Dealmaker: Berkeley Point Provides $20M in Freddie Mac Funds for Affordable Housing

Berkeley Point Capital, Bethesda, Md., closed a $20 million financing package using Freddie Mac’s Direct Purchase of Tax-Exempt Loans program for Positano Apartments in Goleta, Calif.

The Housing Authority of the County of Santa Barbara closed on the financing package May 3. It included $7 million for capital improvements to the affordable housing community.

Freddie Mac designed the Direct Purchase of Tax-Exempt Loans program to work with the 4 percent Low-Income Housing Tax Credit program to provide sponsors such as HACSB a cost-effective way to preserve and upgrade their affordable housing stock.

Berkeley Point Capital Director Max Naish originated the two-part loan. The first part, an 18-year fixed-rate loan with 35-year amortization, included two years of interest-only. The second loan was structured to insure the project satisfied the requirement that at least half of the project’s land plus depreciable assets must be financed by tax-exempt bonds–a first for Freddie Mac’s Tax-Exempt Loan program.

HACSB Executive Director Bob Havlicek served as project sponsor and said the financing gave the authority “flexibility to address the complexities that arise in affordable housing development.”

Berkeley Point Capital Affordable Group Executive Managing Director Robert Wrzosek said Freddie Mac’s Tax Exempt Loan execution enabled a 120-day early index lock with competitive terms. “The result is a compelling alternative to traditional bank balance sheet debt, credit enhancements and tax exempt bond financing,” he said.