RRHA secures funding to build and renovate public housing units
Borrower : Roanoke Redevelopment and Housing Authority
Where : Roanoke, VA
Loan Amount : $719,000 and $802,250
Project Type : Commercial real estate loan
Opportunity
The Roanoke Redevelopment and Housing Authority (RRHA) is committed to providing quality, affordable homes for residents. Currently, RRHA is working on expanding housing options for elderly and disabled residents.
As part of the initiative, RRHA identified an opportunity to build eight new housing units in Roanoke’s West End in the Hurt Park neighborhood.
These units would join 1,276 units of public housing managed by RRHA, which also administers 2,053 units of federal Section 8 housing vouchers. Additionally, the authority owns and operates 24 housing units of new construction Section 8, and it manages 187 units in the Low-Income Housing Tax Credit program.
At the same time, RRHA recognized the need to renovate units in three of its public housing developments to make them accessible to elderly and disabled residents. Melrose Towers, Morningside Manor, and Jamestown Place all have units that were identified for accessibility upgrades per Housing and Urban Development’s Section 504 standards.
Solution
Real Estate Lending
Affordable housing is essential to the vitality of a community, and the Virginia Community Capital (VCC) team has provided financial support for earlier RRHA projects. Today, VCC is committing $802,250 in a self-funding commercial real estate transaction to support the construction of the eight new units in Hurt Park, along with $719,000 for the Melrose Towers, Morningside Manor, and Jamestown Place renovations.
To secure these transactions, RRHA uses a portion of its operating fund reserve balances as collateral for financing housing projects, which eliminates the funding and credit risk for VCC. Due to government regulations, RRHA cannot use its operating funds for direct construction. VCC can hold those funds for collateral, which enables us to make a construction loan at a rate below market rate.
Impact
The mission of RRHA is to provide affordable housing and homeownership opportunities; offer resources to aid residents in building self-sufficiency, self-esteem, and self-determination; and foster economic development and growth opportunities through redevelopment. The authority works with Roanoke City, area businesses, and homeowners to facilitate business and residential redevelopment opportunities.
These eight new homes will deliver needed affordable housing for elderly or disabled citizens, while both projects will support economic development and revitalization in their neighborhoods.