Dealmaker: Greystone Provides $100M in HUD-Insured Multifamily Financing

Greystone, New York, provided $100.3 million in HUD-insured loans for multifamily properties in California and Texas.

The firm provided $51.3 million to refinance Cadence Apartments, a 206-unit property in Hayward, Calif. Greystone Managing Director Shana Daby originated the transaction for AMCAL Equities LLC, Agoura Hills, Calif.

The non-recourse HUD 223 (a)(7) loan refinances the property for a 35-year term and amortization, resulting in a significant reduction in annual debt service payments.

Constructed in 2017, Cadence Apartments occupies 2.9 acres near Dixon Street directly across from the South Hayward BART station, giving residents access to San Jose, the Peninsula and Oakland.

“At first it seemed counterintuitive that an (a)(7) would make sense given the prepayment penalty on the existing loan, but the combination of the dramatic decrease in interest rates and the lower Mortgage Insurance Premium for green announced by HUD since the initial closing resulted in significant savings,” said Daby.

Greystone also provided a $49 million construction loan under the HUD 221(d)(4) program to develop Katy Apartments in Katy, Texas. Daby again made the arrangements for AMCAL Equities.

The $49 million FHA financing will fund 85 percent of total project costs and is structured as a non-recourse fixed-rate construction loan that automatically converts to a 40-year fully amortizing permanent loan upon stabilization. Upon completion, Katy Apartments will house 324 market-rate and income-restricted rental units in 12 garden-style buildings.