Dealmaker: Lument Closes $117M Freddie Mac Loan for Brooklyn Affordable Portfolio

Lument, New York, closed a $117.4 million Freddie Mac unfunded forward loan for Hope Gardens, a portfolio of affordable housing communities in Brooklyn, N.Y.

The loan included a three-year rate lock and served as construction take-out financing, covering 949 units across 47 buildings.

Lument Director Josh Reiss led the transaction. “The closing allows the client to complete the substantial rehabilitation of the properties with lower cost, short-term financing and then close into permanent financing with the Freddie Mac tax-exempt loan, which offers the benefits of long-term, fixed-rate debt,” he said. 

The 30-year fixed-rate loan included a 40-year amortization schedule.

Located in Brooklyn’s Bushwick neighborhood, Hope Gardens includes 60 scattered-site multifamily properties near one community center building. Built from 1980 to 1987, the portfolio totals 1,321 units in garden-style, mid-rise and high-rise buildings, with all units subsidized by long-term Section 8 contracts.

The sponsor was a joint venture between Pennrose Holdings, Acacia Real Estate Development and an affiliate of The New York City Housing Authority. Other funding sources beyond the Freddie Mac loan included low-income housing tax credit equity, a seller note and a deferred developer fee.

The closing marked the first of two financings for Hope Gardens between Lument and the sponsor, as a second portfolio is scheduled to close in late July. In aggregate, Hope Gardens will carry nearly $190 million of Freddie Mac permanent financing once the second transaction is completed.