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Greystone Leads Effort to Upgrade Rural Housing

Greystone Leads Effort to Upgrade Rural Housing for the Poor Shortages of affordable, low-income housing are reaching crisis proportions in some parts of the U.S. Plantation Apartments in Richmond Hill, Ga. New York finance firm Greystone & Co. has teamed up with federal and state agencies in Georgia to preserve 1,310 low-income rental apartments built in the 1970s and 1980s by the Agriculture Department for rural households.   New York housing-finance firm Greystone & Co. has teamed up with federal and state agencies in a $168.6 million effort to preserve and recapitalize 1,310 low-income rental apartments in Georgia. The units, developed and managed by Atlanta-based Hallmark Cos., were built in the 1970s and 1980s through a U.S. Agriculture Department program targeting rural households. Tenants, who are required to meet income-eligibility requirements, pay about $400 to $500 a month in rent. The portfolio includes 26 properties in 17 counties. Like tens of thousands of other properties developed under federal housing programs, the Georgia homes are badly in need of repair. The deal, known as a recapitalization, provided funds for upgrades worth an average of $37,000 per unit, including such improvements as new appliances, counters, cabinets and electrical systems. The recapitalization also involved a sale of the properties and a refinancing of the debt on the portfolio. Through those actions, enough surplus capital is being raised to pay for the improvements. “Unless you do something creative, they really have no chance of being preserved,” said Tanya Eastwood, president of Greystone’s affordable-housing redevelopment unit. The sellers of the properties were the limited partners who decades ago provided equity financing to Hallmark for their development, mostly in exchange for tax credits. The new owner is a venture of Hallmark and new equity investors who also are getting returns primarily in the form of low-income-housing tax credits. The units are being preserved at a time when shortages of affordable and low-income housing are reaching crisis proportions in some parts of the country. According to a recent report by the National Low Income Housing Coalition, the U.S. has a shortage of more than 7.2 million units for “extremely low income” renter households. Hundreds of thousands of units are at risk of becoming unusable, housing advocates say. “There’s obviously a great need for more affordable housing, but we also can’t afford to lose any of the existing,” Ms. Eastwood said. The program in Georgia “allows us to prevent...
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