Love Funding Secures $46M in Virginia, Michigan

Love Funding, Washington, D.C., closed a $19 million loan to preserve and refurbish an affordable senior housing community in Vienna, Va.

The Fairfax Education Association Retirement Housing Corp. built Tysons Tower in 1976 to provide affordable housing for senior residents. With the property’s rental assistance contract set to expire in 2017, FEARHC sought to ensure that the 274 units remain reserved for people aged 62 and older who earn 80 percent or less of the area’s median income.

Love Funding Director Ann Bolen secured a loan through the Virginia Housing Development Association after securing a HUD commitment for a new 20-year Project-Based Rental Assistance contract on the property. HUD created the Rental Assistance Demonstration program in 2014 to convert expiring rental housing contracts to long-term contracts and thereby secure a rental subsidy for low-income households.

Bolen said a large share of loan proceeds loan will finance property improvements including a new roof, heating and air-conditioning systems.
Love Funding also closed a $17.3 million loan secured by Cranbrook Senior Tower in Ann Arbor, Mich. Midwest Regional Director Bruce Gerhart secured the loan through a HUD pilot program designed to expedite processing times for affordable rental apartments with low-income housing tax credits.

“The financing was supplemented with 4 percent LIHTCs and Midland States Bank provided a bridge loan to fund the tax credit equity,” Gerhart said.

Built in 1980, Cranbrook Senior Tower is a 202-unit property restricted to residents 62 and older. As part of the transaction, the property’s current HUD Housing Assistance Payment contract was renewed for another 20 years. More than $3.5 million of the financing proceeds will go toward renovating the property, including a new generator, HVAC system and siding.

Gerhart also secured $4.6 million to refinance Devonshire Retirement Village, a 40-bed assisted living center in Lapeer, Mich. and $4.7 million to redevelop part of Detroit affordable apartment community Oakman Townhomes.

Financing for Devonshire Retirement Village came through HUD’s 232/223(f) non-recourse loan insurance program. Gerhart said the 232/223(f) program enables borrowers to obtain low-rate financing for up to 35 years to purchase or refinance existing long-term healthcare facilities.

Gerhart secured the Oakman Towers loan through HUD’s 221(d)(4) loan insurance program for multifamily property construction or substantial rehabilitation. “The Michigan State Housing Development Authority provided a substantial equity contribution to the project with the awarding of 9 percent LIHTCs,” he said.

Oakman Townhomes will be built on a part of the site that currently houses Ryan Court Apartments. The new 72-unit property will reserve at least 40 percent of units for tenants with incomes below 60 percent of area median income. All of the new units will be covered by a Section 8 housing assistance payment contract that will help subsidize rents for a 20 years.