Kingsport West is a 103-unit complex for low and moderate income residents in the Allandale section of Kingsport.
Kingsport West II, L.P., a Tennessee limited partnership, asked KEDB for the bond issue to finance the acquisition and rehabilitation.
The complex was built in 1980 and accepts Section 8 funding from the U.S. Department of Housing and Urban Development.
KEDB Legal Counsel Joel Conkin said during a Zoom meeting that the parties expect to close on the deal in July.
"KEDB and the city have no direct recourse," he told the board. "It's the developer who ultimately would have to pay in the event of any shortfall or any problem with the bonds."
The Kingsport West rehabilitation will give the units all new interiors, electrical upgrades and flooring. No residents are expected to be permanently replaced but will go through a relocation.