PEMBROKE — Despite a rejection from a state agency, the Lumbee Tribe is moving forward with its plan to build 50 low-income rental properties around Robeson County, a tribal official said.
“We’re still looking at all our financing options, but we are looking to start before the end of the year,” said Danielle McLean, the tribe’s Legal & Compliance officer.
The N.C, Housing Finance Agency rejected the tribe’s bid to award tax credits to potential investors to help finance the cost of building the homes on four tracts of land the tribe owns. The land is in Union Chapel, Prospect, Rowland and Raynham. Each home would cost about $95,000 to build.
The project did not qualify for tax credits because the sites are too far away from amenities, McLean said. Those amenities include schools, shopping, public facilities, health care and more.
“They thought our sites were too rural, not close enough to amenities to justify the investment of state funds,” McLean said.
The project has been approved by the federal department of Housing and Urban Development, she said.
“I had a conversation with them last Wednesday and they understood all of this,” said Chris Austin, manager of Rental Development at N.C. Housing Finance Agency.
The Agency’s Quality Allocation Plan contains a numerical scoring system used to evaluate proposed projects, he said. One of the criteria scored in the QAP is distances to amenities. The tribe’s 50-unit project failed on distance to these amenities because they were too far from amenities used to score a housing plan.
“These sites were more than four miles from amenities for scoring purposes,” Austin said.
The project was approved by tribal leaders and taken before tribal members and members of the community, McLean said. Everyone to whom the project was presented approved it.
“These are people who don’t want to live in town,” McLean said.
So the tribe is moving forward with the rural plan, she said. It will seek funding from other private, state and federal agencies.
The pre-application process for the first 50 homes was completed in January. McLean said. In June the tribe will submit for approval a plan to build 50 more homes near Lumberton. This project will meet the N.C. Housing Finance Agency’s criteria, she said.
“We are still in the early planning stages of the second 50-unit project,” McLean said. “Land must be purchased or the tribe must have an option to buy before submitting a pre-application. We will again apply for the Low Income Housing Tax Credit program with the NC Housing Finance Agency.”
An early estimate puts the cost of the project at about $8 million, she said, which will include the purchase of land. The site will be within three to four miles of amenities.
Each year the Lumbee Tribe submits a housing plan to HUD, McLean said. The plan outlines housing projects the tribe will pursue over a number of years.
If the tribe wants to pursue a project immediately it can submit a supplemental housing project plan and ask to leverage some of the HUD funds, she said. That means the tribe can get an advance on a portion of the funds. The tribe and HUD treat those funds as a loan, complete with interest rate and repayment plan.
If the leveraged funds do not cover the project’s total cost, the project that can seek outside investors, McLean said. To make investing in the project more attractive, the tribe can ask the N.C. Housing Finance Agency to approve the awarding of tax credits to potential investors.
“That doesn’t take away at all anything we told HUD we’re going to do this year,” McLean said.
