San Diego Senior Affordable Housing Project Kicks Off
The fully affordable, 127-unit community will rise on the site of a former adoption center in the Linda Vista neighborhood.
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A partnership between San Diego County, Wakeland Housing and Development, and San Diego Kind Corporations has broken ground on Levant Street Cottages, a 127-unit affordable senior housing development in the Linda Vista neighborhood of San Diego. The development team plans to complete the property in early 2024.
The project site at 6950 Levant St. was formerly home to an adoption service center operated by the county government. That structure was completely demolished in 2018, leaving behind only a parking lot. Plans filed with the county call for 18 one-story and two two-story buildings with a mix of 108 studio and 18 one-bedroom apartments, in addition to an unrestricted manager’s unit.
The developers, which will lease the 4.6-acre parcel for $1 per year, are taking advantage of several affordable housing-focused financing options. The property will benefit from $23 million in tax credits, primarily through a 4% LIHTC, which subsidizes up to 30% of a project’s total cost. Further, the state is providing $19 million in multifamily housing program funds. While the cost of the development was not disclosed, plans filed in summer 2021 indicate a total development cost of $51.6 million. However, since that time, construction costs have skyrocketed.
Income-Tiered Availability
According to a release put out by the county, the full property is expected to house up to 150 people. Units will be reserved for those aged 55 years or more, based on area median income, with two tiers delineated. At least 20% of units will be expressly reserved for seniors earning at or below 50% of AMI, with the remaining units restricted to those earning 60% or below of AMI.
Beyond these tiers, the San Diego Housing Commission is providing 70 project-based vouchers. These will each cover up to 70% of a resident’s rent, leaving the renter responsible for the remainder.
More on the Way
The county government noted that it has invested $175 million toward affordable housing in the past five years. According to a statement put out this April, the total scope of this investment encompasses 44 developments, 10 of which are already complete. Seven other parcels owned by the county are slated to be redeveloped as affordable housing in the near future.
Related Questions
What are the benefits of HUD multifamily loans?
HUD multifamily loans offer many benefits, including 35-year fixed rate terms, full amortization, and leverage up to 83.3% for market-rate apartment buildings or 87% for rental assistance properties. HUD loans also have few restrictions on borrower experience, unless you’re getting a construction loan, and their liquidity and net worth borrower requirements are far more flexible compared to even agency loans. Additionally, HUD multifamily loans include specific benefits for affordable properties, such as increased LTV allowances, reduced DSCR requirements, and lower mortgage insurance premiums, or MIPs. HUD multifamily loans also fit well with the Low-Income Housing Tax Credit (LIHTC) program https://www.hud.loans/hud-loans-blog/lihtc-program-hud-multifamily-loans and the Rental Assistance Demonstration (RAD) program https://www.hud.loans/hud-loans-blog/rental-assistance-demonstration.
What are the requirements for a San Diego senior affordable housing project?
The San Diego Senior Affordable Housing Project requires that units be reserved for those aged 55 years or more, based on area median income. At least 20% of units will be expressly reserved for seniors earning at or below 50% of AMI, with the remaining units restricted to those earning 60% or below of AMI. The San Diego Housing Commission is also providing 70 project-based vouchers which will each cover up to 70% of a resident’s rent, leaving the renter responsible for the remainder.
The county government has invested $175 million toward affordable housing in the past five years, encompassing 44 developments, 10 of which are already complete. Seven other parcels owned by the county are slated to be redeveloped as affordable housing in the near future.
What are the advantages of investing in a San Diego senior affordable housing project?
Investing in a San Diego senior affordable housing project has many advantages. The county government has invested $175 million in the past five years, and 44 developments have been completed or are in the process of being developed. These developments are income-tiered, with 20% of units reserved for seniors earning at or below 50% of the area median income, and the remaining units restricted to those earning 60% or below of the area median income. Additionally, the San Diego Housing Commission is providing 70 project-based vouchers, which each cover up to 70% of a resident’s rent.
The advantages of investing in a San Diego senior affordable housing project include:
- Investment in the local economy
- Increased access to affordable housing
- Income-tiered availability
- Project-based vouchers
What are the eligibility criteria for HUD multifamily loans?
HUD multifamily loans are available to borrowers of all experience levels, with a minimum credit score of 620. Eligible properties must already be encumbered by HUD-insured loans. For more information, please see 5 Myths about HUD-Insured Multifamily Loans and HUD 241(a) Supplemental Financing for HUD Multifamily Loans.
What are the risks associated with investing in a San Diego senior affordable housing project?
Investing in a San Diego senior affordable housing project carries a few risks. These include the risk of a decrease in property value due to market fluctuations, the risk of tenant turnover, and the risk of not being able to fill all of the units. Additionally, there is the risk of not being able to secure financing for the project, as lenders may be hesitant to invest in a project that is not expected to generate a large return on investment. Finally, there is the risk of not being able to meet the requirements of the project-based vouchers, which could lead to a loss of funding.
How can I apply for a HUD multifamily loan for a San Diego senior affordable housing project?
You can apply for a HUD multifamily loan for a San Diego senior affordable housing project through the HUD 223(f) program. This program provides long-term, fixed-rate financing for the acquisition or refinancing of multifamily properties. The loan amount is based on the value of the property and the borrower's creditworthiness.
The HUD 223(f) program is available to developers of senior housing projects in San Diego. To qualify, the project must meet certain requirements, such as providing affordable housing for seniors earning at or below 50% of the area median income (AMI) or 60% of the AMI. The project must also be approved by the San Diego Housing Commission.
For more information on the HUD 223(f) program, please visit the HUD website.