1. Case Study Texas Rural Rental Housing Preservation Academy
June 7, 2018

2. Case Study
Acquisition of failing 515 project by mission driven NP
Short sale, acquired for appraised value
Small Complex (18 units) in very rural community
Loss of subsidy and affordability can not be replaced
Original construction/loan: 1975
Major rehab with LIHTC:
Investor exit: 2013

3. Case Study
RD had a loan in default, unpaid property taxes, out of state ownership, poor property maintenance
Initiated foreclosure process
Negotiations took some time, original owner difficult to work with
NP made the case to funders to save the affordability

4. Case Study Total Project Cost $1,313,000
$830,000 physical improvements
$175,600 for rehabilitation (12 units)
$654,400 new construction (6 units)
$315,000 property acquisition (short sale)

5. Case Study Sources of financing RD-USDA $315,000
West Virginia Trust Fund $215,000
Federal Home Loan Bank AHP $500,000
West Virginia HOME funds $150,000
Private bank loan $85,000
Owner equity $48,000
Total: $1,313,000

6. Case Study
Reconfigured property now has 12 two bedroom units financed by RD-USDA with rental assistance
One six unit building split off from deed allowing tear down of damaged building (water, settling issues)
New building has 8 one bedroom units with no RD overlay, have HOME rents, affordable.
County H.A. providing vouchers for one bedroom units

7. Case Study Factors for success
Committed NP preserving affordable housing
Local ownership
Good relationship with H.A. for vouchers
Supportive elective and public officials
Strategy/plan for acq/rehab had flexibility
Great communication between NP and funders
Persistence
Patience