Hunt Companies, Inc. (“Hunt”) and the Housing Authority of the City of El Paso (“HACEP”) today announced the successful closing on 1,590 units at 13 separate properties across the City. This project is Phase I of the country’s largest Rental Assistance Demonstration Project, representing a $250 million initial public/private investment of what could potentially grow to $1 billion over the next five years.
“This partnership enables both the Housing Authority of the City of El Paso and the Hunt team to leverage our collective strengths to develop high-quality affordable housing for families in need while helping the city of El Paso continue to thrive,” said Robin Vaughn, President of Hunt’s Public Infrastructure Capital Markets division. “This project provides significant benefits to the City of El Paso and its residents, including the creation of over 1,000 jobs and an estimated $1 billion in local economic impact.”
In December 2013, the Department of Housing and Urban Development approved HACEP’s application to convert 6,100 units through the Rental Assistance Demonstration (RAD) initiative. RAD allows public housing agencies to leverage public and private debt and equity in order to rehabilitate the public housing stock. This is critical given the $25.6 billion backlog of public housing capital improvements.
HACEP selected Hunt as its development partner for Phase I in 2014. This closing marks the formalization of the partnership which will revitalize these properties over the next two years. This public-private partnership demonstrates a successful way forward towards improving public housing and offering a more sustainable solution for the city of El Paso and its residents.
“It is a priority to provide sustainable and affordable housing for folks that are in the greatest need. For too long, local housing officials tasked with preserving public housing and creating new affordable units have been constrained by tight federal budgets and tough economic conditions that made local funding scarce. The Rental Assistance Demonstration turns that funding stalemate on its head – allowing public housing authorities and owners of other HUD-supported properties to access private financing to rehabilitate and preserve existing affordable housing – expanding opportunity in communities like El Paso and across the nation,” said Julián Castro, Secretary, U.S. Department of Housing and Urban Development.
“The Rental Assistance Demonstration initiative is a game changer that will transform the way we think about public housing well into the future,” said Gerald Cichon, HACEP Chief Executive Officer. “The benefits to the City of El Paso are unprecedented, bringing $500 million in public and private investment to our City with a $1 billion local economic impact. We are proud that this is the first in the State of Texas and the largest in the country.”
Hunt’s wholly-owned subsidiaries and affiliates involved in this effort include Hunt Development Group, who will act as the development manager; Moss Construction who will be the project’s master subcontractor; Hunt Mortgage Group providing the debt, through a Freddie Mac tax-exempt loan direct purchase program; and Hunt Capital Partners, which secured the tax credit equity from Aetna, MetLife and USAA.