Dealmaker: Love Funding $43M for Multifamily Assets
Love Funding, Washington, D.C., closed $42.7 million for Colorado and Michigan multifamily properties.
Senior Director Leonard Lucas secured $32.8 million in construction and permanent financing for NE Development’s Rocket Apartments in Durango, Colo. through the HUD 221(d)(4) loan insurance program, which provides non-recourse financing for up to 40 years.
Rocket Apartments will offer 194 one- and two-bedroom units in seven three-story buildings on eight acres.
Love Funding also closed two loans totaling $16.4 million to build a new multifamily housing community for low-income residents in Ecorse, Mich.
Renaissance Estates of Ecorse is being built in two concurrent phases on land that previously held the Wade H. McCree Plaza and Voisine Terraces Apartments. The new community will replace the current 1952-vintage units with 200 affordable housing units in 16 buildings.
The financing, secured by Love Funding Midwest Regional Director Bruce Gerhart and Associate Director David Strachan, represented the first time a borrower has used both 4 percent and 9 percent low-income housing tax credits for the same project in Michigan.
The Michigan State Housing Development Authority granted the tax credits in tandem with mortgage insurance provided by the 221(d)(4) program. As part of the transaction, all units will be converted through HUD’s Rental Assistance Demonstration program, which transitions public housing units to private ownership while ensuring their affordability through long-term Section 8 contracts.
The development team led by Ginosko Development Co., Milford, Mich., considered building all 200 units in one phase but transitioned to a two-phase approach after Low Income Housing Tax Credit pricing dropped. This allowed the team to retain the previously allocated 9 percent LIHTCs while also pursuing a 4 percent LIHTC allocation.
In addition to the construction loan, Love Funding parent company Midland States Bank, Effingham, Ill. provided an equity bridge loan.
