Dealmaker: NewPoint Secures $12M for Affordable Housing Construction

(The Flats at 402 illustration, Madison, Wis.)

NewPoint Real Estate Capital, Plano, Texas, provided $12 million in construction financing for The Flats at 402, a 54-unit affordable housing community to be built in Madison, Wis.

NewPoint Director Cesar Diaz originated the loan, which he structured as a NewPoint Impact 4% Tax-Exempt Bond Financing.

Sponsor Bear Real Estate Group is a Kenosha, Wisconsin-based affordable housing and commercial developer with a portfolio spanning 20 states.

The Housing Authority of Dane County issued three series of bonds, one of which was a taxable tail. National Equity Fund, Chicago, served as the LIHTC equity syndicator.

Located less than four blocks south of the State Capitol, The Flats at 402 will rise on the northwest corner of West Wilson and South Broom streets in downtown Madison, with walkable access to restaurants, museums, shopping, trails and green spaces. The unit mix will include 29 one-bedroom units and 25 two-bedroom units, all restricted to residents at 50% to 60% of the area median income. The limestone exterior of an existing two-story commercial property will be repurposed for the construction of The Flats at 402, and an existing parking lot will be demolished and replaced with an underground parking garage.

“While Madison is not a market typically referenced when discussing the affordable housing crisis, its population has increased nearly 16% in the past decade, driven by job growth in high-wage technology sectors and low-wage service sector jobs,” said Rob Wrzosek, President of Affordable Strategies at NewPoint. “Rents have increased dramatically, and the city estimates it needs to add 10,000 jobs every five years to curtail the crisis. This situation is emblematic of the issues facing cities across the nation.”