Partnership with my city

5 Replies

My name is Jason and I'm in the beginning stages of partnering with the City of Amarillo, TX to construct multifamily homes for low to moderate income families. Partnering with the City using my VA Loan and HUD funds, they will reimburse up to 50% of construction cost (hard and soft). Partnering with the city on a project like this requires me to rent to low to moderate income families for 20 years and keep the property up to HUD/City codes. In constructing the first duplex or triplex I will occupy one and rent out the others, the city will not reimburse anything for the one I occupy. I currently have 2 acres of land to begin this project within city limits, I'm now working with builders to receive 3 bids to satisfy the City/HUD requirement for bids. Once my plan is approved by the city they will start reimbursing the builder at each phase of the project. Once the duplex or triplex is complete, I will use the equity from the city's reimbursement to continue the development of the acreage, most likely 4-plexes.

My question to you, with you knowing very little about the the City's program is, what are somethings I should consider for construction. I already have my own plans but they will need some adjusting based on square footage and layout I would like. I'm open to any other suggestions or questions you may have.

When dealing with HUD and Federal Funds, you usually have both completion bonding and Davis Bacon wages to consider. Be sure that you bids and contractors are aware of these type of cost when bidding.

good luck

@Nicolas Paez

  Thanks for your response.  Since I'm starting out with a duplex or triplex and then doing 4 units at a time after that the Davis Bacon Wages do not apply, so I was told by the manager in community development.  I will have to submit individual applications for each 4-plex to avoid Mr. Davis Bacon.     

@Nicolas Paez

  Thanks for your response.  Since I'm starting out with a duplex or triplex and then doing 4 units at a time after that the Davis Bacon Wages do not apply, so I was told by the manager in community development.  I will have to submit individual applications for each 4-plex to avoid Mr. Davis Bacon.     

Hi Jason,

Congratulations on your endeavor and I think it is awesome you were able to partner with the city this way. We are also hoping to partner with our city and have a meeting with the community development department next week. It would be great if you could take a few minutes to give us some much appreciated insight. What advice would you give us about the meeting? What questions should we ask and how should we position ourselves? Are there any buzzwords or certain things we should be sure to say? We understand the housing has to be for low-income residents and this is our focus as we want to improve our community and the quality of life for those within. Thank you so much for taking a few moments to make a HUGE difference in our upcoming meeting!!

Jeneane Noble

Congrats @Jeneane Noble . First, I would request a copy of the contract you will sign, prior to the meeting to give your attorney time to look over it. Once you understand the contract and how it affects you short term and long term, you will then need to find a bank that's willing to do a loan on a silent 2 lien. This has been my greatest challenge because I'm building a 4-plex and I will occupy one unit, while trying to use my VA loan. If you have 25% down and your willing to accept a commercial loan on these units, then you should have fewer problems. For me the returns are not that good, due to the set rents and commercial loan terms. As of now this all I can think of, but if something else comes up I will notify you.