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MSHDA Board approves funding for four housing development projects to create or preserve more than 760 affordable rental housing units
June 23, 2022
Board also oks measures supporting new energy-efficiency program
LANSING, Mich. -- Housing developments in Clawson, Detroit, Grand Rapids and Kalamazoo received loan approval from the Michigan State Housing Development Authority (MSHDA) Board this week to construct 466 new affordable apartments and preserve 300 more across the three projects.
“Efforts to address the shortage of quality affordable housing hinge on the ability to create new affordable housing stock while at the same time preserving and upgrading what already exists,” said Chad Benson, MSHDA rental development director. “The resolutions passed by the board this month address both of those areas of need and will go a long way in providing equitable access to affordable housing to those who need it most.”
Clawson Manor in the City of Clawson was approved for feasibility and is expected to receive a tax-exempt bond construction loan in the amount of $26,026,608, a permanent mortgage loan of $19,233,297, and a Housing Trust Fund loan of $6,308,521 for the preservation and upgrade of 251 affordable apartments for seniors. Property improvements will include a new roof, windows, and HVAC system, fire alarm upgrades, enhancements to common areas, new kitchen cabinets and flooring in each unit and more.
Two loans totaling $38.4 million were also approved by the board to create 111 affordable units as part of River’s Edge, a proposed workforce housing development in Kalamazoo. Rent in these units will be restricted to 60% of the area median income. The project also includes 115 market rate units.
HOM Flats at Maynard in Grand Rapids received construction financing from MSHDA in March 2022. The volatile pricing for construction materials resulted in an increase of just over $5 million to construction hard costs for the project, along with $2 million in related soft costs. The board authorized a loan of $5,315,280 to help with this increase in construction costs to advance the preservation of 240 affordable family units. The board also authorized an additional loan of $11,107,987 for short-term construction bridge financing.
Field Street III in Detroit initially received construction financing from MSHDA in 2020. However, volatile pricing for construction materials resulted in an increase of nearly $2 million to construction hard costs for the project. The board authorized an additional loan in the amount of $1,448,201 to help with this increase in construction costs to advance the preservation of 49 affordable family units.
The board also granted the executive director the delegated authority to issue commitments and grants up to $1 million for the MI-HOPE Program. MSHDA is launching the federally funded program this summer to provide residential clean energy improvements for home rehabilitation, assistance to existing owner-occupied homeowners, and occupied rental properties for structural and mechanical repairs, and for stabilization and enhancement of Michigan neighborhoods.
The $30 million program, which targets occupants at income levels at or below 300% federal poverty level, is funded by the U.S. Department of the Treasury’s American Rescue Plan Coronavirus State and Local Fiscal Recovery Funds.
“This change will expedite the awarding of MI-HOPE Program funds to subrecipient agencies and ensure the Authority can meet Treasury’s required deadlines,” said Tonya Joy, MSHDA Neighborhood Housing Initiatives Division director. “We are looking forward to launching the program and partnering with local entities to promote energy efficiency within existing housing stock to assist households in need.”
The board also authorized the Executive Director to approve and enter into grant agreements for $20 million of U.S. Department of the Treasury American Rescue Plan funding to the City of Detroit and The Heat and Warmth Fund (THAW). Detroit’s allocation must be used to invest in and repair homes, which will promote public health and safety and increase property values. It is anticipated that the $5 million to THAW will be used for a low-income home energy assistance program.