Breaking NewsGlobeSt.com will be offline for scheduled maintenance Friday Feb. 26 9 PM US EST to Saturday Feb. 27 6 AM EST. We apologize for the inconvenience.

 
X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

HOUSTON-The owners of a 117-unit multifamily property in the southwest section of the city have obtained a $2.8-million Fannie Mae mortgage and will take out a second loan of nearly $1.7 million in the next six months to help bring the complex into compliance with fire and safety codes.

William E. Cave in PW Funding Inc.’s local office arranged the Fannie Mae loan for the 92.3%-leased Madison Apartments at 9701 Forum Park Dr. He tells GlobeSt.com that the borrower, Madison Barnwell Partners of Victoria, TX, had a 65% loan-to-value ratio with the Fannie Mae DUS arm mortgage, but that will jump to 80% with a supplemental loan that will be placed within six months.

Cave says the seven-year Fannie Mae loan, with a 30-year amortization, is based on 90-day LIBOR with a 3% start rate plus a 6% lifetime cap and debt service coverage of 1.11x. The mortgage replaces financing from World Savings of Oakland, CA.

Cave says the glitch in handling the entire refinance in one transaction is the city is holding the certificate of occupancy for the 20-year-old complex pending compliance with fire and safety codes. Cave describes the repairs as “innocuous,” adding many vintage properties are facing similar problems.

City officials now require a “life safety certificate” for inspections of electrical, plumbing and mechanical systems as well as structural stability. A borrower and lender can’t secure a certificate of occupancy until a life safety certificate is issued, a city official explains.

According to Cave, the owner, a long-term holder, is working to clear up the violations and plans to complete additional renovations at the gated, class B property, using $270,000 from the second loan to cover upgrades and satisfy city codes.

Located 15 miles southwest of Downtown, the Madison consists of one- and two-bedroom units in nine two- and three-story buildings. Units average 902 sf and bring in an average monthly rent of $667. In the past year, PW Funding, the Mineola, NY-based subsidiary of Charter Municipal Mortgage Acceptance Co., has completed more than $50 million in financing in the Greater Houston area.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.