City approved $1.2 million in federal funds for apartment project

City Commissioners unanimously approved $1,231,657 in HOME Investment Partnerships Program funds during their Nov. 7 meeting to NeighborWorks Great Falls for the purchase and restoration of the Ulmer Square property.

Staff is recommended approval and said HUD is doing the final review of the project now, but they anticipate approval.

The U.S. Department of Housing and Urban Development established the HOME program to provide grants to state and local governments to fund building, buying and rehabilitating affordable housing.

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“HOME is designed exclusively to facilitate the creation of affordable housing for low-income individuals,” according to the city staff report.

HUD annually allocates HOME funds to the city.

NeighborWorks Great Falls submitted a grant application to purchase the property at 619-621 3rd Ave. S., known as Ulmer Square.

NWGF is planning to use $1,231,657 of program income from their revolving loan fund, which was HUD funding, toward the purchase and rehabilitation of the apartment building. That’s an allowable use under HUD guidelines, according to city staff.

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The 22,520-square-foot property includes a multi-family residential structure with eight one-bedroom apartments.

NWGF is planning to acquire and restore the property with exterior improvements include siding, insulation, front doors, railings, landscaping, and drainage limitations, according to the staff report.

Planned interior improvements include new flooring, paint, appliances, bathroom fixtures, and heating/cooling systems.

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NWGF plans to continue leasing all of the units at HUD-approved rates and that no current residents will be displaced.

The city’s internal grant committee reviewed and approved the application. HUD also authorized the use of HOME funds for the project, which is in line with the city’s annual action plan and would preserve affordable housing and improving the property.

“The purchase and restoration of property for affordable housing purposes is a central tenant of the HOME program. Affordable housing is a pressing need in the Great Falls area. This proposal will address this need while adhering to the original ambitions of the funding,” according to the staff report.

If approved, the project will be funded through program income from HOME funded activities. Similar to the Community Development Block Grant revolving loan fund, a HOME recipient may use program income resulting from HOME funded activities to fund other projects as long as they meet the same city and HUD eligibility requirement, according to the staff report.

Sherrie Arey, NWGF director, said that the organization turned their attention to acquiring apartments in the downtown area, where many are concentrated, to preserve affordable housing.

Jake Clark of the Great Falls Development Alliance said they support the project that preserves affordable housing.

The “housing situation in Great Falls is precarious,” he said.

Commissioner Rick Tryon asked why the city approved the project before HUD.

Tom Hazen, the city’s grant manager, said that’s the process they use for all of the HUD funds.

Staff screens applications for eligibility, then the city’s internal committee reviews and and makes recommendations for funding. Hazen said then projects go through the full HUD approval process, which is long and in-depth.

He said that staff makes sure projects meet the city’s internal requirements before going through the full HUD process.

Hazen said the city submitted the request to HUD for the funds about two weeks ago and had hoped to have final approval in time for the commission meeting, but based on discussions with HUD, staff was confident it would be approved, so they wanted to keep it moving through the city’s approval process.

Arey said that rent for HUD funded units are set by federal guidelines and residents of the Ulmer property can also apply for Section 8 vouchers.

Mayor Bob Kelly said that the project checks a lot of the city’s boxes for housing needs.