NEW YORK--(BUSINESS WIRE)--R4 Capital, a national affordable housing tax-credit syndicator, lender, and asset manager, celebrated the groundbreaking of Gloria Drive Apartments in the Pocket area of Sacramento, California alongside the developer, financial and social services partners, and federal, state and local officials.
The property includes 32 dwelling units in seven, one-story, garden-style residential buildings, plus a community building. It was built in 1982 and has historically operated as a HUD Section 8 multifamily property with a full Section 8 HAP Contract on all of the 31 revenue producing units. The HAP contract, due to expire this year, will instead be extended for an additional twenty years which means that residents will be able to remain in their units and continue to pay no more than 30% of their income for rent. The property has not had a full interior or exterior renovation since its original construction forty years ago. The recent award of 9% Federal Housing Credits and California State Housing Credits will fund renovations of nearly $200,000 per unit.
The proposed rehabilitation will meet California’s strict energy-efficiency requirements. Unit upgrades will include, among other items, new energy efficient appliances; new kitchen cabinets and countertops; in-unit water heaters and PTAC systems; low-flow plumbing fixtures; Energy Star lighting fixtures; and the replacement of all windows. In addition, four of the units will be upgraded to be fully ADA compliant and two others will meet audio/visual impairment requirements. The community building which will include a community room with kitchen, leasing office, bathroom and laundry facilities will receive similar upgrades. Roofs on all buildings will be replaced and solar panels will be installed. Grounds will be upgraded and a perimeter fence and security cameras will be installed.
Social services will be provided by Life Skills Training and Educational Programs, Inc. (“LifeSTEPS”). LifeSTEPS is a nonprofit with extensive experience in providing social services to residents of Housing Credit communities since 1996. Available programs are extensive and will be provided to meet the desires and needs of the residents.
The total development costs of $22.3M will be financed with over $13M of Federal and State Housing Tax Credit equity provided by R4 Capital and an FHA 221(d)(4) permanent loan.
Attendees included the Sacramento District 7 Councilmember, representatives from the State Treasurer’s office that allocated the Credits and from U.S. Congresswoman Doris Matsui’s office as well as representatives from partners involved in the rehabilitation: California Organized Investment Network (COIN), CSAA Insurance Group (equity investor), Dawson Holdings, Inc. (affordable housing developer), LifeSTEPS (social services provider), R4 Capital LLC (tax credit syndicator), and The Meridian Companies (placement agent).
“This property was soon to lose its rental subsidy and be sold to a market rate developer when we stepped in with R4 Capital, allowing the residents to remain in their units and preserving the 32 units of affordable housing for another 55 years.” notes Tim Fluestch, VP of Acquisitions at DHI.
“Preserving a low-income property in an established residential area launches revitalization and ensures long-term housing affordability for the families that already live there. As evidenced by attendees who worked to bring us to this groundbreaking, it’s a move all of us can get behind.” said Cory Bannister, R4 Capital executive vice president, R4 Capital.
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