Little Rock board debates options as foreclosure looms for Madison Heights housing complex

The Little Rock City Board of Directors on April 15 held a lengthy discussion about the threatened foreclosure of Madison Heights 1 and 2, two subsidized apartment complexes owned by the Metropolitan Housing Alliance (MHA), and directed the mayor and city attorney to explore financing options to avoid a courthouse-auction sale.

The board discussed four broad options presented by city staff: pay off the loan via a financing transaction and take title; purchase the first‑lien notes and provide forbearance while MHA rehabilitates units; allow foreclosure and attempt to acquire the properties at auction; or take no action and permit the foreclosure to proceed. Mayor Frank Scott Jr. said the city’s priority is protecting housing security for residents as the parties seek a path forward.

Why it matters: Madison Heights 1 and 2 together contain 241 apartment units in a mixed subsidy/market portfolio a short distance from UAMS and other medical centers. A creditor filed for summary judgment and a foreclosure hearing is scheduled for April 29, 2025. Board members said a foreclosure sale to a private investor risks displacing residents and removing locally accountable stewardship of the properties.

City staff and outside advisers gave the board financial and legal context. Nicholas Harper, described in the meeting as a city finance official, said the total debt outstanding tied to the Madison Heights loans is about $5.4 million — roughly $4.2 million in unpaid principal and about $1.2 million in accrued interest, late fees and legal…