Lument has completed a $28 million U.S. Department of Housing and Urban Development/Federal Housing Administration Section 221(d)(4) loan to support a major renovation of Western Horizon, a 353-unit affordable housing community in Lorain, Ohio. The financing is intended to facilitate substantial rehabilitation work at the property on behalf of TFG Housing Resources and Raise Up.
The capital stack incorporates a component of HUD’s Rental Assistance Demonstration program, which enables the conversion of public housing assistance to long-term, project-based rental assistance contracts. The units at Western Horizon were converted through the RAD program and paired with 4% low-income housing tax credits allocated by the Ohio Housing Finance Agency, creating an additional subsidy layer to support the redevelopment.
Lument managing director Joey Hague, based in Columbus, led the transaction. Hague noted that the FHA 221(d)(4) structure provides fully amortizing, 40-year construction-to-permanent financing at a favorable interest rate, which is expected to help position the property for long-term operational stability after the rehabilitation is completed.
In addition to the FHA-insured mortgage, Lument Securities served as underwriter for $9.2 million in tax-exempt bonds issued in connection with the project. The bond proceeds, in combination with the FHA loan and tax credit equity supported by the RAD conversion, are designed to fund the capital improvements needed to modernize the aging property while preserving affordability.
Western Horizon has its origins in three separate communities developed in the 1950s: Leavitt Homes, Westview Terrace, and Westgate Apartments. These properties have historically functioned as public housing. The current recapitalization and rehabilitation effort is structured to preserve the existing affordable housing stock while upgrading the physical condition of the complex.
The transaction highlights the continued use of HUD’s 221(d)(4) program, RAD conversions, and tax-exempt bond issuance as tools to fund large-scale renovations of older public housing assets. By combining federal housing programs with state-level tax credit allocation and bond financing, the stakeholders aim to extend the useful life of Western Horizon and maintain affordability for residents in the Lorain area.
