The City Council in Atlantic, Wednesday, authorized City Administrator Doug Harris to sign a letter of commitment with the non-profit RD Atlantic LLLP group, which will help the group get a higher tax credit rating for an elderly affordable housing project. RD Atlantic representative Cindy Voorhees with National Consulting Alliance in Des Moines, says the group is seeking a Low Income federal Housing Tax credits award administered by the Iowa Finance Authority, for the acquisition and rehabilitation of the 24-unit Regency Villa Apartments on Redwood Drive.

She says a local government contribution will help to make the project competitive and successful. Right now however, they don’t need money from the City, just a commitment that would enable the developer to get the necessary tax credits and begin work on the project.

The developer plans on investing $2.1-million to improve the property, which includes rehabilitation of the living units, new roofing and siding, appliances and carpeting. Voorhees says the organization will need some financial help from the City, but it’s really only necessary to increase the chances they will get more points in the tax credit rating. She says in order for the organization to get more money from the feds, the City needs to agree to provide a $20,000 interest free loan for 15-years with a “Bullet Maturity” (that is, no principal paid until the end of the 15-year term). The $20,000 will be put in a cash or cash equivalent account to fully secure the loan.

Originally, the developer had asked the City for a $100,000 interest free loan with a 20-year Bullet Maturity. Voorhees said the project would make a Payment in Lieu of Taxes (PILOT) of $750 per year for the first 15-years.

Regency Villa is owned by a non-profit organization and is in the Rural Development Program, a benefit of which is that the tenants will never pay more than one-third of their income, for rent.