The Hallmark Companies has preserved 20 aging affordable housing developments across Tennessee in a single transaction.

By bundling the small, rural properties into one large tax-exempt bond deal, the firm was able to rehabilitate and recapitalize 793 affordable housing units. Trying to finance each project individually would have likely taken years, if not decades.

The portfolio approach allowed Hallmark to address all the properties at once, with the fixed costs of the deal spread across multiple properties. Combining the properties into a large portfolio also allowed Hallmark to utilize tax-exempt bonds, financing that’s usually not functional for small individual projects.

The average property size in the deal was less than 40 units, but the U.S. Department of Agriculture Sec. 515 developments provide important housing in their communities, according to Billy Glisson, vice president of acquisitions and development at Hallmark. Nine communities serve low-income seniors, and 11 target low-income families.

Working with consultant Greystone Affordable Development, Hallmark was able to rehabilitate the approximately 30-year-old properties.

As a result of the $88.6 million project, the team was able to complete the needed renovations. The work varied from property to property, but many apartments received new windows, flooring, doors, and appliances. The team also replaced roofs and building systems where needed.

“When residents returned to their homes, they were greeted with essentially a new unit,” says Will Eckstein, senior vice president at Greystone.

The recapitalization also ensures that the properties will remain affordable for at least another 30 years.

The first project of its kind in Tennessee, the deal required the cooperation of multiple agencies over several years, including the Tennessee Housing Development Agency, which awarded 4% low-income housing tax credits. Boston Financial Investment Management then used the credits to raise equity for the project.