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HOF advisory board approves $480,000 rental-gap loan for Catherine Terrace in Hill District
Summary
The advisory board authorized a 40-year, 0% cash-flow rental gap loan of up to $480,000 to the Catherine Terrace project—$400,000 for construction and $80,000 for a supportive-services escrow—to fund eight affordable units in the Middle Hill neighborhood. Three board members abstained from the vote because of conflicts.
The Housing Opportunity Fund (HOF) advisory board voted on May 6 to authorize a rental-gap program loan of up to $480,000 for a development identified in application materials as Catherine Paris LLC to build eight affordable rental units in the Middle Hill District.
URA lending analyst David de Bernardo said the proposed loan would provide $400,000 toward construction costs and $80,000 to a supportive-services escrow. The loan was described in materials as a 40-year, 0% interest, cash-flow loan. The eight units will include four one-bedroom units on the ground level and four two-story three-bedroom units; all eight units are planned to be rented to households earning at or below 50% of area median income and the project will accept housing vouchers.
De Bernardo and the applicants said the total development cost is $3,148,000. Other sources in the financing stack include a $1,200,000 Federal Home Loan Bank Affordable Housing Program (FHLB AHP) grant, a permanent mortgage from Bridgeway Capital for $668,000, $250,000 of owner equity and $250,000 of equity from Neighborhood Allies. Of the $480,000 loan request, $80,000 is from HOF 2022 funds and $400,000 from HOF 2023 funds.
The applicant team said nonprofit and community partners will provide tenant services: Neighborhood Resilience Project (education services), Catapult Greater Pittsburgh (financial literacy, credit counseling and life skills) and ACH Clear Pathways (youth and after-school programs). Co‑owners Ernest Darby and Emma Lucas Darby addressed the board and described the project’s long history in the Hill District and the applicants’ intent to preserve affordable housing rather than generate profit.
Board members asked about targeting tied to the FHLB award and whether the development team had prior experience building similar housing. The applicants said their prior work includes building and renovating homes and that they had responded to URA questions and plan to continue coordination with the URA. URA staff said the HOF loan’s starting point for repayment is typically 50% of free cash flow after operating expenses, reserves and debt service; the packet allowed the precise percentage to be determined in loan documents when other cash-flow loans are part of the financing.
A motion to approve the rental-gap loan passed. Board members recorded abstentions for Lena Andrews, Tamika Harris and Deidra Washington because of identified conflicts of interest; those abstaining were explicitly named in the meeting record. Several other advisory members voted in favor; no opposition was recorded on the transcript.
The board invited the applicants to return with project updates as construction and closing proceed.
