(Save the date: RealShare Apartments East comes to the Hyatt Regency Miami, Florida on February 26th, 2013)
SAN FRANCISCO-CBRE, through its direct HUD FHA lender, CBRE HMF Inc., has closed on the first two projects in the nation to be financed under HUD’s new Low Income Housing Tax Credit Pilot Program, according to a prepared release. Both loans—in the amounts of $13.25 million for Villa Vasona Apartments in Los Gatos, CA and $4.23 million for Twin Oaks Apartments in Vacaville, CA—have low fixed interest rates and 35-year terms, and are non-recourse and fully amortizing.
CBRE HMF was one of the first FHA lenders approved to participate in the program, which is designed to increase FHA’s production of affordable housing by streamlining the processing of mortgage applications and significantly cutting approval timelines. The sponsors secured 9% LIHTCs for the properties through the California Tax Credit Allocation Committee, qualifying them to take advantage of the higher rehabilitation limits and increased efficiency available under the Pilot Program, says a release.
The loans both closed in 120 days after the initial concept meeting. “We are pleased to have worked with HUD FHA to break new ground in affordable multifamily financing,” says Jayne Hulbert, president of CBRE HMF. “The Pilot Program is a valuable tool in financing low-income housing, and it marks a new level of responsiveness from HUD.”
The sponsors for the financings were Highland Companies LLC and Mission Housing Development Corp. RBC Capital Markets’ Tax Credit Equity Group provided the equity capital through its purchase of the Low Income Housing Tax Credit awarded to both projects.
Constructed in 1983, Villa Vasona Apartments is a seven-building, 107-unit property restricted to elderly and disabled tenants. The site is leased from the Town of Los Gatos at a cost of $1 per year, with the provision that the project remain in its present use. Also built in 1983, Twin Oaks Apartments consists of 12 two-story walk-up structures and totals 46 one-, two- and three-bedroom family units. Both properties will receive moderate improvements as part of participation in the Pilot Program, including new siding, appliances and cabinetry, as well as general site upgrades and increased accessibility.