A team of Ballard Spahr attorneys played a central role in a historic affordable housing finance transaction in El Paso, Texas. The renovation project for more than 1,500 apartments ensures affordable and sustainable housing for thousands of individuals and families on a long-term basis.
The Ballard Spahr team represented and assisted the private developer of the project, which will rehabilitate 1,590 low-income housing units of the Housing Authority of the City of El Paso (HACEP), the largest public housing agency in Texas. It’s the first phase of the largest project in the country to close thus far under the Rental Assistance Demonstration (RAD), a program of the U.S. Department of Housing and Urban Development (HUD).
RAD strives to address a massive nationwide backlog in much-needed public housing repairs and renovation. It shifts traditional public housing rehab dollars to HUD Section 8 voucher funding. Under this paradigm, RAD units function more like private housing, with greater access to financing resources and fewer regulatory limitations.
The El Paso project utilizes several forms of financing, including private low-income housing tax credit equity, tax-exempt loans and bonds, and subordinate loans. Our client, Hunt Development Group, joined with HACEP as developer of the project, which converted apartments in 13 housing authority complexes to Section 8 RAD units. We also represented Hunt Mortgage Group, LLC, which provided $59.6 million in long-term, senior debt financing, and Freddie Mac, which is processing the loan through its new Direct Purchase of Tax-Exempt Loans program.
“The Rental Assistance Demonstration initiative is a game changer that will transform the way we think about public housing well into the future,” said Gerald Cichon, El Paso Housing Authority Chief Executive Officer. “The benefits to the City of El Paso are unprecedented.”