Rockport Mortgage Corp. announced it has provided $17 million for the acquisition and substantial rehabilitation of Pinnacle Park Apartments in Knoxville, Tenn.
Originated by Dan Lyons, managing partner, and utilizing the Department of Housing and Urban Development (HUD) Sec. 221(d)(4) program, the complex debt structure includes the use of 4% low-income housing tax credits (LIHTCs), short-term tax-exempt bonds, and multiple tranche financing.
Pinnacle Park is a 200-unit low- and moderate-income housing community originally developed under the Sec. 236 program in the early 1970s. In 1994, it was preserved as affordable housing under the Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA) for a term of 50 years and was recapitalized in 2004 using LIHTCs. Aging systems and rehabilitation needs required the infusion of additional capital to preserve this important affordable housing resource.
Working collaboratively with Rockport and HUD, LHP Development was able to obtain a Sec. 8 rent increase and approval of the creative financing structure under the Sec. 221(d)(4) substantial rehabilitation program. The financing involved a multiple-tranche debt structure and leveraging the benefits of the increased net operating incomemade available through a new 15-year PILOT (payment in lieu of taxes) and the approved Sec. 8 rents.
Boston-based Rockport Mortgage is a privately owned commercial mortgage banking firm founded in 1992. It specializes in providing Federal Housing Administration-insured loans to market-rate, affordable, and senior housing communities, and healthcare facilities.
