Affordable housing firm Vitus has secured financing for two deals that will add eight properties to its holdings.
In North Carolina, the company has closed on loans for the seven-property, 560-unit Thetford portfolio.
Financial services company Merchants Capital announced that it is providing $31.9 million in acquisition bridge loans and $57.8 million in seven separate Section 221(d)(4) loans for the deal.
The portfolio consists of properties with over 90% Section 8 subsidy in addition to a number of budget-based rent increase properties on historical contracts from the Low-Income Housing Preservation and Resident Homeownership Act of 1990, which offered project incentives to preserve low-income rental properties.
Merchants Capital provided the acquisition bridge loans to take down the seven properties at high loan-to-cost to facilitate low-income housing tax credit (LIHTC) executions and then closed on the 221(d)(4) loans on the same day.
“This seven-deal, same-day closing for the North Carolina Thetford portfolio is unprecedented with the Department of Housing and Urban Development (HUD),” said Merchants Capital senior vice president Matt Kaercher. “A single sub-rehabilitation LIHTC transaction is difficult enough for execution, but seven simultaneously requires a different subset of skills and persistence.”
Additionally, during the transaction, Vitus closed a single bond issuance that saved the project money while pursuing the same day closing.
“Vitus specializes in protecting existing affordable housing in communities with the greatest need. This was a unique transaction that enabled us to do so for seven properties at once. We are grateful for the guidance of the Merchants Capital team, the flexibility of our bond issuer Burlington Housing Authority, and the cooperation of the many parties involved along the way in getting a deal of this complexity financed,” said Brooke Shorett, director of development management for Vitus.
In Jonesboro, Georgia, the firm has acquired Riverwood Townhouses, a 282-unit affordable housing community with rents restricted to 60% of the area median income.
The property will undergo interior and exterior renovations as part of the resyndication. The property’s amenities include a business center/computer lab, a clubhouse, a community room, a playground, and a picnic area.
Berkadia announced that it structured $51 million in financing for the redevelopment effort. Senior managing director Tim Leonhard of Berkadia Affordable Housing secured both $25.9 million of acquisition bridge financing and $25.3 million of permanent financing to rehabilitate the property. The bridge loan had a 4.25% adjustable interest rate and was provided through Berkadia’s proprietary bridge lending platform. The permanent loan was provided through Freddie Mac’s affordable housing program.
“Through our financing partnership with Berkadia, we are thrilled to be able to make such a significant investment at Riverwood Townhouses,” said Samantha Cullen, development management director at Vitus. “These property improvements will help provide high-quality, affordable housing to our residents and benefit the surrounding community as a whole.”
