VA Loan Updates

12 single-family homes also get funding

Southwestern Illinois Development Authority has agreed to provide funding for the metro-east’s first veteran’s homeless shelter.

The agency has also agreed to help fund construction of 12 single-family homes in the Emerson Park neighborhood

The shelter, to be known as St. Joseph Center, would provide assistance to as many as 26 metro-east-area veterans at one time. A former armory located at 48th and State streets in East St. Louis will be converted into a 26-bed shelter with a $870,000 grant from the Illinois Housing Development Authority and a $154,000 construction grant from the Chicago Federal Home Loan Bank through a sponsorship with the Bank of Edwardsville.

The SWIDA board has agreed to provide:

• A $175,000 performance construction bond in the form of irrevocable letter of credit, as required by the state housing development authority;

• A $26,100 irrevocable “working line of credit,” good for one year to cover additional construction costs; and

• A $50,000 short-term loan to cover pre-closing costs, including surveys, title searches and prepaid insurance.

This advance would be reimbursed to SWIDA from the proceeds of the grant, which is expected to occur within the next two months.

Local nonprofit group Eagle’s Nest has been pushing for a low-interest loan from the state for some time. SWIDA executive director Mike Lundy said the project has gained support from Mayor Alvin Parks and other local leaders.

“With more veterans coming home each month, and more of them having problems, I think the board is excited about helping in this project,” Lundy said. “It’s generally going to help homeless vets get back on track.”

The 12 single-family homes, SWIDA has agreed to help build in East St. Louis’ Emerson Park neighborhood is adjacent to Parsons Place. Developer Don Johnson, of CDC Development Corp. of East St. Louis, is partnering with Emerson Park Development Corp. in requesting a $60,000 land acquisition and pre-development loan. The loan will be repaid in one-twelfth increments as each home is sold. He has also received $500,000 line of credit to pay for construction materials to be paid off as homes are sold. The sales price for the houses would be about $165,000 apiece.

Johnson said this development is unique in that it will provide $75,000 to $80,000 in subsidies per house. In the past, subsidies have been limited to $30,000 to $40,000 per house, he said.

“It will be a little more upscale, with two-story, full-brick fronts, garages … higher ceilings, higher upgrades and amenities,” Johnson said.

He said it’s part of a five-year development plan the developer has presented to the city.

“At the same time, it will help stabilize or begin to create more value based on the way it’s structured for future housing development in the next five years.”

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