NEW YORK, NY - Greystone, a leading national provider of multifamily mortgage loans, announced the closing of a $117 million multifamily transaction in the state of Georgia. The financing will be used towards the acquisition and rehabilitation of 44 affordable housing properties, consisting of 1,362 units that serve low-income households in 30 counties across the state. The aged USDA Rural Development Section 515 portfolio was acquired by WWJ, LLC an affiliate of Boyd Management, Inc. The rehabilitation is expected to be completed within 12 months.
Greystone is a leader in affordable housing preservation and worked closely with National and State USDA Rural Development, the Athens Housing Authority Georgia Department of Community Affairs, and Fannie Mae to coordinate and secure the financing needed to acquire and rehabilitate the portfolio.
“Affordable housing communities across the country are suffering from significant age and many are in drastic need of renovation and modernization. This combined with the ever increasing state and federal budget restrictions has made preservation of existing affordable housing stock even more of a challenge,” said Tanya Eastwood, Managing Director for Greystone’s Affordable Housing Initiatives group. "These properties risk being removed from the affordable housing stock unless there are collaborative efforts from all agencies and partners involved. We at Greystone truly appreciate all of the organizations we work with who share our passion for preserving and extending the life of existing RD515 properties.”
The financing involved in the transaction was a combination of both public and private funding and included:
Fannie Mae: $26.9 million in Fannie Mae DUS® loans spread over 37 properties (6 consolidations).
Tax Exempt Bonds: Issuance of over $47.2 million in multi-family private activity tax exempt bonds by the Athens Housing Authority.
LIHTC: Purchase of 4% State and Federal LIHTCs by a Community Affordable Housing Equity Corporation (CAHEC) affiliate, generating over $31.7 million in capital contributions.
RHS 515 Debt: Assumption and subordination of over $35.9 million of original USDA RHS 515 debt. The Section 515 program is a direct loan program designed to provide subsidized loans to developers of affordable housing in rural markets. In addition, of the 1,362 units, 98% continued to receive Section 521 Rental Assistance by the USDA Rural Housing Service.
Other: Other funding sources included additional financial support in the amount of over $2.2 million.
“The financing structure of this transaction truly shows the dedication and out-of-the-box thinking of an extraordinary group of people,” said Jeff Englund, head of Greystone’s Affordable Housing lending group. “Even though we were thrown a few curve balls, it was the hard work and dedication of many people, especially those at Fannie Mae and the USDA that allowed us to close this transaction and ultimately make a positive impact on the lives of the residents that call these Georgia properties ‘Home’.”
The rehabilitation plan consists of substantial improvements for all apartment units within the 44 communities. Planned interior improvements will include new flooring, energy efficient appliances, hot water heaters, upgraded HVAC, kitchen cabinets and countertops, as well as fixture upgrades. Electrical improvements will include the replacement of all interior and exterior light fixtures, new GFI outlets and new smoke detectors. Planned exterior improvements include new insulated double-pane windows, doors, gutters, siding and a new roof system. Landscape enhancements will also be implemented.
The renovation project will have a positive economic impact at both the local and state levels. More than $34 million will be spent in construction costs, the majority of which will be spent directly with Georgia contractors on physical goods and improvements. Further, the contractors and subcontractors will stay in local hotels, eat at local restaurants and purchase hardware and personal items at local stores. The General Contractor estimates that the rehab for each of the properties can lead to 226 workers, 322 motel nights, 3,167 meals and several local employees hired.
Ms. Eastwood added, “Successful, financially feasible preservation at this level requires extensive cooperation and commitment of many different organizations. This was a major undertaking and the first of its kind in Georgia. Such a preservation effort would not have been possible without the endless persistence and innovative efforts by all groups involved.”