Bellwether Originates $150M Freddie Mac Credit Line for Envolve

Bellwether Enterprise Real Estate Capital has closed a $150 million Freddie Mac Transitional Line of Credit originated for Envolve Communities LLC to preserve and improve affordable housing at four communities located in Texas and Oklahoma.

The credit facility is Freddie Mac’s first specifically for Targeted Affordable Housing and was seeded with four properties owned by Envolve: Aspen Park in Houston; Brookhaven Plaza in Bartlesville, Okla.; Center Ridge in Duncanville, Texas; and Red Hills Villas in Round Rock, Texas. The terms include a 5-year adjustable-rate loan with two 12-month extension options and full-term interest only periods.

Jon Killough, executive vice president in BWE’s Alabama office, and John Roberts, vice president in the firm’s Dallas office, originated the TLC after working closely with Envolve’s management team to develop a capital solution to bridge property acquisitions or existing properties exiting low-income housing tax credits compliance periods to a rehabilitation and recapitalization.

Killough said in a prepared statement the TLC will provide a flexible capital solution for Envolve on existing affordable assets as the company prepares the same assets for rehabilitation or future LIHTC re-syndication.

Based in Montgomery, Ala., Envolve is an owner-operator, property management and asset management firm specializing in multifamily and senior housing preservation projects financed using state and federal LIHTCs paired with tax mortgage bond financing and other debt programs. In July, Envolve was named one of Multi-Housing News’ Top Multifamily Property Management Companies for 2022. The firm managed 28,295 units in 2021.

Properties Financed

The four apartment communities that are the seed assets for the Freddie Mac TLC are:

• Aspen Park, 8811 Boone Road, Houston, a 256-unit garden-style apartment complex offering two- and three-bedroom apartments. Financed through LIHTCs, the property provides housing for low-income residents with rent and income restrictions in place at or below 60 percent of the area median income on 90 percent of the units, with 5 percent set aside for disabled tenants.
• Brookhaven Plaza, 1441 South Santa Fe Ave., Bartlesville, Okla., a 120-unit garden-style apartment complex with one-, two- and three-bedroom units. Financed with LIHTCs and the Department of Housing and Urban Development’s Housing Assistance Payment program, the property is encumbered by two long-term HAP contracts for 100 percent of the units. All the units are income and rent restricted at or below 50 percent AMI, with 5 percent set aside with rents at or below 25 percent for disabled tenants.
• Center Ridge, 700 W. Center St., Duncanville, Texas, a 224-unit garden-style apartment community with one, two- and three-bedroom apartments. Financed with LIHTCs, the property provides housing for low-income residents with rent and income restrictions in place at or below 60 percent AMI for 95 percent of the units and the remaining 5 percent are unrestricted, with 5 percent set aside for disabled tenants.
• Red Hills Villas, 1401 South A.W. Grimes Blvd., Round Rock, Texas, a 168-unit garden-style apartment property feature one-, two- and three-bedroom apartments. Financed with LIHTCS, the property provides housing for low-income residents with rent and income restrictions in place at or below 60 percent AMI on 100 percent of the units, with 5 percent set aside for disabled tenants.