The Art & Science of Adaptive Reuse/Redevelopment: Mortgage Guarantee Programs Thru HUD

Tuesday, April 10, 2012

Mortgage Guarantee Programs Thru HUD

The Housing and Urban Development (HUD) sector of the U.S. Government was established in 1965 for the original purpose of policy making for housing and city development. Since the mid-1970's, HUD's focus has moved primarily to housing. One of HUD's primary functions is a lending facilitator(loan guarantee) for low to middle income level people trying to acquire a loan to purchase a home.HUD works closely with other housing loan programs such as the Federal Housing Administration (FHA), the Federal National Mortgage Association (FNMA or Fannie Mae), the Federal Home Loan Mortgage Corporation (FHLM or Freddie Mac) which is a Government Sponsored Enterprise (GSE) In short, a GSE is a stockholder-owned, privately managed corporation(s) chartered by Congress in 1970, with the purpose of keeping money flowing to mortgage lenders. Some examples of HUD/FHA guaranteed loan programs are: FHA's Section 203(b) program of One-to-Four Family Home Mortgage Insurance, which will provide insurance to finance home ownership, FHA's section 203(k) program for Rehabilitation Loan Insurance which insures loans to finance One-to-Four Family property Rehabilitation, FHA programs to prevent foreclosure, FHA's Insurance for Condominium Units section 234(c), Adjustable Rate Mortgages section 251, Manufactured Home Loan Insurance Title I, Energy Efficient Mortgage Insurance, which is insurance to finance energy efficient improvements made to a dwelling, and Insured Mortgages on Indian Land section 248. In addition, HUD provides capital advances for supporting housing for the elderly section 202 and grants for substantial repairs to eligible multifamily projects owned by private nonprofit organizations. In the last decade, HUD has turned their attention to the Community as a whole and has initiated Community Development Block Grants (CDBG), dividing grant money between Entitlement and Non-Entitlement development needs, CDBG technical assistance grants, CDBG for disaster relief, and CDBG grants for Insular areas of the United States. Please note, these are only a handful of programs that fall under HUD's jurisdiction. For further information, please access the HUD website provided.

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Location - 221 W. Lancaster

Originally designed by Architect Wyatt C. Hendrick and built by P.O'B Montgomery in 1931 as the Texas & Pacific Railway Terminal, it served as a passenger terminal, an office building and a warehouse facility. The entire complex is designed in Zigzag Moderne Style of Art Deco. Original redevelopment plans called for conversion into a 330 room railway themed hotel. These plans were revised into loft for sale apartments and opened in 2006. The Trinity Railway commuter service has used this as the western terminal since 2001.

Location - 610 Main St.

The Fort Worth Club built the first building on this site, a three story structure. In 1915, the club demolished the building and built a 6 story building in its place. Haltom Jewelers occupied the ground floor, as they did in the original building. By 1926, the Fort Worth Club decided that they outgrew this building and a new 12 story building 2 blocks to the west. In 1937, the ground floor was remodeled in a Art Deco facade.Mid-Continent Supply occupied the building from 1949 to 1989. From 1989 until 2001, the building remained vacant. In 2001, restoration work was completed (Architect Robert Kelley) and the building was restored to what is now the Ashton Hotel.

Location-604 Main/605 Houston

The Kress building was constructed as a commercial structure in 1936 and designed by Edward F. Sibbert of New York. Sibbert had streamlined the store's design in an Art Deco style. The Kress building in Ft. Worth is one of many redeveloped Kress building across the United States. S.H. Kress was the founder of the Kress five and dime department stores which he started in 1896. He wanted the public to see his buildings as works of art, rather than the heavy ornate commercial buildings of his day. Currently, it is the home of Hyena's Comedy Club and the Fox and Hound Pub. The upper floors have been renovated into loft apartments.

Location - 111 E. 4th

The Land Title Block building was constructed in 1889 and is considered one of the best Victorian style buildings in Downtown Ft. Worth. It was designed y Haggard and Sanguinet of Fort Worth and it's original tenants were the Land Mortgage Bank, the Chamberlain Investment Co., and the Law firm of Ross, Herd & Ross (the initials RHR can still be found on the facade). The current tenant is The Flying Saucer Beer Imporium. As of May 2012, the Flying Saucer will be relocating. The new tenants are expected to open a restaurant.

Location - 1401 Jones St.

The Santa Fe Freight Station was constructed in 1938 as part of the railroad improvements in the area. It's original use was to store outbound/inbound freight and cold storage. It's constructed of reinforced concrete and features decorative brick work and a large neon Santa Fe sign at the north end of the building. The building was restored and opened as the Fort Worth Rail Market, which was not successful. It has been remodeled in to class rooms for the University of Texas at Arlington-Fort Worth campus.

The Fort Worth Near Southside Development Criteria

The Near South Side Development plans are part of the City of Fort Worth Comprehensive Plan and are part of the initiative of reuse and redevelopment by Fort Worth South, Inc., a non-profit redevelopment corporation working with community groups and the City of Fort Worth to revitalize the Near South Side area into an Urban Design District. Examples of the General Development Principles that the comprehensive plan calls for are: Applying Sustainable Urban Design principles such as pedestrian-oriented(walkable) developments, maximum connectivity, promoting social opportunities, preserving distinct neighborhoods, promoting sustainable development and preserving historic buildings.

The Evolution of the Near-South Side Development

Our Reuse and Redevelopment class met with Mr. Eddie Varston, the developer and partner of Robert Kelley Architects. He talked about some of the history of the building that they now occupy, at 209 S. Main Street. He briefly discussed the process in obtaining loans and how, as a developer, he was able to obtain the building using Historic and New Market Tax Credits. The historic building at 209 S. Main is a mixed use building with first floor retail suites and second floor loft apartments and was built in the early 1900's.

The photo above is of the Supreme Golf Warehouse. This is Varston's next venture. It was originally constructed in 1914-1915, and is a 2-Story of brick and concrete which will be a mixed use residence/office and restaurant project. A brick paved street parallels the building and will be turned into a "beer garden". The building was a furniture storage warehouse for several years and still has second floor storage lockers with steel fire doors.

The photo below is of the Miller Lofts, constructed in 1909 and renovated into loft apartments. It originally served as a warehouse. Living units range from 800-1400 sq. ft. Varston explained that this project required very little renovation, compared to the 209 S. Main building.

The Live Oak Venue - A Near Southside Reuse/Redevelopment Sucess Story

Located at 1311 Lipscombe, just off Magnolia and part of the Modern Drug Village II area, is success story only Bill Smith could tell. Last year, Bill decided pursue his life's dream of opening a Bar/Music Venue and came upon the perfect location....an abandoned 5,000 sq. ft. building once owned by the Lyons Club and originally built in 1962. Bill started his career path in his teens in landscaping and graduated to construction, remodeling and design. Having remodeled other music venues, he decided it was his time. Bill prescribes to the "hard work will reward" ethic where communication and transparency go hand in hand. He proudly explains that he has taken risks all his life and this one, with lower start-up costs and expected better than good returns is his life's passion. His first step was to take his intentions to the surrounding neighborhood. He acquired a first term lease of 72 months with two 60 month lease options. His ability to sell the concept to the neighborhood and to Fort Worth South, Inc., has paid off. His next step was to distribute a printed business plan to investors, which was met with great success. Start-up costs were estimated at 1.2 M which he divided into 100 lots. He threw a big investment party, which included people from the neighborhood. Not to his surprise, all 100 shares were quickly sold. He hinted that the next round of shares would cost more than double to raise the necessary operating capital.
The Live Oak will host live adult music, great food and drink inside and in addition, roof top and outside patio seating. A separate stage is being built inside and outside at the rear of the building. Scheduled opening is June 15th, 2012.

Click on the link below to see "The Live Oak"

http://vimeo.com/39338043

The Role of Fort Worth South, Inc.

Our Adaptive Reuse and Redevelopment class was fortunate enough to have Mike Brennan from Fort Worth South, Inc., as a guest lecturer. Mike explained that the role of Fort Worth South, Inc.,(specifically, the Magnolia Street Redevelopment area/Fairmount Neighborhood) is to promote locally owned businesses, encourage small scale projects and re-establish a vibrant, mixed-use urban district...encouraging the "complete" street concept...all by keeping the authenticity and character of the area. In May 1995, there was a Strategic Plan for the South side Medical District, which threatened to move their facilities if the neighborhood was not re-developed. They suggested a group to oversee the re-development process and the Fort Worth South, Inc., group was established. Since it's inception, the group has brought about sweeping changes(due in large part)by convincing the City of Fort Worth to abandon the use of conventional zoning codes and using a form based code in it's place. Form based codes address the historical significance of structures, buildings in relationship to one another, and what form and scale should the streets and blocks be in relationship to the surrounding structures.
One of the most comprehensive undertakings by Fort Worth South Inc., was the Modern Street Car proposal to the City of Fort Worth. As Mike explained, it was proposed to the City Council when then Mayor Moncreif was mayor and the plan was discarded in favor of a Light Rail proposal. When the new Mayor was elected, the group approached the City Council, but was turned down again. Mike explained to us that the Street Car concept makes better economic impact sense than does any other form of "people movement". In what he called "Tracks to the Future", he told us the plan was simple enough...bridge the Near South Side thru downtown. Why it works was just as simple....the tracks are permanent and predictable, thereby having the constant steady flow of people using the Street Car moving from point A to point B and back to point A again. This form of transportation makes much better sense than do buses and light rail, and at a reduced cost. Mike told us the cost of the project was approximately $ 85 M, where Light Rail can reach greater than $1 Billion. I for one, have to agree with him. Maybe the Fort Worth City Council will someday see the error of their ways.

Reference Web-Sites

The POD & the TOD of Reuse and Redevelopment
POD's
http://pcj.typepad.com/planning_commissioners_jo/2010/03/ewing.html
http://des.nh.gov/organization/divisions/water/wmb/repp/documents/ilupt_chtp_3.2.pdf
http://crec.berkeley.edu/Evaluating%20the%20Performance%20of%20PODs.pdf

TOD's
http://www.fta.dot.gov/about_FTA_6932.html

The EPA Superfund and Brownfield Grants Programs
http://www.epa.gov/brownfields/overview/anat_bf_redev_101106.pdftp://www.epa.gov/brownfields/overview/anat_bf_redev_101106.pdf
http://www.epa.gov/superfund/community/tag
http://www.policyarchive.org/handle/10207/bitstreams/19366.pdf
http://www.epa.gov/brownfields/grant_info/index.htm

Adaptive Reuse and Redevelopment & Building Codes - A New Era
http://en.wikipedia.org/wiki/Building_code
http://adaptivereuse.info/tag/smart-building-codes/
http://www.structuremag.org article.aspx?articleID=461
http://www.huduser.org/Publications df/smartcodes.pdf

Tax Increment Financing - The "TIF" Explained
http://www.in.gov/indot/div/projects/i69planningtoolbox/_pdf/Tax%20Increment%20Financing.pdf
http://en.wikipedia.org/wiki/Tax_increment_financing
http://www.realtor.org/smart_growth.nsf/docfiles/tifreport.pdf/$file/tifreport.pdf
http://www.window.state.tx.us/taxinfo/proptax/registry04/zone.html

Mortgage Guarantee Programs Thru HUD
http://archives.hud.gov/pubs/ProgOfHUD06.pdf
http://www.huduser.org/whatsnew/ProgramsHUD05.pdf
http://portal.hud.gov/hudportal/documents/huddoc?id=184pg_ch_11_rev_4_8_11.pdf
http://www.fhamortgagecenter.com/fha-blog/hud-mortgage-modification-program-offers-some-help/

U.S. Government Funding Programs on a "Community " Scale

What is a CDE?

http://law.justia.com/cfr/title12/12-1.0.1.1.22.html
http://www.frbsf.org/publications/community/investments/0308/article1a.html
http://www.novoco.com/new_markets/resource_files/cde/CDE_Q_A_0705.pdf

What is a CDBG?

http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/communitydevelopment/programs
http://en.wikipedia.org/wiki/Community_Development_Block_Grant
http://www.texasagriculture.gov/GrantsServices/RuralEconomicDevelopment/RuralCommunityDevelopmentBlockGrantCDBG.aspx

The "Magic" of Reuse and Redevelopment - Tax Credits

Historic Tax Credits/Rehabilitation Tax Credits

http://www.cr.nps.gov/hps/tps/tax/index.htm
http://www.nps.gov/tps/tax-incentives.htm
http://www.nps.gov/tps/tax-incentives/taxdocs/about-tax-incentives.pdf
http://www.nps.gov/tax-incentives/before-apply/irs.htm

New Market Tax Credits

http://en.wikipedia.org/wiki/New_Markets_Tax_Credit_Program
http://www.rejournals.com/2011/03/09/new-market-tax-credits-separating-fact-from-fiction/
http://www.gao.gov/new.items/d10334.pdf
http://ntcicfunds.com/tax-credit-basics/new-markets-tax-credits/
ReadingsClassOne.pdf-website-www.J Russell Peterson.com -REAE 5316 link

Low Income Housing Tax Credits

http://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credit
http://www.hud.gov/offices/cpd/affordablehousing/training/web/lihtc/basics/work.cfm
http://www.reznickgroup.com/sites/reznickgroup.com/files/papers/reznickgroup_lihtc_survey_2011.pdf

Tuesday, April 10, 2012

Mortgage Guarantee Programs Thru HUD

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