NEW YORK, NY - Hunt Mortgage Group and Freddie Mac today announced the closing on the financing and rehabilitation of 13 non-contiguous sites known as the HACEP El Paso Portfolio managed by the Housing Authority of the City of El Paso, Texas. This project is Phase I of the country’s largest Rental Assistance Demonstration Project, representing a $250 million initial public/private investment which is expected to grow to $1 billion over the next five years.
As part of the RAD program, each property will receive a 20-year project based HAP contract for 100% of the units. The communities are primarily garden style apartments and groups of duplexes and single family homes each containing five or more units on a common parcel.
In December 2013, the Department of Housing and Urban Development approved HACEP’s application to convert 6,100 units through the Rental Assistance Demonstration (RAD) initiative. RAD allows public housing agencies to leverage public and private debt and equity in order to rehabilitate the public housing stock. This is critical given the $25.6 billion backlog of public housing capital improvements.
"This partnership enables both the Housing Authority of the City of El Paso, the Hunt team and Freddie Mac to leverage our collective strengths to develop high-quality affordable housing for families in need while helping the city of El Paso continue to thrive,” said Robin Vaughn, President of Hunt’s Public Infrastructure Capital Markets division. “This project provides significant benefits to the City of El Paso and its residents, including the creation of over 1,000 jobs and an estimated $1 billion in local economic impact.”
In addition to Hunt Mortgage, three other Hunt subsidiaries were involved in the effort. They include Hunt Development Group, who will act as the development manager; Moss Construction who will be the project’s master subcontractor; and Hunt Capital Partners, which secured the tax credit equity from Aetna, MetLife and USAA.
“The Rental Assistance Demonstration is transforming public housing and will bring unprecedented benefits to local communities throughout the country by enabling the use of public and private investments to help revitalize and preserve much needed affordable housing,” commented Greg Calvert, Senior Managing Director and Chief Credit Officer at Hunt Mortgage Group.
We are providing capital to preserve, rehabilitate and improve a large amount of the public housing in El Paso,” said Shaun Smith, senior director of Freddie Mac Multifamily. “Initiatives like this help preserve affordable rental housing and could not be done without the coordination of many public and private participants like HACEP and the Hunt Companies.”
Hunt Mortgage Group and Freddie Mac provided financing in the amount of $59,625,000 under the Freddie Mac Direct Purchase of Tax-Exempt Loan offering.
The property will undergo an extensive renovation of $85,834,400 ($53,984/unit) in hard costs and tenants will be displaced during the renovation period. Planned renovations will improve energy efficiency, heating/cooling systems, electrical and mechanical systems, roofs, unit floors, wall coverings, bathroom and/or kitchen remodeling and various additional improvements.
“Upon completion of the renovation, the properties in this portfolio will be in excellent condition,” added Joshua Reiss, Assistant Vice President at Hunt Mortgage Group. “We were pleased to play such a big role in this groundbreaking deal – currently the largest RAD deal in the country.”
About Hunt Mortgage Group: Hunt Mortgage Group, a wholly owned subsidiary of Hunt Companies, Inc., is a specialty finance company focused on financing commercial real estate nationwide. The Company specializes in financing multifamily properties, but also finances: affordable housing, manufactured housing, healthcare/senior living, office, retail, industrial, and self-storage facilities throughout the United States. It offers Fannie Mae, Freddie Mac, HUD/FHA and its own proprietary loan products. The Company maintains a servicing portfolio of over $10.9 billion. Headquartered in New York City, Hunt Mortgage Group is comprised of 136 employees located in 15 locations throughout the United States. To learn more about Hunt Mortgage Group, visit www.huntmortgagegroup.com