BWE is excited to introduce its new Bridge Loan to Bond Purchase product. This execution allows developers to acquire and preserve affordable housing properties that will be recapitalized with 4% LIHTCs and tax-exempt bonds. The bridge loan term is up to five years giving buyers the opportunity to secure all sources and the interest rate can be variable or fixed.
“As more states are oversubscribed with their bond cap volume, this new bridge product gives borrowers peace of mind on obtaining tax-exempt financing even if they need to wait 2 or 3 award cycles,” said Jim Gillespie, BWE Executive Vice President and Director of the BWE Direct Bond Purchase Program. “Previous to this, developers would have to weigh the length of time to get bond cap with a shorter bridge term. This is a great product to ensure the preservation of affordable housing.”
A key advantage to the bridge loan is that the facility can be prepaid at any time, with no penalty, if the 4% LIHTC bond transaction is financed via a BWE Bond Purchase execution.
The first utilization of this new product by BWE was for a $21.8 million bridge loan on Orchard Park Apartments in Salem, OR. The loan closed less than 70 days from app to closing. Financing for this deal was arranged by Jim Gillespie and BWE Vice President Ilya Weinstein.
Orchard Park is a 224-unit multifamily property that was built in 1994. Units were restricted to 60% AMI through the end of 2021 and are currently restricted at 80% of AMI. Upon the 4% re-syndication, the unit restrictions will revert to 60% AMI thereby preserving deeper affordability for the long-term. The $59.2 million acquisition and scope of work includes an investment by Enterprise’s Real Estate Equity team through its Preservation Fund.
“Orchard Park is a great example of why the bridge product is necessary for preserving affordable units,” Weinstein said. “Also, I love it when BWE and Enterprise can bring two critical pieces of the capital stack to our sponsor general partner and make this happen!”
To learn more about this product contact Jim Gillespie at jim.gillespie@bwe.com and Ilya Weinstein at ilya.weinstein@bwe.com