Love Funding, one of the nation’s leading providers of FHA multifamily and healthcare financing, announced the closing of an $8.64 million loan for the rehabilitation and expansion of a historic apartment complex in St. Louis.
Gotham and Delmar Apartments will consist of a substantially revitalized building recently certified by the National Park Service as a historic structure, and a newly constructed building on the same site. The transaction enables the property’s developers, Delmar Properties Management and Construction LLC, to obtain a fixed, low-rate, non-recourse loan for the period of construction and for a 40-year term once the buildings are completed. Many of the improvements being made to the existing building are designed to make the apartment units and public spaces more energy efficient and help reduce residents’ monthly expenses.
Love Funding Senior Director Robyn Cunningham of the St. Louis office, assisted by Director Adrian Hartman, secured the financing through the U.S. Department of Housing and Urban Development’s Section 220 loan insurance program for the construction or substantial rehabilitation of multifamily properties. The loan was structured with a two-tier lease pass-through structure to be able to take advantage of state and federal historic tax credits.
“It was a very complicated deal to put together and we knew we would need an experienced partner to help us make it happen,” said Jeffrey Mugg of Delmar Apartments. “Love Funding’s HUD expertise and relationships were very much needed to help us navigate HUD’s rules and financing sources, and get us to the initial endorsement.” “We made a good team and are looking forward to the next opportunity,” Delmar’s David Mastin added.
Mugg and Mastin, who founded Delmar Properties in 1995, have previously earned a Landmarks Association of St. Louis preservation award for their efforts to help revitalize St. Louis neighborhoods. Sustainability and energy efficiency have been key focus areas for the development team, and the Gotham and Delmar Apartments rehabilitation project is no exception. Once completed, the buildings will feature Energy Star appliances and light fixtures, new heat reflective roof shingles, insulated low-e glass windows, motion sensors for public space lighting, and building wrap on exterior walls to reduce air infiltration and reduce heat loss.
The renovation of the Gotham building will reduce its unit count to 54 apartment units from 66, while the new Delmar building will consist of 18 residential units and a number of first-floor commercial suites for office or retail use.
For more information, contact Robyn Cunningham. To read about the groundbreaking ceremony, click here.