A U.S. Department of Agriculture Section 538-backed loan has helped finance the rehabilitation and new construction of Walnut Hills Apartments in Penn Yan, N.Y.
A U.S. Department of Agriculture Section 538-backed loan has helped finance the rehabilitation and new construction of Walnut Hills Apartments in Penn Yan, N.Y.

RED Mortgage Capital has provided a $950,000 U.S. Department of Agriculture (USDA)-backed loan for the recently completed Walnut Hills Apartments project in Penn Yan, N.Y.

Company officials say the deal is the first time a Section 538 loan is being used for a combined rehabilitation/new construction project.

The $10.7 million project by developer ODS Management involved the rehabilitation of 59 existing apartments and the construction of eight new apartments.

Additional financing included $8.5 million in subsidy from New York State Homes and Community Renewal. In addition to mortgage insurance, USDA provided 40 project-based Section 521 rental subsidies.

“The successful completion of the Walnut Hill renovations is the direct result of the commitment by New York State Homes and Community Renewal and USDA-Rural Development to preserve affordable housing properties,” said Mark Ogiony, president of ODS Management. “Walnut Hill is a testament to that commitment by providing residents of the community a beautiful and peaceful home to reside in for many years to come.”

Walnut Hills was originally constructed in 1972 by the USDA. The renovation includes new roofs, windows, and siding for all buildings as well as new kitchens, baths, and energy-efficiency upgrades. The rental office was expanded to include a community room, a patio, and a playground. All apartments are affordable to households earning at or below 60% of the area median income.

RED Mortgage Capital, a division of ORIX Real Estate Capital, provides targeted financial services in the multifamily and affordable housing markets.