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 Portsmouth, Virginia. The total investment was $4.7 million.
The property being acquired is Dale Homes Phase I, which consists of a single parcel containing 146 units. The loan has an eighteen-year loan term, with two-years interest-only payments and a 35-year amortization schedule beginning in year three.
“Dale Homes 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 for 100% of the units,” explained Joshua Reiss, Assistant Vice President at Hunt Mortgage Group.
“The property will remain affordable housing relying upon LIHTC financing, and other sources, to finance the rehabilitation of the property,” noted Reiss. “By converting through the RAD program the property receives two 20 year project based rental assistance contracts thereby preserving affordability for the next 40 years.”
The overall development was built in 1940 as a 296-unit public housing development by the Portsmouth Redevelopment & Housing Authority (PRHA). Phase I is comprised of 38 one-bedroom units, 72 two-bedroom units, 28-three bedroom units, and eight four-bedroom units. The 150 additional units at the project, known as Phase II, are proposed for future renovations but are not proposed collateral for this Freddie Mac loan.
“Working with Freddie Mac to finance this property enables us to leverage our collective strengths to develop high-quality affordable housing,” added Reiss. “The RAD Program is transforming public housing and brings unprecedented benefits to local communities throughout the country. The program enables the use of public and private investments to help revitalize and preserve much needed affordable housing.”
In addition to the Freddie Mac loan, Towne Bank of Chesapeake, Virginia will provide a $6.3 million bridge loan to be advanced and then re-paid by the receipt of LIHTC equity at construction completion. This loan will bridge the tax credit equity during the construction period.
“Following the renovations, Dale Homes Phase I will be in excellent condition,” concluded Reiss. “We were pleased to play such a big role in this transformative deal.”