Key financing has been arranged for the rehabilitation of the Carolyn Mosby Apartments in Gary, Indiana.
The New York office of Merchants Capital announced that it is providing more than $13 million in financing to a joint venture between veteran developer Gorman & Co. and the Gary Housing Authority (GHA) for the project.
Located just west of downtown Gary, Carolyn Mosby Apartments was built by the GHA in the late 1960s as a public housing development. The eight-story high-rise contains 142 one- and two-bedroom units reserved for senior and/or disabled residents earning between 30% and 60% of the area median income.
The project received an allocation of $13 million of tax-exempt bonds from the Indiana Housing and Community Development Authority, enabling GHA to partner with Gorman to convert it from public housing to a long-term Section 8 Housing Assistance Payment contract as a Section 18 public housing disposition and perform much-needed renovations while continuing to provide rental assistance to its residents.
Merchants Capital New York facilitated the bond purchase in the form of a $13 million Merchants Bank of Indiana construction loan. Following construction completion, the loan will convert to a $5.2 million permanent loan pursuant to a Freddie Mac tax-exempt loan forward commitment, to be serviced by Merchants Capital.
The project also received equity investments totaling approximately $9.7 million in return for federal low-income housing and federal historic rehabilitation tax credits. Additionally, the project benefits from a variety of soft financing and other incentives, including a property tax exemption, all integral to maintaining the project’s affordability.
Carolyn Mosby Apartments will undergo both interior and exterior improvements, including updates to all electrical and plumbing fixtures to improve the energy efficiency and water usage throughout the property. Common residential areas for residents will be upgraded on each floor as well.
