South County Housing
$2,750,000 Interim Loan
Purpose: Construction of single family affordable studio apartments
The north half of the county is Silicon Valley, south half is more suburban. There is nothing in the southern part of county that serves the homeless – Gilroy has highest per capita homeless population in the county. 45,000-50,000 people, 680 homeless.
Construction is just beginning. This project will house 26 studio apartments for chronically homeless individuals. We had all the permanent funding lined up but a couple sources don’t come in until the project is complete, so they needed a construction loan.
South County Housing got caught up in the single-family market problem. We didn’t necessarily get turned down by other lenders, but we know we would have had a lot of banks that couldn’t have made the loan based on stricter loan criteria.
Community Housing Capital (CHC) has a willingness to look beyond the surface and see that there are strong fundamentals that don’t show up on a balance sheet. To really look at the project itself and see what kind of support it has from community and other funding sources that make the project a good risk, and having faith in the org that they can see it through.
This two-story building will contain 26 units, scheduled for completion in February 2013. It’s next to a 60-unit apartment project that we own that is transitional housing for previously homeless or at-risk homeless families. They can live there for two years to get re-oriented. All infrastructure is already there – curbs, parking, gutters, sidewalks, utilities. We just have to build the building.
A sizeable amount of state, local, federal resources will help to support the project and its services. State – mental health services act provided funding for mentally persons – permanent housing. Besides some construction funding – providing $2M operational – everyone pays 30% of their income. They may pay just $150 in rent, so the operating subsidy from state is huge piece. HUD – McKinney-Vento program, which is the homeless program. It provides funding for some units. Homeless Mentally Ill – they will pay 30%. They will be on SSI; that will provide maybe half their monthly rent; the rest will come from subsidies.
Providing case management services – case management is part of the state program. The county pays for case management for each tenant – case managers will try to integrate them back into society and re-orient them to living in a building rather than under a bridge. Make sure they can do grocery shopping, pay their rent and bills monthly, basic stuff. Go to medical appointments, get medications if needed, help them get training if they want it.
CHC has flexibility and an understanding of NeighborWorks organizations and how we operate, and just an understanding of the economics we’re dealing with.