Mel Maeder of Maeder Enterprises talks about USDA's section 515 rental housing program and the need for preservation of affordable rental housing in rural areas. Presentation from the Housing Assistance Councils symposium "Housing Seniors & Veterans in Rural America: Preservation, Development and Services" in Council Bluffs, IA on August 28-29, 2013

1. CASE STUDY: USDA SECTION 515
RENTAL PRESERVATION:
CYPRESS VILLAGE, RICHLAND IA
Mel Maeder – Maeder Enterprises

2. Richland, IA
Entrance to Cypress Village

3. View of the handicapped parking

4. View of buildings B and C

5. Building A

6. Building B

7. DESCRIPTION OF PROJECT
• USDA Section 515 Rural Rental Housing
Complex
• Owned by Richland Community – operating
under non-profit corporation, Richland
Betterment Council, Inc., formed in 1979
• Community shareholders elect Board of
Directors, made up of 9 members, one of
which is here today, Mr. Byron Kimble

8. DESCRIPTION OF PROJECT cont.
• Facility was built and first occupied in 1981
• Originally designated as Senior Housing, but
currently designated as family housing
• Facility is composed of 4 buildings, with 4 one
bedroom apartments in each building, with
the exception being that the community room
takes the place of one apartment, therefore
there are only 15 rental units

9. DESCRIPTION OF PROJECT cont.
• Tenant population:
– 8 tenants that are either seniors, handicapped or
disabled individuals – one of which is a veteran of the
Korean War
– 5 tenants that are under age 62 and not handicapped
or disabled
– All tenants fall under very low income criteria defined
by Department of Housing and Urban Development.
– Currently have 2 vacancies, one of which is the
handicapped unit under construction as part of
current rehabilitation project

10. FUNDING
• Project is funded through original loan from
Farmers Home Administration, now USDA
Rural Development, rental assistance from
USDA Rural Development, and tenant rent
payments
• IRS designated 501-C4 Non-Profit entity

11. FUNDING cont.
• Rent income and rental assistance are
expected to cash flow operating and
maintenance expenses and repay the USDA
RD loan, plus any other loans we may have

12. THE ROLE OF USDA AND HAC
• Determined in early 2012 by Board of
Directors that the overall condition of the
complex, due to age, was in need of repair
that would exceed the amount of reserve
funds available.
• Mr. Tony Putz, now since retired from State
Office of USDA RD, suggested to apply for a
loan with Housing Assistance Council

13. THE ROLE OF USDA AND HAC cont.
• The Housing Assistance Council (HAC) is an
organization which cooperates with USDA RD in
funding the rehabilitation of USDA 515 projects
• USDA RD re-amortized existing loan for another
30 years
• USDA RD also helped establish a budget to enable
us to make payments on an additional loan of
$200,000 from HAC; with an amortization based
on 10 years

14. THE ROLE OF USDA AND HAC cont.
• A $200,000 loan was applied for with HAC
• Mr. Obediah Baker, HAC representative, came
to the project, met with the Board of Directors
and determined the loan was feasible.
• The loan was approved and closed in late April
of 2013
• The construction began June 22, 2013

15. CHALLENGES
• A new Comprehensive Needs Assessment
(CNA) was required
• A property appraisal was required
• An Architect was needed to set the standards.

16. CHALLENGES cont.
• A new budget was needed to be able to repay
USDA and HAC loans. New budget would
establish a very substantial rent increase,
which would not affect our tenants that are
receiving rental assistance from USDA RD.
However, it might affect ability to fill
apartments with individuals that did not
qualify for rental assistance.

17. CHALLENGES cont.
• Required to use USDA RD approved
government contracts, advertise for certified
and bonded contractors and accept the low
bid contractor for each phase of the
rehabilitation project.
• A large commitment of time and paperwork is
required by management and the Board of
Directors to complete the project, but
guidance is provided by USDA RD and HAC

18. IS IT ALL WORTH THE EFFORT??
YES!!