Dealmaker: Sims Mortgage Funding Closes $26M Construction Loan for Louisiana Multifamily

Sims Mortgage Funding, Montvale, N.J., closed a $26.1 million loan for Elan at Terra Bella, a proposed 178-unit market-rate apartment community in the New Orleans area.

Elan at Terra Bella will be in a traditional neighborhood development on the North Shore, one of metropolitan New Orleans’ fastest-growing areas.

The loan was insured under the HUD Section 221(d)(4) program and underwritten at 85 percent of replacement cost. It included a 40-year amortization schedule commencing four months after construction and a 4.0 percent fixed interest rate. The debt service coverage ratio equaled 1.176.

Sims Mortgage Funding Executive Vice President Kerrie Tomasiewicz served as the Multifamily Accelerated Processing underwriter for the loan. She said the financing faced two significant challenges: a temporary change in housing market conditions since the deal was initially approved and the structure of the general contractor’s payment and performance bonds.

“The development and financing teams collectively developed risk mitigation plans to address these challenges that enabled the deal to close before the deadline expired on the financing commitment,” Tomasiewicz said.

Tomasiewicz said Sims has closed 23 HUD-insured loans totaling nearly $350 million for this regional development and management company client since 2002.