Sabal Capital Partners announced the closing of a $129 million multifamily portfolio of Freddie Mac Small Balance Loans (SBLs) for the Emerald Equity Group.
Encompassing more than 850 total units in 34 affordable housing properties in New York City, the deal is the largest SBL transaction processed through the Freddie Mac program since it began in 2014, according to officials.
The deal was treated as a portfolio, but there were 34 separate loans that closed simultaneously, says Pat Jackson, chairman and CEO of Sabal, a diversified financial services firm specializing in real estate, lending, and banking.
By having individual loans instead of one large loan that bundles all the properties, the owner retains greater flexibility in their business plans for each property, says Jackson, who estimates that about 70% of his Newport Beach, Calif.-based firm’s business involves affordable housing.
This process included site inspections conducted with five third-party companies, appraisals and environmental reports, review with the Freddie Mac credit division, and commitment letters as well as legal review, title analysis, and loan documents for each property. All of this was enabled through SNAP™, Sabal’s proprietary servicing portal.
“The upgrade and rehabilitation of the properties in this portfolio, which are comprised of nearly 100% workforce housing, will provide families with a nice and affordable place to call home in an area with an extremely high cost of living,” said Isaac Kassirer, president at Emerald Equity Group.
The bulk of the apartments serve residents earning no more than 60% of the area median income.
“We are delighted to play a role in this unique transaction, which will ensure that more than 800 affordable rental units are preserved as workforce housing in the Bronx," says David Brickman, executive vice president and head of Freddie Mac Multifamily. “This is the largest Small Balance Loan transaction in Freddie Mac SBL history, and it underscores the flexibility, responsiveness and streamlined process that are synonymous with our program.
Jackson says the SBL product is gaining traction in the market. The loan amounts range from $1 million to $6 million but can go up to $7.5 million for certain properties in top markets. The program has different hybrid adjustable-rate and fixed-rate options.
