HAP Contract – Love Funding | Leading HUD Lender

Acquisition/Rehab Financing for MI Apartments

Love Funding closed a $9.9 million loan to purchase and significantly rehabilitate Newman Court Apartments, an affordable community in Pontiac, Michigan.

Newman Court Apartments offers 172 one-, two- and three-bedroom units. The apartments are located in 19 one- and two-story buildings originally constructed in 1971 and 1972. The property will undergo significant renovations through the use of 4 percent low-income housing tax credits (LIHTCs) allocated by the Michigan State Housing Development Authority. All of the apartments will continue to be tax-credit-restricted under a new 20-year Section 8 HAP contract.

The financing was secured by Love Funding’s Cleveland office through the U.S. Department of Housing and Urban Development’s 223(f) loan insurance program. The HUD program provided the development team with low-rate, non-recourse financing for a 35-year term. The City of Pontiac approved the property for payment in lieu of taxes (PILOT), which will set annual property taxes at 7 percent for the full length of the mortgage term. (more…)

Refinance Loan for Detroit Affordable Housing Community

Love Funding closed an $6.66 million loan for the refinancing and repair of Greenhouse Apartments, an affordable senior living community in Detroit. Greenhouse Apartments offers 208 age-restricted, one-bedroom units and one two-bedroom manager’s unit in a 10-story building. All of the age-restricted units are covered under a Section 8 HAP contract, and all 209 units are restricted under the Low Income Housing Tax Credit (LIHTC) program.

The financing was secured by Love Funding Midwest Regional Director Bruce Gerhart through the U.S. Department of Housing and Urban Development’s 223(a)(7) loan insurance program. This program allows for the refinancing of properties currently insured by FHA, as well as an extension of up to 12 years beyond the original mortgage term.

The property was built in 1981 and was substantially renovated in 2008 with financing provided by the HUD 221(d)(4) program in conjunction with an award of low-income housing tax credits (LIHTCs). The current refinancing, which locks in a lower interest rate for a 40-year term, will generate significant debt service savings and fund necessary repairs.

Greenhouse Apartments will remain under the management of KMG Prestige, a firm approved to manage HUD-affiliated communities. The ownership group of KMG has a combined 50 years of experience in the property management industry.

For more information, contact Bruce Gerhart at (216) 583-0812.