(McMINNVILLE, TN) — Residents at the McMinnville Arms Apartments will be getting a welcome refresh of their homes soon, thanks to new owner Chesapeake Community Advisors (CCA). Built in 1969, McMinnville provides affordable housing to 100 families, with rents that are fixed at 30% of their incomes. In addition to a $185,000 investment in immediate rehab needs and playground equipment, Chesapeake Community Advisors plans to undertake a full rehab in the near future using Low Income Housing Tax Credits (Housing Credits). National community development loan fund Mercy Loan Fund (MLF) financed the acquisition.
“CCA needed to jump on this opportunity, so they called on us because they knew it was squarely within our mission sweet spot and we would get it done,” said Julie Gould, President of Mercy Loan Fund. “The majority of Mercy Loan Fund’s recent lending has been for the preservation of affordable housing, particularly outside of urban areas, because it is such a crucial need that is not well served by the market.”
Life at McMinnville Arms is scheduled to improve with upgrades to the units and the community space, the addition of resident services through partnerships with local social services organizations, and the eventual investment of at least $30,000 per unit in improvements using the Housing Credit.
HUD currently provides rental assistance to McMinnville Arms that pays the difference between 30% of the resident’s income and the amount needed to operate the property, but the contract was due to expire and the original owner did not want to renew, leaving the property open to market rate conversion or disinvestment. In the constrained budget environment, losses to the affordable housing stock are likely to be permanent. CCA will apply to the Tennessee Housing Development Agency (THDA) to arrange financing for the more extensive rehab. These preservation opportunities often come up outside of the State’s financing round and with little time for a developer to arrange financing, making it important to have reliable longtime partners who can finance the purchase. MLF was able to put financing together in less than three months and can be patient while CCA arranges permanent financing.
“MLF has been involved with all of our Tennessee preservations and we hope to make McMinnville Arms our fourth successful Tennessee development using the Housing Credit. This will also be be our tenth successful collaboration with Mercy Loan Fund,” said Ben Etheridge, Senior Vice President of Chesapeake Community Advisors.
The Housing Credit program is the most successful affordable housing program in our nation’s history, producing and preserving close to 100,000 affordable rental homes annually through nearly $100 billion in public-private equity partnerships. In Tennessee, the Housing Credit has provided critical financing for the development of 56,797 affordable homes.
About Mercy Loan Fund
Mercy Loan Fund, a subsidiary of the national affordable housing organization Mercy Housing, provides financing to hundreds of local nonprofit organizations, enabling them to build or preserve affordable housing in their communities. Since 1985, the organization has made 454 loans in 38 states totaling $245 million, resulting in 19,400 affordable homes for over 52,200 residents. These loans have leveraged more than $1.7 billion in total development funding. Mercy Loan Fund is certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI). Mercy Loan Fund was formed with the goal of supporting the mission of Mercy Housing by making loans for affordable housing developments when conventional financing is not possible or affordable. For information about Mercy Loan Fund, please visit www.mercyloanfund.org.
About Chesapeake Community Advisors
Established in 2001, Chesapeake Community Advisors is one of the nation’s leading community development consulting firms, having served as a development consultant for more than 75 developments in 15 states. Their mission is to create, and help others create, sustainable and profitable real estate developments that improve their communities. They specialize in structuring and developing low-income, historic, new market tax credit and federally financed projects, but their work has included affordable multifamily and market rate rental, new construction, preservation, historic renovations, affordable homeownership and multi-use developments. For more information, please visit www.ccadev.com.