RAD transaction supports construction of new affordable rental homes at Cherokee Place property
The U.S. Department of Housing and Urban Development’s Office of Multifamily Housing announced today that it has closed a Rental Assistance Demonstration (RAD) transaction with the Franklin Housing Authority in the City of Franklin, TN, Through RAD, the Housing Authority will newly construct 76 affordable rental homes at their Cherokee Place property as part of a multi-phase affordable rental housing development plan for the property. When complete, the property will have 12 deeply affordable Section 8 rental assistance homes, 48 affordable homes funded through low-income housing tax credits, and 16 homes with rental assistance through the housing authority’s project-based voucher program. The 12 Section 8 rental assistance homes were preserved through RAD by transferring the rental assistance for these units from the Housing Authority’s Short Court property, which will be redeveloped in the future.
The RAD transaction includes a construction budget of $19 million ($249,092 per unit) fully financed through:
- National Housing Trust funds
- 9% Low-Income Housing Tax Credits
- Commercial First Mortgage Loan
- Tennessee Housing Development Agency funds
Cherokee Place is phase one of a two-phase development on a vacant site which was originally an 87-unit property built in 1971. The previous site was demolished due to its poor condition. Phase two, which will be known as Shawnee, and will be new construction of 50 units including 16 deeply affordable rental homes that will be converted to the Section 8 platform through RAD. When complete, this two-phase development will bring the total number of affordable homes on the site to 126.
The new units on this site will have central heat and air conditioning and energy efficient features. Additionally, the redevelopment will feature open and recreational space and will preserve the existing tree canopy near the development. Public transit is also available nearby.
RAD was designed to help address the multi-billion-dollar nationwide backlog of deferred maintenance in the public housing portfolio and to stem the loss of affordable housing that could no longer be kept to decent standards. From the program’s inception through August 1, 2022, the RAD has facilitated more than $14.5 billion in capital investment to improve or replace nearly 180,000 deeply rent-assisted homes, most of which house extremely low-income families, seniors, and persons with disabilities.
Under RAD, projects funded under the public housing program convert their public housing assistance to project-based Section 8 rental assistance. Under Section 8, residents continue to pay 30% of their income towards rent and the housing must continue to serve those with very low and extremely low incomes, as was the case when the property was assisted through the public housing program. Residents must be notified and consulted prior to conversion, are given a right to return to assisted housing post-construction so that the same tenants can enjoy these newly preserved and improved apartments and maintain the same fundamental rights they had as public housing residents.
View photo essays and read case studies where RAD is working to successfully preserve and improve public housing for low-income families.
Watch an educational video for public housing residents or those new to the RAD program.