MAY 2022. Weave Social Finance (Weave) has closed on a project loan to provide gap financing that preserves two affordable multi-unit residential rental properties in Grand Junction. Weave’s Colorado Housing Accelerator Initiative (CHAI) program secured below-market-rate funding for the transaction, which includes a deed restriction that limits rents and and specifies qualifying resident incomes. The project will provide multiple positive impacts for residents and the community, including:
- Preservation of existing affordable housing assets that will continue to provide housing options for local residents in an appreciating market
- Stability and cost savings for existing tenant housholds, which will not be subject to rent increases
- Ongoing benefits for Section 8 voucher beneficiaries, who will continue to access 12 project-based units
- Avoidance of displacement, which could have occurred following a sale to a traditional investor
- An opportunity for enrollment at lease renewal in CHAI’s Tenant Equity Vehicle, which provides monthly cash back and annual profit sharing distributions
The project loan involved 39 rental units at Bunting Courtyard and Lincoln Apartments, which are located near Colorado Mesa University, St. Mary’s Hospital and Regional Medical Center, and Bookcliff Elementary School. The Grand Junction Housing Authority (GJHA) had owned and operated the properties as part of its subsidized housing portfolio and was seeking to sell them in order to free up capital to support the construction of new affordable housing to be built in conjunction with the Low Income Housing Tax Credit program.
The transaction involved the GJHA, Headwaters Housing Partners, and nonprofit Rocky Mountain Communities, which will serve as the on-site property manager. Financing for the project came from CHAI Debt Capital, First Bank, and the Colorado Housing & Finance Authority’s Preservation Fund.
As a result of the transaction, the GJHA will be able to fund new construction of affordable housing without losing an existing affordable asset or displacing any families currently living in the properties.
Under the sales agreement, occupancy of the properties will be restricted to households earning up to 60 percent of the area median income (AMI), and residents will pay not more than 30 percent of their income toward rent. In addition, the project will be operated as affordable housing for ten years.
Lastly, tenants can enroll at lease renewal in CHAI’s Tenant Equity Vehicle (TEV) program, which provides credit reporting on rent payments and earns monthly cash back and annual profit sharing distributions that support a path to financial stability and wealth building.
ABOUT WEAVE SOCIAL FINANCE
Weave Social Finance, LLC, specializes in facilitating “triple bottom line” impact investments in affordable housing and early-stage businesses. Weave was founded in Denver in 2012 and is the sponsor and investment manager of the Colorado Housing Accelerator Initiative. Learn more about Weave at www.weavefinance.com.
ABOUT COLORADO HOUSING ACCELERATOR INITIATIVE
The Colorado Housing Accelerator Initiative is the housing investment practice of Weave Social Finance, LLC. CHAI is an impact-first social enterprise that pools mission-driven capital and deploys it to middle-income housing projects in Colorado through both debt and equity funding. Beginning in 2020, Weave Social Finance incubated the CHAI program as part of its regional impact investment strategy.
Learn more about CHAI at www.chaifunds.com.