing provided to them in the respectable and convenient neighborhood of Richland, WA. Despite the pressure to either sell to a low income housing tax credit partnership or to opt out and convert to a lucrative market rate project, the owner board set their sights on a major rehabilitation of the existing project and the creation of additional units of affordable housing. Fortunately for the residents, they have succeeded!
The 74-unit elderly project was originally developed in two phases with 100% of the units receiving project based Section 8 via two Housing Assistance Payment (HAP) contracts. In this recent effort to preserve affordable housing for the long term, the two separate projects were merged into one by combining and extending the two HAP contracts for 39 years and refinancing through Centennial Mortgage, Inc. (CMI) under one FHA Section 223f loan of $3,392,000 with a 3.12% interest rate.
“Our goal was to keep the funding as streamlined as possible. Simply using straight Section 223f debt, we were able to generate nearly $14,000 per unit for renovation at the existing property and $1.4 million in cash proceeds for the sponsor to develop and internally subsidize 10 units of additional affordable housing on an adjacent site,” said Sunny Fitzgerald, VP of Affordable Housing at CMI. “The owners were resolute and unwavering in their desire to continue their mission and we were inspired to do all that we could to champion their purpose without adding unnecessary expenses or operational complexity.”
As in any endeavor of this magnitude, a team approach was vital. The Board of Directors of the Luther Senior Center elicited the development services of Goodale and Barbieri Company (G&B). The G&B management team of Tami Dolson and Paula Garland was joined by Sheryldene Rogers and Kim Conway to coordinate the effort. Drawing on their decades of experience in developing new construction of affordable multi-family projects, G&B’s role was to put together and execute the rehabilitation plan for Luther Senior Center as well as acquire and develop the adjacent properties. The City of Richland is contributing $181,000 of its CDBG funding to assist with the acquisition of a portion of the new development.
Gary Weible, board president says, “With the preservation incentives available for prepayment and subsequent refinancing we, along with our team at CMI and G&B, were able to make a meaningful contribution to our community. It was worth the significant effort and long-term commitment to be able to continue to provide HUD-subsidized housing for the disabled and low income residents. We are honored to serve our residents and we are grateful for the trust they placed in us.”
Centennial Mortgage is a mortgage bank providing capital through a variety of U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture (USDA) insured loan programs. Founded in 1975, Centennial Mortgage, Inc. (CMI) provides real estate financial services to owners and developers of multifamily housing, hospitals, nursing homes, and board and care facilities throughout the nation.
Sunny Fitzgerald has successfully financed innovative and complex affordable and subsidized multifamily housing and healthcare projects utilizing HUD and Fannie Mae and USDA. Taking a consultative, creative and collaborative approach, Sunny is an advocate for her clients and their mission to preserve and grow affordable housing stock.
Sunny can be reached at 206-641-9935 or firstname.lastname@example.org.