Affordable housing isn’t easy to come by in Tillamook, a rural city of about 5,000 people near the Pacific coast of Oregon. The sale of Golden Eagle, multifamily housing development, would have made affordable options even scarcer, if not nonexistent.

In 2016, the private owner of the Golden Eagle Project requested to prepay the property’s original USDA Rural Development loan, leave the program and no longer serve low-income Oregonians, selling the property off in pieces as the maturity of the original loan drew near. 

The new owners did not have to meet the affordable housing requirements of the original landlord. Dozens of residents, mostly seniors on fixed income, were displaced. Residents from the other Golden Eagle properties watched their neighbors across the street either move out or be evicted. 

“All of them had to move because they could no longer afford the new market rate rents,” said Sheila Stiley, Executive Director of Northwest Coastal Housing (NWCH), a nonprofit that advocates for affordable housing. “Most had to leave their community. It was really sad.”

Stiley and her board were informed about the fallout from the sale of the first phase of the Golden Eagle housing project and were concerned about what would happen to the remaining residents if the second phase was sold to a private developer.

NWCH stepped in to save the other 32 units of vulnerable affordable housing and maintain the community. The nonprofit purchased and renovated the project by utilizing a special financing model never achieved before through a “Two-Step Transfer” process, now known as a “Simple Transfer.” The Housing Assistance Council (HAC) stepped in as the lender providing the largest loan they had ever offered. 

A national nonprofit, HAC offers training, technical assistance and financing solutions that support affordable housing initiatives in rural areas. Funded in part by the U.S. Department of Housing and Urban Development (HUD), HAC is able to offer below-market financing options that are particularly valuable in rural areas. In addition, HAC collaborates with the USDA’s Rural Development program. The organization has worked closely with USDA’s Rural Housing Service to enhance affordable housing in rural communities. 

NWCH encourages this type of housing investment as rural development loans initiated in the 1980s and 1990s begin to mature across the country and more affordable communities, that were once partially subsidized, face the potential of being sold. Tillamook saw it happen four times before the first phase of the Golden Eagle project was sold.

“It’s very, very, very rural here. You’re literally taking away the pool of affordable housing for the vast majority of the vulnerable senior population,” Stiley said, noting that over half of the Golden Eagle community has residents who have lived there for more than a decade. “Imagine, their physicians, prescriptions, senior services and community network are all about a mile apart. And now suddenly, they have to move away from their entire network and support system and worse, they have no home. These folks just lost the availability of where to go to remain in their community.”

NWCH, utilized a new form of financing with technical assistance from HAC. The property’s mortgage was partially-subsidized through USDA RD 515 loan (financing for the property acquisition from the construction rehabilitation). The inclusion of Low Income Housing Tax Credits, General Housing Account Program Grant, and HUD Community Development Disaster Recovery Grant funds all help reduce the cost of the project. 

Northwest Coastal Housing was the first organization in the nation to take advantage of this USDA program. Combining subsidies with decoupling is a creative approach to funding an affordable housing development. Making sure the development could be financed in a way that met the needs of all parties was a collaborative effort. Their experience will be an example of how affordable housing can be efficiently and fiscally financed to future developers. 

“I feel like we needed to be rocket scientists to navigate this. We needed many people and agencies to guide us through this process or we would not have been successful,” Stiley said. “That’s part of the appeal of working with the Housing Assistance Council. They took a risk in an unfamiliar process because they care about rural affordable housing.”

Stiley said the program has since been streamlined to encourage its use in other areas. As the developer of the Golden Eagle II project, NWCH benefits from low-income housing tax credits, which helps build equity and creates opportunities for reinvestment back into the property.

After the success of the Golden Eagle project, NWCH partnered with HAC again to build a first-of-its-kind multifamily community specifically for veterans. The 11-unit project with three permanent supportive housing units, known as Blackberry Hill, includes wheelchair accessible residences, serene surroundings, and exceptional privacy between units. 

“It is what we do. We knew we had to build it. The city was behind the project, our state government supported it…so, we really pushed, and it now serves our veterans. We have many to thank for this project including HAC. They have been a great lending partner and we hope to pursue other projects with them,” she said. With federal investments Northwest Housing Council is maintaining its mission to build housing with heart.