Q10 KDH Secures $22M for Three Multifamily Properties

May 11, 2017

Q10 Kinghorn, Driver, Hough & Co., Houston, arranged $22.5 million for three Texas multifamily properties.

In College Station, Q10 KDH Vice President Larry Peters arranged $5.7 million for Cedar Ridge Apartments, located one mile from Texas A&M University, the largest university in the state. A life insurance company provided the fixed-rate financing in the low 4 percent range with a 20-year term and a 20-year amortization schedule, Peters said.

“The borrower was looking for an option instead of his typical agency lender,” Peters said. “He had never borrowed money from a life company but selected one that provided a rate half a point less than what an agency lender could provide.”

Peters said the borrower locked the rate at application, which removed interest rate risk from the equation, and noted that the borrower did not need to escrow for taxes, insurance or capital expenditures.

In Houston, Q10 KDH Vice President Ryan Watson arranged $16.5 million for two multifamily properties through Fannie Mae, Washington, D.C., and Freddie Mac, McLean, Va.

Watson arranged $11.5 million through Fannie Mae to refinance a 350-unit Houston property. He said Fannie Mae offered the borrower a 4.6 percent rate for 10 years with two years of interest-only payments followed by a 30-year amortization schedule. “Given the rehab program that was undertaken by the owner, Q10 KDH was able to convey this and offer the client all of their initial equity back in less than 18 months,” he said.

Watson also arranged a $5 million Freddie Mac Small Balance Program loan that refinanced a West Houston multifamily property. The loan provided a 4.40 percent fixed rate for 10 years with three years of interest-only payments.

“The Small Balance Freddie loan gave the sponsor the ability to lock his rate before interest rates began to rise and cash out most of the equity from the extensive rehab,” Watson said. “The lender fees were less than $15,000 on the loan, which made the transaction even more appealing.”