Walker & Dunlop, Inc. announced today that it structured $11,595,700 in accelerated financing for Lewisburg Summit Apartments. The property is an affordable multifamily community that is supported by an allocation of four percent Low Income Housing Tax Credits (LIHTC) in partnership with the Tennessee Housing Development Agency.
Located in Lewisburg, Tennessee, the property is within the bounds of Marshall County, one of Tennessee’s designated opportunity zone census tracts. Established by Congress in the Tax Cuts and Jobs Act of 2017, opportunity zones encourage long-term investments in designated low-income areas by offering incentives in the form of lower or deferred capital gains taxes.
Walker & Dunlop Senior Vice President, Rob Rotach, worked closely with the developer, LHP Capital, LLC, to ensure the terms of the financing were consistent with opportunity zone guidance. Drawing on his extensive experience with HUD financing, Mr. Rotach secured the debt through the agency’s 221(d)(4) program. Combining both construction and permanent financing into a single 42-year, fixed-rate loan, the structure and term are an ideal fit for opportunity zone requirements, which require that the developer hold the asset for a minimum of ten years.
The transaction also represents the first property financed with the United States Department of Housing and Urban Development’s (HUD) Atlanta Southeast Office under the new LIHTC Pilot Program, which provides accelerated processing of qualifying loans. As part of this program, HUD reviewed and approved the application within 36 days, and achieved a closing within 72 days from the submission.
“LHP is very pleased with HUD’s new LIHTC Pilot Program,” commented Carr Hagan, President of LHP Development. “Working with our good partner Walker & Dunlop, we were able to utilize the streamlined LIHTC application process which enabled us to secure the funding necessary for the preservation of much-needed affordable homes for 130 families.”
Said Mr. Rotach, “We were extremely pleased with the outcome of this transaction. HUD has continued their efforts with prioritizing and offering lower fees for both affordable tax credit properties and projects located within opportunity zones, which allowed for this complex, tax-exempt bond transaction to close expeditiously under the strenuously tight timeframes required.”
Lewisburg Summit Apartments is a three-story, 130-unit apartment community catering to the elderly and disabled. The property is 100 percent supported by Section 8 Project-Based Rental Assistance and will benefit from $8.5 million in substantial rehabilitation. Renovations will include upgrades to unit kitchens, bathrooms, and common areas, as well as the replacement of HVAC systems and electrical systems. The improvements will also substantially improve the energy efficiency of the building and will increase handicap accessibility throughout the building.
Walker & Dunlop is one of the largest multifamily lenders in the country and is ranked as the third largest HUD lender based on MAP (Multifamily Accelerated Processing) volume for the agency’s 2018 fiscal year. To learn more about opportunity zones, read our recent insights:
About Walker & Dunlop
Walker & Dunlop (NYSE: WD), headquartered in Bethesda, Maryland, is one of the largest commercial real estate finance companies in the United States. The company provides a comprehensive range of capital solutions for all commercial real estate asset classes, as well as investment sales brokerage services to owners of multifamily properties. Walker & Dunlop is included on the S&P SmallCap 600 Index and was ranked as one of FORTUNE Magazine’s Fastest Growing Companies in 2014, 2017, and 2018. Walker & Dunlop’s 800+ professionals in 32 offices across the nation have an unyielding commitment to client satisfaction.