MEMPHIS—Wesley Forest Townhomes, a two-phased garden-style townhome community in Memphis, has secured a loan refinancing. The assets were originally built as low-income housing tax credits (LIHTC).
Love Funding director Christopher Schilling of the New York office secured the financing for both transactions through the U.S. Department of Housing and Urban Development's 223(f) loan insurance program. The program allows the refinancing of debt on existing multifamily properties originally funded through conventional or FHA-insured mortgages, as long as they do not require substantial rehabilitation.
“Through these transactions, the ownership group was able to recapitalize the property and pay off the current debt while nearly cutting their debt service in half,” Schilling tells GlobeSt.com. “That will help keep this affordable housing property financially viable for the next 35 years.”
Phase I of Wesley Forest was built in 2000 and offers 100 units spread across 20 one- and two-story buildings. Phase II of the project, which added another 65 units, was completed in 2002.
Rental limits on both developments are set by the Tennessee Housing Development Agency as a participant in the LIHTC program. Both developments received the tax benefits in exchange for agreeing to set aside 100% of the residential units for persons earning either 50% or 60% of the area median income. Debt-service savings secured through the transactions will help the ownership group, Southeast Regional Development Corp., take on needed repairs and fund replacement reserves.
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