Transcript Success Stories in Financing Housing for the Elderly N A L H FA - - 2 0 1 3 A n n.

Success Stories in Financing
Housing for the Elderly
N A L H FA - - 2 0 1 3 A n n u a l C o n fe r e n c e
M a r k U l fe r s , E xe c u t i v e D i r e c t o r
D a ko t a C o u n t y
C o m m u n i t y D e v e l o p m e n t A g e n c y ( C DA )
[email protected]
(651)675-4400
w w w. d a ko t a c d a . o r g
Dakota County
Community Development Agency
Dakota County CDA:
 Established in 1971
 One of the largest housing and
community development program
providers in the Minnesota
•
Administers over 30 different
programs
Area Served:
 South of Minneapolis-St. Paul
 3rd largest county in Minnesota
• Population: 402,006
 21 cities and 12 townships
• Suburban and rural
Why Senior Housing?
 Senior Need

Demographics clear about
the wave that was coming
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Graying of suburbia
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From 2005 to 2035 in
Dakota County:

138% increase in 55+
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245% increase in 65+
Why Senior Housing?
 Decline in Federal Funding

Section 202, Public Housing and Section 8 new construction
 Lack of state focus on senior housing
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Minnesota Housing decision to not use Low Income Housing Tax
Credits (9%)
 Lack of private market to address affordability for
low/moderate income senior households

In 2015, 32.1% of households with head of household ages 75 to 84
will have incomes of less than $25,000
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In 2015, 40.4% of households with head of household ages 85 and
older will have incomes of less than $25,000
Senior Housing Development Program
• Program developed in 1989
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Phase I 1990-1997 = 535 units
Phase II 1998-2007 = 600 units
Phase III 2008- Present = 408 units
• First building opened in 1990
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26 developments
1,543 units
• Developments are:
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Generally three story buildings
Mix of 1 and 2 bedrooms
Include: underground parking,
community room/common space,
laundry on each floor, emergency
call systems
Senior Housing Development Program
• Maximum income:
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1 person household: $45,500
2 person household: $52,000
• Rents:
• Income Based
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1 bedroom = 30% of income
minimum $373/maximum $686
2 bedroom = 32% of income
minimum $549/maximum $869
Fixed Rent
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1 bedroom: $566-$586
2 bedroom: $691-$711
Senior Housing Development Program
 Households: 1,417
 Individuals: 1,590
 77% female/23% male
 Average age: 75
 Average length of
residency: 5 years
 Average income: $21,000
Financing Structure
• The Dakota County CDA created a Common Bond Fund in order
to finance the Senior Housing Development Program
• Rental revenues of all the buildings are pooled to pay the
expenses and debt service for all buildings
Common Bond Fund – Flow of Funds
20th of the month
Revolving Fund
[2]
$ Revenues &
Supplemental
Revenues
[3]
[6]
[7]
U.S. Bank Trust
Receipts Account
(subset of lockbox
account)
[1]
[8]
[4]
[5]
Operating Account
(subset of lockbox
account & 4m)
Annual Release
Test
Operating Surplus
Account (4m)
Fund shortfalls in:
- operating account
- bond account
- reserve account
Operating Reserve
(4m)
Note: For the Annual
Release Test, first, you
must meet debt coverage
of 1.10 and then anything
in excess of $5,000 is
released
Replacement
Reserve (4m)
[1]
[2]
[3]
[4]
Next month operating costs
Trust fees
Rebate
To equal operating reserve requirement
[5]
[6]
[7]
[8]
Deposit
Debt service
Bond reserve
Residual
Financing
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The Dakota County CDA issues tax exempt bonds, credit enhanced with a
general obligation pledge from Dakota County
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The major source of supplemental revenue to pay debt service is the
CDA’s Special Benefit Tax Levy
Basic Indenture Requirements
 Operation– CDA is responsible for paying all
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
operating costs
Pledge of Revenues - tax increment, senior
levy
Insurance requirements – “All risk” property,
liability insurance and business interruption
insurance
Debt service coverage requirements – 1.15
DCR
Replacement Reserve requirements $600/unit/year
Operating Reserve requirements – 25% of
annual operating costs
Net Operating Income average of
$200/unit/year
Resources Accessed
 Levy
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Cash on hand from Senior Levy
Ongoing Senior Levy Collections
 Tax Increment (for equity and debt service)
 Earnings on bond funds, including fully funded debt service reserves
 General obligation pledge of the County
 CDA purchases the land and then contributes it
•
Sources used to purchase land have included CDBG, HOME, TIF, and CDA
and/or City General Funds
 City Waiver of Fees
 Sales Tax Rebate on construction materials
 PILOT (Payment in Lieu of Taxes) – 5% of gross shelter rents
Questions?
For more information:
Dakota County CDA
1228 Town Centre Drive
Eagan, MN 55123
651-675-4400
www.dakotacda.org