Brian Salyards, vp at DBBM says, in a statement, "reflecting thestrength of the borrower, property condition and strong propertyperformance, we were able to approve 10 years of interest onlypayments in order to preserve the value of the existing tax exemptand taxable bonds. The new loan structure ensure an appropriateamount of leverage while keeping balloon risks at maturity to aminimum."

"Doing interest only is very attractive," explains an anonymoussource, unrelated to the companies. "because it puts more money intheir pocket immediately, as opposed to waiting until the end to doit. That's attractive." The troubled GSEs have "an internalmandate" to put out as much money as possible for residential realestate. The source continued, "they classify apartments asaffordable housing and it really helps them balance their portfolioby doing that."

The property is 14 buildings on 15.3 acres with two swimmingpools, tennis courts, fitness room, play area and basketballcourts. The project is required to be rented in compliance withSection 142(d)(1)(A) of the Internal Revenue Code of 1986. Thisstates that "a project meets the requirements of section142(d)(1)(A) if 20% or more of the residential units in the projectare occupied by individuals whose income is 50% or less of areamedian gross income."

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