HDC helps ULRA secure $44 million to preserve one of Oregon’s largest affordable senior housing projects.

WASHINGTON, D.C. – June 25, 2015 – (RealEstateRama) — With assistance from Housing Development Center, Union Labor Retirement Association (ULRA) has secured $44 million in new federal and private funds, in addition to federal rent subsidies ULRA projects to be worth $144 million, to preserve Westmoreland’s Union Manor.

The 1966 development is one of the largest affordable senior housing projects in Oregon, home to 300 low-income senior households in Southeast Portland’s Sellwood-Moreland neighborhood. The funding deal, which closed last Thursday, will finance a $30.2 million renovation of the seven-story apartment building and its 6.6-acre grounds, and will assure the apartments remain affordable to low-income seniors for 40 more years.

The $44 million in new funds comes entirely from federal and private sources, including the U.S. Department of Housing and Urban Development (HUD), J.P. Morgan Chase and PNC Financial Services Group (PNC). Oregon Housing and Community Services (OHCS) provided affordable housing tax-credit and tax-exempt-bond allocations to attract the investments from Chase and PNC; the $29.4 million bond is believed to be the largest project revenue bond issued by OHCS in its history.

“Leveraging $44 million to preserve Westmoreland’s Union Manor, without relying on local public resources, is a great win for this community,” said Portland City Commissioner Dan Saltzman.

The project was one of only 12 in the country to be awarded federal rent subsidies through the initial round of HUD’s Senior Preservation Rental Assistance Contract program, which aims to prevent displacement of elderly residents. HUD granted 67 new rent subsidies, and extended 217 existing subsidies, previously set to expire. The 20-year subsidy contracts are automatically renewable for 20 additional years.

The rent-subsidized units, 284 in total, will enable Westmoreland’s Union Manor residents to continue living affordably in an amenity-rich neighborhood where housing costs are high and rising. (Average studio rent in older buildings in Inner Southeast Portland is $839 per month, according to a spring 2015 rent survey by Norris & Simpson. The low-income seniors who live at Westmoreland’s Union Manor—whose incomes average $18,842 per year, or 34.3 % of area median—pay an average of $281 per month for their studio and one-bedroom apartments.)

Westmoreland’s Union Manor was the first affordable housing project developed by ULRA, a volunteer-led nonprofit founded, in 1962, by Earl B. Kirkland and other leaders in Portland’s Building Trades Movement to “provide housing and related facilities and services for the elderly.”

“The renovation will improve the lives of building residents and prepare Westmoreland’s Union Manor for decades of additional service,” said ULRA Board President Larry Kirkland, Earl’s son. “Just as important, the $44 million in funds will enable these 300 homes to remain affordable to low-income residents for 40 more years.”

 The $30.2 million renovation will replace the nearly 60-year-old building’s aging envelope and greatly improve the building’s energy efficiency, fire safety, accessibility and seismic resistance. Walsh Construction will serve as the general contractor. Residents will be temporarily relocated during portions of the estimated 22-month construction period, scheduled to begin this week.

Previously, HDC Community Fund provided ULRA with a $500,000 predevelopment loan to support the Westmoreland’s Union Manor preservation effort.

Funding details:

• The U.S. Department of Housing and Urban Development (HUD) granted a 20-year extension (with a 20-year automatic renewal) of 217 existing project-based rent subsidies, previously set to expire, and granted 67 additional subsidies. The 284 subsidized units will enable ULRA to continue providing affordable rents to low-income and very-low-income residents, many of whom earn 30% or less of area median income.

• The funding agreement is one of the first 12 nationwide to be approved under HUD’s new Senior Preservation Rental Assistance Contracts (SPRAC) program created under the Supportive Housing for the Elderly Act of 2011. The act permits HUD to provide rental assistance contracts with 20-year terms to prevent the displacement of income-eligible elderly residents of certain projects assisted under HUD’s Section 202 Supportive Housing for the Low Income Elderly direct loan program in the event of the project’s refinancing or recapitalization and to further preserve and maintain affordability.

• Oregon Housing and Community Services provided allocations of Low Income Housing Tax Credits, which attracted equity from private investor PNC Financial Services Group (PNC), and a tax-exempt bond purchased by J.P. Morgan Chase. The tax credits and bond are for construction-period financing.

• A HUD FHA-insured mortgage, in combination with PNC equity, will provide permanent financing for the renovation. ACRE Capital LLC is the FHA lender.