Langley, a desirable place to live with a quaint downtown area on Puget Sound, faced the prospect of losing its only affordable housing in 2006 when Saratoga Terrace was offered for sale. Given its desirable location and the frequency of apartment conversions to condominiums at the time, there was a real threat that it would be sold and converted to market rate.

In partnership with a non-profit organization, we packaged Saratoga Terrace with three other at-risk USDA RD 515 family properties in Island and Skagit counties. On February 28, 2007, the 102-unit Island Skagit Partners, LP portfolio was the first 3560-20 preservation transfer transaction to close. The property was financed with tax-exempt bonds and 4% low-income housing tax credits and by re-amortizing and subordinating the existing USDA 515 loan over 50 years with the USDA interest credit reducing the effective interest rate to 1%.

The rehabilitation included roof replacement, exterior paint, installation of humidistat fans and energy star appliances, as well as other improvements designed to reduce energy usage and promote sustainable building practices.