A new fund has acquired three multifamily communities in an effort to expand middle-income housing opportunities in Bellevue and Kirkland, Washington.
Urban Housing Ventures (UHV) announced that it has closed its first fund in partnership with Microsoft, Washington Federal, Washington Trust, and Stream Real Estate, and financing provided by Berkadia and Freddie Mac.
The initiative enables investors to buy existing market-rate apartments and then lower up to 40% of the units to middle-income levels without losing long-term financing viability for the investors, according to UHV. Led by management from Seattle-based Stream Real Estate, UHV is a privately funded company.
UHV’s Fund I acquired three Class A properties—Aventine and Borgata Apartment Homes in Bellevue and Waterscape in Kirkland with 335 units. Following its plans, UHV said it is converting 40% of the apartments to target individuals and families earning 60% to 80% of the area median income (AMI).
The move would assist an often forgotten group. These renters earn too much to qualify for most affordable housing, so they are left to struggle to afford pricey market rents.
Microsoft announced that it is committing $40 million to the initiative.
“The Puget Sound region hasn't built enough housing for the people who live here, including many who are on the front lines of our community’s response to COVID-19,” said Brad Smith, president of Microsoft, in a statement. “We need fresh, creative approaches like this one to quickly bring new private-sector financing and funding to address the affordable housing crisis—in our home state of Washington and nationwide.”
“Through self-imposed rental restrictions we are helping ensure that affordable housing is not only preserved but created,” said Debby Jenkins, executive vice president and head of multifamily at Freddie Mac. “Our $325 million commitment will supply debt financing that drives the conversion of high-cost multifamily units to rental homes that are affordable to middle-class families. The creation of affordable housing is central to Freddie Mac’s mission, and it only becomes possible when we work together.”
Affordable housing is an issue that requires deep commitment and innovative solutions from all sectors, according to Berkadia CEO Justin Wheeler.
“I believe that multifamily solutions are the primary avenue to an answer,” he said. “We are proud to have worked with UHV and Freddie Mac to facilitate a funding solution, together with Microsoft’s affordable housing commitment, for this unique and essential project. We will continue the crucial work that supports the shared mission of our partners to provide safe and affordable housing for communities in the Pacific Northwest and across the country.”