D3G was engaged by the current owner of the senior housing project to explore the opportunities of funding within the Inflationary Reduction Act (IRA) to assist in filling gaps in a planned recapitalization effort.
The property consists of 9 single-story buildings constructed in 1982, containing 152 units of Section 8 Project-Based Assistance. The property underwent a moderate rehabilitation in 2008; and is looking to not only recapitzlize but also attempt to achieve “net-zero” and abate climate hazard risls. The property was identified to be located in a “Disadvantaged Community” per the EJ40 mapping tool, and per FEMA mapping the property has a National Risk Index (NRI) score of >98, Extemely High Risk.
The goals for the project are to obtain approximately $8 to 10 million in gap financing to achieve recapitalization, climate risk mitigation, and a high-acheiving green building certification with “net zero” if possible. The HUD, EPA, DOE, and IRS funds under the IRA were explored based upon site conditions, mapping software applications, and explicit goals for the client. An FHA 221(d4) substantial rehabilitation is planned, with potentially 4% bonds.
The primary solution for the property, at the time of project engagement, was identified as the HUD Green Resiliency and Retrofit Program (GRRP), specifically Cohort 2 Leading Edge. As secondary sources of gap money, potentially coming available in Q3/Q4 ’24 are the EPA GGRF National Clean Investment Fund (NCIF); the Solar for All (SOA) program; DOE electrification programs administered by the State; and IRS benefits under Section 48, Investment Tax Credit (ITC) for solar installation.
D3G provided educational training to the client on the various funding mechanisms for disadvantaged communities and affordable housing within the IRA. Cohort 2 Leading Edge of the GRRP was selected as the primary target for funds, and as a backup, the forthcoming NCIF BMIR loan rates would be an excellent secondary option. In both options, a firm understanding of the current utility structure and usage was required.
Upon completion of the technical services, D3G worked with the client and their design architect on a potential scope of renovations which would achieve HUD’s Green Resilient Retrofit Program (GRRP) threshold requirement of a NGBS Remodel Gold or Emerald level and secure either the NGBS Net Zero or Climate Resilience badge. To achieve increased energy performance and decrease carbon emissions, the property has pledged to make significant building envelope upgrades, replace all fixtures and appliances, and replace the majority of the mechanical, electrical and plumbing systems. Additionally, modeling demonstrated that solar on carports and rooftops would push the property towards net-zero. Regarding climate hazards, primarily the risk of wildfire and extreme heat, the property will install standing seam metal roofing prior to solar installation and perform additional groundskeeping. The increased building envelope insulation and tightening combines with 72-hour emergency power provisions at the leasing office creates resiliency for senior residents. D3G’s consulting efforts resulted in the client receiving a substantial award under the GRRP.
