Walker & Dunlop announced that it has structured an $11.1 million loan for the acquisition and rehabilitation of Harriman Gardens, a 136-unit affordable housing development in Harriman, Tenn.

LHP Capital plans to make $6.8 million of tenant-in-place rehabilitation improvements at Harriman Gardens.
LHP Capital plans to make $6.8 million of tenant-in-place rehabilitation improvements at Harriman Gardens.

The transaction was arranged using the Department of Housing and Urban Development/Federal Housing Administration’s Sec. 221(d)(4) mortgage insurance program, allowing for substantial rehabilitation to the property in conjunction with an allocation of short-term tax-exempt bonds and 4% low-income housing tax credits.

Harriman Gardens II, L.P., featuring developer LHP Capital, plans to make $6.8 million of tenant-in-place rehabilitation improvements to the property, which will be preserved as affordable housing, according to Walker & Dunlop (NYSE: WD).

Renovations will include the conversion of seven units to meet full Americans with Disabilities Act and U.S. Access Board accessibility standards, as well as several green efficiency upgrades to include Energy Star–rated lighting, appliances, and plumbing fixtures and upgraded insulation. External improvements include updates to the sidewalks, pavement, and accessible parking ramps.

Rob Rotach, vice president at Walker & Dunlop, led the origination team, which structured the 40-year, fully amortizing, fixed-rate loan with a 1.22x debt-service coverage ratio for the borrower.

“Following recent streamlining of HUD processes, the agency’s expedited review timelines allowed its Atlanta branch to process the loan application within 45 days, and the company was able to close the loan just 181 days after application,” Rotach said.

Located on 3.1 acres, Harriman Gardens was constructed in 1977 and consists of 136 units located in two three- and four-story low-rise buildings. The complex features several community rooms such as a gathering area, a kitchen, and an exercise room. The occupancy at closing was 97 percent, and unit options include one- and two-bedroom units.

Headquartered in Bethesda, Md., Walker & Dunlop is one of the largest commercial real estate finance companies in the United States, providing financing and investment sales to owners of multifamily and commercial properties.