Case Study | Verona Village
Acquisition Loan
Ithaca Neighborhood Housing Services (INHS)
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IMPACT
- Preserved the affordability of 46 one-bedroom apartments in rural Ovid, NY
- Paired acquisition loan with predevelopment loan to cover costs of design, engineering and third-party reports.
The mix of acquisition financing and a predevelopment loan to help with the cost of developing a refinancing/renovation strategy was key. The design, engineering, and third-party reports necessary to apply to New York can cost between $250,000-$500,000 so having a predevelopment loan from NeighborWorks Capital to cover those costs was critical.
SYNOPSIS
Verona Village is the only affordable senior housing within 15 miles, with affordability at 60% AMI ($31,000). To preserve much-needed affordable housing for low-income seniors in rural Ovid, NY, INHS wanted to acquire and renovate the property comprised of 46 one-bedroom apartments in six buildings on 15 acres.
CHALLENGE & SOLUTION
Need is high, and Verona Village is fully leased. Its Section 8 HAP contract renewed in 2018; 100 percent of the apartments have the rent subsidy. The property is well-managed but needs upgrades, including kitchens, bathrooms, flooring, and accessibility improvements. NeighborWorks Capital provided a $2.4 million acquisition loan and $424,000 unsecured predevelopment loan to INHS. INHS will refinance and renovate the property, improving energy efficiency, reducing maintenance costs, and improving the lives of the tenants. For the renovation work set to begin in 2022, it plans to apply to New York State for Low Income Housing Tax Credits (LIHTC) and subsidy financing.
ABOUT NEIGHBORWORKS CAPITAL
NeighborWorks Capital fills a critical resource gap by investing in communities that have been underserved by traditional financial institutions. They provide flexible, responsive, and affordable financing solutions for residential and commercial real estate development and business expansion. NeighborWorks Capital is a national nonprofit, certified Community Development Financial Institution rated by Aeris-Insight serving members of the NeighborWorks America network in all 50 states, Puerto Rico, and the District of Columbia.
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