Bellwether Enterprise Real Estate Capital announced the closing of a $10.1 Fannie Mae loan for the acquisition of Four Seasons Apartments in Faribault, Minnesota. The 144-unit property was purchased for $12.5 million, or $86,805 per unit.
The development is the first transaction out of Bellwether Enterprise’s Minneapolis office to utilize Fannie Mae’s new Sponsor-Initiated Affordability (SIA) program. The SIA program will ensure rents at Four Seasons Apartments are affordable to tenants earning 80% of the area median income or less for the 12-year loan term.
SIA incentives aim to preserve naturally occurring affordable housing and workforce housing by encouraging property owners seeking Fannie Mae financing to agree to rent and income restrictions for residents living in conventional workforce housing.
“Bellwether Enterprise is proud to be a part of the future of Four Seasons Apartments,” said Lucas Goring, vice president in Bellwether’s Minneapolis office, who originated the loan. “This deal represents an important step toward increasing the availability of affordable housing in Minnesota.”
The four-building property was built in the 1970s and has gone through exterior updates, including new roofs, windows, siding, and decks in the past five years. New ownership plans to continue updating the property with high-efficiency lighting and low-flow water fixtures, in addition to unit upgrades.
The property was purchased by a subsidiary of Felfam, a third-generation family partnership based in California with assets across the country in all major property types.
“Four Seasons is a great addition to our portfolio,” said Ryan Stomel, general partner of Felfam. “We are actively searching for more projects in Minnesota because of the critical mass we have there. The economic stability in the state continues to impress us.”