LHP Capital has closed on the financing for its latest preservation project utilizing the expanded Low-Income Housing Tax Credit (LIHTC) Pilot Program.

Working with Walker & Dunlop, the affordable housing firm received approval for an $11.6 million Federal Housing Administration (FHA) Section 221(d)(4) loan in just 36 calendar days under the accelerated financing program.

The transaction supports the $19 million acquisition and rehabilitation of the 130-unit Lewisburg Summit Apartments in Lewisburg, Tenn.

LHP Capital has acquired Lewisburg Summit Apartments in Lewisburg, Tenn., from a local owner and has begun more than $8.5 million in renovations to the property, which is home to seniors 62 and older and adults with disabilities.
LHP Capital has acquired Lewisburg Summit Apartments in Lewisburg, Tenn., from a local owner and has begun more than $8.5 million in renovations to the property, which is home to seniors 62 and older and adults with disabilities.

“This is good news for the residents of Lewisburg Summit and the Lewisburg community,” says Carr Hagan, president of LHP Development. “With the renovation, the apartments will be completely transformed, making them more appealing, energy efficient, safe, and accessible for the residents.”

The property is the first financed by the Atlanta office of the Department of Housing and Urban Development (HUD) since the LIHTC Pilot Program was expanded to include new construction and substantial rehabilitation projects using Section 221(d)(4) and Section 220 loans earlier this year, according to the project team.

The pilot program, which originally focused on aligning the Section 223(f) program with LIHTC financing, aims to reduce the processing time for LIHTC deals, which average about 90 days, by eliminating redundant reviews and streamlining the approval process.

“The 221(d)(4) sub-rehab loan program has been pretty material to our deal flow over the years,” says Hagan, estimating that Lewisburg is the company’s 45th transaction using the program.

The expansion of the LIHTC Pilot Program was notable because Section 221(d)(4) allows developers to do a deeper rehab than under Section 223(f).

It’s also the 99th overall deal for LHP Capital, which shortly after closed on the financing of its 100th multifamily property, a project-based Section 8 development in Oak Ridge, Tenn.

The Tennessee Housing Development Agency allocated 4% LIHTCs for Lewisburg Summit Apartments, which generated approximately $7.4 million in equity from First Tennessee Housing Corp.

The property is located in Marshall County, one of Tennessee’s designated Opportunity Zone census tracts. “With the amount of rehab we are doing, it qualified as an Opportunity Zone Fund investment,” says Hagan. “As a result of that, we received some savings on some of the typical HUD fees.”

In May, FHA announced that it was introducing reduced application fees paid by property owners applying for certain multifamily mortgage insurance programs for the development or rehabilitation of apartment units in Opportunity Zones. In addition, FHA is designating teams of senior underwriters to review these applications to ensure the most attentive and timely processing.

LHP Capital acquired Lewisburg Summit Apartments from a local owner and has begun more than $8.5 million in renovations to the property, which is home to seniors 62 and older and adults with disabilities.

Hagan says that every apartment unit will be refurbished from top to bottom, including new kitchen cabinetry, appliances, flooring, and modern fixtures throughout. The renovation will also allow for updates to the apartment building’s common areas, laundry facility, and community room.