To understand the power of teamwork in getting affordable housing deals done, look no further than Jevue Club Apartments in New Martinsville, W.Va.
Not far from the banks of the Ohio River in the heart of Appalachia, this 42-year-old apartment community of 40 two-bedroom units “…was a great fit for our new fund with Freddie Mac,” says Ryan Thayer, acquisitions manager at equity syndicator CAHEC. “It’s a project we all certainly wanted to be involved in.”
Assisted affordability
The project originally caught the eye of Columbus, Ohio-based affordable housing developer Buckeye Community Hope Foundation in 1996. The Foundation’s founder and president, Steve Boone, says they were attracted by the “… 31 of 40 units under rental assistance through the U.S. Department of Agriculture’s Rural Development (USDA RD)Sec. 521 program. The more rental assistance, the better.”
The apartments require a deep renovation, right down to the studs. “We’re replacing just about everything,” Boone says. Ten units will be designated for households earning at or below 40% of the area median income (AMI), with the remaining 30 units at 60% of the AMI.
New LIHTC fund
Momentum for the project gained speed from some timely good fortune: CAHEC had recently partnered with Freddie Mac Multifamily on a $50 million low-income housing tax credit (LIHTC) fund targeting rural and underserved communities. The fund is now committed to eight affordable housing projects in four states, including $4.6 million for the Jevue project. “Jevue Club was one of the first projects we identified for our new fund with Freddie Mac. The preservation aspect, experienced development team, and location in rural mid-Appalachia made it a natural fit,” Thayer says.
Growing team
Boone credits the involvement of all parties in facilitating a smooth closing process. Additionally, the expertise Freddie Mac brought to the table was a stabilizing force. “The West Virginia Housing Development Fund (WVHDF) was really excited to hear that Freddie Mac was involved in the project. I think having them on board provided them with a lot of comfort,” Boone says.
In fact, the expertise of the entire project team runs deep. Woda Construction is serving as the general contractor, with RiverHills Bank providing the construction financing and permanent debt. Additionally, the WVHDF and USDA RD played an instrumental role in the renovation and recapitalization of the property.
Underserved market
The convergence of people, project, and vision delighted Freddie Mac officials, especially David Leopold, vice president, targeted affordable sales and investments, who closely followed the project. “Our goal with our LIHTC business is to develop a diversified portfolio while meeting the needs of underserved markets. We view underserved markets several ways, the most important of which is duty to serve. Duty to serve focuses primarily on rural and preservation,” Leopold says.
Inspiring others
Boone and Thayer couldn’t be happier with the planned rehab, scheduled to deliver later this year. Leopold is especially gratified. “Jevue Apartments exemplifies how we can add value and market stability,” he says. Leopold believes their funding focus is already inspiring others. “Our commitment is bringing technical assistance and best-in-class expertise to underserved markets. Even if a deal doesn’t come to our fund, there may be other capital sources now looking for deals.”
For more information on the creation and preservation of affordable rental housing, visit Freddie Mac Multifamily.
