The Springs

Jonathan Rose Companies purchased La Mesa Springs in La Mesa, CA in partnership with the not-for-profit Community Opportunity Fund in June 2019 to preserve the affordability of the 129-unit HUD project-based Section 8 community for low-income seniors. The project included an $8.3 million capital transformation of the 8-story mid-rise building that substantially renovated all existing units and building systems.

The property’s Section 8 contract was renewed for the maximum term of 20 years, and 100% of units will remain affordable to seniors earning 60% of AMI and below.

The project was financed through allocation of federal 4% LIHTCs, issued by the California Tax Credit Allocation Committee, in conjunction with tax-exempt bonds issued by the California Debt Limit Allocation Committee. The US Bancorp Community Development Corporation served as the federal LIHTC investor providing $8.1 million of total equity, as well as a $5.5 million equity bridge loan. Hunt Mortgage Group originated an FHA Heavy 223(f) first mortgage of $25.5 million, cash-collateralizing the multifamily housing revenue bonds. 

The project team took input from the residents themselves through on-site resident information sessions, working with them to identify key scope concerns. The property benefits from a tax abatement through the state Welfare Exemption.

The project’s construction took place during the COVID-19 pandemic.