In Spring 2023, a groundbreaking affordable housing initiative debuted in Springfield, Missouri—Keystone Family Homes. This project leveraged a novel financing structure blending HUD’s Rental Assistance Demonstration (RAD) with Section 18, making it one of the first scattered-site rehabilitations in the nation to do so.
Strategic Rehabilitation Across Neighborhoods
The Housing Authority of the City of Springfield (HAS) collaborated with Knight Development to breathe new life into seven aging affordable housing locations throughout Springfield. Despite pandemic-related hurdles—like supply chain delays and health protocols—the project was executed smoothly and innovatively .
Phasing was key: starting with Keystone Village (76 units, 1–5 bedrooms), then Greenway Village (33 units), Cedarbrook Estates (80 units), Arrowhead Townhomes (32 units), Carson Lee Estates (24 units, renovated in just four months), and finally Circle and Scatter (52 units). Residents were able to remain in place during most of the rehab, except Carson Lee Estates.
Impact and Outcomes
By May 2023, all 297 units were fully leased, with tenant rent capped at 30% of income. Eligibility targeted households at or below 60% of the Area Median Income (AMI), with 25% of units specifically reserved for those earning no more than 30% of AMI .
Homes were upgraded with modern amenities—washers, dryers, dishwashers, LED lighting—and essential infrastructure like plumbing and electrical systems received full updates. Communal upgrades included shared community rooms, computer centers, and eco-friendly outdoor spaces .
Innovative Financing: RAD + Section 18 Blend
Knight Development’s use of the RAD/Section 18 blend was particularly inventive. After a 9% Low-Income Housing Tax Credit (LIHTC) application was initially rejected, the project expanded to 297 units, shifted to 4% credits, and successfully secured financing. Combining RAD subsidies with 4% LIHTCs raised contract rent levels necessary to support redevelopment and long-term operations.
Utility cost savings played a role too: by capturing 75% of energy utility savings, RAD rents received a boost—bringing in nearly $60,000 annually—while still keeping housing costs lower than expected post-renovation without utility savings.
The total project cost was $42.8 million. Funding came from multiple sources: 4% LIHTC equity, tax-exempt bonds, tax abatements (over $800,000 facilitated by early coordination with local authorities), and more.
Fostering Resident Well-Being
Beyond bricks and finances, Keystone Family Homes placed a strong emphasis on resident support. Educational and empowerment programs included financial literacy, life skills training, entrepreneurship support, food distribution, and healthy living workshops. Such initiatives help residents reduce costs, build skills, and foster better home environments. With occupancy over 95%, resident satisfaction has been exceptionally high, according to Knight Development’s CEO, Holly Knight.
Recognition & Significance
Keystone Family Homes received a 2024 Novogradac Development of Distinction Award for preserving family housing, underscoring its status as a nationally recognized model in affordable housing preservation.
Keystone Family Homes in Springfield, Missouri showcases Knight Development’s creative use of HUD’s RAD/Section 18 financing to rehabilitate 297 affordable housing units across seven scattered sites. Completed ahead of schedule and under budget in 2023, it features modernized units, energy-efficient upgrades, community spaces, and robust resident support programs. In 2024, the project earned a Novogradac Development of Distinction Award. Read the full HUD case study for details.