San Francisco, CA – CBRE, through its direct HUD FHA lender, CBRE HMF, Inc., is pleased to announce the successful closing of the first two projects in the nation to be financed under HUD’s new Low Income Housing Tax Credit (LIHTC) Pilot Program. CBRE HMF was one of the first FHA lenders approved to participate in the program, which is designed to increase FHA’s production of affordable housing by streamlining the processing of mortgage applications and significantly cutting approval timelines.
Both loans—in the amounts of $13,250,000 for Villa Vasona Apartments in Los Gatos, CA and $4,231,800 for Twin Oaks Apartments in Vacaville, CA—have low fixed interest rates and 35-year terms, and are non-recourse and fully amortizing.The sponsors secured 9% LIHTCs for the properties through the California Tax Credit Allocation Committee, qualifying them to take advantage of the higher rehabilitation limits and increased efficiency available under the Pilot Program. Ultimately the loans were processed in record time, both closing just 120 days after the initial concept meeting.
“We are pleased to have worked with HUD FHA to break new ground in affordable multifamily financing,” said Jayne Hulbert, President of CBRE HMF. “The Pilot Program is a valuable tool in financing low-income housing, and it marks a new level of responsiveness from HUD. This experience shows that HUD is backing up their good intentions with action, by speeding up processing and creatively designing terms to meet affordable development realities.”
Constructed in 1983, Villa Vasona Apartments is a seven-building, 107-unit property restricted to elderly and disabled tenants. The site is leased from the Town of Los Gatos at a cost of $1 per year, with the provision that the project remain in its present use. Also built in 1983, Twin Oaks Apartments consists of 12 two-story walk-up structures and totals 46 one-, two- and three-bedroom family units. Both properties will receive moderate improvements as part of participation in the Pilot Program, including new siding, appliances and cabinetry, as well as general site upgrades and increased accessibility.
The sponsors for the financings, Highland Companies LLC and Mission Housing Development Corporation, are experienced developers, owners and operators of housing for low-income families, seniors and the disabled.
RBC Capital Markets’ Tax Credit Equity Group (TCEG) provided the equity capital through its purchase of the Low Income Housing Tax Credit awarded to both projects.
About CBRE HMF, Inc.
CBRE HMF, Inc. is a direct HUD FHA lender offering the full array of HUD FHA multifamily mortgage insurance programs. CBRE HMF, Inc. is approved for both Multifamily Accelerated Processing (MAP) and Lean Seniors Healthcare, and offers competitive financing solutions for multifamily rental, cooperative, seniors, and health care properties, including hospitals, for new construction, substantial rehabilitation, moderate rehabilitation, refinance, and acquisition. CBRE HMF, Inc. also specializes in affordable housing involving low income housing tax credits and tax-exempt housing bonds. CBRE HMF, Inc. was created in 2007 by CBRE to expand its multifamily and healthcare lending platform. Please visit our Web site at www.cbre.com/fha.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com.