Greystone Affordable Housing Initiatives announced the closing of a $130 million multifamily housing transaction in Florida.

The statewide pooled transaction involves 24 aged U.S. Department of Agriculture (USDA) Rural Development Sec. 515 properties, comprising 1,058 apartment homes serving low-income households in 12 counties. They are owned and operated by The Hallmark Cos.

The 28-unit Park Place community in Zephyrhills, Fla., is among the 24 properties involved in a pooled bond transaction to rehab and preserve the affordability of the communities.
The 28-unit Park Place community in Zephyrhills, Fla., is among the 24 properties involved in a pooled bond transaction to rehab and preserve the affordability of the communities.

Greystone’s affordable housing preservation group worked closely with USDA’s Rural Housing Service (RHS) national and Florida offices as well as the Osceola County Housing Finance Authority and Florida Housing Finance Corp. to coordinate and secure the financing needed to acquire and rehabilitate this at-risk housing.

“With each new preservation project we undertake, we see unique challenges, and without the collaboration of everyone involved, we would not be successful,” said Tanya Eastwood, president of Greystone Affordable Housing Initiatives, in a statement. “Our ability to orchestrate such a complex repositioning is dependent upon the close cooperation of public and private sectors, and at the end of the day, what drives everyone to the finish line is the dedication to the hundreds of residents who will ultimately benefit from the rehabilitation of their homes.”

Eastman praised Atlanta-based Hallmark and other companies involved in preserving affordable rural housing.

“The preservation of aging affordable housing is an ongoing challenge we continue to face within the housing industry,” said Martin “Pete” Petersen, president of Hallmark. “There is a critical need for both the affordability and long-term physical viability of these multifamily housing communities in rural areas throughout the country. These homes are a valuable resource for both the elderly and families in local communities, who would otherwise not have access to safe, dependable, and sanitary housing.”

The financing plan combined both public and private funding and included:

· Tax-exempt bonds: Single issuance of $41.6 million in multifamily private-activity tax-exempt bonds by Osceola County. The short-term bonds received an A-1+ rating from Standard & Poor’s.

· Low-income housing tax credits: Purchase of 4% federal low-income housing tax credits by Boston Financial Investment Management, generating $28.1 million in capital contributions. The credits were allocated by Florida Housing.

· RHS Sec. 515 debt: Assumption and subordination of $26.7 million of original USDA Sec. 515 debt. The Sec. 515 program is a direct loan program designed to provide subsidized loans to developers of affordable housing in rural markets. In addition, 62% of the 1,058 apartment units will continue to receive Sec. 521 Rental Assistance provided by RHS.

· Senior debt of $29.9 million: Long-term debt comprised of a combination of $12.5 million in USDA-guaranteed Sec. 538 loans, provided by Greystone Servicing Corp. and $17.3 million in newly issued soft second USDA loans.

· Other: Other funding sources included additional financial support of $4.5 million.

The rehabilitation plan includes a fast-paced construction process, estimated to be complete within 12 months, during which no residents will be permanently displaced. Substantial renovations, averaging $32,000 per unit, will include both interior and exterior improvements. Particular emphasis will be placed on bringing the properties, built between 1975 and 1995, up to modern standards, addressing accessibility, functional obsolescence, and deterioration.

The deal team included:

Tidwell Group (Birmingham, Ala.)
Developer Consultant
The Community Solutions Group (Gainesville, Fla.)
Wallace Architects, LLC (Columbia, Mo.)
Bond Counsel
Greenberg Traurig (Miami)
Osceola County Housing Finance Authority (Osceola County, Fla.)
Borrower’s Counsel
Coleman Talley (Atlanta)
Credit Underwriter
Seltzer Management Group (Panama City, Fla.)
The Hallmark Cos. (Atlanta)
Developer Consultant
Greystone Affordable Housing Initiatives (Raleigh, N.C.)
Boston Financial Investment Management (Louisville, Ky.)
Equity Counsel
Gallagher Evelius & Jones (Baltimore)
General Contractor
Formula Construction Group (Roswell, Ga.)
Issuer’s Counsel
Latham, Shuker, Eden & Beaudine (Orlando, Fla.)
Permanent Lender
Greystone Servicing Corp. (Warrenton, Va.)
Permanent Lender's Counsel
Ballard Spahr (Washington, D.C.)
Rating Agency
Standard & Poor’s Rating Services (New York)
Subordinate Lender
USDA Rural Housing Service (Washington, D.C.)
U.S. Bank National Association (Atlanta)
Trustee's Counsel
Butler Snow (Atlanta)
RBC Capital Markets (St. Petersburg, Fla.)
Underwriter's Counsel
Eichner Norris & Neumann (Washington, D.C.)