Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Affordable Housing Project topic
No spam. Unsubscribe anytime.
Council approves modification to Cottages of Idlewild agreement to preserve financing flexibility
Summary
Raleigh approved a one-time modification allowing the project’s construction lender limited flexibility to sell for higher AMI levels only in a foreclosure scenario, after lenders stepped in to cover a last‑minute financing gap.
Raleigh City Council approved a modification to the Cottages of Idlewild affordable housing agreement that gives the project’s construction partner limited flexibility in the event of foreclosure. The change was approved by motion and a voice vote.
City Housing and Neighborhoods staff and representatives of the Raleigh Area Land Trust told council the project’s capital stack had a $938,000 shortfall after the North Carolina Housing Finance Agency reallocated construction funding for hurricane recovery in western North Carolina. Self Help Ventures Fund agreed to fill the construction gap but asked for one condition: if the lender had to assume the project through foreclosure, the seven for‑sale units now required to be restricted to 50 percent and 60 percent of area median income could be resold at up to 80 percent AMI to preserve the lender’s ability to recover investment.
Erica Brandt of Housing and Neighborhoods reviewed the project history: the city selected a developer in 2021 to receive three city parcels (about 1.17 acres) and negotiated a land sale for one dollar as part of an affordable‑housing subsidy. Council previously approved a total of $1.26 million in city gap financing and related resolutions that, together with the donated land value, amount to roughly $3 million in city subsidy.
Rhett Fussell, a consultant for Raleigh Area Land Trust, described a complex capital stack containing rental and for‑sale units and said partners had secured a Federal Home Loan Bank grant and other commitments that made the project viable. He and city staff said foreclosure is not anticipated and that the requested modification would apply only if foreclosure occurred; they said the modification would still meet the statutory requirement that the city convey property only for a public purpose.
A council member moved to approve the modification; the motion was seconded and approved by voice vote. City staff said site work is scheduled to begin later in 2025 and that the change is aimed at preserving financing needed to complete the project.
