Mortgage banking company Merchants Capital has secured $25.9 million in Fannie Mae funding for a 476-unit multifamily affordable housing property in Joliet, Ill., announced the firm.
The Fannie Mae Cash Preservation loan was secured on behalf of Brinshore Development, The Richman Group, and Eric Richelson.
Their development, Larkin Village, operates under the low-income housing tax credit program through the Illinois Housing Development Authority (IHDA), which requires 256 of the property’s 476 units to serve residents earning at or below 60% of the area median income. The other 220 units are unrestricted.
“Now more than ever, there is a need across our country for affordable housing properties that are safe, clean, and available for our American workers,” said Merchants Capital senior vice president Randall Rogers Jr. “Securing the financing for a multifamily affordable housing property such as Larkin Village supports Merchants Capital’s passion for providing these housing options nationwide.”
The company was also instrumental in structuring and underwriting the transaction, facilitating the communications and documentation that led to the approval of a 10-year interest-only period. The partners were able to execute and close the loan remotely, due to the COVID-19 shelter-in-place order issued days before closing.
This deal allowed the property owners to retire IHDA debt, make useful repairs to the property, and redeploy the equity accumulated over many years of effective operations. The equity will be used to invest in other affordable housing projects either through new construction developments or renovations.
“The payoff of the IHDA loan marks the end of a success story. Larkin Village was one of only two foreclosures of multifamily loans that IHDA ever held. In 1999, IHDA selected the development team to rehabilitate, re-tenant, and operate the failed affordable housing project,” said David Brint, principal of Brinshore Development. “Twenty-one years later, Larkin Village is an important asset to the affordable housing stock in Will County, Ill.”
Larkin Village offers studio, one-, two-, and three-bedroom apartments. The property provides complimentary heat, cooking, gas, water, garbage, and private satellite TV for each apartment.
Outdoor amenities include a swimming pool, a community center, a playground, and a clubhouse, along with numerous green areas and management on-site.