Creekside Apartments
Homeword, Inc. is working to secure financing to preserve the affordability of Creekside Apartments in the long-term, and carry out a rehabilitation that will improve the safety and quality of these 161 rental units in Missoula. Homeword is a nonprofit housing developer that has created or preserved 1,319 affordable units across the state. The property's rehabilitation will provide new siding, roofing, windows, mechanical systems, and plumbing systems, among other improvements. The resulting modifications will improve housing quality and reduce safety risks to tenants.
Creekside Apartments was purchased by Homeward in 2017 and is a mix of studios, one, two, and three bedrooms, targeted to households earning between 50 and 60% of the area median income. The homes were developed in 1996 using the low-income housing tax credit (LIHTC) program. Language included in the state's qualified allocation plan when the project was developed would allow the project to exit the LIHTC program and its corresponding affordability restrictions without penalty in 2026 or possibly even earlier.
In areas with strong rental markets, characterized by escalating rents and low vacancies, projects like Creekside (located near the University of Montana) are at high risk of conversion to market rate rentals, resulting in displacement of low- and moderate-income renters. In recognition of this risk, Homeword partnered with the City of Missoula, First Security Bank, and NeighborWorks Montana to purchase the property and prevent the displacement of low- and moderate-income households. The financing structure – which includes a mix of LIHTC, a city-issued bond, financing from CDFI NeighborWorks Montana, and state and local grant sources – allowed Homeword to make an offer competitive with speculative market offers while making interest-only payments supported by affordable rents. With this financing package, Homeword will preserve and extend the affordability of the property while carrying out an extensive renovation that will substantially improve quality and safety. MHCF’s relatively small contribution of long-term, low-cost debt will help Homeword to complete the project without accumulating an operating deficit that could threaten its viability in the long term.