A highly regarded affordable housing property in Charlotte, N.C., is stronger financially after refinancing its debt on a 192-home apartment community and having 20 of its apartments undergo a conversion to the Housing Choice Voucher program under the U.S. Department of Housing and Urban Development (HUD) Rental Assistance Demonstration (RAD) program.
The result for South Oak Crossing is positive, but the transaction was a challenge.
“It had many moving parts,” said Padam Singh, vice president for Lancaster Pollard, which led the transaction. “Not for any single reason, but because the partners were very different. Besides borrower and lender, there was the city of Charlotte, the Charlotte Housing Authority and then there were two sides of HUD–the loan and the RAD. There were a lot of things that had to happen and every time you thought you were almost set, something new popped up.”
Fred Dodson, chief operating officer of nonprofit developer and property owner Charlotte- Mecklenburg Housing Partnership (CMHP), said the complexity of the transaction caused a bit of a delay.
“Fortunately, the two HUD departments worked together,” Dodson said. “They closed simultaneously. It added maybe a couple of months [to the timeline].”
Now the South Oak Crossing apartments are stronger financially, which continues a success story for the property. “The property is relatively new,” Singh said. “It was new construction completed in 2008 and didn’t require much recapitalization. Initially, this was more about refinancing to reduce interest rates. RAD came in as the transaction was underway.”
South Oak Crossing
South Oak Crossing is a 192-apartment low-income housing tax credit (LIHTC) and market-rate complex on 10 acres that opened in 2006 near the light rail line in Charlotte. Included were 20 units of public housing as part of HUD’s HOPE VI program, which encouraged the construction of extremely lowincome housing (residents earning no more than 30 percent of the area median income [AMI]) with market-rate housing.
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