$45.6 Million Redevelopment Project is Part of Indiana’s Vital “Moving Forward” Rural Development Program; Completes Financing Phase of Project, Including “Twinning” of Both 4% and 9% Tax Credits, and Readies Over a Dozen Properties for Immediate Renovations
Greystone Affordable Development, a national affordable housing developer, is spearheading the $45.6 million redevelopment of 336 affordable housing units in Indiana as part of the state’s “Moving Forward” Rural Development program. Partnering with property owner and operator Justus Property Management, Inc., Greystone is guiding a complex recapitalization and renovation process that brings energy efficiencies and renewed housing for residents of 14 properties in 10 counties across Indiana.
A Recipe for Success
Indiana’s governing bodies’ commitment to and support of innovative affordable housing programs and policies have set the stage for a successful preservation process, including maximization of resources. Indiana’s Moving Forward Program, launched in 2015 by Indiana Housing and Community Development Authority (IHCDA) and Energy Systems Network (ESN), is designed to create affordable housing that increases quality of life while decreasing the cost of living for low to moderate income individuals and families. These forward-thinking programs and policies will not only help preserve this much-needed affordable housing, but they will also encourage and spur investment within the rural communities across the state where these affordable housing properties are located.
With the continued support of affordable housing by Lt. Governor Suzanne Crouch, U.S. Senator Todd Young (R-IN), and IHCDA, Greystone and Justus have persevered and overcome the numerous development headwinds related to the pandemic to secure and ultimately close the financing needed to both preserve and renovate these properties. Funding sources, organized by Greystone’s experienced team, include a rare mix of both 4% and 9% tax credits, the former which recently won a victory in Congress as part of a bi-partisan bill passed at year-end that established a permanent interest rate floor, proving critical to this transaction.
The combination of funding sources enabling this state-wide preservation effort includes $14.7 million in USDA 538 guaranteed loans from Greystone; $12.4 million in capital contributions from purchase and syndication of both 4% and 9% Housing Credits by Boston Financial Investment Management; $10.6 million in multifamily private activity tax-exempt bonds from IHCDA; $6.6 million of assumed and subordinated USDA Section 515 long-term debt; $1 million in funding from IHCDA via the Rural Revolving Loan Fund; and other miscellaneous sources totaling $236,000.
Renovations in the Pandemic Era
The pandemic created the need to completely recalibrate the way Greystone executed their traditional rapid (same day) and in-place rehabs. However, with new processes in place and the heightened focus on safety of residents and contractors at the forefront of planning, Greystone anticipates a 19-month construction process for the Indiana portfolio. Substantial renovations for Justus’ properties, averaging over $44,000 per unit, will include both interior and exterior improvements and modernization. Furthermore, no qualified resident will be permanently displaced.
“I applaud Greystone and Justus for their unwavering commitment to this process, which is so vital to the residents of Indiana,” said Lt. Governor Crouch. “The partnership we’ve forged should serve as a model for other states to act now and save affordable housing.”
“It’s really incredible how nimble our teams have been in solving new challenges to get the deal done despite the pandemic,” said Tanya Eastwood, head of Greystone Affordable Development. “We have learned so much, and the most important lesson is that no matter what’s happening in the world, we must do what we can to save this housing for the sake of the residents. It’s truly what drives us.”
“Greystone Affordable Development’s guidance and expertise in this redevelopment has been truly invaluable to our team, from knowledge on tax credits to sustainability,” said Steven K. Walters, CEO, Justus Property Management. “Even with the added complexity of a pandemic, working on this process with them was nothing short of incredible, and we are grateful for the positive outcome we are able to provide to the families living in our communities.”
“When we are leading a transaction such as this, with the potential to impact hundreds, if not thousands of individuals, it becomes clear what our mission is, and that is to deliver safe, clean and renewed housing while keeping our commitment to the owner,” said Will Eckstein, Senior Vice President, Greystone Affordable Development. “It’s been an honor to contribute to the preservation of critical housing stock in Indiana, and a pleasure to work with the Justus team as well as representatives from across the state of Indiana.”
“We are so thrilled with the progress and accomplishments of the Moving Forward program and the positive impact it has made on affordable housing across Indiana,” added Jacob Sipe, Executive Director, Indiana Housing and Community Development Authority. “We are thankful for all participants’ contributions and their continued commitment to bettering the lives of residents at these communities statewide.”