NEW YORK, NY - The Community Development Trust announced its $100 million commitment to the Rental Assistance Demonstration (RAD) program, an innovative program developed by the U.S. Department of Housing and Urban Development designed to supplement congressionally allocated funds that alone are insufficient to keep up with the capital needs of public housing units across the country.
RAD allows projects currently funded under the public housing and Section 8 Moderate Rehabilitation (Mod Rehab) programs to convert their assistance to long-term, project based Section 8 rental assistance contracts. Since the inception of RAD in 2012, CDT has provided approximately $20 million in commitments to support a number of communities benefitting from the RAD program. RAD's goal is to assist public housing agencies and private owners in obtaining private debt and equity to address capital needs. It is a tool to assist in the preservation and improvement of public housing developments while ensuring that existing tenants remain in their homes.
"We believe there is tremendous value in the RAD program and through our $100 million commitment, we are prepared to expand our investment of capital to public housing developments, both new and rehabilitated," said Joseph F. Reilly, president and CEO of CDT. "Our involvement increases public housing financing options and positively impacts the lives of residents. Working with our partners we look forward to our continued involvement in the RAD program and this new opportunity to transform these communities."
As an example of our involvement, CDT most recently approved a long term forward commitment for a permanent first mortgage of $4.4 million for the Ribicoff Cottages, a 55-unit multifamily housing development in New Haven, Connecticut. This is a two-phase project that requires demolition of the existing structures, originally built in the 1950s, and the construction of the new 106-unit Ribicoff Apartments. Once the second phase is complete, the community will consist of one-, two-, three-, and four-bedroom units of town houses and small cottages. This mixed-income community will serve a full range of low and middle income families working in New Haven and surrounding neighborhoods.
Amenities will include a shared community garden and building, which will serve as the location of the Supportive Housing Program. This program provides for a case manager who will work with the Housing Authority of New Haven (HANH) to provide residents with on-site educational services designed to strengthen the families residing in the development. The partnership which owns the Ribicoff Apartments is comprised of entities controlled by The Glendower Group and Red Stone Equity Partners, LLC (Red Stone). Red Stone is also the tax credit syndicator. The Glendower Group, in conjunction with HANH, will serve as the management company for the Ribicoff Apartments.
"The Ribicoff Apartments are a perfect example of how we can secure the long-term financing for a public housing project through increased opportunities made available under the RAD program," said Brian Gallagher, Senior Vice President of CDT. "In conjunction with our partners, we will ensure the preservation of public affordable housing in the community while also providing resources to help residents."
The RAD program allows organizations like CDT to provide stable financing for projects that are in need of major rehabilitation by linking private equity and debt markets to public affordable housing. The RAD program aligns with CDT's commitment to invest in affordable housing and make a positive difference in residents' lives.