Dealmaker: Sims Mortgage Funding Closes $21M in Construction, Permanent Financing in Louisiana

Sims Mortgage Funding, Montvale, N.J., closed a $20.6 million FHA-insured loan to finance multifamily housing construction in Lafayette, La.

The Reserve at Couret Farms will be part of the Couret Farms traditional neighborhood development. This 125-acre mixed-use development will include nearly 500 single-family homes, several large green areas and 100,000 square feet of retail and office space in addition to the apartment community with its two three-story buildings and one two-story building.

The loan was insured under the Section 221(d) (4) program and underwritten at 85 percent of estimated replacement cost. Debt service coverage at stabilized occupancy is projected at 1.31. Working capital, construction contingency and operating deficit escrows totaled $1.76 million. 

Sims Executive Vice President Kerrie Tomasiewicz served as the transaction’s MAP underwriter. She said that Sims Mortgage Funding obtained waivers from HUD “that allowed us to bypass the preliminary application stage and to underwrite the loan at the higher loan-to-cost and lower debt service coverage ratios that would be going into effect well after the application was filed.” 

These waivers shortened the financing schedule, which helped avoid a construction cost escalation and enabled the borrower to maximize loan proceeds, Tomasiewicz said. “Moreover, because of the accelerated financing schedule, our client was able to lock in a favorable rate before the recent spike in interest rates.”  

Tomasiewicz noted that the timeframe from mortgage insurance application submission to closing was slightly under six months.

The Reserve at Couret Farms represents the 19th FHA-insured loan Sims Mortgage Funding has closed for this client, a major regional developer and property manager headquartered in Louisiana.