Charlie Harris, CASA of Oregon

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Charlie Harris, CASA of Oregon

  1. 1. LINNHAVEN STONEBROOK Preservation of Two Rural Development Projects Charlie Harris, CASA of Oregon
  2. 2. Linnhaven Apts 26 Unit Elderly/Disabled
  3. 3. Stonebrook Apts 25 Unit Family Project
  4. 4. PROJECT SUMMARY: <ul><li>Consolidation, transfer and rehabilitation of 2 RD projects located in Sweet Home, Oregon </li></ul><ul><li>both built in mid-70s. </li></ul><ul><li>Had 37 units of RA, rec’d 12 add’l units. </li></ul><ul><li>Sponsor is Willamette NHS </li></ul><ul><li>Owner is LLC subsidiary of WNHS </li></ul>
  5. 5. SCOPE OF REHAB LINNHAVEN <ul><ul><li>Exterior rehab : new siding, new windows, new 2nd story landings, ext paint. </li></ul></ul><ul><ul><li>Interior rehab : new refrigerators, stoves, exhaust fans, sinks & faucets in all kitchens; new shower/tubs, sinks, faucets, flooring in bathrooms </li></ul></ul><ul><ul><li>New community building w/ mgt office, tenant meeting space </li></ul></ul>
  6. 6. SCOPE OF REHAB STONEBROOK <ul><ul><li>Exterior rehab: new roofs, new siding, new windows, new 1st floor decks, ext. paint; New playground </li></ul></ul><ul><ul><li>Interior rehab : new refrigerators, stoves, exhaust fans, sinks & faucets in all kitchens; new shower/tubs, sinks, faucets, flooring in bathrooms </li></ul></ul><ul><ul><li>New community building w/ office, tenant meeting space </li></ul></ul><ul><ul><li>Accessibility: converted 2 units for full accessibility </li></ul></ul>
  7. 7. FINANCING USES OF FUNDS <ul><li>Total Development Cost: $5,000,000 ($98,000 per unit) </li></ul><ul><ul><li>Acquisition: $1,654,000 ($32,500 per unit) </li></ul></ul><ul><ul><li>Rehab Cost: $2,180,000 (($43,000 per unit) </li></ul></ul><ul><ul><li>Soft Costs: $1,150,000 ($22,600 per unit) </li></ul></ul>
  8. 8. SOURCES OF FUNDS <ul><ul><li>$3,100,000 Sec. 1602 Exchange Funds </li></ul></ul><ul><ul><li>$1,062,580 RD 515 loans </li></ul></ul><ul><ul><ul><li>$ 300,000 Assume Existing Loans (MPR debt deferral) </li></ul></ul></ul><ul><ul><ul><li>$ 762,580 New 515 loan: (1%, 30 yr term, 50 yr amortzn) </li></ul></ul></ul><ul><ul><li>$ 585,000 HOME grant w/ soft loan to LLC </li></ul></ul><ul><ul><li>$ 90,000 Green/Energy Incentives: (HAC, Enterprise, Oregon Wx) </li></ul></ul><ul><ul><li>$ 130,000 Other Grants: (OHCS, NeighborWorks) </li></ul></ul><ul><ul><li>$ 50,000 Seller Contribution: (for deferred maintenance) </li></ul></ul>
  9. 9. TIMELINE <ul><li>May, 2007: Purchase Agreements </li></ul><ul><li>May, 2007: RD MPR Pre-Application </li></ul><ul><li>June 2007 Notification of Pre-App Approval </li></ul><ul><li>October, 2007: Appraisal </li></ul><ul><li>December, 2007: CNA </li></ul><ul><li>Jan 2008 to Aug. 2009: Full RD Transfer Application </li></ul><ul><li>February, August 2008: Application for LIHTC, state funding </li></ul><ul><li>November 2008: Notification of state award </li></ul><ul><li>August 2009 Notification of MPR Funding Tools </li></ul><ul><li>August 2009 Application for 1602 Exchange funds </li></ul><ul><li>September 2009 RD Conditional Commitment </li></ul><ul><li>December 2009 Loan Closing </li></ul><ul><li>January to June, 2010 Rehab </li></ul>
  10. 10. Timeline <ul><li>Only person put out by 3 yr timeline was one of seller’s realtors </li></ul><ul><li>Since sellers have been dealing with RD for 30 years, they’re used to LLOONG process </li></ul>
  11. 11. ISSUES <ul><li>What path to go down for RD? </li></ul><ul><ul><li>MPR (see NOFA) </li></ul></ul><ul><ul><li>Transfer </li></ul></ul><ul><ul><ul><li>7 CFR 3560.406; Hdbk 3-3560, Chp. 7 and/or </li></ul></ul></ul><ul><ul><li>Prepayment </li></ul></ul><ul><ul><ul><li>With Incentives </li></ul></ul></ul><ul><ul><ul><li>Without incentives </li></ul></ul></ul><ul><ul><ul><li>7 CFR 3560.651 to 700; Hdbk 3-3560, Chp. 15. </li></ul></ul></ul>
  12. 12. ISSUES (cont.) <ul><li>Factors in Deciding what path to go down for RD? </li></ul><ul><ul><ul><li>Is property subject to use restriction and/or prepayment? (Need original loan date and date of last RD servicing action) </li></ul></ul></ul><ul><ul><ul><li>Additional RA needed? </li></ul></ul></ul><ul><ul><ul><li>Eligibility for $50k predev grant? </li></ul></ul></ul><ul><ul><ul><li>Increased Return to Owner? </li></ul></ul></ul><ul><ul><ul><li>Need for new 515/514 loan? </li></ul></ul></ul><ul><ul><ul><li>Need for other MPR tools </li></ul></ul></ul>
  13. 13. ISSUES (cont.) <ul><li>When do you know what you’re getting from RD MPR program? </li></ul><ul><li>Using LIHTC for rural RD scattered-site project (Section 1602 to the Rescue!) </li></ul><ul><li>Transfer of Project Accounts </li></ul><ul><li>Forecast Balances of Assumed Loan(s) </li></ul><ul><li>Drawdown of Funds (RD last in, but consider RD-ineligible costs like dev fee) </li></ul><ul><li>Relocation </li></ul>
  14. 14. ISSUES (cont.) <ul><li>Operating Budget </li></ul><ul><ul><li>Replacement Reserves </li></ul></ul><ul><ul><li>Rents v. CRCU (and v. current rents, if not 100% RA) </li></ul></ul><ul><ul><li>“ Soft Second” HOME loan and Project Cash Flow </li></ul></ul><ul><ul><li>Project Consolidation gives owner leeway—one operating budget for both projects </li></ul></ul>
  15. 15. Non-Issues <ul><li>Timing with Multiple Funding Sources </li></ul><ul><li>Additional RA (State Office provided 12 units of recaptured RA) </li></ul><ul><li>Lien Priorities (no construction lender, RD is only perm lender) </li></ul>

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