Old Historic Carnation, LP: A HAC Success Story

HAC’s patience and flexibility help convert a vacant Carnation milk plant into homes for seniors in Tupelo, MS

Rendering of carnation plant developmentThe Carnation Milk plant in Tupelo, Mississippi, has sat vacant since 1972. In about a year, that will change when 33 low-income senior households move into new affordable homes in this old factory. This May, Old Historic Carnation, LP broke ground on Carnation Village, a $16.8 million adaptive reuse project to convert the abandoned factory into 33 units of affordable senior housing. These units are sorely needed in Tupelo, a high-poverty community which needs over 1,500 additional senior affordable housing units. With a $325,000 loan from The Housing Assistance Council (HAC)—and two sixth-month extensions to that loan—the developer successfully navigated a predevelopment process mired in construction cost increases and unexpected funding gaps. Here’s how:

Photo of vacant Carnation plantThe original project scope called for 50 units: 25 from an adaptive re-use of the plant itself and another 25 in a second building to be constructed next door. When our loan closed in July 2021, the project budget totaled about $12.7 million, to be funded by Low Income Housing Tax Credits, Historic Tax Credits, and a $1.6 million equity investment. Our financing covered the predevelopment costs of the work required to get to construction financing closing including environmental testing, historic preservation approvals, tax credit application and reservation fees, a market study, and an appraisal.

In the fall of 2021, increases in construction costs left Old Historic Carnation with a $3.8 million funding gap. By the time they applied for and received more tax credits from the Mississippi Housing Corporation (MHC), added a $1 million mortgage, received approval from the National Park Service, and updated the construction bids, costs had increased by a further $4.5 million. In the space of less than a year, the construction cost for the project nearly doubled.

Because HAC can be a patient lender, we extended our loan by six months to give the developer time to solve the problem. Old Historic Carnation applied for and received another tax credit increase from the state, reduced costs with value engineering measures, and increased the deferred developer fee by almost $2 million.

Construction costs increased again in the summer of 2022, causing the equity investor to back out of the project. The developer went back to the drawing board once again and reduced the project’s scope to 33 units, all affordable to households making less than 80% of the area median income (AMI). Plus, 26 would also be affordable to households under 60% AMI. With an additional loan extension from HAC, Old Historic Carnation secured approval of the new scope by MHC, obtained the necessary building permits, and have now begun demolition.

HAC Loan Office Alison Duncan (center) breaks ground for Carnation Village.

HAC Loan Office Alison Duncan (center) breaks ground for Carnation Village. Photo by Adam Robison, the Daily Journal.

On March 21st, Old Historic Carnation, LP closed on construction financing and repaid our predevelopment loan in full. And on May 31st, the project broke ground. Old Historic Carnation’s persistence and creativity made this project a success. But it was HAC’s flexibility that supported them as they went through the process of raising additional funds three times to make the project work. The Carnation Village project showcases how the ingenuity of a local housing developer, solid working relationships with private, state and federal funders, and flexible and patient HAC financing all add up to bring difficult and important projects to fruition. Fifty-one years ago, Carnation Milk closed its factory in Tupelo, Mississippi. Soon, thirty-three low-income, senior households will be able to call it home.

HAC is proud to be a critical part of this project and we look forward to watching it develop.

HAC Seeks Proposals for its Affordable Housing for Rural Veterans (AHRV) Initiative

HAC’s Affordable Housing for Rural Veterans initiative supports local nonprofit housing development organizations that meet or help meet the affordable housing needs of veterans in rural places. Grants typically range up to $30,000 per organization and must support bricks-and-mortar projects that assist low-income, elderly and/or disabled veterans with home repair and rehab needs, support homeless veterans, help veterans become homeowners, and/or secure affordable rental housing.

HAC will be hosting a open forum to discuss this RFP. HAC recommends attending this session prior to submitting a formal application.

This initiative is funded through the generous support of The Home Depot Foundation.

Applications are due by 4:00PM (EST) on or before Monday, January 23, 2023.

Download the Application Package: Application (WORD) | Application Guidelines

For more information, contact HAC staff, ahrv@ruralhome.orgNo phone calls please.

Download Application (WORD) Application Guidelines Webinar Registration
Loan Fund FY 21 Impact Report

HAC Loan Fund FY 2021 Impact Report

HAC is proud to present our 2021 Loan Fund Impact Report. In fiscal year 2021 (October 2020-September 2021), we financed the construction, preservation, or rehab of 775 affordable homes. By closing 33 loans, we invested $15.9 million in rural communities and leveraged $177.6 million in additional investments. Our lending has helped hundreds of rural families find safe, healthy, and affordable places to call home. Over 40% of these families live in persistent poverty counties, where the poverty rate has been at least 20% for the last 30 years.

Loan Fund Impact Report FY 2021 by Mackenzie Webb

The Castro Family's Self-Help Housing Story

Self-Help Homeownership: What it means to Families

We are proud of the families we’ve helped achieve the dream of homeownership. This series highlights the incredible impact we’ve made thanks to the US Department of Housing and Urban Development’s Self-Help Homeownership Opportunity Program. Homeownership changes lives—it can be a gateway to financial stability and better quality of life. The four families featured here all know the difference a home can make. Congratulations to all of them for the extraordinary achievement of building a home!

The Castro Family

With the help of People’s Self-Help Housing, the Castro family built their own home in King City, California. This is their new home:

Ben Phelps

Ben Phelps built his new home in Heber, Utah, thanks to support from Self-Help Homes of Utah. Here’s how his new home has made a difference in his life:

The Root Family

Self-Help Homes of Utah also helped the Root family build their own home in Heber, Utah. Here’s what their home means to them:

The Smith Family

With the help of People’s Self-Help Housing, the Smith family built their own home in Boone County, Arkansas. This is their new home:


Over the last 25 years, the Housing Assistance Council has financed the construction of over 10,000 new self-help homes. Under the self-help model, homeowners help build their homes, contributing “sweat equity” instead of a traditional down payment.

HAC Seeks Proposals for its Affordable Housing for Rural Veterans (AHRV) Initiative

HAC’s Affordable Housing for Rural Veterans initiative supports local nonprofit housing development organizations that meet or help meet the affordable housing needs of veterans in rural places. Grants typically range up to $30,000 per organization and must support bricks-and-mortar projects that assist low-income, elderly and/or disabled veterans with home repair and rehab needs, support homeless veterans, help veterans become homeowners, and/or secure affordable rental housing.

This initiative is funded through the generous support of The Home Depot Foundation.

Applications are due by 4:00PM (EST) on or before Friday, January 21, 2022.

Download the Application Package: Application (WORD) | Application (PDF) | Application Guidelines

Access the recording and materials from HAC’s webinar about this opportunity

For more information, contact HAC staff, ahrv@ruralhome.orgNo phone calls please.

Application Guidelines Download Application (WORD) Download Application (PDF) Access Webinar Recording


SHOP Application Reference Material

Application Materials

The following links are provided to assist you in completing a 2021 Self-Help Homeownership Opportunity Program (SHOP) application. These links provide additional information on program and eligibility requirements.

  1. FY 2021 SHOP NOFO
  2. Eligibility Requirements for Applicaitons of HUD’s Grant Programs
  3. General Administrative Requirements and Terms for HUD’s Financial Assistance Awards
  4. Federal Register Notice

Loan Products

Rural Seed Money Loan Products

The Housing Assistance Council (HAC) operates several loan funds that provide vital seed money to rural housing developers: community-based, nonprofit organizations, housing development corporations, self help housing sponsors, farm worker organizations, cooperatives, Indian tribes, public agencies, units of local government, public utility districts, and small business and minority contractors. HAC funds help these organizations and individuals take the steps necessary to improve housing and living standards for rural, low- and very-low-income households, such as creation of subdivisions and new single- or multifamily housing units, rehabilitation of existing units, and improved water and waste water disposal systems in rural communities.

The Housing Assistance Council’s loan fund provides low-cost financing to developers of affordable housing in rural communities nationwide. Funds are currently available at 5.0% interest with a discounted 1.0% service fee; borrowers are responsible for closing costs. Current interest rate for for-profit developers is 8%. The standard loan term is three years. There is no maximum loan amount, although loans may not exceed available collateral. Loans must be recoverable from the permanent financing for the project.

Loans must be for projects, which include provisions for serving low-income people as defined by federal guidelines. Projects serving low- and very-low income persons will receive priority. At least 51% of the resulting housing units must be affordable to low- or very-low income people. The proposed projects must be located in areas that are rural in character and have populations of less than 25,000. Each of HAC’s loan products is briefly described below.


Loan funds are available for predevelopment expenses associated with the development of affordable housing. Eligible uses are: land options, down payments, architectural and engineering fees, site surveys, soil test borings, market studies, appraisals, environmental engineering studies, archeological clearances, and legal expenses related to site acquisition.


Loan funds are available for acquisition and related costs for the development of affordable housing. Eligible uses are: land options, escrow payments, land purchase, legal expenses associated with site acquisition, and other reasonable closing costs.


HAC loan funds may finance site development expenses associated with affordable single-family and multifamily development including self-help housing. Eligible expenses are: impact and permit fees, engineering surveys/fees, clearing and grading, wells, septic/water, sewer installation, utility hook-ups, streets, curbs, sidewalks, and legal expenses for site development.


Loan funds may finance unit construction costs of affordable housing developments. Eligible expenses are: construction materials and labor, construction bonds, construction inspection fees, legal costs, and title and recording fees. The maximum loan amount for construction loans is currently $750,000 and limited to single-family development. All fees incurred by HAC, including legal costs, hiring of a local construction inspector, title, and recording fees, will be charged to the borrower and, if necessary, financed by the HAC loan. The term of the loan will be determined by the needs of the project, pending underwriting review.


HAC provides loan funds through the HUD Self-Help Homeownership Opportunity Program (SHOP) to self-help housing providers for land acquisition and infrastructure improvement for the development of self-help units. The homebuyer family must contribute a significant amount of sweat-equity towards the construction of the dwelling. Loan funds are made available through a competitive application process and cannot exceed $15,000 per lot. SHOP loans are at 0% interest. Up to 90% of the SHOP loan may be forgiven when the borrower has satisfied the conditions of the loan agreement. The forgivable portion may become a grant for the group to establish its own revolving loan fund for future site acquisition and development of self-help housing or to provide direct subsidies to participating homebuyer families. SHOP funds are subject to HUD Environmental Review regulations.


PRLF proceeds are for short- or long-term costs of preservation, repayment and rehabilitation of USDA RHS Section 515 properties. Loans may be used for refinancing and costs incorporated into long-term financing such as options; downpayments; purchase; site development; architectural and engineering fees; construction financing; working capital and construction bonds; costs associated with USDA RHS required Capital Needs Assessments; preliminary easement and water rights purchase; legal expenses to establish utility districts; bonding; interim financing of local share costs; acquisition of existing private systems for rehabilitation; and emergency repair; and rehabilitation and repair.

If you are interested in applying for HAC loan funds, please contact HAC at (202) 842-8600, for information regarding application criteria and to request an application packet.

Applications should be submitted to HAC’s National Office at 1025 Vermont Avenue, N.W., Suite 606, Washington, D. C. 20005, Attention: Loan Fund Division. Telephone (202) 842-8600. Information about HAC and state and federal loan programs may be obtained from the same address or from the HAC Regional Offices.


HAC-Funded Projects

HAC Profile: Lee County C.D.C., Arkansas


SHOP 2001 – $80,000

Raising twelve children in their three-bedroom mobile home, Clarence and Willa May Taylor had to park another trailer in the back yard for extra space. Taylor says he thought he was doing well when he bought that place, but the past year has been “the best ever” because his family is now living in a new home.

The Taylors are retired and receive limited disability assistance. They could afford a new house because of the work of the Lee County Community Development Corporation (LCCDC), which used funding from the Housing Assistance Council (HAC) and other

sources as well as technical assistance from HAC. A loan from HAC’s Self-Help Homeownership Opportunity Program (SHOP) enabled Lee County CDC to prepare the sites in the Taylors’ small subdivision. Additional financing and “sweat equity” labor from the Taylor family brought the mortgage to an affordable level.

“This is the best thing the CDC could do for the community,” says Clarence Taylor, gesturing to the neat yards and well-kept homes around his. “This is really a wonderful place to live.”

The Taylors sold their old mobile home to a neighbor who intends to rent it to someone else. Perhaps the new tenants will be able to follow the Taylors’ path to better housing.


HAC Profile: Community Action Commission of Fayette County, Ohio

Village Green Subdivision

SHOP – 1996, $300,000
RHLF – $60,000 Phases I & II
SHOP 1998, $200,000
RHLF – $155,000 Phase III

Julie Allen and her children Tess and Travis moved from a homeless shelter to an apartment to a home of their own, thanks to the Community Action Commission of Fayette County, (CACFC) and the Housing Assistance Council. In 1996, when Julie was pregnant, she left a domestic violence situation and became homeless. She moved into a homeless shelter run by the CACFC and then into supportive housing, which provided services and assistance as well as an apartment for the family.

Julie’s next step was to enroll in the CACFC’s self-help housing program. A loan from HAC helped the CACFC to buy and prepare the land for the 75-unit subdivision in

Bloomingburg, Ohio where Julie’s house was to be built. She and several of her neighbors worked together to help build each other’s houses. Their “sweat equity” replaced their down payments, helping them to afford to purchase their homes. Julie says she really values the safety and community spirit that homeownership has provided. Her children are thriving in the neighborhood, and she has an excellent job. In December 2002, she was a featured speaker before 800 people at the opening session of HAC’s National Rural Housing Conference, describing how self-help housing had changed her life.

HAC Profile: Northeast C.A.C.

SHOP ’99 – $181,818

Glenn Lawrence is proudly helping to build a house for his family in Moberly, Mo. Funding from the Housing Assistance Council (HAC) and the Rural Development arm of the U.S. Department of Agriculture are enabling the Northeast Community Action Corporation (NECAC) to develop this house and 17 others. The homes are built using the “self-help” method. Because of their labor contribution, Glenn’s family’s house will cost about $79,000 to build but will be appraised at over $100,000. The family will obtain a mortgage from USDA, with payments scaled to fit their income. Northeast Community Action oversees the development process. A loan from the Housing Assistance Council’s Self-Help Homeownership Opportunity Program covers predevelopment costs such as architectural fees and lot preparation.

Glenn’s mother, stepfather, and younger brother and sister will live in the modestly sized four-bedroom, two-bathroom house, which will be far more comfortable than the house they are now

renting. The rental “isn’t too bad,” says Glenn, but then admits the roof leaks so seriously that one room is unusable. Since he lives on his own, Glenn will not move here with them, but he is glad to use his construction skills on their behalf. A graduate of NECAC’s youth training program, he hopes to make a career in construction.

Learning about the self-help program was a side benefit of Glenn’s participation in the training program. He suggested to his mom, Patsy Hayden that she should apply, since she has always wanted her own house. Glenn is delighted to be helping her make that dream reality — just in time for her fiftieth birthday.