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Innovative Financing for Seniors Housing in Carlisle Underscores Teamwork

In one of the largest check presentations of its kind, FHLBank Pittsburgh and owner-member Orrstown Bank presented $6.7 million in financing July 31 for extensive renovation work at a seniors housing project in Carlisle.

U.S. Rep. Todd Platts (PA-19) was on hand at One West Penn Apartments to help announce the funding, accomplished through the considerable teamwork of FHLBank, Orrstown Bank and the Cumberland County Redevelopment and Housing Authority (CCHRA), whose executive director, Chris Gulotta, also serves as chair of FHLBank's Affordable Housing Advisory Council.

At a ceremony in the community room of the 130-unit residence where Congressman Platts served as keynote speaker, Gulotta announced that Community Lending Program (CLP) financing from Orrstown Bank has resulted in lowering the interest rate on the project's existing HUD Section 202 mortgage by approximately 4.5 percent. In turn, Gulotta said, this considerable cost savings now permits CCHRA to borrow above the refinanced amount for additional site improvements on behalf of area seniors. CLP financing has been structured as a tax-free loan through the Redevelopment Authority expressly to reduce the interest rate and maximize dollars applied to the renovation.

"This creative approach to refinancing is a prime example of how the municipal and private sectors can work together for the common good," said Congressman Platts.

The project's owner, Carlisle Senior Housing Associates and CCHRA had looked long and hard at the best way to refinance the 40-year, fixed-rate 9.25 percent mortgage. They discovered that, using a new, 20-year loan rate of only 4.73 percent, refinancing costs were cut in half. In addition, debt service payments were reduced from pre-payment monthly costs greater than $47,200 to post-refinance payments of $43,400. They also experienced a savings of more than $80,000 in fees using CLP when compared to alternative financing.

"Our release of nearly $7 million in CLP financing at our own cost of funds represents one of the largest disbursements from our Bank for a single project," said John Bendel, director of Community Investment for FHLBank, who attended the event along with Peter Knight and Bill Miller of the Bank's Government Relations Department. "Ken Shoemaker, the president of Orrstown Bank, was a strong partner in this endeavor. He really made this loan package happen."

With $1.47 million now available for improvements to One West Penn Apartments, work is starting on much-needed improvements at the 22-year-old complex. Planned changes include the installation of a new roof, new elevators, remodeling of kitchens, upgrades to mobility-impaired units, installation of hardware on entry doors, redecoration of the lobby and additional parking.

West Street Pride tour

Immediately following the check presentation, Congressman Platts, Gulotta, Bendel, Knight and other civic leaders visited two nearby homes on North West Street that are part of the Pride of Carlisle Neighborhood Development Initiative. The initiative is designed to replace absentee landlords and eliminate blight. Homeowners, through a neighborhood association, are expected to take an active interest in reducing crime, vandalism and other undesirable behaviors. Carlisle Housing Opportunities Corporation, CCHRA, Orrstown Bank and FHLBank Pittsburgh are all parties to West Street Pride.

Approximately 50 people turned out in 90-plus-degree heat for the day's events.