Springfield housing developments in line for stimulus funds

Two local affordable housing developers short on national investors are in line to receive federal stimulus money to jump-start their projects.

The Missouri Housing Development Commission is putting nearly $100 million in federal stimulus money into 38 projects statewide, and two Springfield area projects - Silver Brook Estates and Fulbright Springs, Phase II - are among the recipients.

Silver Brook, a project of Affordable Homes Development Inc., is slated to get $1.8 million for its 32-unit development, while Sustainable Housing Solutions LLC's 35-unit second phase of Fulbright Springs stands to receive $830,000. Funding is in the form of no-interest loans to be paid through each project's cash flow.

Janell Thome, director of rental production for the state housing commission, said the stimulus money was set aside by the federal government in February specifically for low-income housing developments that needed to cover financing gaps created by the slow economy.

"Eligible projects were those that had been having difficulty attracting adequate investment ... and therefore, despite good faith efforts, were unable to proceed without getting help from the stimulus funds," Thome said.

Developers from both companies said national financial institutions that in the past would have invested in their low-income housing projects - in exchange for tax credits - are not interested in spending the money.

"You used to go to the national market and would find a single investor to do the whole project," said Joe Carmichael, principal of Affordable Homes Development, who believes that Fannie Mae and Freddie Mac's withdrawal from purchasing credits caused the tax credit market to collapse. "Big national banks weren't investing because ... you don't need tax credits to offset income if you have no income."

Carmichael's company was able to raise roughly $4 million from several regional banks, but that combined with a $244,000 Community Development Block Grant left the project short of its $6 million price tag.

"This low-interest loan is substituting for the shortfall in investment," Carmichael said.

The Silver Brook project west of Springfield should have infrastructure in place by the beginning of the year, with homes completed by early spring 2011. The 1,900-square-foot, three-bedroom homes will be rented to families at or below 60 percent of Greene County's median income and will offer a no-down-payment purchase option for qualified renters.

The situation is similar at Fulbright Springs, where homes in Phase I will be complete this spring northwest of Springfield. Sustainable Housing Solutions owner Debbie Shantz said her project was hit by two factors.

National banks weren't interested in the tax credits, but that lack of demand also caused their value to decline; credits that previously sold for up to 95 cents on the dollar now sell for about 65 cents.

"The federal funding allows us to bridge both gaps," Shantz said. "Without the federal stimulus funding, these projects wouldn't be viable."

She said the need is especially high now for projects such as Fulbright and Silver Brook because of historically high unemployment and poverty levels.

Fulbright also will serve low-income families. Additionally, Fulbright will feature an on-site social worker through an agreement with Community Partnership of the Ozarks, as well as quarterly classes on personal finance and child care, Shantz said.

The second phase of the project also features bungalow-style homes with front porches, designed to bring neighbors together.

"The idea is that we can create more community with other neighbors, and research indicates that helps decrease crime and increase accountability," Shantz said. "We're cautiously optimistic that it will be well received and a nice benefit."

Homes in Fulbright, which will be 1,500 square feet with three bedrooms and meet Energy Star efficiency standards, should be complete in spring 2011.[[In-content Ad]]