Dealmaker: Bellwether Enterprise Secures $135M for Affordable Housing

Bellwether Enterprise Real Estate Capital, Cleveland, closed a $135 million dollar deal to preserve and renovate 550 affordable housing units in New York City’s Harlem neighborhood. 

To finance the loan, Bellwether Enterprise arranged a Fannie Mae bond credit enhancement for $38.1 million in long-term bonds and $24.2 million in short-term bonds issued by the New York City Housing Development Corp. New York City Housing Preservation and Development provided a $15.2 million second mortgage. Enterprise Community Investment syndicated the tax credit equity. Other funding sources included a seller note, existing reserves, deferred developer fee and income from operations. 

“Over the past decade, rents in Harlem have increased dramatically, pushing out hard-working families who struggle to make ends meet,” said Bellwether Enterprise Executive Vice President Phil Melton. “Protecting affordable housing is crucial to helping families get ahead and ensuring the continued vitality of historic neighborhoods around the country.”

Fannie Mae’s Reduced Occupancy and Rehabilitation program underwrote the property’s credit enhancement, eliminating the need for a construction loan, Bellwether Enterprise said. 

The five affordable housing properties include Gladys Hampton Houses (2411 Frederick Douglass Blvd. and 400 St. Nicholas Avenue), New West I and II (8-56 West 111th St) and Riverside I and II (602-622 West 135th St). The properties will remain at full occupancy and continue to receive rental revenue from project-based Section 8 contracts as they undergo construction, which allows a more efficient renovation. A portion of the units will be set aside upon vacancy for homeless individuals and families.