Betsy McRight listens to a conference call at a Chattanooga Housing Authority Board Meeting in their offices on Friday, Oct. 28, 2016, in Chattanooga, Tenn. The board decided to submit an application for HUD's Rental Assistance Demonstration program to redevelop College Hill Courts.

The Chattanooga Housing Authority will renovate the 44-unit Missionary Heights apartments near Glenwood and Habitat for Humanity will build another 15 houses in Alton Park with the aid of a new city program designed to help preserve and develop more affordable housing in Chattanooga.

The Chattanooga Housing Facilities Board Wednesday agreed to provide nearly $600,00 from the city's Affordable Housing Fund to combine with other federal and nonprofit grants and loans to refurbish and build more housing for low-income residents. The new housing will be targeted at those making only 30% to 60% of the average median household income in Chattanooga.

CHA, which owns and operates about 2,400 of its own apartments and handles Section 8 vouchers and other assistance for 3,638 other housing units, plans to renovate the Missionary Heights apartments at 500 Latimore Street in Chattanooga. The city will provide $400,000 from this year's $1 million allocation for its Affordable Housing Fund to match other federal grants and CHA borrowings to pay for the $7 million rebuild of the 44 apartments.

Missionary Heights, which was originally built in 1974, is among 111 units being refurbished by the housing authority at four different properties. Collectively, CHA is planning $18 million of property upgrades.

Pennrose Properties will manage the renovated Missionary Heights complex and the upgrade is expected to take a couple of years to complete, CHA Executive Director Betsy McRight said.

"We'll be dividing the project in two and moving 22 families off site while the first phase is done and then we'll move those in the other 22 units and do that work in the second phase," she said.

The Housing Facilities Board also authorized providing $196,546 from the city's Affordable Housing Fund for Habitat for Humanity in Chattanooga to help fund a $2 million plan to acquire 15 lots and build 15 Habitat homes next to the Villages at Alton Park.

David Butler, president of the Chattanooga Habitat program, said the new homes will carry a monthly mortgage payment, including principal, interest and insurance, of about $450 a month and the homes will be built to have an average monthly utility bills no more than $100.

Such costs are less than half the average monthly mortgage cost of $1,150 for a typical 2-bedroom home in Chattanooga and the typical utility bill of $150 a month.

"So the homeowner who moves, usually from rental properties, into one of our Habitat houses usually saves somewhere around $750 a month," Butler said.

The city of Chattanooga created the Affordable Housing Fund last year and has committed to providing $1 million a year for the fund for five consecutive years.

The grants approved Wednesday were the first from the Affordable Care Fund.

Contact Dave Flessner at or at 757-6340.