Faircloth to RAD: A Vision for Affordable Senior Housing in Dover, DE

Faircloth to RAD: A Vision for Affordable Senior Housing in Dover, DE

CSG assists as RAD Consultant in the first preservation transaction utilizing the Faircloth to RAD conversion closed on June 28th, 2023.

Many Public Housing Authorities (PHAs) across the country operate fewer rent-assisted units than their “Faircloth” authority limits them to. Faircloth authority is a cap that Congress established in 1998 on the number of public housing units the Federal government would support. There is existing Federal authority to provide deep rental assistance for nearly 220,000 units, provided the PHAs can finance the acquisition or initial construction. The Faircloth-to-RAD strategy targets this financing need. In response to this national effort, CSG served as RAD Consultant to Dover Housing Authority in the Faircloth to RAD conversion of Owens Queens Manor, marking the first preservation transaction utilizing the Faircloth to RAD conversion process.

In a Faircloth-to-RAD transaction involving the rehabilitation of two adjacent public housing properties, Owens and Queens Manor, Dover Housing Authority (DHA) developed 26 additional public housing units using HUD’s public housing mixed-finance program with pre-approval to convert to HUD’s RAD program through the Faircloth to RAD conversion process. Upon a successful construction closing record on June 28th of this year, the Owens Queen Manor project involved the rehabilitation of two adjacent properties: 50 public housing units at Queen Manor and 60 non-public housing LIHTC units at Owens Manor. As the first Faircloth to RAD preservation transaction in history, this project marked a significant milestone which highlights the importance of preserving and rehabilitating affordable housing. The Dover Housing Authority planned and executed the 110-unit rehabilitation in partnership with Leon N. Weiner and Associates (LNWA) as the developer.

Research into the greater Dover Market Statistical Area (MSA) indicates a significant demand for senior affordable housing in the region. As it stands, no new construction multifamily developments in the area are addressing this demand, indicating a necessary priority for Dover Housing Authority to address this need. The Owens Manor property has a senior preference, providing 48 affordable 1-bedroom units and 12 affordable 2-bedroom units.

The transaction was financed with

  • Private debt,
  • LIHTC equity,
  • State of DE HOME,
  • Housing Development Fund (HDF) funding,
  • American Rescue Plan Act (ARPA) funds,
  • Deferred developer fee,
  • And a seller note from Dover Housing Authority.

The 60 units at Owens Manor are composed of 26 Faircloth to RAD units and 34 Dover Housing Authority existing PBVs. Queen Manor’s 50 units were converted through a 40% RAD/60% Section 18 RAD Blend process.

Owens Manor under constructionUpon construction completion, Queens Manor includes 40% of the units transitioning to the Rental Assistance Demonstration (RAD) program while the remaining 60% are repositioned through the Section 18 housing program. This conversion will yield 20 units under the RAD initiative, bolstering affordable housing options, while 30 units will be designated as non-RAD Project-Based Vouchers (PBVs), contributing to a diverse housing landscape. Simultaneously, Owens Manor, comprising 60 units, encompasses a combination of Faircloth units and Project-Based Vouchers. Specifically, 26 Faircloth units will be activated, thereby becoming ACC (Annual Contributions Contract) units, whereas the allocation of 34 units will receive Project-Based Vouchers offered by the Dover Housing Authority (DHA).

Through example of this successful case study, Owens Queens Manor demonstrates the need of Public Housing Authorities as a whole to be adequately staffed and supported to pursue the preservation of their existing housing with high capital need through the Faircloth to RAD conversion process. Whether for a target focus of a senior population or enhanced quality of life of public housing residents as a whole, the successful closing of Faircloth to RAD Preservation transactions not only equips Public Housing Authorities to best serve their community-based mission and long term objectives; the rehabilitation and expansion of targeted affordable housing plays a cumulative role in stabilizing communities across the country to address local needs and accommodate all tiers of income, including the lowest on the economic spectrum.

Owens Manor RAD eventThis critical effort embodies an integral part of CSG Advisors Housing Strategies Group’s core mission: empowering communities through delivering deeply affordable housing as a pathway to housing stability and homeownership. As the first of Faircloth to RAD Preservation transactions completed by a PHA, CSG is optimistic that the successful closing of Dover Housing Authority’s Owens Queens Manor will spur the preservation-based rehabilitation of many more public housing properties to come through Faircloth to RAD. Contact us to help you make a positive impact in your communities.

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References

Senator Coons visits Dover to kickoff $1M renovation project for affordable housing apartment complex

Faircloth-to-RAD Program Utilized for Preservation for the First Time

Recent Press

    1. EmpowHER Ep 6: Emily Cadik, CEO Affordable Housing Tax Credit Coalition: The Power of Expertise - [PODCAST] Listen Now >>
    2. EmpowHER Ep 5: Lisa Lim, General Counsel of NYC Public Housing Preservation Trust: Breaking Barriers: AAPI Voices in Affordable Housing Leadership - [PODCAST] Listen Now >>
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    4. EmpowHER Ep 3: Leaving a profound mark on workplace equity and flexibility with Priya Jayachandran, CEO of National Housing Trust - [PODCAST] Listen Now >>
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CSG Advisors Incorporated is a national, full service, independent financial advisor that assists public finance clients in the design, financing and implementation of affordable housing, urban redevelopment and economic development initiatives. CSG has been the #1 financial advisor for affordable housing for 19 of the last 20 years, according to Thomson Reuters. CSG Advisors is entirely employee-owned and independent. Employee owners include minorities and women.

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