Principal Deputy Assistant Secretary Lourdes Castro-Ramirez of the U.S. Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing joined other city and county officials at the site of Coffelt-Lamoreaux Apartments to showcase the use of public/private partnerships and utilizing Rental Assistance Demonstration (RAD) financing.
Also in attendance were Jemine Bryon, PDAS Ramirez Chief of Staff; Barbara Gallegos, Director Arizona HUD Office for Public Housing and Indian Affairs; Gloria Munoz, Executive Director Housing Authority of Maricopa County; Cindy Stotler, Acting Housing Director City of Phoenix; Deanna Jonovich, Deputy City Manager City of Phoenix and District 7 Phoenix City Councilman Michael Nowakowski.
The event was hosted by Paragon Mortgage Corporation and Jason Israel, Vice President Paragon Mortgage Corporation offered opening remarks. Paragon Mortgage served as senior lender to spearhead efforts of the HUD 221(d)(4) senior loan and all other forms of financing being used for the project. Gorman & Company Arizona President Brian Swanton and Project Development Manager Zach Johnson were also in attendance.
The event agenda highlighted the use of Section 221(d)(4) HUD-insured financing combined with a RAD conversion to a PBRA contract and provided an overview of the complex financing structure for the substantial rehabilitation of the Coffelt-Lamoreaux Apartment Homes. Since 2013, the Housing Authority of Maricopa County (HAMC), Gorman & Company and Paragon Mortgage Corporation have been working to bring the project to reality. The HAMC and Gorman & Company entrusted Paragon Mortgage to facilitate the application process. The mixed-financing structure includes 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 and two HAMC seller carryback notes. 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. The structure also qualifies the project for a 4% Low Income Housing Tax Credit (LIHTC) allocation. The project is also able to take advantage of historic tax credit equity with a master lease structure, resulting in sufficient equity sources to cover all rehabilitation costs.
According to Paragon Mortgage Corporation President, Jim Swanson, “The Coffelt-Lamoreaux project represents the best in utilizing public/private partnerships bridging a public housing authority with a private developer to redevelop, revitalize and recreate an environment that existed almost 50 years ago.”