Dealmaker: Love Funding Secures $103M in HUD, Bridge Financing

Love Funding, Washington, D.C., secured $102.5 million for three multifamily properties in Plano, Texas and Clayton County, Ga.

In Texas, Love Funding Senior Director Leonard Lucas obtained $87.3 million to build a new high-rise market-rate apartment building. The project, named LVL 29 for its 29 levels, is located in a 250-acre mixed-use development near the Dallas North Tollway and State Highway 121 in Plano. Sponsor NE Development plans to complete the property in May 2019.

Lucas obtained the financing through the HUD Section 221(d)(4) mortgage insurance program, which provides non-recourse financing for up to 40 years to fund new multifamily construction or substantial rehabilitation.

Lucas said the LVL 29 financing represents the largest construction loan HUD has ever issued in the southwest region. 

The firm also secured $15.2 million in bridge financing for two Georgia properties, Southlake Cove Apartments, a 346-unit community in Jonesboro, and Vineyard Point Apartments, a 108-unit community in Riverdale. An ownership group led by Paul McMaster acquired and will rehabilitate both properties.

Jonathan Camps, Senior Vice President with Love Funding, secured the bridge financing from the firm’s parent company, Midland States Bank, Effingham, Ill. He noted that going directly through HUD would have delayed the acquisition beyond the seller’s timeframe. “The bridge loan enabled the buyers to act quickly and needed repairs identified through the underwriting will help streamline the process for obtaining permanent HUD financing,” he said.

Love Funding began underwriting the HUD applications immediately upon the closing the bridge loans. “We apply HUD’s capital needs and environmental guidelines to every bridge loan we do so there aren’t any surprises when we do the HUD takeout,” Camps said. “The financing sets aside ample funds to tackle the critical repairs identified and escrows the remainder so it can be transferred over when the HUD loans close.”

Love Funding introduced its bridge loan platform in 2015 to provide interim funding support for acquisition and refinancing applications on HUD multifamily and healthcare loans. It later expanded the platform to include tax credit equity bridge loans and construction/mini-perm financing for multifamily and healthcare development.