Memphis-based Global Ministries Foundation is getting out of the federally subsidized housing game with a move to sell all of its Memphis properties and about half of its nationwide portfolio, which includes complexes in eight states.

In an Aug. 30 letter to bondholders, the nonprofit housing provider said that it has made a decision to sell off its housing complexes supported by Section 8 subsidies from the U.S. Department of Housing and Urban Development.

RICHARD HAMLET

“A large majority of the current GMF affordable housing portfolio is performing well from a financial and physical condition perspective,” states foundation president and CEO Richard Hamlet in the letter. “However, a portion of our older HUD-subsidized family Section 8 communities would benefit from an infusion of capital.”

In recent years, GMF has come under fire for keeping its Memphis properties in unsafe conditions. After the Warren and Tulane apartments failed multiple HUD inspections, HUD announced in February that it would no longer provide Section 8 rent subsidies at those properties. It also ordered the relocation of all residents to safe and sanitary housing, with relocation costs partially funded by the subsidy payments that otherwise would have gone to GMF.

The move to sell the properties does not include the Warren and Tulane apartments, which are under the control of a receiver appointed in a Memphis federal court claim filed earlier this year by Bank of New York, the trustee for bondholders for the two apartment complexes.

GMF agreed to the court’s appointment of a receiver, and the goal of the receiver is to sell the two apartment complexes.

With the cutoff of the HUD subsidies, GMF then announced on its own that it would move to sell Warren and Tulane.

GMF spokeswoman Audrey Young told The Daily News that the receiver put Warren and Tulane up for sale in May, and GMF followed by marketing its remaining Serenity, Madison Towers and Goodwill Village apartment communities.

Young said that GMF and HUD are negotiating with large, national housing developers to take on the properties.

“It’s taking some time because HUD is under political pressure right now because of how all of this came about, and they want to make sure they’re getting a new company that’s going to put millions in these properties,” she said.

Hamlet has said the federally subsidized apartment complexes were a part of GMF’s “mission.”

“But that (mission) would be funded by other properties that are not Section 8 or have a higher demographic where there are profits coming from those other properties – like a real estate investment trust with diversified properties,” Hamlet said in a November 2015 interview with The Daily News.

Hamlet said the strategy was key to the size of GMF’s real estate portfolio.

“There are many more properties like these that are out there that are old. They are crime-ridden,” he said. “They need revitalization and unless you have a nonprofit that has resources that will risk that private capital, which we are able to do … nobody’s going to touch these properties.”

Daily News senior reporter Bill Dries contributed to this report.