A sea change may be coming in the way the homeless are being housed.

While there’s still a need, especially in cold weather, for the traditional shelter with cots and curfews, a new emphasis on permanent, supportive housing is taking this kind of living option away from the shelter model into the realm of for-profit real estate development.

Hunt Capital Partners is on the leading edge. The Los Angeles-based syndication unit of the Hunt Companies is a big capital markets player. It has raised more than $1.5 billion in Low Income Housing Tax Credit equity for affordable housing projects, some of which target permanent solutions for the homeless.

HCP recently announced the closing of $4.2 million in LIHTC equity for the construction of Rhododendron Place in Vancouver, Washington. The project will consist of newly built studio apartments, with 23 of them set aside for homeless people. Half of the total will go to very low-income residents, with incomes up to 30 percent of area median incomes; the other half, to low-income renters with incomes up to 50 percent AMI.

While the overall homeless population has declined since 2010, new research puts the current total at 661,000 nationwide. That’s 100,000 higher than the official number from the Department of Housing and Urban Development.

Projects like the one in Vancouver are designed for the special needs of homeless people. For example, they rarely have much in the way of furniture, so the units will come with some basic furnishings -- a single bed frame, mattress, side table, desk and chair. Supportive services will also be offered through Columbia Mental Health Services.

“These include child and family services, youth services, mentoring, drug and alcohol treatment, employment services, medical, supported housing and treatment programs, to name a few,” according to Dana Mayo, Hunt Capital executive managing director.

Mayo says: “Our investment in this development will provide affordable housing for the homeless and equip them with resources to help break the cycle of poverty.”

The total development cost for the project is $7.78 million. Hunt Capital Partners “syndicated” the complicated tax credit deal, meaning it found investors who could use a tax break to get one by investing in low-income housing. Investors can either be a single entity or a consortium of investors. In this case, it was a multi-investor fund.

Hunt’s local partners, the Vancouver Housing Authority and Columbia Non-Profit Housing, have long had an emphasis on housing the homeless. CNPH provided a $2.1 million construction-to-permanent loan and VHA provided a $1.2 million C2P loan for Rhododendron Place.

The LIHTC is a complex program that has managed to finance over 2 million affordable homes since 1986.

Since it involves the tax code, it is overseen by the Internal Revenue Service. But it is administered by state housing finance agencies, which award the credit to real estate developers who put forward projects like Rhododendron Place. Then the credits are sold to investors through syndicators like Hunt Capital.

The tax credit can be a potent weapon for constructing permanent housing for the homeless, thus providing more units feeding the philosophy of “rapid rehousing” of homeless people to prevent them from becoming homeless long-term.

In Minneapolis, for example, of the 3,000 homeless people served in 2016-2017 by the Adult Shelter Connect program affiliated with Simpson Housing Services, 40 percent were placed into subsidized rental housing, with 7 percent of them going into housing immediately from the shelters.

Hunt Capital Partners now has helped finance a total of four developments for homeless or developmentally disabled people, two in Florida, one in Texas and the one in Washington state.

In Jacksonville, Florida, it raised $9.2 million in a multi-investor syndication to build Sulzbacher Village, a 124-unit development with 70 slots reserved to permanently house homeless women with children. The other 54 are temporary homeless units. Support services include an on-site health clinic.

Local buy-in was important, as Jacksonville “has decided it wants to end homelessness, not manage it,” says Cindy Funkhouser, president and chief executive of Sulzbacher, who vows that no homeless woman with a child will ever be turned away from its doors.

St. Paul, Minnesota is another good example of this forward-thinking change in philosophy. One property has gone from a shelter where people slept on mats on cold, concrete floors to a massive $115 million multi-part development through Catholic Charities.

Named for the head of the Catholic Workers Movement, an early advocate for the homeless, Dorothy Day Place will have multiple buildings and feature an enormous 320-bed shelter. The plan calls for 193 units of permanent housing completed in the first building phase, and an additional 177 units of permanent housing completed by the end. A new wing will provide transitional housing, where the working homeless -- of which there are many -- pay $7 a night rent for their period of residency. Then, if they have met certain conditions, the rent money is rebated to them to help pay some of their move-in costs when they transition into a permanent apartment.

Dominium of Minneapolis was the syndicator for the LIHTC tax credits on this deal, but there was only a single investor, U.S. Bank of Minneapolis. The project also tapped New Markets Tax Credits for the commercial/supportive part of the project.

Freelance writer Mark Fogarty and research assistant Priestess J. Bearstops contributed to this report.

Twenty-two years ago, when he was chief economist at the Mortgage Bankers Association, Doug Duncan was tapped to lead the effort to create a truly electronic mortgage, one that would start online at the application stage and end at recordation in the local courthouse without ever being touched by human hands.

Today, Duncan has moved on to Fannie Mae, where he holds the same chief economist post. But as far as online mortgages are concerned, not much has changed. “We’re closer today than we’ve ever been,” Duncan says. “But only a handful of true e-loans have been closed to date.”

Dan McGrew of Pavaso, a digital closing platform, figures some 6,000-10,000 e-loans have been completed in just the last two years. That’s still just a drop in the proverbial bucket when you consider that more than 6.6 million home loans were written in 2017 alone, according to data from the MBA.

But digital lending is coming, the dozen or so mortgage professionals and vendors interviewed for this column agree. It’s just a matter of time.

“It’s going to be like getting a car loan; there’s no reason you can’t do that with a mortgage,” offers Joe Langer of Blue Sage Solutions, a cloud-based digital lending platform. He describes the future mortgage this way: Would-be borrowers will log on, input basic information and the system will auto-populate an application. Then the system will interconnect with other programs to pull in such key information as income, tax returns, liabilities and assets.

Based on that and other data, the program will tell you how much you can afford and explain your various loan options. Once you make your choice, it will make sure your specific loan fits into the lender’s investor requirements.

“It will be a 1-2-3 process,” Langer says. “You’ll go from application to close in a matter of hours.”

What’s driving the change? First and foremost, there’s the ever-present motivation to increase efficiencies and save money. Lenders earned just $480 on each loan they made in last year’s third quarter, according to the MBA’s latest figures.

The past several years have been “challenging” for bank profitability, says the MBA’s Marina Walsh in something of an understatement.

Homebuyers, particularly younger ones, also are pushing for speed. In a recent survey by Elle Mae, a popular loan origination system used by some 2,300 lenders, some 3,000 people who had just purchased a house were asked what they would change about the lending process. The No. 1 answer: Make it go faster.

“They want to know why they can buy a $125,000 car in 2.5 hours, but it takes six weeks to buy a $125,000 house,” says Joe Tyrell of Elle Mae.

There are still roadblocks, though. One is the mortgage business itself, which has been slow in adopting digitization. Another is well-meaning federal and state regulators who put rules into place to protect consumers that make it more difficult for lenders to automate. And a third rests with the country’s 3,100 or so county courthouses, many of which still record liens by hand.

“The industry needs to be where consumers want to be,” says Gagan Sharma of BSI Financial, which administers mortgages on behalf of lenders and their investors. “I don’t believe consumers are the bottleneck. If anything, they are what’s bringing the industry along.”

To make it happen, regulators have to get on board, adds Langer of Blue Sage. “While they have the interests of consumers in mind, some of the requirements we’ve seen in recent years have added to the complexity. ... It’s hindered our ability to provide faster service.”

To have a truly electronic mortgage, though, the note must be closed, delivered and recorded automatically. And when you are dealing with state-by-state rules, says William Decker of MAXEX, a business-to-business loan exchange platform, that could prove the toughest hurdle of all.

“The closing is the most difficult step to scale,” Decker believes. “And then all those counties have to weigh in. Ninety-nine percent of all loans are still physically delivered to the county courthouse for recordation. They’re making progress, but it’s taking a long time.”

Pavaso’s McGrew predicts that 2019 “will see the fastest technology growth the mortgage business has ever seen.” And in 10 years, he offers, paper will be a thing of the past. “There will be no paperwork involved whatsoever,” he says.

Despite the accelerated pace toward digitization of the entire mortgage process, from application to close to recordation, there will always be a need for loan officers, perhaps not to take an application and gather all the supporting documents, as they do now, but in more of an advisory role for would-be borrowers who want or need some hand-holding.

The result, then, will be similar to the trend in the real estate sector, where consumers now go online to find a house and engage an agent later in the process to take care of all the legal details.

“Consumers are going to want choice,” says BSI Financial’s Sharma, who believes that down the road, the mortgage business will look much like the financial brokerage business. “There will be online loan platforms as well as traditional loan agents, each serving a different market; one for those who don’t want to speak to anyone -- nor do they need to -- and the other for those who want to sit down with an adviser in front of them and talk.”

At this time of year, it’s always fun to look ahead to what might be; in our case, what new houses might look like in the future.

Unfortunately, no one has a crystal ball that can predict exactly how much bigger or smaller newly constructed houses will be or what will be inside. But the folks at Porch, a website that connects homeowners with professional repairmen and remodelers, have taken a shot at it.

They analyzed current and projected trends to predict what houses of the future will be like as far off as 2036. But for our purposes here, we’ll concentrate on what they think new houses will look like in 2026, just eight short years from now.

Some of Porch’s predictions seem to be off the mark, perhaps by a wide margin. Others are quite surprising. Despite the current trend for building smaller houses to combat the affordability crisis, for example, Porch boldly suggests that houses will grow larger, not slim down further, with more bedrooms and baths.

According to the latest data from the U.S. Census Bureau, the average house in last year’s third quarter declined to 2,495 square feet. And the National Association of Home Builders says house sizes have been falling for the last three years as builders add more entry-level houses to their product mix.

But the Porch report asks: “Why have less when you could have more?”

Using Census Bureau data from 2016 as its baseline, Porch reckons that houses will be more than 200 square feet larger on average in 2026. That’s the equivalent of two rooms, 10-by-10 feet each.

All this will happen, Porch prognosticators suggest, on smaller and smaller lots, from an average of nearly 31,000 square feet in 2016 to 28,000 in 2026 and 2,050 in 2036.

One of the trends that is driving up house sizes is the number of bedrooms and baths.

Houses with two or fewer bedrooms are expected to continue to decline to only about 10 percent of all new construction in eight years, while those with three bedrooms will fall to about 39 percent. Even at that, three-bedroom abodes will still be predominant.

The rest of the new houses built in 2026 will be four bedrooms or more, Porch predicts. Nearly 37 percent of all new houses will have four bedrooms by 2026. But those with five sleeping rooms will account for more than 14 percent, a 3.6 percentage point increase from 2016.

Meanwhile, houses with a single bathroom are heading for oblivion. Two baths will continue to dominate, but they, too, will be fewer and fewer, according to Porch’s predictions. In 2026, only half of the newly built houses will have two bathrooms. The rest will have either three or four, but mostly three.

Garages will be larger in the future, Porch suggests. Only 7 percent of new homes in 2026 will have a one-car garage, while 60 percent will have room for two vehicles and 25 percent will hold three. About 8 percent won’t have a garage at all.

After a brief increase over the last decade, the number of single-story homes will decline, but just slightly over the next eight years, the report indicates. At the same time, two-story production will grow, but again, ever so slightly.

What’s all this going to cost? Porch weighs in on that, too. In 2016, it says, the average price for a 2,600-square-foot house was $198,000. In 2026, the average cost of a slightly larger 2,700-square-foot house will be $252,000, a jump of $54,000.

As Porch sees it, decks are on their way out, replaced by patios and the iconic piece of American architecture, the front porch. Ditto for fireplaces, which won’t be found in 60 percent of new construction in 2026. (Here, the report considers a fireplace as a source of heat, not for its romantic quality, which is why most people want them.)

Still, there’s more to what goes into a home than space and rooms, the report notes. “The house of the future could be more energy efficient and durable and incorporate exciting advances in automated technology.”

Along those lines, it points out, giant home builder Lennar, already pre-wiring its houses for Wi-Fi compatibility, has taken smart home technology to the next level by building Alexa, Amazon’s smart digital assistant, into all its new production. And California has mandated that solar panels be placed on every new house built within its borders.

(Next week: Future Financing)