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ATLANTA-Northside Village Partnership LP has broken ground on Northside Village Apartments, a planned $17.7 million, 261-unit multifamily community with an undetermined amount of retail and commercial space. The complex is scheduled to open in January 2005.

Arbor Commercial Mortgage LLC of Uniondale, NY is funding the project under its FHA 221(d)(4) product line. The initial phase of the financing is an 18-month construction loan, according Schatzi Melick, the FHA regional director who originated the loan. When the project is completed, the construction loan will convert to a fully amortizing 38-year structure.

Arbor utilized a Ginnie Mae mortgage-backed security to provide credit enhancement for the fixed-rate, tax-exempt and taxable bonds which carry a blended note rate of 5.91%. The financing structure also involved a Tax Allocation District loan and grant, along with a bridge loan from Bank of America. The loan-to-cost ratio is 76%.

“This was a very complex transaction with multiple layers of debt structure that was made possible and viable through the enhancement of the 221(d)(4) program which gave the bonds a AAA rating and a favorable interest rate,” Melick says.

The allocation of tax-exempt bonds came from the city’s Urban Residential Finance Authority. The project 370-372 Northside Dr. calls for 85% of the units to be set aside for tenants eligible for low-income housing tax credits.

The principle entities within the development partnership are Southeast Capital Partners LLC and Bethursday Development Corp., a for-profit development entity of the Bethel Northside Baptist Church.

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