SACRAMENTO—Green lending has been around for a while, but a recent loan gave it a new twist. Because a multifamily borrower had factored many green renovations into the acquisition business plan, Walker & Dunlop Inc. capitalized on the Freddie Mac Green Up program, which provided additional leverage and significant rate savings to the client, OpenPath Investments.

Walker & Dunlop structured a $52 million loan for The Eleven Hundred Apartments, a 565-unit class-B garden-style apartment community. The Walker & Dunlop team led by senior vice president Mark Grace used its understanding of Freddie Mac's offerings to provide optimal loan terms. The 10-year loan was structured with five years of interest-only payments, a 75% loan to value and a debt-service coverage ratio of 1.25x.

The Eleven Hundred Apartments was first constructed in 1961. Since 2015, the property has undergone extensive renovations, including more than $6.5 million in improvements and repairs to common areas and the interiors of 535 units. The borrower plans to invest an additional $400,000 into the property, half of which will be allocated to green upgrades. Once the improvements are implemented, annual utilities savings will exceed $100,000 and the property will be certified by ENERGYSTAR for Multifamily and the Environmental Protection Agency.

“We were able to offer very compelling loan terms utilizing both an experienced borrower's renovation capacity and the Freddie Mac Green Up program,” Grace adds. “The borrower had already factored many green renovations into the acquisition business plan, so we capitalized on the Green Up program, which allowed us to deliver additional leverage and significant rate savings to our client.”

Walker & Dunlop is an experienced green lender, having completed $1.4 billion in green financing in 2016.

“Green financing is not brand new news, however, Freddie's program was very attractive for this deal,” Grace tells GlobeSt.com. “We were the number one DUS Green Lender for Fannie Mae in 2016. This has facilitated better leverage and lower rates. The programs continue to evolve and we continue to capitalize and keep our finger on the pulse. We're doing a lot of great work incorporating green rewards into deals that fit the profile. The Eleven Hundred was a great example where we were able to obtain a great competitive quote from Freddie Mac, which was only marginally able to edge out a very compelling bid from Fannie Mae.”

The Eleven Hundred Apartments is bordered by 50-year-old redwood and oak trees, and consists of 45 buildings. The unit offerings consist of townhouses, one-, two-, and three-bedrooms, as well as studios. Amenities include a fitness center, playground, picnic and barbecue area, basketball court, three lighted tennis courts, spa, a junior Olympic-size swimming pool and one recreation-size swimming pool. The property is strategically located just 6 miles east of downtown Sacramento, within the Arden Arcade neighborhood, with access to schools and many shopping, dining and entertainment options. Major employers in the area include US Bank, Wells Fargo, the state of California, the Sacramento Bee and California State University Sacramento. The 32-mile American River Recreational Trail, with jogging and bike paths, fishing, kayaking, canoeing and rafting, is also nearby.

In Roseville, CA, Walker & Dunlop also provided a $33.83 million commitment under the Freddie Mac Tax Exempt Loan Unfunded Forward Program for the permanent financing of Campus Oaks Phase I, an affordable garden-style apartment community. Senior vice presidents, Frank Baldasare and Carolyn McMullen led the origination team, which arranged the TEL forward commitment for construction financing upon completion and stabilization of the property. The Freddie Mac TEL Unfunded Forward Program allows borrowers to lock in interest rates for permanent debt at the same time the construction loan closes. Walker & Dunlop leveraged the program to provide faster and more affordable financing than competing lending sources.

“The Freddie Mac TEL is the most cost-effective way for the borrower to lock the rate on his permanent loan, thereby greatly reducing the interest rate risk,” McMullen tells GlobeSt.com.

The property is located on the site known as the Hewlett-Packard Campus Oaks Master Plan, located within the North Industrial Planning Area. The property is the first of a two-phase multifamily development that will include a total of 395 units and will bring much-needed affordable housing to Roseville. Once constructed, Campus Oaks Phase I will consist of 20 three-story apartment buildings, featuring 186 units and a two-story clubhouse. Common area amenities will include a swimming pool, cabanas, spa, barbecue area, fire pits, bicycle repair station, beach volleyball court and bocce courts.

SACRAMENTO—Green lending has been around for a while, but a recent loan gave it a new twist. Because a multifamily borrower had factored many green renovations into the acquisition business plan, Walker & Dunlop Inc. capitalized on the Freddie Mac Green Up program, which provided additional leverage and significant rate savings to the client, OpenPath Investments.

Walker & Dunlop structured a $52 million loan for The Eleven Hundred Apartments, a 565-unit class-B garden-style apartment community. The Walker & Dunlop team led by senior vice president Mark Grace used its understanding of Freddie Mac's offerings to provide optimal loan terms. The 10-year loan was structured with five years of interest-only payments, a 75% loan to value and a debt-service coverage ratio of 1.25x.

The Eleven Hundred Apartments was first constructed in 1961. Since 2015, the property has undergone extensive renovations, including more than $6.5 million in improvements and repairs to common areas and the interiors of 535 units. The borrower plans to invest an additional $400,000 into the property, half of which will be allocated to green upgrades. Once the improvements are implemented, annual utilities savings will exceed $100,000 and the property will be certified by ENERGYSTAR for Multifamily and the Environmental Protection Agency.

“We were able to offer very compelling loan terms utilizing both an experienced borrower's renovation capacity and the Freddie Mac Green Up program,” Grace adds. “The borrower had already factored many green renovations into the acquisition business plan, so we capitalized on the Green Up program, which allowed us to deliver additional leverage and significant rate savings to our client.”

Walker & Dunlop is an experienced green lender, having completed $1.4 billion in green financing in 2016.

“Green financing is not brand new news, however, Freddie's program was very attractive for this deal,” Grace tells GlobeSt.com. “We were the number one DUS Green Lender for Fannie Mae in 2016. This has facilitated better leverage and lower rates. The programs continue to evolve and we continue to capitalize and keep our finger on the pulse. We're doing a lot of great work incorporating green rewards into deals that fit the profile. The Eleven Hundred was a great example where we were able to obtain a great competitive quote from Freddie Mac, which was only marginally able to edge out a very compelling bid from Fannie Mae.”

The Eleven Hundred Apartments is bordered by 50-year-old redwood and oak trees, and consists of 45 buildings. The unit offerings consist of townhouses, one-, two-, and three-bedrooms, as well as studios. Amenities include a fitness center, playground, picnic and barbecue area, basketball court, three lighted tennis courts, spa, a junior Olympic-size swimming pool and one recreation-size swimming pool. The property is strategically located just 6 miles east of downtown Sacramento, within the Arden Arcade neighborhood, with access to schools and many shopping, dining and entertainment options. Major employers in the area include US Bank, Wells Fargo, the state of California, the Sacramento Bee and California State University Sacramento. The 32-mile American River Recreational Trail, with jogging and bike paths, fishing, kayaking, canoeing and rafting, is also nearby.

In Roseville, CA, Walker & Dunlop also provided a $33.83 million commitment under the Freddie Mac Tax Exempt Loan Unfunded Forward Program for the permanent financing of Campus Oaks Phase I, an affordable garden-style apartment community. Senior vice presidents, Frank Baldasare and Carolyn McMullen led the origination team, which arranged the TEL forward commitment for construction financing upon completion and stabilization of the property. The Freddie Mac TEL Unfunded Forward Program allows borrowers to lock in interest rates for permanent debt at the same time the construction loan closes. Walker & Dunlop leveraged the program to provide faster and more affordable financing than competing lending sources.

“The Freddie Mac TEL is the most cost-effective way for the borrower to lock the rate on his permanent loan, thereby greatly reducing the interest rate risk,” McMullen tells GlobeSt.com.

The property is located on the site known as the Hewlett-Packard Campus Oaks Master Plan, located within the North Industrial Planning Area. The property is the first of a two-phase multifamily development that will include a total of 395 units and will bring much-needed affordable housing to Roseville. Once constructed, Campus Oaks Phase I will consist of 20 three-story apartment buildings, featuring 186 units and a two-story clubhouse. Common area amenities will include a swimming pool, cabanas, spa, barbecue area, fire pits, bicycle repair station, beach volleyball court and bocce courts.