Explanation
BACKGROUND:
To authorize the Director of the Department of Development to forgive the principal and accrued interest for Country Ridge Apartments currently owned by Columbus Metropolitan Housing Authority. The property located at 5656 Farmhouse Lane., Hilliard, Ohio 43206 was originally developed by Country Ridge Apartments Limited Partnership for low income housing. A HOME loan was made on July 30, 1997 in the amount of $1,152,000.00 from the City of Columbus for site acquisition and construction of the project which has been providing affordable housing for eligible residents since that time. The interest rate on the loan is 3.0% and the current balance of the loan exceeds $2,400,000.00. In 2019, the property was transferred from the limited partnership controlled by National Church Residences to Columbus Metropolitan Housing Authority (CMHA) and the City HOME loan was assumed by CMHA. The required federal compliance period for this loan is complete and the restrictive covenant can be released. The project has never operated at a profit. The completion of the 20 year HOME affordability period has passed and the owner would like to recapitalize using 4% LIHTC funding and have requested gap funding from the City and other sources to do so.
The property is being refinanced and re-syndicated to allow the property to remain affordable housing for decades to come. In order to recapitalize the property it must take on additional debt. The owners must show the additional debt and the existing city debt can be paid in full for the new debt to not be considered a grant. If it is considered a grant, the low income housing tax credit basis and the corresponding tax credit equity will be reduced causing a funding gap.
The debt forgiveness policy of the Development Department allows debt forgiveness in those instances in which the affordability period has been completed and debt forgiveness will facilitate recapitalization of the project with a new ...
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