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Presentation, discussion, and possible action on the approval of a loan for 2910 Motley Senior Living
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RECOMMENDED ACTION
recommendation
WHEREAS, the above listed development was awarded 9% housing tax credits during the 2024 competitive Application round;
WHEREAS, the Developer applied for additional funds under the Department’s 2025-1 National Housing Trust Fund (NHTF) Notice of Funding Availability; and
WHEREAS, the Department is now recommending approval of a loan in the amount of $5,331,291, with proposed loan terms and details concerning the Development’s financials outlined below;
NOW, therefore, it is hereby
RESOLVED, that the that loan of $5,331,291 of NHTF to 2190 Motley Senior Living is approved, subject to conditions that may be applicable as found in the Real Estate Analysis Underwriting Report attached to this Board Action Request, any HUD required environmental conditions, and the conditions as outlined herein.
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BACKGROUND
Development Information: 2910 Motley Senior Living is to be located in Mesquite, Dallas County, and proposes the new construction of 133 units that will serve the elderly population. The Development will serve households with incomes at or below 30% to 60% of Area Median Family Income (AMFI), and will also include 45 market-rate units.
The Development was initially proposed to have 9 30% AMFI units in its 2024 9% housing tax credit Application. As a result of this loan, 20 additional units will be converted to 30% AMFI. These deeply affordable units are critically needed and difficult to produce.
Financial Information: The Department’s $5,331,291 NHTF loan is to be structured as fully repayable at 2.00% interest, and is in second-lien position.
The Development was initially awarded $2,000,000 in housing tax credits in 2024. Since the last underwriting, total building costs have increased by $412,280, and total development costs have increased by $767,707, bringing the current total development cost to approximately $36.4 million. The interest rate on the permanent loan has risen from 5.25% to 5.80%, and credit pricing has decreased from $0.91 to $0.89. The Department’s NHTF loan will partially replace the permanent loan. This lower interest rate will help maintain the financial feasibility of the development while supporting deeper affordability than originally proposed. Annual debt service on the loan will be $193,734.
The funds from this loan are sourced from the Department’s 2023 NHTF grant, which has a federal commitment deadline of August 3, 2025. Notwithstanding any other deadline established by rule, the Borrower must submit all required due diligence and provide timely comments on the draft NHTF Contract to ensure execution of the Contract by both parties no later than July 30, 2025. Failure to meet this deadline may result in termination of the award, which will not be appealable to the Board of Directors if the Department no longer has access to the 2023 NHTF funds. The Borrower may also be subject to penalties under 10 TAC §13.11(b).