A Community of Friends (ACOF) is one of the largest affordable housing developers in Los Angeles County. In 2015, the organization partnered with NeighborWorks Capital to secure a $2,000,000 acquisition loan to acquire land to construct Huntington Square, a mixed-use development with affordable apartments and commercial space in Huntington Park, CA. Unfortunately, progress on the new development was threatened when the city expressed concern over the affordable use of the property. Policy and regulatory changes can be a serious obstacle for tax credit-funded projects, but NeighborWorks Capital was able to help by extending ACOF’s acquisition loan and by providing a $500,000 predevelopment loan to see the project through its tax credit equity application and closing process.
The project continued to face resistance and delays from the city which resulted in additional loan extensions. ACOF considered selling the property but after much deliberation, they decided to continue pushing forward to secure the city’s approval. Huntington Park needed affordable housing. In the last 20 years, only two affordable developments (43 apartments total) have been built. ACOF remained focused on their goal and presented a revised development plan that the city could ultimately support.
The revised plan for Huntington Square includes 48 affordable apartments with most units reserved for homeless veterans. In place of the commercial space that was originally proposed, ACOF will sell a portion of the parcel to Azure Community Development, a California nonprofit, to build nine affordable for-sale townhomes.
ACOF recently refinanced their existing acquisition and predevelopment loans with NeighborWorks Capital and increased their predevelopment loan amount to cover interest and other predevelopment expenses to support the project’s construction closing.
“Despite this being a complex loan process with countless drawbacks from the city of Huntington Park, NeighborWorks Capital diligently worked with our team to ensure we could achieve our number one goal – providing housing for seniors who are veterans, low-income, and homeless,” said Dora Leong Gallo, President & Chief Executive Officer of ACOF.
NeighborWorks Capital seeks to share your vision and provide the patient capital needed to achieve that vision. When realities on the ground require a change in plans, we strive to be a supportive partner you can count on. Visit our lending solutions page for more information about our competitively priced, fixed-rate loan capital.
