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 property located in El Paso, Texas. The total investment was $5.2 million.
The property, Father Carlos Pinto Memorial Apartments, consists of a mid-rise senior-restricted multifamily property totaling 113 apartments. The property is located in the Segundo Barrio neighborhood of downtown El Paso, one of the city’s oldest and most historic districts. After the renovations, the property will offer 113 one and two-bedroom LIHTC units restricted to senior-citizen residents 62 and older earning 60% of the Area Median Income (AMI) or less.
“The property is 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 borrower is Paisano Housing Redevelopment Corporation (PHRC), a wholly owned instrumentality of HACEP, which will also serve as the third-party non-recourse carve-out guarantor. The Freddie Mac tax exempt loan (TEL) has an eighteen-year loan term, two years of interest-only payments and a 35 year amortization schedule beginning in year three.
“We are pleased to have the opportunity to work with HACEP again,” added Reiss. “We partnered with them in April 2015 and in September 2016 on two other portfolios, including the largest single loan to date under the RAD program, a $59.6 million loan for the rehabilitation of 13 non-contiguous sites known as the HACEP El Paso RAD I Portfolio.”
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.
In addition to the senior indebtedness, during the construction phase (estimated to be fifteen months) Series B Bonds in the projected amount of $3.1 million will be advanced and then re-paid by the subsequent receipt of low income housing tax credit equity by construction completion.
Upon completion of the renovation, Father Carlos Pinto Memorial Apartments will be in excellent physical condition with total construction hard costs projected of $6.5 million.