Hunt Mortgage Partners, LLC, a wholly owned subsidiary of Hunt Mortgage Group and a leader in financing commercial real estate throughout the United States, today announced it provided financing to facilitate the acquisition and moderate rehabilitation of a multifamily portfolio located in El Paso, Texas. The total investment was $5.2 million.
The Housing Authority of the City of El Paso (HACEP) Tranche IB Portfolio consists of two separate garden-style multifamily properties totaling 120 apartments that will be the collateral for a single note and single mortgage structure. The properties are George W. Baines Apartments (58 units) and Charles R. Morehead Apartments (62 units).
“These two properties will be part of the Rental Assistance Demonstration (RAD) program in which its public housing units will be converted to project-based Section 8 housing with a 20 year HAP contract in-place at closing covering 100% of the units,” explained Joshua Reiss, Assistant Vice President at Hunt Mortgage Group. “The loan will facilitate the acquisition of the properties from HACEP and rehabilitation in conjunction with the receipt of Low Income Housing Tax Credits and issuance of Tax-Exempt Bonds.”
The Freddie Mac Tax Exempt loan has an eighteen-year term, with two-years of interest-only payments and 35-year amortization schedule.
“Our relationship with Freddie Mac and our deep understanding of the RAD program allowed us to structure the loan as an immediate funding,” continued Reiss. “An immediate funding allowed HACEP to secure a lower interest rate than a forward funding execution and avoid the additional cost of engaging a construction lender. Our top goal when working with public housing authorities is to ensure the long term viability and affordability of the property.”
“We are pleased to have the opportunity to work with HACEP for the second time,” added Reiss. “We partnered with them in April 2015, providing a $59.6 million loan for the rehabilitation of 13 non-contiguous sites known as the HACEP El Paso Portfolio. This was the largest loan to date under the RAD program.”
The Rental Assistance Demonstration program 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.
“Hunt Mortgage Group and the Hunt Companies are committed to working with public housing authorities under the RAD program. We are proud to play an integral role in this important program,” concluded Reiss.