Pullman Wheelworks Wins Financing for Rehab
- May 02, 2012
Chicago—Mercy Housing Lakefront and National Housing Trust/Enterprise Preservation Corp. have obtained financing for the rehabilitation of the Pullman Wheelworks, a 210-unit affordable housing apartment building on Chicago’s south side. Pullman Wheelworks, built in 1903 as part of the factory town developed by railroad industrialist George Pullman, is listed on the National Register of Historic Places and is being redeveloped as part of an overall neighborhood revitalization plan over the next several years.
Red Mortgage Capital LLC processed and funded a $9.57 million FHA 221(d)(4) insured mortgage commitment through HUD Chicago, a cornerstone of the project’s financing. The project’s overall financing had multiple layers of capital and a tight timeframe in which to secure the FHA commitment. Ultimately, 11 sources of capital were used, including tax-exempt bonds issued under the U.S. Treasury’s New Issue Bond Program, historic tax credits, 4 percent low income housing tax credits and HOME loans.
The rehabilitation project, scheduled for completion in about 18 months, will include major renovations to kitchens, bathrooms and balconies, new windows throughout, and new and expanded common space areas. Having last been rehabbed in 1980, the revitalization will ensure the long-term economic viability of the property, thereby preserving housing for low-income residents of the area. The property has 122 one-bedroom units; 28 two-bedroom units; 54 three-bedroom units; and six studio units.
Obtaining the financing that affordable housing needs, either for development or rehab, is only going to get more difficult in the coming years, according to Tracy W. Peters, senior managing director and co-head of affordable housing of Red Mortgage Capital. But she tells MHN that there are steps affordable housing interests can take to help mitigate the difficulties.
“The industry needs to promote and encourage the development and modification of debt products at HUD, Fannie Mae, and Freddie Mac that are more viable in conjunction with low income housing tax credits,” she says. For example, the Tax Credit Pilot Program at HUD or Fannie Mae’s 7/6 ARM Program.
“The industry also can encourage developers and other professionals to point out to lawmakers and community leaders certain facts about affordable housing,” Peters continues. It’s important that policymakers understand “the transformations that are happening with these properties—and their surrounding communities—that are financed using low income housing tax credits, Fannie, Freddie and FHA debt products, and various soft funds.”