Neighborhood Development Services, Inc. (NDS)
For years, the 66-unit Terrill Apartment complex in Ravenna, Ohio, provided very low-income renters a place to live. Its residents tend to be young families, and subsidized housing is all they know. Asked by the city and township of Ravenna to save this badly needed but poorly maintained complex, Neighborhood Development Services saw an opportunity to not only rehabilitate the physical buildings to preserve this important source of affordable housing, but also to provide skill-building services to prepare its residents for employment and self-sufficiency.
NDS' acquisition of the project required that they assume the existing project financing due to prepayment penalties. NDS applied for a 9 percent Low Income Housing Tax Credit (LIHTC) to assist with the funding for long-term renovation and preservation. Once the tax credit allocation was awarded, NDS approached CHC for help with the balance of the construction financing. As CHC would be subordinate to the existing acquisition financing, CHC came up with an innovative solution: an assignment of the owner's interest in the project, resulting in fast and flexible financing.
"Without CHC's creative solution, we would have had to delay the project, pay off the first mortgage, including a prepayment penalty, and take out a new loan," said NDS Executive Director Dave Vaughan. "The time constraints involved would have put the
project in jeopardy. No other lender would have made the loan without a mortgage lien." Now under construction, the project will include new kitchens and baths, energy-efficient systems and a community room, along with other site improvements.
A unique service—HUD's Moving to Work job readiness and self-sufficiency program—was provided by the Portage County Housing Authority. The focus of this program is to move the chronically unemployed to self-sufficiency over time by building skills. Monthly rent is based on a sliding income scale; as residents start to earn more money, the federal government pays less and less of the tenants' monthly rent. "Eventually, the hope is that the family will be economically stable and self-sufficient and able to move on to other housing, making these units available for others who need help," says Vaughan.
Moving to Work programs are successful in curbing the cycle of poverty that's repeated many times with low-income families. There will be many positive economic impacts for these families and, consequently, for the community, as residents begin to earn wages, pay taxes and contribute to their local economy.
Terrill Apartments will become "housing of choice" and continue to provide affordable housing for extremely low-income families that have been living in substandard housing.