Paragon Mortgage Corporation arranged the HUD 221(d)(4) Substantial Rehabilitation construction loan for Coffelt-Lamoreaux Apartment Homes – one of the largest, most complex RAD conversion projects in the Southwest US.
“Paragon Mortgage Corporation provided principal underwriting services for one of the most complex rehabilitation projects in the history of Arizona.” – Kimberly Taynton, MAP Underwriter for Paragon Mortgage Corporation. The mixed-financing structure included a HUD Section 221(d)(4) construction and permanent loan, CDBG Funds from the City of Phoenix, State Housing Trust Funds from the Arizona Department of Housing, Federal Home Loan Bank AHP Funds, two (2) seller carryback notes and Historic tax credits. The developer is utilizing 4% tax credits and cash-collateralized tax-exempt bonds. This structure combines tax exempt, short term bonds with a taxable permanent loan which are both credit enhanced with FHA mortgage insurance and a GNMA Mortgage backed security all under a master lease arrangement.
“The most complicated housing project in the State of Arizona” as originally published on AZ Central on Sunday, May 8th, 2016 by Brenna Goth…
The nearly 40-acre public housing project, built in 1954, has deteriorated. Maricopa County lacked the funds to redevelop. Demolition was a practical option available to the county, but hundreds of low-income residents would be displaced in the process. – Rob Schumacher/The Republic
When nearly 40 acres of historic public housing sat deteriorating south of downtown Phoenix a few years ago, demolition was one of Maricopa County’s most practical options.
The housing authority lacked money to redevelop the aging Coffelt-Lamoreaux homes, built in 1954 near 19th Avenue and Buckeye Road. County officials said old infrastructure, swamp coolers and potholes were making the housing project obsolete, but razing it would mean uncertainty for hundreds of low-income residents living there.
The homes almost met the fate of the thousands of public-housing units demolished or disposed of each year nationwide, due to a backlog of repairs. Instead, the county worked with a private developer to list the site on the National Register of Historic Places and to break ground last week on $44 million in renovations.
“It will look like brand-new construction from the 1950s,” said Brian Swanton, Arizona market president of Gorman and Company Inc., that’s co-developing the property.
The project is one of the first in Arizona to try a federal pilot program aiming to save similar sites throughout the country.
The U.S. Department of Housing and Urban Development launched in 2012 the Rental Assistance Demonstration to address roughly $26 billion in large-scale repair needs, like new roofs and electrical systems, for public housing across the nation. Housing authorities have more flexibility to fund projects under the program through public-private partnerships.
For tenants like Luz Mata, who moved into the Coffelt-Lamoreaux homes in 1989, the uncertainty is ending. When Mata heard her duplex and hundreds of others were at risk of demolition, she didn’t know where she would go.
“This is my home,” she said. “This is where I feel safe.”
‘Gut rehab’ for historic buildings