CHW Finishes Redevelopment of LA County Affordable Housing
- May 06, 2015
Azusa, Calif.—Community HousingWorks (CHW) has completed work on the redevelopment of the 88-unit Azusa Apartments. In doing so, the San Diego-based affordable housing developer was able to preserve the property’s affordable status. It’s open to families and individuals with incomes of up to 60 percent of area median income (which is $49,800 for a family of four in LA County.)
Azusa Apartments was originally developed in 1971 using a HUD Section 236 loan and project-based rental assistance, and was refinanced in 1995 with a HUD Section 241(f) loan. The affordability restrictions requiring occupancy by low and very low income persons had expired by 2013, and the existing owner was eligible to pre-pay the 241(f) loan, which would allow the property to become market rate. Also, the existing Section 8 HAP Contract was on a one-year term, which was set to expire in late 2013 with no requirement for the owner to renew.
CHW competed with over two dozen purchase offers to acquire the property in July 2013. The purchase was financed with bridge loans from U.S. Bank, NeighborWorks Capital and PVCHA.
After winning an allocation of highly competitive 9 percent tax credits, CHW financed the renovations with an FHA 221(d)(4) mortgage from RED Capital, low income housing tax credit equity from Union Bank, a 20-year renewal of a Project-Based Rental Assistance contract and FHA mortgage insurance from HUD, and a CHW sponsor loan with funds from NeighborWorks America. Total acquisition and development cost for Azusa Apartments was $30 million.
CHW completely modernized Azusa Apartments, making improvements to major systems, energy and water conservation, and new interiors and apartment unit upgrades. According to the company, the renovation achieved a 27 percent improvement in energy efficiency in the units, while new solar photovoltaic system and domestic solar hot water panels now reduce the common area utility costs by 50 percent.