SYNOPSIS

After serving rural Alamosa, CO for several years, Community Resources and Housing Development Corp (CRHDC) sought to address the needs of the greater San Luis Valley, a community facing high rental rates and home prices due to a tight housing market. They found an opportunity to expand their geographic impact with a mixed-use portfolio acquisition that included Kiva Apartments, a 64-unit building providing much needed affordable housing to the area.

CHALLENGE & SOLUTION

CRHDC needed to keep rents affordable without subsidy financing. As they worked to get rents to the right level in their market, NeighborWorks Capital offered an innovative approach with a debt service reserve by assuming that in the next few years, CRHDC could increase their rental income while remaining affordable in the market. NeighborWorks Capital sized the loan based on these projections and provided a $6.3 million permanent loan for Kiva Apartments with a debt service reserve to cover DCR shortfalls in the first two years of rent transition.