BWE, a national commercial and multifamily mortgage banking company, announced today that it has secured $15.25 million in permanent loans to finance three affordable and senior housing communities located in Austin, TX, Douglasville, GA, and Mobile, AL.
Jon Killough, Executive Vice President in BWE’s Montgomery, AL, office, and Tony Love, Senior Vice President in BWE’s Cleveland, OH, office, originated the loans using the Department of Housing and Urban Development’s RAD for PRAC initiative, a new tool designed to preserve existing Section 202 housing as well as create new Section 8 housing across the country.
Traditionally, Section 202 PRAC rental assistance could only be used for operating expenses, not debt servicing. The RAD for PRAC process allows borrowers to convert PRAC subsidies to project-based Section 8 contracts, which boosts the rental subsidy to a level that can pay for both operating costs and debt service, while also bringing more project-based Section 8 homes to the market. These transactions represent some of the first multifamily RAD for PRAC executions in the country.
“For aging portfolios in need of repairs and refinancing, RAD for PRAC is a powerful tool to inject new capital into affordable housing properties. BWE is proud to execute the first ever RAD for PRAC deal in Alabama and among the first in Georgia and Texas,” said Killough. “As we look for new ways to combat the housing crisis, we will continue to lead the way in utilizing RAD for PRAC to bring much-needed financing to affordable housing across the country.”
The three properties financed through this innovative tool are:
AHEPA 310 (Mobile, AL), a $6,000,000 HUD Insured Section 221(d)(4) loan to refinance a 175-unit scattered-site apartment community. The three buildings, AHEPA V, VI, and VII, contain 51, 65, and 59 one-bedroom units, respectively. All units will be affordable to residents earning at or below 50% of the area median income (AMI). Property amenities include on-site management and maintenance, lobby, elevators, library, laundry room, green space, part-time social service coordinator, community room with kitchenette, and off-street parking. Unit amenities include refrigerators, electric range/ovens, carpeting, blinds, and air conditioning. The loan terms include a 40-year fixed-rate term with interest only payments during the rehabilitation period and a 40-year amortization.
Sweetwater Point (Douglasville, GA), a 7,755,000 loan to finance the construction of a 96-unit, garden-style, age restricted (62+) community. The three-story multifamily senior affordable housing building will include 55 one-bedroom units and 41 two-bedroom units, and all units will be affordable to residents earning at or below 60% AMI. Amenities available to residents include an arts and crafts room, common laundry, fitness room, and lounges on the second and third floor. The loan was originated with Freddie Mac and has a 17-year fixed-rate term with a 40-year amortization.
La Vista de Lopez (Austin, TX), a $1,500,000 HUD Insured Section 221(d)(4) loan to finance the construction of a 27-unit apartment building for lower-income seniors. The apartments at La Vista de Lopez will be affordable to residents earning at or below 50% AMI. The development has also received a HUD Section 202 Capital Advance loan, and it is the first multifamily property in the country to combine an FHA-insured new construction mortgage with a new Section 202 Capital Advance. The Section 221(d)4 loan has a 40-year term with a 40-year amortization period.
BWE provides flexible financing solutions for clients covering the entire spectrum of commercial and multifamily real estate. For more information on BWE’s services, visit us at: https://www.bwe.com/.
BWE is a national, full-service commercial and multifamily mortgage banking company. Partnering with Enterprise Community Partners, Inc., BWE has production offices across the country and an integrated servicing platform based in Cleveland. With local market expertise, national lending relationships and financing structure experience, we provide clients with competitive, creative solutions for their financing needs. BWE provides loans for a range of institutional investors including life insurance companies, pension funds, commercial banks and CMBS lenders and is a Fannie Mae Delegated Underwriting and Servicing (DUS®) lender, Freddie Mac Optigo™ seller/servicer for Conventional and Targeted Affordable Housing Loans, Federal Housing Administration (FHA) approved Multifamily Accelerated Processing (MAP) lender and U.S. Department of Agriculture (USDA) Section 538 Rural Development lender.