St. Francis Village Maps Out $16M Expansion

Dallas-based Malone Mortgage Co. has cleared a $16.3-million, HUD-insured loan to speed the project to fruition. Bud Malone, the firm's president, put together a four-pronged transaction with a sub-6% interest rate for the 160-acre acquisition, 298-cottage renovation, 148-unit expansion and an immediate roll to permanent financing when the work's done. The 40-year loan is interest-only for the 14-month construction period, he says.

"It took some fine-tuning to make sure it stays operating throughout the construction," Malone tells GlobeSt.com. Malone took a walk down memory lane in packaging a deal that took 1.5 years to assemble. "I first saw it (St. Francis Village) in 1966 when HUD took the note back and 30 years later, they're sitting in our offices asking to refinance and enlarge," he says.

The Franciscan priests of the Sacred Heart Province developed St. Francis Village in the 1964 with a $3.6-million, FHA loan to cover the costs for the seniors housing project. Malone says financial problems set in when lease-up fell short of expectations. In 1966, the original lender assigned the note to the FHA, which finessed a number of work-outs and an eventual sale to the Horsham, PA-based GMAC Mortgage Corp., which serviced the loan as an HUD/FHA-insured vehicle until a week ago when Malone's financing gave a fresh start to a four-decade-old project.

In back-to-back transactions, St. Francis Village Inc.'s board of directors, made up of nine couples and two Franciscan priests, closed the Malone financing and acquired an adjacent 160 acres to the 64.3-acre development. Now, full rehabs are ramping up for the two residential wings attached to the common-area facility and 298 cottages, including new roofs on all buildings. The new construction will add 74 duplex "cottages" and a 10,000-sf activity center. At the end of the work, the village's independent-living cottages will house more than 700 elderly residents, many on the waiting list for years.